Common Values Commons Valued Closing Keynote Address by Tan Sri - PDF document

Khazanah Megatrends 2010 Common Values Commons Valued Closing Keynote Address by Tan Sri Nor Mohamed Yakcop Minister in the Prime Minister’s Department (Economic Planning Unit) 5 October 2010 Shangri-La Hotel Kuala Lumpur

Tan Sri Azm an Mokhtar Managing Director, Khazanah Nasional Berhad Distinguished guests, Ladies & Gentlem en. 1 . I t gives m e great pleasure to deliver the concluding address for the Khazanah Megatrends Forum 2 0 1 0 . I m ust com m end Khazanah for feasting us over yesterday and today, w ith a distinguished and international m ix of speakers, w ho have provided diverse perspectives, provoked fresh ideas and shared inspiring experiences. The Megatrends Forum is increasingly establishing itself as a not to be m issed annual event for critically m inded Malaysians, and as part of the broader agenda to build up our know ledge base, w hich unlike a physical resource, can be used and shared w ithout dim inishing. 2 . The them e for Megatrends 2 0 1 0 , Reclaim ing the Com m ons: Collaborating and Com peting in the New Econom ic Order , is especially tim ely and relevant to consider, as the w orld m oves out of the recent global crisis to establish a new norm al. Earlier, during the depth of the crisis, it w as com m endable how nations across the w orld 1

w ere able to join forces and respond decisively. Such united action undoubtedly helped avert a deep depression. How ever, as the w orst has passed, collective com m itm ents are w aning. Even before global recovery is firm ly rooted, m any developed nations face increasingly opposing view s on the m erits of continued stim ulus. Plans to dram atically reform the global financial architecture have gone quieter. W e now have increased calls for protectionism . Nations, w hich w ere active collaborators not so long ago, are potentially descending into zero-sum -like com petitive behaviour. 3 . There has been increasing scientific evidence on global w arm ing, coupled w ith greater aw areness, in part, through docum entaries such as Al Gore’s I nconvenient Truth . Despite the fate of the w orld at risk, the Copenhagen Sum m it did not inspire w ith the level of global cooperation displayed. Are w e destined to suffer a Tragedy of the Com m ons at a global scale through our inability to w ork together to safeguard the earth’s environm ent? How do w e avoid our im pending self-m ade disaster? 4 . One could not be blam ed for despair or for having a bleak outlook. How ever, I w ish to offer hope. The reason 2

for optim ism is because the solution for the challenges w e face is already w ith us. I t is not contingent on the discovery of any new groundbreaking technology or a com pletely new m ode of hum an interaction. I w ould contend that it is through values, not unfam iliar to us, that w e can safeguard our future. My speech today is titled, Com m on Values, Com m ons Valued . The values I w ish to focus on are:- - first, valuing the long term , - second, cultivating a com m unity-based culture, and - third, ensuring a sense of justice. I f these values are collectively em braced and com m only practised, it w ould facilitate greater cooperation, especially in term s of safeguarding m ankind’s com m ons and its future. 3

Tragedy of the Com m ons Ladies & Gentlem en, 5 . The definition of a com m on resource is that it is available to everyone, such as the fish in the sea. Aristotle had said, for that w hich is com m on to the greatest num ber has the least care bestow ed upon it . Basically, som ething ow ned by everyone, is looked after by no one. I t w as Garrett Hardin, an ecologist, w ho in 1 9 6 8 , clearly articulated The Tragedy of the Com m ons . Hardin presented the scenario of a com m unal pasture shared by a group of herders. Logic suggests that since no individual herder ow ns the com m ons, none has the incentive to act sustainably, resulting in overgrazing of the pasture and, ultim ately, the destruction of the com m ons, to the detrim ent of all the herders. 6 . I n the w ords of Hardin, Therein is the tragedy. Each m an is locked into a system that com pels him to increase his herd w ithout lim it -- in a w orld that is lim ited. Ruin is the destination tow ard w hich all m en rush, each pursuing his ow n best interest in a society that believes in the freedom of the com m ons . This is in stark contrast to Adam 4

Sm ith’s invisible hand, w hereby those cham pioning laissez-faire econom ics w ould claim that individual self interest results in an optim al outcom e for all. Clearly in the context of the recent global financial crisis, unfettered greed pursued in global financial m arkets has not proven optim al for everyone. Com petition m ust be tem pered. 7 . W hilst w e have alw ays had com m ons, the problem has becom e m ore acute today, principally due to technology and globalisation. Overgrazing of m edieval com m ons w as constrained by disease lim iting the size of herds and transportation costs lim iting the num ber of people accessing the com m ons. Over tim e, technology has progressed and m ultiplied our capacity to plunder our resources. W hether it is global financial m arkets, fish in the sea or forests, these have becom e global com m ons, now people from all over the w orld are able to access and overconsum e these resources. W ith globalisation, m ankind has becom e m ore interdependent on each other and our fates are increasingly intertw ined. I f only w e could collaborate! 8 . The analysis of the tragedy of the com m ons offers a logical but bleak conclusion on m ankind. W e are not able 5

to cooperate, even w hen it is in our collective interest to do so. The tragedy of the com m ons im plies that there is either a need to assign property rights or introduce regulations to enforce desired behaviour. How ever, there are lim itations to our ability to assign ow nership rights over com m ons such as the air, in order to control pollution, or effect national regulations given the increasingly global nature of com m ons. 9 . I n contrast to the pessim ism that com m ons are doom ed to tragedy, som e optim ism is offered through the w ork of Elinor Ostrom , w inner of the 2 0 0 9 Nobel Prize in Econom ics. I n her w ords, w e are not helpless individuals caught in an inexorable process of destroying our ow n resources . Her field w ork provides various real life exam ples of com m unities, ranging from Nepal, Kenya and Guatem ala that self-m anage com m on resources through institutions that support cooperation. I n Malaysia, w e have our ow n exam ple, being the Tagal system , a Dusun tradition of river conservation practised in Sabah and Saraw ak, w hich involves the prohibition of fishing for one or tw o years, to help replenish the stock of fish. 6

1 0 . Ostrom ’s w ork highlights the various factors in com m on am ong the com m unities able to collaborate to self-m anage their com m unal resources. Draw ing inspiration from these factors, m y proposition is that w e can achieve greater cooperation in addressing the m ajor global challenges w e face, through three core values, nam ely long term ism , a com m unity based culture and a sense of justice. Valuing Long Term Ladies & Gentlem en, 1 1 . Valuing the long term is the foundation for cooperation. I f individuals care little for the future, they w ould not invest in cooperating today. Elinor Ostrom cites the exam ple of w hen local users of a forest have a long term perspective, they are m ore likely to m onitor each other’s use of the land, developing rules for behaviour . 1 2 . Having a long term horizon prom otes success at all levels, w hether for individuals, com m unity or nation. The value of long term ism at the individual level is dem onstrated in a study initiated at Stanford University during the early 1 9 7 0 s, know n as the Marshm allow Test . 7

The study involved children aged 4 to 5 years old being offered one m arshm allow and told that they could either eat it im m ediately or if they w ere w illing to w ait for a few m inutes, they w ould instead get tw o m arshm allow s. The initial goal of the experim ent w as just to assess the process of self control by children. How ever, the test subjects from the initial experim ent w ere subsequently tracked to see how they perform ed later in life. Overw helm ingly, the children w ho w ere able to delay gratification and hold out for a longer period, w ere found to have been m ore successful as adults, in term s of higher school grades, success at w ork and even personal life. 1 3 . Traditionally, nurturing self control has taken the form , for instance, of getting children not to snack before dinner, study for exam inations and save up allow ances. Marshm allow Test researchers concluded that such nurturing can and should be reinforced to strengthen the ability of children to resist short term desires and focus on long term gains. The m essage basically is that learning to delay gratification helps prom ote future success and fulfilm ent. One can only w onder w hether the preoccupation on short term perform ance and rew ards, particularly in the financial sector, is the undoing of individuals and our financial system . 8