Anyway, this is a topic that is extremely interesting and one that I mentioned is deeply relevant to economics.
Let me remind you of the definition I used in the last post.
Discrimination is the differential treatment of individuals or groups based on perceived group membership rather than individual merit.
I also mentioned that discrimination shapes how resources are allocated in our society by others, and it also shapes our view of ourselves and what seems logical for us to do when we ourselves allocate resources, whether we invest our time into an endeavor, our money into a business, or our presence within a country – But let me not speak in rhymes, riddles, or theory at the moment.
If you are from Malaysia, as with pretty much all other geographies, I am sure that many of you have thought that you have been discriminated against in your life.
I mean that completely, by the way.
It’s not just that Black Lives Matter exists as a real reaction to racial discrimination or the George Floyd “I can’t breathe” moment – I think that it is true even for white people nowadays in a sense, beyond the ironic, even as people share “It’s okay to be white”.
For that matter, it doesn’t matter whether you’re Malay, Chinese, or Indian either – If you go around reading social media, you will see every single major racial group declaring that they have been discriminated against, indicating a fundamental truth:
There are people from every single racial group on the planet who feel that they are getting discriminated against.
From personal experience, I can speak about Chinese family dinner table experiences where elderly people tell you about how projects are given to people who are not of your race, scholarships were given to a random acquaintance’s child because they were Malay, and that your goal, your sole and only goal, is to run away from this country as fast as possible because it is not for you and you will never be valued.
If you are Indian, we could also speak about the tales that we hear about people not renting because you had the wrong skin color, or because you were denied the same scholarships as the people in the Chinese family situation — now with a double dose of insults about illegal temples and people questioning you about your stance on Pakistan because apparently you must support Pakistan otherwise you’re not Malaysian.
Oh, but are all the aggressors Malays?
I read too much and too widely across different media ecosystems to conclude that that’s how the Malays feel — just look on social media to see dozens of different people talking about how apparently 3R laws are only for Malay people or any number of delightful permutations of ideas that people have about how somehow an imaginary system is against them, justifying Malay umbrellas, ‘agama dan bangsa’ yapping, and inviting reactions from a whole universe for whom there is nothing optimal about this situation in first, second, third, or fourth order for any community in this country.
Of course, these people are a small sample of a wider pool, but it’s not like they don’t exist or their views aren’t valid.
Do I assume some of these people are lying?
How about all of them, even as I consider an unspecified proportion of them to merely play victim in their own little racial boxes?
…Or shall I just be a charitable person and think that actually none of them are lying at all, and in reality, they are unfortunate people in a broken world?
Well… The reality is slightly more nuanced than that.
Imagine, for example, that the reason you are complaining about this in the first place is because you lost a scholarship and now your family has to go into debt in order to pay your way through university. There then arises a big question. Did you lose the scholarship because you were discriminated against? Or was it because you were just not good enough, however that’s defined?
Consider just some of the following follow-ups.
How can we know it’s discrimination?
Were you actually discriminated against, or was it just perception?
You might think it’s easy to differentiate, but it’s actually not.
I can cite you hundreds of kids who got 8 A’s for their SPM exams and who tried to apply for scholarships and didn’t get the scholarship, and then went out immediately raising hell and declaring that surely they were discriminated against because their results were so amazing, yet they didn’t receive funding, declaring “It was because I was Chinese!” or “It was because I was Indian!” or even “The government is racist against Malays and it gave all the scholarships to those Chinese and Indians!”
“How do you know how they made the decision, or who applied?”, you might ask — but then faced with that, the same people might very well then cite one or two examples of people who had less good results but who managed to get certain scholarships or grants for their education that the complainer did not as they raise hell in a state of aggrievement that unfortunately, I don’t really have a lot of sympathy for.
Yes it’s true that it could be sad if you’re not from a rich family and you don’t get a scholarship and thus cannot continue your education… But to what extent is it really fair to say that you didn’t get a scholarship because of your race and not because you didn’t display enough merit?
I am sure that many people don’t even get to the point of asking this question.
It’s undoubtedly true that many people have faced some kinds of racial slurs or epithets in their lives or the realities of living in a society where race and religion are very real things that affect how we experience life in this country, but it’s unclear that this means that scholarship providers or the people who were responsible for administering any treatment, allocating financial resources, or otherwise made the decisions that they did did so because they viewed you as being Chinese, Indian, Malay, or otherwise.
It is far from trivial to declare yourself a victim of discrimination.
In fact, whether you get rejected or not, race may not have been relevant in the first place, and the reason that you might have not gotten a scholarship need not actually have anything to do with race but instead could have something to do with your income level, the quality of your interview performance, or your academic performance – there could also have been luck, chance, or circumstance along the way.
Clearly, it is quite hard to determine what exactly happened here, and not just if you didn’t get the scholarship. In fact, even if you did get a scholarship, could you definitively prove why it is that it was you who got the scholarship? If you said no, then I think you are probably on the right track — I will never know why I, a Chinese, was given a full scholarship equivalent to more than 20 years of an average Malaysian’s annual income, to complete my education overseas — but I would probably not conclude that it was because of discrimination either positive or negative.
What if we move beyond this very limited context into understanding some of the more broad-ranging questions that we might have out there about discrimination in universities, workplaces, or otherwise in domains that extend beyond our personal lives?
Well, clearly the complexity increases.
Did students not get admitted to a particular university because they were of the wrong race?
Was it because of their academic performance?
Was it because of a particular affirmative action policy or was it because of the lack of an affirmative action policy?
Did they even apply in the first place and if they did, did they apply seriously?
Were there other factors that were not considered?
Whatever your answers to the questions above, and in the context of any and all of the answers whether provisional or settled that you gave to those questions earlier, can you prove your assertions beyond a shadow of doubt?
If you have no answers, then good – you’re in the right place.
Let me draw this to a close by first telling you what I am NOT saying.
I am not saying that discrimination does not exist in our society; it can be very real and present.
You can feel it subjectively with all the force of a thousand hurricanes, and however it is that you choose to go through life as you view the world through your lens of perception, that lens is yours and yours alone to decide what to do with the whole to refine and to look through and to behold the universe and its truths, lies, half-truths and half-lies, as it filters itself out to you in the limited span of your perception and really, if you feel that way, are you really wrong…?
But all I am saying is, before you conclude that something is discrimination, you may want to take a step back and ask yourself, “Is it discrimination? Am I sure that that’s the case? Can I prove it?”
Perhaps there, beyond the informational asymmetry that you may try to but never completely resolve, you will find yourself going into statistics – the statistical discrimination of Phelps and Arrow (basically, making decisions about individuals on the basis of what you observe about the average behaviors or qualities of groups), understanding how groups may be treated differently across time and space, and learning to think about both the discriminations that exist in the world and how to excel in that world anyways, damn any discrimination that may come along the way – Even if discrimination should exist, you may well then be thinking, “I will be the one to overcome”.
…Or will you choose not to engage in the process in the first place because stereotypes shape or confirm your beliefs?
Sure, the lens is modulated by attention, shaped by the evidence of our senses, beliefs, value systems, and history of prior interactions with the world, but it seems to me that while discrimination is a possibility, assuming that you are discriminated against at first glance against all evidence and at smallest moment of notice is a slippery slope towards a different kind of evil: playing victim, which, as a phenomenon, has its own fair share of maladies.
So yes, is it really discrimination?
I can’t answer that question for you in your unique situation, but if there was something that this blog post was meant to accomplish, hopefully it was to make you look around you and look at the world and begin to ask the question.
Alright, and that’s all I have to say about that, and I’ll see you in the next one!
Sepupus, it’s been a minute! Haven’t been posting videos for a while because I was working on Sepupunomics (read: To serve you!), but here we are with a brand new update featuring some of our acquaintances from PAS that’s giving ✨racial discrimination ✨, which has been completely fair game for economics since Gary Becker’s The Economics of Discrimination.
Now, why am I writing this?
Essentially, Malaysia got its very first Malaysian Chinese three-star general in the country (Congratulations, Datuk Johnny Lim!), and then immediately, as with most problems in Malaysia… PAS.
PAS’s Zaharudin Mohammad, who is also an in-law of PAS president and communism accuser Hadi Awang, came out and started undertaking wild speculations about Chinese prime ministers and the lot, feeding into the racial frenzy, imaginary fear of oppression, and rabble-rousing that the party is so famous for using in lieu of any sort of measurable, tangible economic success or semblance of intelligent decision making.
Speaking of intelligent decision making, seems like even though he tried deleting his Facebook post, Zaharudin didn’t make the intelligent decision of removing his Instagram post, which I reproduce here.
Meanwhile, he is just casually saying now that what he wrote was taken out of context.
I find that interesting. How and in what way was it taken out of context?
How do you even take something out of context when you established the context very clearly, and in what way was it not related to the context? Is there genuinely no relation? I wonder.
Well, if it was not related to the context because he was just writing in an incomprehensible way while expecting his piece to somehow go viral or go completely off into the stratosphere, I think that he’s got something else coming there – I also find it funny how he proceeded to delete the Facebook post but left the Instagram post intact. If he forgot, then he’s incompetent. If he left it up, then I suppose it’s pretty obvious that he’s just intentionally baiting us. Neither is a good sign.
Update: He tried to come up with a justification. He also cropped the picture and tried to hide the fact that he misspelled “My Second Home” and cannot even get simple facts correct lmao.
But is this just a Zaharudin thing?
Before you ask about whether discrimination exists in Malaysia and before you meet any Malaysians who ask if you are crazy for asking this question…
Yes, discrimination 100% exists and it is a widespread thing – you can already see it in the comments below.
Oh, did you need a trigger warning? Here’s your trigger warning.
Now, confront reality.
What did you learn from that wonderful sampling of comments?
These are real comments from people who are not Zaharudin.
These are people who seem to have all these suspicions and hears about Chinese people and who will mock Chinese people, lie about Chinese people, express paranoia about Chinese people or about people from other races, and thrive in calling Chinese people communists whether that’s true or not, while casually suggesting that Malaysians are communists and do not deserve their positions.
The thing is,whether they even understand what communism is is beyond a convenient label for Chinese people deeply suspect, and frankly, this is just scratching the surface – Not even close.
How is this related to Economics?
Discrimination is deeply relevant to Economics, given that discrimination is the differential treatment of individuals or groups based on perceived group membership, rather than individual merit.
Discrimination shapes how resources are allocated in our society by others, and it also shapes our view of ourselves and what seems logical for us to do when we ourselves allocate resources, whether we invest our time into an endeavor, our money into a business, or our presence within a country.
So, what does it mean when people and the politicians that they elect support, favour, and facilitate discrimination with no qualms or compunction?
Politicians or elected representatives are in charge of constituencies. They decide how resources will be allocated for their people, how they will fight for their people, and how in turn they will fight in order to push forward the nation as a whole. In deciding intelligently or at least that’s how it’s supposed to be how the nation’s resources income from taxation dividends and everything else will end up giving Malaysia the best possible future.
If you elect people like this, they are the ones who are going to make decisions about how government budgets will be spent.
They will be the ones planning out what’s going to happen in the country, and they will be the ones who decide on the long-term vision of your country’s development.
Now here’s a question for you:
How confident do you feel about leaders like Mr. Zaharudin in terms of how they could potentially steer Malaysia as a country?
Let me be frank here, I am not confident in them at all.
Just look at this person. He cannot write properly, he can barely articulate himself, and he features in this beautiful little graphic here raising question after question about familial ownership and affiliation… And that’s even leaving aside the fact of his casual discrimination and the way that affects the country as a whole.
The unfortunate thing about Malaysia though is that people’s utility functions and the way that they make their decisions, at least in aggregate and within certain sub-classes of people within Malaysia, is such that people like this individual are likely to come to the top not necessarily due to any particular merit but instead because he happens to fit the correct religious profile.
Apparently, this is a sufficient condition – no need for ethics, no need for administrative skill, no need for anything beyond a qualification from a mediocre religious school…It also helps if they discriminate against the correct people while appealing to the weaker part of the population that somehow thinks that they are constantly persecuted or need to thrive and fight against colonialism even though it isn’t there in the same process becoming colonizers themselves while pretending that that’s not what they’re doing.
The unfortunate thing about democracy is that if enough people choose individuals like this to lead a country and if their propaganda effort succeeds, which we can at least partly see with some of these people in the heartlands of Malaysia with people who are less educated, then that’s probably what’s going to happen unless there is a realization that there is a danger in the first place on a wide scale, beyond any echo chamber, any language community, any platform – which means that if you merely leave this here and don’t talk about it, it will die as an issue unless you start discussing it.
Having said that, we are not completely blind on this or committed only to just raving about our personal opinions – there is a little bit of economics research about discrimination, most of it is done outside of Malaysia, and what is done in Malaysia concerns the private sector, not the public sector, the military, or otherwise.
Beyond Greg, Emily, Lakisha, and Jamal, we have our very own Muhammad Abdul Khalid and Lee Hwok Aun, who feature in the study of this extremely interesting topic with Discrimination of High Degrees; It is possible to study, understand, comprehend, and perhaps address this issue and the toxic subcultures that have come up around it.
Hello and welcome back, sepupus! (Psst! Join our Telegram group!)
Politics is not conventionally considered a part of Economics, but in reality, the subjects are deeply intertwined; Economics is the art of allocating resources to best meet the unlimited wants of humans in the best possible ways, while politics in many ways decides what every society and economy deems best.
The relationship goes a little further than that, but the first ‘economists’ like Adam Smith, Ricardo, JS Mill, and Karl Marx were political economists – they wrote not only about how resources are allocated in society, but also institutions, laws, class relations, governance, and moral philosophy.
These aren’t topics I’ve written about just yet, but they are things I will touch on a little later.
Meanwhile, today, we will be talking about Islamist economic governance, focusing on PAS and later Iran. Exciting topic – normally, this would be a premium resource given the amount of research that has gone into it, but in this instance, your access will be free although you will have to register in order to read this piece in full.
Why?
Well, because today, I saw a strange recommendation from former Minister in the Prime Minister’s Department for Legal Affairs and Judicial Reform, Zaid Ibrahim.
This was what I first saw when MalaysiaKini reported the matter.
Before long, I had started writing, and the result is what you see today – Which begins by understanding what Zaid actually said.
Here is what Zaid said:
I find Zaid’s opinion interesting. I respect Zaid’s right to his opinion, but I do not share it for various reasons, including the fact that an ulama council would not be elected and would not be subject to democracy – not that PAS really respects democracy beyond a means to an end to confront the fact that their end goal is impossible under the conditions of the nation state, but certainly, we can see that they try.
Let’s also observe that netizens too do not share his opinion, although note that this is merely one part of the echo chamber, and there are more echo chambers out there – do read widely to avoid that, and don’t take what I say as the truth without evaluation.
Also, opinions are not evidence or truth – but they do say something. Consider some of the truth conveyed by the comments below.
Well, Zaid is entitled to his opinion – but if you were to ask me?
It is my opinion that constitutionally, ethically, educationally, developmentally, institutionally, environmentally, socially, and culturally, PAS has failed.
In other words?
Well, Zaid said that PAS can “take Malaysia to heights we have yet to reach”.
That’s interesting.
Do we have proof that they have done so that somehow we have a confidence that they have the ability to govern the present as a rational basis for the future?
Do we have any proof that they can do that beyond their feeble statements in parliament, and their whataboutism involving DAP?
What’s the verdict?
It is not encouraging.
If it is true as Zaid says that PAS can “take Malaysia to heights we have yet to reach”, that does not really seem to be related to its religious agenda, and it would appear that it has to be tied directly to what is common to all of us after you cut away everything else.
This brings us now to our main topic.
That’s right, sepupus.
This is Sepupunomics, and it logically follows that we must talk about the economy.
PAS and the Economy
We discussed the numerous failures of PAS on multiple fronts earlier, all of which relate in nuanced ways to methods of capturing standards of living that stand beyond the usage of gross domestic product per capita – to demonstrate that PAS has failed on all of those fronts.
If PAS administration is good administration, then that logically must mean that it is able to push Malaysia forward to achieve goals such as standards of living improvements – Rather than just religious sabre-rattling and moral policing while hoping for sedekah or rezeki or for parties like DAP to do research through their think tanks on matters like the hydrogen transition, National Energy Transition Roadmap, National Semiconductor Strategy, or the New Industrial Master Plan 2030.
What do we mean?
If we are to say that PAS can in fact rule Malaysia, then they must be able to deal with the Malaysian economy and show proof that they can deal with the Malaysian economy.
Otherwise, it is meaningless to talk about the concept of ‘advancement’ in the first place.
Let’s understand what PAS is doing with what it has at the moment to try to understand whether it has what it takes to deal with the rest of the country and in turn deal with the rest of the world.
PAS‐Ruled States in Context
It would not be fair to declare that the present state of PAS-run states is purely the result of PAS administration, and we have to look at what all these governments were dealing with beforehand – a very important part of economic logic.
In economic terms, what happened on the margin?
In other words, what happened as a result of PAS administration that would not have as a result of PAS administration, to the extent that we know it?
In the best case scenario, we would be able to split up reality into two dimensions, and have PAS rule one set of states and another dimension where PAS did not rule those states, and then compare the economic differences.
Unfortunately, we only have one reality to look at, and we cannot completely know what an alternate history would look like where PAS ruled states were not ruled by PAS.
However, we can make comparisons across states in order to get ourselves an idea.
With that in mind, let’s first have a look at what PAS is dealing with and its timeline of control to understand what they have done with the economies of the states they have ruled.
Timeline of PAS Control
State
PAS First Took Office
Periods of Rule
Quick Context at Handover
Kelantan
Oct 1990
Continuous since 1990
Already Malaysia’s poorest; GDP pc ≈ RM3–4 k in 1990 (≈15 % of national). Rural, rubber-rice economy and ageing infrastructure.
Terengganu
Nov 1999
1999-2004, then again since May 2018
Inherited an oil-rich state (royalty > RM1 bn/yr) but BN had financed many prestige projects; PAS immediately lost royalty as Putrajaya converted it to wang ehsan cash grants (thenutgraph.com).
Kedah
Mar 2008
2008-2013 (Pakatan-PAS), lost, then since May 2020
Took over a state with Kulim High-Tech Park (1990s BN legacy) and large paddy sector; manufacturing cluster linked to Penang supply chains.
Perlis
Nov 2022
Since 2022
Tiny, agrarian economy; PAS administration too recent for trend analysis.
1 What Has Happened to the Numbers under PAS?
Let’s compare the growth rates of PAS economies as compared to Malaysia as a whole as a baseline to understand what we are working with.
Key idea: Instead of looking only at today’s ringgit values, compare how fast each state’s GDP per capita (current prices) has grown since 2015 ― the first year with a consistent DOSM time-series. Eight years is long enough to see whether PAS administrations are closing the gap with the rest of Malaysia.
* PAS first entered Kedah in 2008, lost in 2013, and returned in 2020. Terengganu had a BN interlude 2004-18.
What the numbers mean – in plain language
Kelantan: grew by about 4 % a year, but Malaysia as a whole grew faster (5 %). That means Kelantan has slid from 32 % of the national average in 2015 to 31 % today. Put simply: it’s still the poorest state and is not catching up despite three decades of uninterrupted PAS rule.
Terengganu: even with billion-ringgit oil royalties, its income per person rose just 2 % a year – the slowest of any PAS state and far below the national pace. In 2015 an average Terengganu resident earned 71 % of the national mean; by 2023 that share is 57 %. The gap widened.
Kedah: the bright spot among PAS states. Thanks largely to the pre-existing Kulim High-Tech Park and Penang spill-overs, Kedah grew almost as fast as Malaysia. Yet its citizens still earn less than half the national average, so the distance hasn’t really narrowed.
Perlis: PAS only took office at end-2022, so its below-average trend (2 % growth) mostly reflects long-standing structural limits of a small, rural economy.
Penang & Selangor (benchmarks): These non-PAS states show what higher growth (5–6 % a year) looks like. Both started ahead and pulled further away – which is NOT what we would expect.
How about Poverty?
2022 Absolute-Poverty Rates by State
(Department of Statistics Malaysia – Household Income Survey)
Kelantan and Terengganu are the only states on Peninsular Malaysia with double-digit poverty rates.
Kedah and Perlis also sit well above the national average despite far smaller populations.
Royalty money isn’t a silver bullet.
Terengganu receives > RM1 billion in oil royalties most years, yet its poverty rate (12 %) is only slightly better than Kelantan’s (no royalties).
The quality of spending and economic diversification are stronger predictors of outcomes than the size of fiscal transfers.
Urban, diversified states do best.
Selangor and Kuala Lumpur post poverty rates near 1 % thanks to broad-based job creation in manufacturing and services.
Penang, with an electronics export hub, keeps poverty under 4 % despite limited natural resources.
East-Malaysia outlier.
Sabah’s 19.5 % underscores that geography and late infrastructure catch-up still matter; it is not a PAS state, showing that party control is only one factor.
Trend since 2019:
Poverty nationwide rose sharply during COVID-19 (8.4 % in 2020) and eased to 6.2 % in 2022, but PAS states have been slower to recover, partly due to weaker tourism and outward migration of workers.
In short, PAS-run states consistently occupy the higher-poverty end of Malaysia’s spectrum, and while limited royalties (Kelantan) or boom-bust royalties (Terengganu) contribute, the persistent gap points to deeper issues of investment climate, industrial mix, and human-capital retention rather than fiscal transfers alone.
2 What PAS Inherited vs. What Changed
Kelantan
Starting point (1990): Poorest state, weak industrial base, poor road/water networks, but strong overseas remittances from migrant Kelantanese.
PAS record:
Limited capital spending—average development allocation < RM700 m/year vs > RM2 bn in most states.
Tight syariah-first bylaws (gender-segregated cinemas, alcohol curbs) seen by investors as red-tape; ISEAS notes “low private-sector dynamism” and out-migration of talent(iseas.edu.sg).
Oil royalty dispute: offshore deposits are beyond 3 n mi; Kelantan receives token goodwill money only (RM 58 m April 2025)(theedgemalaysia.com).
Outcome: GDP pc climbed, but only from 15 % to 31 % of national level; poverty remains > 20 %. Water losses (non-revenue water > 50 %) and roads top public-complaint list(theedgemalaysia.com).
Terengganu
Starting point (1999): An oil province with royalties > RM1 bn/yr; BN trophy projects (Crystal Mosque, Monsoon Cup) but limited diversification.
First PAS term (1999-2004): Federal government withheld royalties; growth stalled; PAS lost 2004.
Second PAS term (2018-present): Royalties restored—RM 1.05 bn in 2018, ~RM 1.27 bn in 2019(malaymail.com)(malaymail.com)
Structural flaw: 70 % of revenue from royalties; MARC Ratings flags “crowding-out” of tax effort and boom-bust budgets(marc.com.my). Non-oil GDP share stagnant.
Kedah
Starting point (2008): Paddy belt＋Kulim High-Tech Park (Intel, OSRAM); poverty falling.
PAS 1st era (2008-2013): Focus on smallholder schemes & religious schools; disputes with Penang over water pricing dampened interstate cooperation; electronics cluster continued under MNCs.
PAS return (2020-): New agenda on rare-earth mining, solar parks; water dispute persists; SG4 bloc created with Dr Mahathir as adviser to lure FDI(straitstimes.com).
Scorecard: GDP pc rose but to only 57 % of national; poverty at 9 % (higher than 2009’s 5–6 %).
Perlis
PAS/PN only since 2022; too early for data shifts. Baseline: small agriculture, border trade with Thailand.
3 Systemic Differences in PAS Governance
Feature
How PAS States Differ
Economic Consequence
Fiscal Model
Heavy reliance on federal transfers (Kelantan) or oil royalties (Terengganu); low own-source taxes.
Volatile budgets, under-investment in infrastructure during downturns.
Regulatory Climate
Moral bylaws (liquor, entertainment segregation) stricter; local councils dominated by party cadres (iseas.edu.sg).
Adds compliance costs; tourism & service SMEs complain of red-tape, deterring diversification.
Development Priorities
Higher share of spending on religious schools, welfare stipends; lower on industrial parks, R&D.
Slower tech & manufacturing catch-up vs. neighbour Penang; brain-drain of graduates.
Oil Windfalls
Terengganu spends >60 % of royalty on operating outlays rather than long-term funds; Kelantan lacks such windfall but similar outcome.
Classic “resource curse”: consumption today, limited savings for tomorrow.
Inter-governmental Relations
Periodic royalty and grant disputes with federal govt.
Human development: Literacy rates and basic amenities (electricity, piped water) improved nationwide, including PAS states. DOSM shows Kelantan’s rural electrification > 98 % by 2022 (from < 60 % in 1990).
Industrial enclaves: Terengganu’s downstream oil & gas cluster (Kertih) kept expanding; Kedah’s Kulim Park attracted higher-end chip back-end plants—both projects originated pre-PAS but were not derailed.
SG4 experiment (2024-): First proactive effort by PAS administrations to pool resources and seek FDI collectively; still untested but signals a shift from grievance politics to deal-making.
Is “Lack of Oil Royalties” the Whole Story?
No. Kelantan’s chronic poverty correlates with zero or low royalties, yet Terengganu shows that having > RM1 bn/year royalties doesn’t ensure prosperity; governance quality and diversification matter.
Oil cash is neither a silver bullet nor the root of all woes; it magnifies whatever institutional strengths or weaknesses already exist.
5 Bottom Line
PAS took over already-lagging states, but the gap with the national average has not closed; in relative terms Kelantan and Kedah remain stuck, Terengganu slid somewhat, and Perlis is unchanged.
Structural choices—fiscal dependence, moral-regulatory conservatism, modest investment in growth sectors—explain more of the under-performance than royalties alone.
The new SG4 bloc may indicate learning—but until PAS states address core issues (talent outflow, business climate, revenue diversity), oil checks or federal grants will continue to fund subsistence, not transformation.
Now perhaps Zaid or PAS politicians would like to talk about how in fact they have been deprived of royalties and don’t have the money and cannot develop.
Let’s now consider that aspect of the argument. In relation to what we can see from the moral policing that is characteristic of PAS states.
Terengganu proves that having RM 1 billion-plus a year is no guarantee of faster growth; poor diversification and stop-go spending blunt the benefit.
Investment climate matters
Kelantan’s restrictive by-laws (gender-segregated entertainment, liquor curbs) and limited infrastructure make investors choose Penang or Selangor instead.
Fiscal model
Kelantan relies on federal grants; Terengganu on royalties. Both spend heavily on salaries and welfare, leaving less for productive capital projects that raise long-run incomes.
Human-capital leakage
Young professionals from PAS states migrate to Klang Valley or Penang for better jobs, so local productivity growth stays low.
Take-away in one sentence
Over 2015-23 all PAS-run states grew in absolute terms, but—except for Kedah—they grew slower than Malaysia as a whole, so their people are not catching up in relative prosperity.
That shortfall stems more from policy and governance choices than from the presence or absence of oil royalties alone.
Wow, that was a long discussion. Give yourself a round of applause and sip some tea.
What can we see here?
We can see that even though PAS took over from other parties that were already lagging, they did not raise their states to new heights.
They are not doing so, there is no evidence that they are able to do so, and any potential indication that they will raise Malaysia to greater heights is wishful thinking and is likely ideological rather than on the basis of the existing data about PAS governance.
But wait, Mr. Zaid might say, “Past (PAS?) results do not guarantee the future!”
How wonderful. Therefore, we should not support your favourite party.
Maybe he will say:”Well, the statistics show that the Malay support PAS!”
How wonderful. Therefore, it is desirable for non-Malays to migrate unless there is deep evidence indicating that there will be a tectonic shift. That evidence is not present in your states and is at best based on a vain promise that is not supported by any earthly thing. We do not believe in your spiritual things, and based on your actions as identified above, it seems reasonable to conclude that many of you do not either.
Oh, but then…”You haven’t looked at what the people in Iran are doing! Clearly, they are deeply more capable!”
I’m glad that you asked!
Because this analysis includes also what our friends in Iran and in fact all Islamist parties around the world are doing.
With that in mind, here is a full-scale analysis of Iran which Mr Zaid seems to love so much, to establish a comparison between PAS and its existing failures that in turn do not tell a touching or inspiring tale about the economic future of this country if that governance were extended to the rest of Malaysia.
Introduction
Islamist political parties – those seeking to govern by Islamic principles – have had varied success in managing economic affairs. This report examines their economic governance across several countries (including Malaysia’s PAS) and then focuses on Iran.
We compare Iran’s economic progress before and after the 1979 Islamic Revolution, in percentage growth terms, against world averages. We also consider the role of oil, private enterprise, and other factors in Iran’s economic trajectory. Finally, we analyze common trends in how Islamist-led regimes affect economic growth.
I’d like to briefly interrupt this discussion to let you know that the next section will be a membership required section.
In normal premium resources like this one, you will have to sign up for a membership to access the content. However, in this case, you can just sign up for a free membership by signing up at the link below. By signing up for a membership, you affirm your consent to receive communications from sepupunomics.com.
To view this content, please sign up for a membership!
If you haven’t signed up yet, make sure to Join Now!
