Thursday, February 02, 2012

Malaysian Economy: The Real Fix

Wonder why the attempt to implement a knowledge economy via the Cyberjaya initiative fizzles out barely half a decade when the multi-billion test bed was launched? Wonder where Malaysia ended up with all the Look East or Look Everywhere policies? We ended up not looking very far ahead.

The government has continue to act myopic when comes to actual and real economic reform. It should start by answering what are the key elements/ingredients to institute real economic reforms.

Malaysia must look into its education system if it wants to catch up with the leaders of the pack e.g. South Korea, Taiwan, Singapore and Hong Kong. Economic transformation in Malaysia has been hampered by an education system unable to train and produce skilled workers required by the industry. Today's speed of innovation has left behind the production capability of our tertiary education.

Policy makers have to answer to the people why these institutions are producing graduates who are unemployable and have to be immediately send for another round of retraining?

The foundation of a good education should start early. However, constant unprofessional and knee-jerk changes made to the teaching policy at primary and secondary levels have stalled progress, used up scarce resources and time which can be channeled meaningfully to improve and enhance the curriculum and caused much anxiety to parents.

Our education system has created a new social divide. The rich or higher middle class have opted to send their children to private schools and colleges. But the poor and lower income groups have to depend on a mediocre and highly politicized public education. A decade ago, when I was a head of a policy think tank, we had joked that education policy in Malaysia was all about language or medium of instruction. This is going to remain true for decades from now if some bright minds in the ruling regime do not intervene.

Skills development has been identified by up-and-coming economies such as Vietnam, Cambodia, Indonesia, Thailand and Myanmar as the most important cornerstone of their economic success. Alas, we do not feel the same in Malaysia. How many parents can really afford the expensive and often overly commercialized private education?

Unsurprisingly, Myanmar has signed a technical collaboration agreement with Singapore to assist the country's economic reforms and development.

The next most important issue is our labour policy. Malaysia does not have a policy which supports and encourages local knowledge workers to remain in the local economy. Entry pay level for undergraduates has remained stagnant over the last 15 years. Graduates with a degree or a diploma will immediate join a growing segment of urban poor after stepping into the working world. How many people can survive in Klang Valley barely earning RM2k a month? Many of our graduates also have to pay up their PTPTN loan upon graduation.

Escalating cost of living through higher service cost (telco & internet), poor transport system, food cost and accommodation cost are chipping off the real disposable income of our skilled workers. Hence, do not be surprised if more than 60 percent of our skilled workers are working abroad.

Malaysia's lack of foresight on the use of cheap migrant workers is only a temporary relief to the local employers and businesses. Service quality suffers when unskilled and uneducated workforce are being used to do front line work or services. How long more can we depend on cheap foreign workers? As their own economies start to pick up, the higher quality ones are going to stay back and not going abroad to work on more or less the same level of salary. Hence, the quality of cheap foreign labour we are getting is getting poorer. In the long run, it will hurt our cost conscious industries and businesses more than they ever expected.

The government needs to do a quick adjustment and bite the bullet if it is really serious about its ETP and economic reforms. Otherwise, we are going to continue bleeding talents and lose to out to emerging economies which are more serious and disciplined in their reforms.

Politicians, media and thinkers should spend quality time to debate on what's next for Malaysia. How can we reduce the gap between us and leaders of the pack and not bending backward and see who is catching up.


No Eye See said...

One of the factors is because the ruling regime has politicised the education system that produced graduates which are not up to the standards required by the private sector.The only avenue for these graduates is the civil service sector.That is why,for political reasons,the govt try their best to absorb these graduates and make a bloated civil service today.

Anonymous said...

You said that politicians, media and thinkers should spend quality time to debate what's next for Malaysia but I beg to differ.

What you mentioned above is nothing new. We have been talking/debating about these issues since god know when. More debate is not what we need. What we need is a pragmatic and visionary leader like Mr. Lee Kuan Yew to put an end to all the nonsense that has been going on.

bruno said...

Look East,look West,look North and South.Look everywhere,but cannot find a solution to the problems.Why,because the problems lay at home.

Just look at our education systems and standards.It is a joke compared to our neighbours.Our neighbours standards are going up and ours going down.This got quota,that got quota,everything got quotas and now all upside down.

When things go wrong just import cheap labour and the poor economy will be fixed.These damn stupid politicians don't get it.The problem is not cheap labour.The problem is corruption.Every ministry or department has to makan suap.Add everything up and the prices of our goods are no longer competitive.We have priced ourselves out of the markets.

semuanya OK kot said...

When the current Superman met the head of Infosys in Bangaluru, he invited him to invest in Malaysia. Narayanamoorthy revealed that he had tried years earlier, and cancelled his plans because the light-brown little emperors were not issuing work permits to his darker-brown ones.

The majority of Malaysians are psychotically racist and provincial. Racial and religious bigotry will only lead to deepening nepotism, stupidity, incompetence and social decay.

Anonymous said...

Local colleges and universities don't need to produce employable local graduates for private sector, they can always absolve by government agency en masse. The quality is not important, but quantity is as far as BN politic is concerned. It is not even a secret our education system is mess up badly since the old fox is in power three decade ago. The curriculum and medium of instruction is changing on constant basis for his own benefit.