This article first appeared in The Edge Financial Daily on September 26, 2017

SUBANG JAYA: The current amount of endowment funds to public universities in Malaysia is far from enough to help sustain future operations, let alone encourage innovation in academia, said former vice-chancellor of University of Malaya (UM) Professor Tan Sri Dr Ghauth Jasmon.

Out of the endowments to public universities in Malaysia, UM had the largest portion amounting to RM1.6 billion as at August 2017, followed by Universiti Kebangsaan Malaysia with RM71 million, according to the higher education ministry.

In the last parliament session in August, Higher Education Minister Datuk Seri Idris Jusoh said of the 20 public universities in the country, a total of RM1.85 billion in endowment had been collected so far.

“This is not enough, especially given government cuts to public university budget allocation. We need more endowment to help the university thrive in terms of research and innovation. How can we do that without enough funds?” Jasmon told a forum on “Malaysian universities must change” at Sunway University here yesterday.

The government has cut the public university operating budget allocation by 20% this year, in line with its aim of reducing dependency of public institutions on the government.

Jasmon, who is a board member of Sunway University, also called for the need of better regulation on policies to encourage public universities to get involved in entrepreneurship.

He explained private universities, such as Multimedia University (MMU), have a regulated policy encouraging entrepreneurial businesses among staff. About 5% of MMU staff have incorporated their own companies. Sunway University also has a small percentage, he said.

“If you want to create a university that will survive in 2050, you need a huge endowment. Take Stanford University for example. It has one of the largest endowments in the world of US$23 billion (RM96.37 billion). [Thus,] it is able to thrive innovatively, producing graduates that will then go out and contribute to the economy.

“Why? Because it has the money. We need this too,” he said, adding that local institutions should also focus on alternate types of investments such as public equity to increase income.

“We need to give public universities the freedom to make their own money; we need to keep encouraging them openly. The problem is no one is talking about it; they just do it quietly. Everyone is scared because they think it would distract the teaching. It won’t.

“We need to open up the universities because we need more money; it’s as simple as that. There is a lot of money out there that can easily be acquired; universities just need to have the entrepreneurial mindset to take advantage of it” said Jasmon.