Malaysian Economy: The Real Fix

By Khoo Kay Peng

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.

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