Diverse Approaches to Rural Development in ...

Volume 16 Number 1 2000

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Diverse Approaches to Rural Development in Malaysia: The FELDA and Darul Arqam Land Settlement Regimes Ahmad Fauzi Abdul Hamid, Faculty of Economics, National University of Malaysia, Bangi, Selangor, Malaysia Introduction In the analysis of Third World economic and rural development, Malaysia represents an intriguing and somewhat special case. Many applaud the impressive growth registered since independence and particularly in recent years; as Vokes testifies, Malaysia is "one of the most successful cases of economic development in the Third World."1 It has managed a structural transformation of its economic base from one relying on primary commodities to one in which manufacturers now play a central role; not denying the intermittent problem of fluctuating growth and uneven development. But what singles out Malaysia from other cases of Third World development is the virtual absence of any urban bias in development.2 In fact, a slight leaning towards rural development can be traced in the post-independence public development expenditure, and the evidence for this is found in the predominance of rural-rural and urban-rural migratory flows, partly as a result of state-sponsored land settlement schemes, the biggest of which is the Federal Land Development Authority (FELDA). The Malaysian government-directed land settlement programme is not to be treated in isolation; it is merely part of an integrated multisectoral approach to rural and regional development. It is therefore expedient, in the Malaysian context, to comprehend the nature of national policies on rural development before embarking on an examination of land settlement programmes. While sufficient literature exists for us to make a comprehensive assessment of state-sponsored settlement schemes in Malaysia,3 the study of Malaysian spontaneous settlements, defined here simply as settlements constructed without government assistance, has been relatively neglected. It is in this respect that the work by Muhammad Syukri Salleh, 'An Islamic Approach to Rural Development - The Arqam Way' (1992)4 is regarded as being pioneering. Muhammad Syukri Salleh analyses the Islamic revivalist movement, Darul Arqam, as a movement which has initiated a strategy of rural development genuinely inspired, planned, implemented, administered, and evaluated by the people themselves. This grassroots or 'bottom-up' approach differs markedly from the 'top-down' approach which has characterised the exogenous development strategies implemented by the Malaysian state since independence. This article mainly draws upon data collected by Muhammad Syukri Salleh during his field study of Darul Arqam villages in 1988. By comparing the settlement schemes operated by the FELDA and Darul Arqam, both of which have been portrayed as successful in their own distinctive ways, we are able to distinguish characteristics which make up a successful settlement scheme. It is argued here that it is erroneous to employ the same yardstick when measuring success in spontaneous land settlement schemes and in state-sponsored settlement schemes, as their origins were conceived by their authors through different philosophical foundations, with different objectives in mind. A basic theme which runs through this essay is

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that although Spontaneous settlement schemes may be less well-off materially, their success becomes pronounced when judged in terms of promoting self-reliant development. A final introductory point to be noted is that in the Malaysian context, policies on rural development are closely linked to the redress of Malay underdevelopment. With an ethnic composition of 56.6 percent indigenous Malays, 32.7 percent Chinese and 10.1 percent Indians,5 Malaysia has had to live with a perennial quest for racial harmony since independence in 1957. Malay dissatisfaction of having to make do with a disproportionately meagre amount of national wealth, has been attributed as the root cause of the May 1969 racial riots. With the majority of Malays still residing in the countryside,6 rural development is vital towards economic restructuring between the races, and thus partly realising the objectives of the New Economic Policy enunciated in 1970. Nevertheless, there is little doubt that behind the seemingly benign intentions of the Malaysian authorities in developing the countryside, their lurks the political motive of maintaining and courting support and votes for the ruling United Malays' National Organisation (UMNO) party. Land Development Within the Context of Malaysian Rural Development Strategy Putting aside any hidden agenda on the part of policy makers, rural development's main concern is purportedly with the alleviation of rural poverty. The definition of rural development offered by the World Bank is "a strategy designed to improve the economic and social life of a specific group of people, the rural poor. It involves extending the benefits of development to the poorest among those who seek livelihood in the rural areas."7 The problem of persistent rural poverty is to be confronted by raising farm productivity and the income of rural households, which entail a transformation of subsistence agriculture into capitalist agriculture, and which involve the intensification and extension of land under production. In Malaysia, apart from combating rural poverty, rural development performs two further tasks, viz. that of promoting primary exports especially rubber, oil palm and cocoa,8 and that of encouraging food self-sufficiency, specifically of rice.9 In order to achieve the twin productivity and income objectives, the Malaysian authorities have employed two broad strategies, viz. in situ agricultural development programmes and land development. While the former concentrates on developing existing farm land, principally rubber plantations and paddy fields, the latter refers to the opening up of new agricultural land, normally for rubber or oil palm and has recently included cocoa and sugar cane. In situ agricultural development involves improvements in irrigation and other infrastructural facilities, the introduction of high yielding varieties (HYVs) of crops, extension of credit facilities, and subsidies. Land development, on the other hand, covers resettlement, on a significant scale, of farmers from existing farm areas into new land settlement schemes. Besides the two broad strategies outlined above, we can locate further ancillary strategies, for instance rural urbanisation programmes to create new growth centres in rural areas, rural industrialisation programmes to encourage agricultural resource-based industries and rural handicrafts, rehabilitation of traditional villages, applied food and nutrition programmes to promote local food production and better health, and community development programmes to instil communal values among rural households and especially youths.10 Land development and settlement has consistently been prominent as a major plank of the Malaysian government's strategy on rural and agricultural development. In statisti-


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cal terms, the extent of the importance of land development is shown by its consistently being the largest component (around 50 percent) of the budget under 'agriculture and rural development' in the several national plans since 1970. For example, the allocations for the Second Malaysian Plan (1971-75) and the Third Malaysian Plan (1976-80) were 52.9 percent and 49 percent respectively, both of which were significant improvements from the 30 percent allocation registered in the 1960s.11 The planned land development and settlement were carried out principally through the FELDA, the largest of some fifteen different agencies engaged in land development. In discussing state-sponsored land settlement schemes, we propose to focus ourselves upon projects under supervision of the FELDA. The FELDA is singled out for the simple reason that it is the largest land development agency to operate on a national scale; the others mainly operating on a regional scale.12 Under the Malaysian constitution, land alienation is under the jurisdiction of state governments; and the FELDA therefore represents a centralising body to speed up a hitherto lethargic process. However, legally, the FELDA still cannot circumvent state governments; the state government's approval is imperative for a piece of land to be designated a 'development area', be put under the authority of the FELDA and thus be released for settlement. State governments usually agree to release land only on certain conditions. Established in 1956, FELDA's development took on a slow turn as it was aware of its limitations. It started merely as a board to provide technical and financial assistance to state land boards and corporations; only after subsequent amendments was the role of the FELDA redefined so as to gain the upper hand as an executing agency rather than a loans board. The failure of the various state government's-sponsored Group Settlement Schemes and Fringe Alienation Schemes13 further enhanced the importance of the role of the FELDA within the Malaysian land settlement policy. By 1981, the FELDA has emerged as one of the largest plantation companies not only in Malaysia but also in the world.14 By the end of 1987, total public expenditure which had been spent on the FELDA amounted to RM549 billion; this was derived not only from the Malaysian government but also from external sources, mainly international development agencies (RM0.58 billion) including the World Bank and Arab banking interests.15 State-sponsored Settlement Schemes: The Case of the FELDA In comparison with land settlement programmes in other parts of the developing world, the Malaysian resettlement programmes in general and FELDA schemes in particular demonstrate certain measures of uniqueness. Firstly, in terms of beginning time period, the FELDA came into being relatively late, in 1956, while most other countries, under colonial land policy, had embarked on land settlement programmes early in the century. Secondly, in terms of objectives,16 the 'redistributive' objective of relieving population pressure and easing the man-land ratio, often the most important objective in other parts of the world, has not figured prominently in the list of priorities of FELDA schemes. Originally established with the principal aim of providing land for the landless and the unemployed, the FELDA "was never intended as a population redistribution measure, but was essentially aimed at improving the socio-economic status of the participants..."17 Thirdly, land under FELDA schemes was used to grow cash crops, viz. rubber, oil, palm, cocoa and sugar cane; instead of subsistence food crops as in other programmes. Fourth, FELDA programmes are relatively more capital-intensive and involve large-scale proj-

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ects and higher costs. The clearest example of this is during the early stages of resettlement. Instead of the settlers being involved in the arduous task of jungle-clearing, this work is left to private contractors. This contract method, first adopted in the Billut valley scheme in 1958, had its origin in the unsatisfactory and uneconomical results produced when settlers were given the opportunity of complete participation in the initial phases of land development.18 Finally, and most interestingly, FELDA programmes are widely regarded as a success, especially in raising agricultural incomes. This is despite the FELDA operating fully integrated, high-cost schemes, of which the body of evidence shows are more conducive to failure. The FELDA is considered successful especially when evaluated in terms of its primary objective of raising incomes of the rural population. The FELDA has proved to be a solitary exception to Scudder's observation, concluded from evidence gathered from different parts of the world, that "spontaneous settlers usually make better farmers in less time and at a lower financial cost than do government-sponsored settlers."19 Conclusions in favour of spontaneous settlements run through such major works as that of Chambers,20 Nelson21 on Latin America, James22 on the Philippines and Vayda23 on Indonesia. But Hulme24 specifically mentions the FELDA as the one major exception to the widespread lack of success on the part of state-sponsored land settlement schemes. Under schemes operated by the FELDA, settlements with a lower size limit of around 1800 hectares each would settle some 400 families, and provide within each basic infrastructure and amenities like roads, a school, a mosque, a health clinic, a community hall, shop houses, water supply, and transportation and communication services. Under an agreed 'package deal', each family would be given four hectares of agricultural land and a 0.1 hectare piece of residential lot, with an assurance that the commuting distance between the agricultural and house lots is not more than five or six kilometres. As has been mentioned earlier, full settler participation in the opening and early development of settlements, as was practised in early FELDA schemes, has been abandoned in favour of the contract method. In some of the main settlements, private contracting has been extended to cover not only clearing, but also initial planting, several months' maintenance, and the building of settlers' houses. After early experiments in which settlers were assigned their own individual plots early on in a scheme failed to produce desired results, the block method was introduced in 1962. By this method, during the first three years of planting, settlers are required to work in groups of 15 to 20 on blocks ranging from 40 to 80 hectares; so that by the time individual lots are allocated to settlers, the four-year old crops are in well-maintained conditions and the settlers themselves have gained in experience. Settlers are given their individual lots at the beginning of the production phase, which is approximately four years after planting for oil palm and six years after planting for rubber. During the revenue-generating phase, which lasts about 20 to 25 years, proceeds of the main crop are sold through the FELDA, who then remunerates the settler with a monthly net income out of the revenue obtained from the proceeds of the main crop. Settlers can be expected to obtain titles to their land in fifteen years, but usually the procurement of individual entitlement takes much longer, since it is subject to full repayment of settlement costs, plus any accumulated credit arrears. The payable costs cover that of initial land preparation and planting, development of houses


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and maintenance costs. It took exactly 21 years, in 1977, for the first batch of settlers to fully repay their loans and hence be awarded titles to their holdings.25 In the first five years of the FELDA, no definite criterion existed to co-ordinate the selection of settlers, except that there seemed to be a slight bias in favour of those with an agricultural background, those who were poor and those who had 'self-help initiative'. The first formal settler selection system came about in 1961, and it prescribed that prospective applicants had, preferably, to possess the following criteria: that they be citizens of Malaysia or state nationals, that they come within the 21 to 50 year age group, that they are married and preferably with children, that they have an agricultural background, and that they are physically fit. In addition, priority is given to the landless or to rural folk with holdings of less than 0.8 hectares. Interviewees were assessed on a points system, and changes and additions, through time, to selection criteria, enabled prospective settlers to increase their points. For instance, applicants with additional skills, such as business carpentry and tailoring, are able to add to their points. Since 1974, both husband and wife were interviewed, and the selection committee have been guided by two primary sets of criteria. The 'suitability criteria' refer to age and skill factors and settlers' experience, while the 'need criteria' cover factors of family size and land ownership, with a renewed emphasis on the 'landless' criterion.26 As we stated earlier, the FELDA was originally established to improve the socioeconomic status of the rural poor, and indeed, for many years, FELDA schemes were viewed as an easy avenue out of poverty, and those selected participants were the lucky 'favourite children' to be able to escape poverty. The exaggerated stories of nouveaux riches in FELDA settlements, of sons and daughters of FELDA settlers flaunting their wealth in front of relatives, are a much-discussed topic in daily conversations in Malaysian public life. Therefore, judging FELDA schemes by their primary objective of alleviating rural poverty by raising rural incomes, it is fair to say that at a glance, the FELDA has had a significant amount of success, at least in the eyes of the public. The true picture is rather more mixed. It has been revealed27 that the average income of settlers actually gets lower during the pre-production stage of three to five years, during which they are paid a subsistence allowance of only around RM100.00 per month. This is the period when their residential lot has to be utilised to the full, for example, by the planting of fruits and vegetables, in order to provide essential supplementary income. Nonetheless, as the period of residence in a FELDA settlement increases, so does the average real income. It has been estimated that the rise in real income, after a period of 10 to 12 years' residence, reaches between 50 to 74 percent.28 According to Bahrin, Perera and Lim,29 based upon statistics obtained from six rubber plantation schemes and five oil palm schemes operated by the FELDA in the mid-1970s, in settlers' original villages, at least 89.4 percent of them received a net monthly income of below RM200.00, but in FELDA settlements, the figure for this income group had fallen to 25 percent. Blair and Noor have conclusively reported that incomes received by FELDA settlers were about "143 percent of the national Malay average for both rural and urban areas combined."30 While incomes in FELDA schemes have shown a definite improvement vis-a-vis preentry incomes, FELDA settlers in rubber schemes have received less in remuneration as compared with their counterparts in oil palm schemes. While an oil palm settler can proudly compare his income to that of an average urban worker, incomes of settlers in rubber schemes still fall far below that of urban levels.31

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The relatively broad success in income terms of FELDA programmes conceals to some extent the serious structural problem of income instability. This problem has occurred due to commodity price fluctuations in the world market, and affects mainly settlers in rubber schemes. The problem is such that monthly incomes may range from RM400.00 to RM1500.00 several times throughout the year.32 There is no concrete income stabilisation scheme to protect settlers from wild price fluctuations; instead, the FELDA has developed a loan/credit policy which effectively passes the burden of instability to the settlers. Through this policy, settlers receive a so-called 'guaranteed income' whenever net monthly income falls below a certain threshold, which is RM350.00 in the case of oil palm and RM250.00 in the case of rubber. In fact, the policy promotes settler indebtedness, because the supplement to actual income actually adds to a settler's accumulated credit arrears.33 The record of FELDA settlers' loan repayment is generally regarded as satisfactory. The issuing of titles to individual holdings depends on settlers' ability to meet loan obligations. As has been mentioned, the first batch of settlers managed to meet theirs after 21 years, repaying loans on a 6.25 percent interest rate. However, because of unpaid accumulated credit arrears, it has not been unusual for entitlement to be given well after the scheduled 15 years after the maturing of the crop. Of the more than 300 schemes developed by the FELDA by the end of 1983, only six had managed to qualify for entitlement; this is indicative of the severe problems experienced by FELDA settlers in meeting their loan obligations.34 The achievements of the FELDA in terms of area developed make it the most important agency in the field of land exploration and settlement in Malaysia. From its establishment in 1956 until 1985, the FELDA had developed 385 schemes, covering a total of 648,282 hectares of agricultural land and 42,940 hectares of urban and residential land. Within this time-span, 94,168 settler families have been placed in 254 schemes. Of these, 59.1 percent occupied oil palm schemes, 40.4 percent settled in rubber schemes and a mere 0.5 percent (450 families) were resettled in sugar cane schemes.35 Schemes cultivated with cocoa did not admit any settler family. FELDA oil palm schemes are responsible for the production of approximately 30 percent of Malaysia's oil palm. After rubber, the oil palm industry is the second largest user of agricultural land. The FELDA has thus played a major role in making Malaysia the world's largest oil palm producer. It has contributed to the diversification of crops, and in effecting a successful transformation of traditional farmers into modern agriculturists. But one worry that has been expressed36 is the costs incurred in terms of environmental degradation. It is particularly worried that the replacement of tropical rain forests with commercial crops would disrupt existing ecological conditions. However, as yet, there is no concrete evidence to substantiate this view. And it is quite certain that the rampant illegal logging activities have a more damaging impact upon the environment than does the opening of new lands for agricultural purposes. Although FELDA settlers are purportedly selected based on the formal settler selection criteria outlined above, a number of FELDA schemes have been noted for choosing settlers on the basis of political considerations.37 It appears that one with the right political connections, for example via political affiliations to the local state assembleymen or local political representatives, especially to that of the ruling party, has a greater chance of being selected. Applicants would normally have to go through an interview session conducted by a panel whose members might include the district officer, the state assem-


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bleyman and the FELDA representative; so that the advantage lies with those who have established earlier liaisons with them. The effects have been, among other things, the selection of those with little experience in estate management and in working in a cooperative environment. This has led to attempts at circumventing rules of the FELDA, as shown by reported evidence of illegal sales to private dealers for a quick income and of overlapping of rubber trees during periods of high prices. A major problem which has confronted FELDA schemes in the long term is related with the second and third generation of settlers. The FELDA operates an inheritance policy in which the father's plot of land is bequeathed to only one of his sons, usually the eldest. This results in a fixed land-labour ratio, which automatically creates an underemployment trap for those 'FELDA children' not lucky enough to be able to inherit their fathers' land. Migration to urban areas is often the sole alternative to remaining underemployed, such that from a long term perspective, resettlement in FELDA schemes can play only a temporary role in stemming the tide of rural-urban migration. Relying on the opening of new lands to accommodate the second and third generation of settlers is evidently insufficient, since population has the tendency to continually increase, while land available for resettlement is limited. A possible solution to this second-generation problem is the development of rural agro-based industries and better educational and infrastructural facilities in settlements, so that the FELDA children look also for job and career opportunities in rural areas. The prevalence of second-generation migration seems to indicate a labour surplus in FELDA schemes. On the contrary, the increased hiring of cheap, often illegal, Indonesian labour,38 seems to indicate the opposite: that they are faced with labour shortage problems. The reality is that this may be indicative of settler dissatisfaction and protest against FELDA policies and the paternalistic attitude of its trustees. The question has arisen of whether the FELDA represents a cheap-labour policy which deliberately exploits settlers.39 The FELDA has been accused of operating, in actual fact, collectivised labour units, as can be seen from the rigid work regulations imposed de Koninck and McTaggart40 go to the extent of describing Malaysian settlement projects as centrally directed work-camps. The primary criticism against the FELDA, nevertheless, is that, as it stands at the moment, it does not meet enough of the necessary conditions required in order to eradicate rural poverty. Its extremely high-cost nature, not to mention the administrative and operational difficulties encountered, makes its accomplishments outlined above seem meagre by comparison. In other words, more could and should have been achieved. The costs of resettling one family have been estimated to have risen from RM26,600.00 in 197741 to RM53,000.000 in 1985.42 Considering a resettlement rate of 5000 settler families annually, it would take almost 90 years, at a cost of RM13.3 billion, to resettle the estimated 443,700 rural poor household in the country.43 FELDA programmes, are, therefore, not only a high-cost measure, but also a painstakingly slow one, in combating rural poverty. The problem is compounded further by shortage of potential land. Mehmet44 estimates that if we were to assume that one settler family requires four hectares of land, Malaysia would need, overall, 3.14 million hectares of land to accommodate the rural poor; but government reserved land with potential to be developed reaches around 2.6 million hectares only.

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On the whole, the FELDA can be said to have benefited only a small proportion of the rural population. Furthermore, the benefits have eluded the most impoverished groups, and as a consequence, rural inequalities have been intensified.45 The majority of settlers selected also do not come from the poorest regions in the country. It has been estimated46 that until 1980, only 28 percent of FELDA settlers came from the five poorest states, in which 61 percent of the poor reside. On the other hand, 62 percent of all settlers originated from the three states of Johore, Negeri Sembilan and Pahang, all of which have only 21 percent of Malaysia's estimated poor. Part of the problem stems from the large say that state governments have in the opening of new lands. States normally insist that at least half of the settlers in a scheme are state locals. Hence, not surprisingly, intrastate migration, and not interstate migration, is the norm among FELDA settlers, involving 77.7 percent of them (between 1957 to September 1983).47 Only Pahang has absorbed a significant number of settlers from other states, due largely to an imbalance between its large amount of land and its dearth of local applicants. Political factors also come into play. The obvious case is that of the Kelantan state, which between 1957 to 1980, supplied only 4 percent of settlers in FELDA schemes, despite being one of the poorest states in Malaysia. This is because for a large part of the period mentioned, Kelantan was ruled by the opposition Islamic Party of Malaysia (PAS). Despite the above, the FELDA is, without question, a highly profitable enterprise which generates handsome net profits and surplus revenues. Not all of these are channelled back into hands of the rural population in the form of settlers' incomes. Most, in fact, are utilised for the purpose of corporate expansion and diversification.48 Hence in recent years, joint ventures have been established between the FELDA and large multinational corporations such as Nestle of Switzerland and Mitsui of Japan; apart from the FELDA having acquired major interests in a host of other companies.49 This priority given to corporate growth represents a paradox. Rather than most of the benefits of the FELDA accruing to the rural population in general and FELDA settlers in particular, the benefits have largely been amassed by the small network of FELDA trustees, who, being provided with avenues to acquire company directorships, have been granted an outlet for personal enrichment. With the supervision of the FELDA increasingly run by the rural population themselves, perhaps there is less content of paternalism and a less skewed distribution of benefits. But even then, the wealth generated by corporate investment would still mainly be monopolised by a handful of the FELDA population fortunate enough to be able to join in the management of schemes. The wealth would be very unlikely to be widely dispersed. It is wise, therefore, to review the achievements of the FELDA in the light of its role as a major plank in the government's rural development strategy. Broadly viewed as a success, more could have been accomplished had measures been taken to rectify the weaknesses mentioned above. Only then would the large costs invested in FELDA schemes been made to look worthwhile. We do not wish to dismiss the FELDA as a failure, for it could have been worse without it, but it is evidently not enough in addressing the problem of rural poverty in Malaysia.50 Spontaneous Settlement Schemes: The Case of Darul Arqam Darul Arqam was established in Kuala Lumpur in 1968 by an Islamic religious teacher (ustaz), Ashaari Muhammad, who led the movement until its demise in 1994. Darul Arqam sources trace the birth of the movement to Ustaz Ashaari's burning desire to com-


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bat the moral, political, economic and cultural degradation befalling the Malay-Muslims of the 1960s, and the apparent unwillingness of political and religious leaders to redress he deteriorating situation.51 With a meagre ten members in 1968, Darul Arqam organised itself as a study group based in a house at the heart of Kuala Lumpur, but was to experience an astounding expansion for the following 26 years.52 From extremely humble beginnings, Darul Arqam at the time of its dissolution in October 1994 boasted numerous international centres, health clinics, schools run on a distinctive curriculum, an elaborate network of electronic and printed media, profitable economic enterprises organised under the Al Arqam Group of Companies and agricultural projects situated around 48 selfsustaining villages.53 Small wonder observers have dubbed Darul Arqam as 'a state within the Malaysian state' and as possessing its own empire.54 Widely admired for its distinctive success in erecting its own comprehensive system of life on an independent basis, Darul Arqam was consequently perceived as a threat or a rival by the Malaysian authorities who ran the Malaysian state on the liberal-capitalist ideology, leading eventually to its wholesale proscription and enforced disbandment in 1994.55 For our present purposes, however, we shall focus on Darul Arqam's approach to rural development; in particular, on its villagisation strategy c. 1972-1993. The rationale behind this villagisation strategy lies in the unique way in which development was perceived by Darul Arqam. While conventional development theories were obsessed with material aims and achievements, Darul Arqam viewed development as being the result of worship to God. Worship may be divided into basic worship, from which we derive the vertical man-God relationship, and general worship, the observance of which gives us the horizontal man-man relationship. Drawing upon verse 112 in chapter 3 of the Koran, Darul Arqam referred to the former relationship as hablumminallah and to the latter as hablumminannas.56 Hablumminallah involves self-purification towards the achievement of iman (faith) and taqwa (piety), and which necessitates an obliteration of mazmumah (evil attributes) and its replacement by mahmudah (virtuous attributes). Thus the adoption of Darul Arqam of the sufi practice of tariqah,57 with the founder-leader himself assuming the role of Sheikh or Amir.58 Hablumminannas, on the other hand, covers social relations and the organisation of human collective affairs, ranging from seemingly minor matters as eating and dressing, to more major ones such as family organisation, the operation of Islamic educational, economic and political systems, and international relations. In order for an action to become accepted as worship, five basic guidelines are given, viz. that it is done with correct intentions, that it complies with the shari'a, that its execution accords with the shari's, that its outcome is good within the terms of the shari'a, and that in carrying it out, the basic worship under the domain of hablumminallah is not neglected.59 While hablumminallah generates human or spiritual development, hablumminannas generates material development.60 Hablumminallah comes first, as the purification of the self must be directly addressed before individuals involve themselves in society.61 But once set in motion, material development and spiritual development, being interrelated and interdependent, must be concomitantly endeavoured for and healthily balanced; for even pious individuals could not withstand perennially corrupting influences of unislamic systems.62 Such a development strategy, integrating secular and religious pursuits, was conducive to the creation of a unique Islamic culture and civilisation.63 Without spiritual development, a materially developed society will be carried away in excesses and ultimate destruction, as can be seen from the present chaotic state of western civilisation.64 Without material development, an Islamic society, although spiritually developed, will only become passive and dependent; reasons which ultimately led to the subjugation

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of Muslims by western colonial powers.65 As it appeared on the scene, the balance struck between spiritual and material development presents an innovative and dynamic approach to religion, previously seen by some as the prime cause of Malay underdevelopment.66 From a wider perspective, the emergence of Darul Arqam as an Islamic movement may be seen as an indigenous grassroots reaction against the manifest failure of overtly materialistic 'pseudo-solutions' offered by culturally paternalistic exogenous models of socio-economic development and conventional modernisation strategies, as implemented by the Malaysian state.67 The emergence of Darul Arqam could be viewed as a reaction against the failure of the conventional models of development to address broader socioeconomic issues affecting the Malay community, whose disaffection became vivid after the May 1969 ethnic riots. In practical terms, this response took the form of erecting a self-sustaining and comprehensive socio-economic order, based on Islamic values and principles, by operating systems of life totally disengaged from Malaysia's liberalcapitalist system. The Darul Arqam model thus represented a model of development which enabled Malays to recover their original culture values as Malay-Muslims.68 One study has accurately described Darul Arqam's fundamental aim as "to recover, and then practise, the original cultural values of the Muslims, operating initially on a local grassroots level, and subsequently on a wider national level."69 As such values were to be constituted "within an Islamic worldview which offers a comprehensive way of life;" Darul Arqam's cardinal aim may be summarised as "to revive Islamic religious belief and values and practise them in a comprehensive pattern of living."70 Darul Arqam's strategy of villagisation arose out of the need to implement a comprehensive pattern of living centred upon spiritual and material development. An Islamic village represents a miniature Islamic community in which the comprehensiveness of Islam is realised at the level of the jamaah (movement) as a foundation for a future Islamic ummah (global society).71 After five years of concentrating upon self-development through personal worship, Darul Arqam opened its first village in a five-acre land in Sungai Penchala, Kuala Lumpur. Hablumminannas activities began to be conducted under specialised shukbahs (departments), until 1993 numbering 15 in all.72 Since the founding of the first settlement, similar villages were established throughout Malaysia; until 1993 numbering 48. Characteristic of Darul Arqam's settlements was their intensely rural setting.73 Although one of the reasons behind the choice of such remote sites was their comparatively cheaper price, another motivation seemed to be the perceived advantages in terms of shielding the community from inimical influences associated with urban life. The settlements were run on a self-sustaining and self-contained basis. Land was acquired through three methods: land purchase by the movement, collective land purchase by individual members, who then donate it to the movement, and most commonly, waqf (direct donation) by individual members and sympathisers of their own pieces of land.74 Collective effort and personal contribution of assets were responsible for the early development of the settlements.75 Self-reliance was gradually established with the initiation of economic projects in 1977. Such projects operated on a self-financed basis, whereby the capital, instead of being obtained by external loans, was acquired via members' contributions, investments whose profits were then re-invested and an Advanced Payment System in which the monthly expenditure of settlers was pooled, used to buy daily necessities (in bulk), which were then sold to non-settlers.76 Darul Arqam groceries and food products eventually became immensely popular with the Malay public, who were


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now assured of a source of halal (permitted) and clean foods.77 The economic projects were handled by full-time Darul Arqam members, who were remunerated according to their basic needs, irrespective of status and qualifications. According to this ma 'ash distribution system, a worker receives payment as much as he needs to cover his and his family's expenses; as his family expands, and his dependants increase, he is paid more, irrespective of whether he is manager, supervisor or normal worker. Payment may take the form of basic necessities in the form of goods and services, plus a small allowance.78 The responsibility for the centralised provision of basic foodstuffs was undertaken by the Welfare Department of the particular villages.79 Relatively low allowances allowed significant employment creation.80 Up till 1988, a total of 183 economic projects had been identified, and of these, nearly one-half were located in the villages.81 If we include projects in surrounding areas, nearly 70 percent of the economic projects are located in rural areas.82 In general, settler selection in Darul Arqam's villages was based upon Islamic credentials and commitment to the movement. Darul Arqam membership itself was not based upon any formal system of form-filling and annual membership fee; rather, those willing and able to uphold the rules of Islam and to participate fully in Darul Arqam's activities were accepted as members.83 In the early 1990s, Darul Arqam membership was estimated at 5000 to 6000 worldwide;84 not all of which got to live in the settlements. Those selected, because for instance they were directly involved with the projects undertaken in the villages, had the arduous task of steadfastly adhering to the Islamic shari'a and to the rules and disciplines of Darul Arqam. Those who failed to observe these faced suspension or withdrawal of membership, downgrading to the status of sympathisers and may have had their permission to reside in the settlements revoked.85 Once accepted as a settler, one was entitled to enjoy the basic amenities and infrastructural facilities provided in the settlements. These included free housing, toilet facilities, libraries, retail outlets, canteens, public baths and even schools and health care facilities.86 Of these facilities, electricity, piped water and tarred roads were partly or wholly installed as part of the Malaysian government's national rural development policies. Apart from these benefits, some of which were indirect as they were built for the surrounding society as well, the other facilities were constructed collectively, relying on the available capital resources and technological capabilities. In terms of area developed, Darul Arqam's resettlement programme was relatively small. All 28 settlement schemes investigated by Muhammad Syukri Salleh in 1988 covered a total of only 196.1 acres of land, out of which developed land comprised 170.1 acres. Of the 28 villages, 18 were less than five acres, while only one had an area larger than 20 acres. Resettlement covered a total of 3,644 people, which included members, sympathisers and Darul Arqam students.87 As of 1988, 1079 out of the 3169 Darul Arqam members in Peninsular Malaysia (34 percent) secured accommodation within the villages. Of these, 86.5 percent were full-time members while 13.5 percent were parttime members.88 A Shukbah Ta'mir (Development Department) was created in 1981 to oversee the development of Darul Arqam villages.89 The FELDA and Darul Arqam: A Comparative Evaluation Having reviewed the operations and achievements of both the FELDA and Darul Arqam resettlement programmes, we now face the challenging task of comparing and contrast-

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ing them. A quantitative comparison would not be appropriate in this case as schemes under both programmes began, operated and survived with a great discrepancy in resources. It is obvious that, given the financial, infrastructural, technical and other assistance supplied by formal authorities, state-sponsored land settlement schemes would appear the more successful in terms of income, area developed or facilities existing in the schemes. Our accounts of both the FELDA and Darul Arqam schemes bear testimony to this. Furthermore, both resettlement programmes were initiated with different objectives in mind. While FELDA schemes avowedly aim at socio-economic improvement of the rural population, Darul Arqam schemes represented an attempt to build an exemplary Islamic community which practised Islam as a comprehensive way of life. It had been the avowed intention of the founder-leader of Darul Arqam, Ustaz Ashaari Muhammad, that his community be the model Islamic state he and his followers wish to see implemented in Malaysia.90 Ustaz Ashaari saw parallels between the migration of his followers from the unislamic norms prevalent in the Malaysian state, with the migration of the Prophet Muhammad from Makkah to Madina to escape from the degradation of an persecution by the Makkan society.91 Darul Arqam's villagisation programme may only have registered modest achievement in material terms, but it certainly has demonstrated to the public the viability of operating settlements on the basis of non-materialistic values. The Darul Arqam model of rural development is founded upon an interdependent and harmonious co-existence between healthy spiritual and material development. It believes that material civilisation will emerge on top of the spiritual or human development achieved. The very success of Darul Arqam in material terms, albeit modest, by itself rejects the view that the Islamic faith serves as a source of anti-development and so is a religiousinstitutional blockade for the advancement of Malays. For Darul Arqam members, emphasis on communal life has compensated for any apparent material moderateness. They have been trained to sacrifice their human and physical resources for the well-being of the movement, which in turn took care of them and their families' welfare. Individual enrichment was forsaken for communal prosperity; poverty being defined in terms of a lack of basic needs rather than wants.92 In FELDA schemes, settlers are not inculcated with a strong sense of camaraderie and commitment to their settlements. Selected on criteria that they can perform materially, not spiritually as required in the Darul Arqam selection system, settlers enter a scheme with the prime motivation of socio-economic advancement. If the future seems less promising than what is hoped for, settlers might opt to leave. Settlements will only be attractive so long as they pay dividends. Symptoms of settler dissatisfaction and the problem of second-generation migration show the extent to which FELDA schemes have had to endeavour to retain their economic attraction. The success of the Darul Arqam land settlement programme is evidence of the viability of a self-reliant, self-sustaining and independent rural development strategy. Darul Arqam has dispensed with any form of economic and political dependency which is characteristic of Malaysia's 'top-down' approach to development. Darul Arqam settlements had escaped the fate which has befallen the village of Sungai Raya, which, as chronicled by Rogers,93 despite impressive socio-economic advancement, also witnessed a weakening of the motivation and leadership necessary for the villagers to undertake community-based development efforts. This growth in welfare-state mentality is attributed by Rogers to "UMNO's skilful use of rural development amenities and projects as


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patronage."94 As has been shown earlier, political factors do carry significant weight in FELDA programmes; thus we cannot discount the possibility that the ruling UMNO party has deliberately attempted to create pockets of new UMNO voters by a careful manipulation of selection to FELDA schemes. In terms of promoting a self-reliant model of development, the difference between the FELDA and Darul Arqam schemes is stark. In FELDA schemes, virtually everything is government-supplied: land, infrastructure and amenities and even jungle-clearing is done for the villagers. But in Darul Arqam schemes, acquisition and preparation of settlements have to be undertaken by settlers themselves. Even if government help was involved, it was indirect in the sense that it was not intended to assist Darul Arqam as a movement. Although the FELDA's policy of ensuring 'guaranteed income' to settlers make them relatively well off vis-a-vis Darul Arqam settlers, who were guaranteed their basic needs; it is possible also for FELDA settlers to be trapped in indebtedness. But as a consequence of Darul Arqam's non-reliance upon external financial sources, indebtedness is not promoted as any official policy of the movement. Conclusion Both the FELDA and Darul Arqam land settlement programmes have contributed in their own ways towards advancing the overwhelmingly Malay rural population. The different approaches pursued by the programmes have generated different consequences. FELDA settlers may be more well-off, but in the process, they have acquired dependence. This may have been purposely intended by the government. On this account, the Darul Arqam programme, although less prosperous materially, appears more successful in generating self-reliant development from the grassroots. It gives the participants more sense of purpose, and can be treated as a form of indigenous self-assertion. Moreover, it was achieved in the face of hostile reception from the Malaysian state which treated it more as a rival rather than being complementary to its own New Economic Policy.

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Endnotes l.Vokes (1990:24). 2. Lipton(1977). 3. For instance, comprehensive assessments of the FELDA can be found in, among others, Bahrin and Perera (1977); Bahrin, Perera and Lim (1986) and Bahrin (1988). 4. This was originally a doctoral thesis submitted to the University of Oxford in 1991 under the title 'A Grassroots Approach to Rural Development: The Case of Darul Arqam in Malaysia'. Muhammad Syukri Salleh is presently Associate Professor and Head of the Islamic Development Management Project (IDMP), School of Social Sciences, Universiti Sains Malaysia. For a critical review of the book, see Judith Nagata (1993). 5. Mohd. Shukri Abdullah (1992: 1). 6. ibid.: 2-3. According to Table 1.1, the percentage of Malays living in rural areas has gradually fallen from 88.8 in 1957, to 85.2 in 1970 to 70.0 in 1985. However, among races, Malays still form the bulk of rural population; while they only accounted for 60.2 percent of the rural population in 1957, this figure had risen to 63.1 percent in 1970 and 67.1 percent in 1985. 7. World Bank (1975). 8. Cho (1990:86). 9.Mehmet(1988: 17). 10. Rural development strategies are enumerated in, among others, Chamhuri Siwar and Nik Hashim Mustapha (1991). Under the National Agricultural Policy (NAP), introduced in the early 1980s, four primary approaches were emphasised. They are: land development, in situ development, agricultural support services and social and institutional development. The NAP also de-emphasised subsidies. See Mohd. Shukri Abdullah (1992: 8). 11. Mehmet (1988: 18, Table 2.1), Mohd. Shukri Abdullah (1992: 233). 12. Among regional development agencies and their respective development areas are: KEJORA for Southeast Johore, DARA for Southeast Pahang, JENGKA for the Jengka Triangle in Pahang, KETENGAH for central Terengganu, KESEDAR for South Kelantan, and KEDA for Kedah. 13. Bahrin (1988: 93-95). 14. Mehmet (1988: 64). 16. ibid., Mohd. Shukri Abdullah (1992: 241). RM: the Malaysian ringgit is presently equivalent to about £0.16, but for the period under consideration, hovered around £0.25. 16. A comprehensive list of objectives can be found in Oberai (1988a: 8-22). They are: population redistribution, colonisation and development of new areas, provision of land for the landless, promotion of regional development, agricultural development, improved


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welfare of migrants and broader social objectives. Also needs mentioning is the hidden agenda of policy-makers, which includes the establishment and legitimisation of control over rural areas and masses. 17.Bahrin (1988:89). 18. ibid.: 103. 19. Scudder (1985: 125). 20. Chambers (1969). 21. Nelson (1973). 22. James (1979). 23. Vayda (1987: 113-124). 24. Hulme (1987: 413-436). 25.Bahrin (1988: 112). 26. Mohd. Shukri Abdullah (1992: 239-240). 27. Bahrin (1988: 111, 124: Table 4.9). 28. Mariam Omar Din (1981: 34-37). 29. Bahrin, Perera and Lim (1986: 220-222). 30. Blair and Noor (1980: 19). 31. Bahrin(1988: 111). 32.Mehmet(1988:67). 33. ibid.: 69. 34. ibid. 35. Mohd. Shukri Abdullah (1992: 100-102, Tables 5.3, 5.4). 36. For example, by Cho (1990: 106). 37. Mehmet (1988: 65) and Mohd. Shukri Abdullah (1992: 240-241). 38.Mehmet(1990: 163-164). 39. ibid. 40. de Koninck and McTaggart (1987: 354). 41. Bahrin (1988: 125, Table 4.11). 42. Cho (1990: 110).

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43. Mehmet (1988: 66). 44. Mehmet (1984: 357). 45. Cho (1990: 108). 46. Mohd. Shukri Abdullah (1992: 234-239). 47.Bahrin (1988: 113). 48. Mehmet (1988: 70). 49. ibid. 50. Mohd. Shukri Abdullah (1992: 242, Table 10.2). Here, it is revealed that a huge rise in the number of poor settlers outweighs the decrease of existing FELDA settlers classified as poor, so that the percentage of FELDA settler families below the poverty line actually rose from 2.6 percent in 1970 to 9.6 percent in 1980. 51. Darul Arqam (1992a, 1993: 17). A reliable biography of Ustaz Ashaari Muhammad has yet to be written. For accounts of his early life, see Darul Arqam (1992, 1992a), Mohd. Sayuti Omar (1993: chapter 1) and his poem 'Biografiku' (My Biography) in Ashaari Muhammad (1985: 1-2). 52. For the early history and stages of Darul Arqam, see Darul Arqam (1993a). 53. For a complete account of the achievements and other aspects of the 25-year struggle of Darul Arqam, see Darul Arqam (1993). 54. For instance, Yusof Harun (1990) devotes one full chapter of his book to what he calls 'The Arqam Empire'. Yusof Harun was a journalist whose tabloid Mingguan Waktu was banned by the Malaysian government in 1991 for allegedly belittling Dr Mahathir's Premiership. 55. Among the hostile responses received from the Malaysian authorities include the banning of Darul Arqam publications in 1988 and 1991. The Malaysian authorities, through their religious arm, the Pusat Islam (Islamic Centre), had accused Darul Arqam of practising and spreading deviant teachings since 1986. In 1991, the Prime Minister himself made serious allegations against Darul Arqam; see Ashaari Muhammad (1993). Following this, Darul Arqam activities and products were banned from government bodies. The climax of Darul Arqam's confrontation with the government in 1994 witnessed political considerations overwhelming doctrinal arguments in the government's campaign, for instance the charge that Darul Arqam was operating a 313-men 'suicide squad' based in Bangkok to launch a revolution in Malaysia. For a detailed account of the conflict, see Ahmad Fauzi Abdul Hamid (1998). 56. The translation of this verse reads, "Shame is pitched over them wherever they are found except under a Covenant (protection) from Allah and from men..." See Ashaari Muhammad (1989: 17-20). 57. Tariqah comes from the Arabic term meaning 'the way'. It generally involves the reading or chanting of certain dhikrullah (remembrance of God) in a systematised man-


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ner. Practitioners of tariqah are called sufis. The tariqah practised by Darul Arqam was the Aurad Muhammadiah, founded by a twentieth century Muslim saint of JavaneseArabic descent, Sayyidi Sheikh Muhammad Abdullah al-Suhaimi, whose base was in Singapore and Kelang, Malaysia. 58. Ustaz Ashaari Muhammad was also known as Sheikh al-Arqam or Amir Muhammadiah. In the twilight years of Darul Arqam (1993-94), Usaz Ashaari Muhammad was known to his followers as 'Abuya Sheikh Imam Ashaari Muhammad at-Tamimi', the term abuya meaning 'father' in Arabic, while the whole designation possessing millenarian implications (cf. Darul Arqam 1993: 11-15). 59. For a comprehensive account of the concept of development as embraced by Darul Arqam, see Ashaari Muhammad (1990b), Muhammad Syukri Salleh (1992, 1994) and Muhammad Syukri and M.A. Choudhury (1996). 60. Ashaari Muhammad (1984: 88). 61. Tajul Ariffin (1986: 48-49, 90). 62. Ashaari Mohammad (1982: 77). 63. Ashaari Mohammad (1981: 54-55), Ashaari Mohammad (1984: 92, 1989: 37-48). 64. Tajul Ariffin (1986: 9-11), Ashaari Muhammad (1992). 65. Ashaari Muhammad (1991: 227-228). 66. See for example, Parkinson (1967) and Means (1969: 282-283). 67. Muhammad Syukri Salleh (1992: 91). 68. Although Darul Arqam's model supportedly stressed Islam over Malayness, in practice, Malayness was not discarded per se. In fact, several observers have gone to the extent of labelling Darul Arqam as the most chauvinistic of Islamic movements in Malaysia; see Nagata (1984: 111-112,191) and von der Mehden (1986: 223-224). 69. Muhammad Syukri Salleh (1992: 83). 70. ibid.: 84. 71. In Darul Arqam's perspective, the comprehensiveness of Islam is to be implemented in stages: beginning with the individual, then proceeding to the level of the family, jamaah, society, nation until ultimately reaching the global level. See Ashaari Muhammad (1990a: 181-198). 72. The main departments were the Department of Da'wah (Propagation), Department of Tarbiyyah and Ta'lim (Guidance and Education), Department of Information, Department of Culture, Department of Health, Department of Science and Technology, Department of Welfare, Department of Agriculture, Treasury Department and the Economic Department. See Darul Arqam (1993: chapter 13) and Muhammad Syukri Salleh (1994: 35-49).

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73. Muhammad Syukri Salleh (1992: 142-147, Table 5.2). Muhammad Syukri Salleh's case study covers the 28 Darul Arqam villages in Peninsular Malaysia in 1988. By 1993, the number of villages had risen to 48 all over Malaysia; see Darul Arqam (1993: 70). 74. Muhammad Syukri Salleh (1992: 147-153, Table 5.4). 75. ibid.: 153-154. Not all of the early settlers worked full-time for Darul Arqam; part of their income was pooled into a central fund to develop the villages. Ustaz Ashaari himself only resigned as a government religious teacher in 1976. 76. ibid.: 177-178. 77. Before Darul Arqam ventured into food processing, the food industry was monopolised by non-Malays. 78. ibid.: 169, 209-222. On the ma'ash system, the external examiner to Muhammad Syukri Salleh's doctoral thesis was said to have commented that it was capable of destroying the capitalist economic system practised in Malaysia by virtue of its inherently low labour costs; see Darul Arqam (1993: 137). For a simulation model of the ma'ash distribution regime, see Muhammad Syukri Salleh and M.A. Choudhury (1996: 69-72). 79. Muhammad Syukri Salleh (1992: 166-167). 80. ibid.: 207-209. Darul Arqam claimed to have had a zero unemployment rate. 81. ibid.: 1760185, Table 5.13. 82. ibid.: 185. 83. ibid.: 108. See also Ashaari Muhammad (1990: 29-32) and Darul Arqam (1993: 4451). 81. Muhammad Syukri Salleh (1992: 111). His survey reveals that in 1988, there were 3,169 Darul Arqam members and 2,149 sympathisers in Peninsular Malaysia. According to Darul Arqam (1993: 13, 180), by 1993, membership had increased to 10,000 in Malaysia alone. 85. ibid.: 154-155. 86. ibid.: 170-175, pp.205-207, Table 5.11. 87. ibid.: 199-204. 88. ibid.: 157. 89. ibid.: 142-146. 90. ibid.: 142. See also Ashaari Muhammad (1988: 98-100). 91. Ustaz Ashaari's recorded public lecture, Islam Agama Dagang (Islam: the Estranged Religion) is testament to this. Here, Ustaz Ashaari explains a prophetic tradition that Islam will revert to being strange as in its early years, and that the strangers, for whom


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good tiding is promised, are those who break away from their people for the sake of Islam. See also Mohamad Abu Bakar (1981: 1049). 92. For Darul Arqam's conception of poverty, see Ashaari Muhammad (1993a) and Ahmad Fauzi Abdul Hamid (1998a: 15-17). 93. Rogers (1989: 764-785). 94. ibid.: 782.

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