The Beginnings of Crony Capitalism-1955-1970: An academic take on Robert Kuok and cronyism

by Ganesh Sahathevan 

From Kuok's memoirs:

“Cronies are lapdogs who polish a leader’s ego. In return, the leader hands out national favours to them.“A nation’s assets, projects and businesses should never be for anyone to hand out, neither for a king nor a prime minister.“A true leader is the chief trustee of a nation,” Kuok writes in his book, alluding to allegations of cronyism linked to the nation’s leaders over the past few decades.He added that any good leader could also rely on their fiduciary sense to set them on the right course, if the nation lacks an established system to guide its leaders.“A leader who practices cronyism justifies his actions by saying he wants to bring up the nation quickly in his lifetime, so the end justifies the means.“He abandons all the General Orders, that is the civil-service work manual that lays down tendering rules for state projects.“Instead, he simply hands the projects to a Chinese or to a Malay crony,” Kuok said, adding that government-owned banks are also forced to lend to the projects.“Some of these cronies may even be fronting for crooked officials.”

On the other, hand this, extracted from The Beginnings of Crony Capitalism: 

Business, Politics and Economic   Development in Malaysia, c.1955–70 by Nicholas  J. White:1

The enigmatic Robert Kuok was the entrepreneurial success story of the Tunku years—by the late-

1960s, he had developed vast financial interests in Malaysia, originally in the food industry

but extending also to timber, hotels and property development. Case studies by  omez and Rajeswary Brown illustrate that Kuok relied on close ties to the Malay elite, long before the NEP, to secure

pioneer status for his sugar refining and flour milling ventures. He was awarded these concessions despite that the Federation's tax holidays and tariff protection to encourage ISI tended to benefit British multinational enterprises, and notwithstanding the concern amongst Malay leaders that the grant of pioneer certificates to ethnic Chinese would only exacerbate the economic divide between Malay and non-Malay Malaysians. Additionally, Kuok secured nearly 15, 000 acres of land in Perlis to grow sugar cane during the 1960s—again, in a period when the federal government, as Gomez notes, was 'alreadyunder some pressure from UMNO members to augment state intervention

in the economy to promote Malay economic interests'.

For Brown, Kuok's 'oligopolistic niches in sugar and flour milling provided a secure capital base for diversification' of his empire into property and hotels. As Gomez also claims, 'Kuok's close links with

government leaders' smoothed the path for his appointment to the chairs of enterprises with a strong government equity participation—in the late-1960s, Kuok became head of both Malaysia Singapore

Airlines (MSA) and the Malaysian International Shipping Corporation (MISC). He additionally became a director of the national trading corporation, PERNAS and the Bank Bumiputera—two government backed institutions specifically designed to enhance the Malay share in the Malaysian economy.

END