Thursday 28 Mar 2024
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MUCH has been made of the 11th Malaysia Plan (11MP). It is just another of those well-hyped declarations that, when the dust settles, have a slightly hollow ring to them.

This is not to undermine the aspirations associated with it. In fact, 11MP reads well — it has a bright and sprightly feel to it. Plus, it is well intentioned. But when one scratches the surface, no gold will be revealed.

A number of issues come to mind as one reads the report. First, it plays the numbers game, sometimes mistaking high scores for high quality and sometimes incorrectly persuading one in the wrong direction. For instance, one gets the impression that foreign direct investment (FDI) has been doing well and, indeed, if the recent past were considered, one would be so convinced.

But if one took a longer-term view, looking at FDI trends from the pre-crisis years and comparing Malaysia’s performance with that of other Southeast Asia nations, a different picture could emerge. Malaysia may have been the undisputed recipient of FDI in, say, 1993, but there have been stretches of time since then when Thailand overtook it in attracting FDI. Indonesia and Vietnam are formidable competitors for FDI too. Here, we are not talking about leaping ahead of Singapore in attracting FDI.

Little mention is made of Malaysia’s straggling capital formation figures. In the pre-crisis years, gross capital formation came fairly close to 44% of GDP at its best, averaging slightly more than 40% in many years, but it sank to less than 25% of GDP in 1999 and has been hovering in that band since. Malaysia may have been over-investing in those years but the present level of investment is not hugely encouraging either.

Here is another example: The report indicates an increase in the number of degrees awarded, the number of patents granted and the number of citations and publications from public universities. From a purely quantitative viewpoint, Malaysia is making great strides. But there are other figures that indicate that all is not well — the employability of public university graduates lags behind that of private university graduates and Malaysia’s performance in the Program for International Student Assessment (PISA) is dismal with even Vietnam outshining it.

This raises several interesting questions: Why are the graduates of public universities not as employable as those from private universities? Why is this happening despite the abundant funds the public institutions of higher learning receive?

What makes the policymakers behind 11MP think that with an emphasis on Higher Order Thinking Skills, the outcome of PISA and the Teacher Information Management System will be better next year? Are the flaws in the education system some minor engineering problems that can be fixed quickly?

Firstly, poor skills in mathematical and scientific reasoning will prevent Malaysia from reaching developed country status. An inadequate scientific and mathematical base is not conducive to innovation, invention and R&D.

Secondly, having the right strategies, programmes and projects does not mean the desired outcomes can be achieved. The path cannot be confused for the destination. Good transport, for example, is a key ingredient of further development. It is one of the characteristics of a developed nation. It is necessary to plan extensive connectivity but that is simply not sufficient. It is not satisfactory if the light rail transit system regularly has technical problems and commuters are delayed.

The same applies to education and human resource development. Increasing expenditure on R&D is not enough if there are no commercially valuable outcomes. It is not good enough if the number of graduates increases exponentially but the human capital that is produced does not fit the demands of multinational corporations that want to locate in Malaysia, or the skills that are produced are not relevant to Malaysia’s desired growth trajectory.

Thirdly, it is necessary to choose the right indicators that serve to show what needs to be achieved. Good indicators are useful insofar as they are good road maps but they must also be good measures of achievement. The limitations of indicators must be gracefully acknowledged. Take healthcare. It is useful to measure the efficiency of a healthcare system if the time spent waiting for treatment is used as an indicator. But that is not the whole story. Healthcare financing is crucial these days, with medical costs skyrocketing. One cannot talk about the accessibility of healthcare and remain silent about how people will pay the medical costs. 11MP is replete with such issues.

Fourthly, the right institutional structures must be put in place. At the risk of being simplistic, one cannot overemphasise the need for the right institutions, transparency, proper processes and the rule of law. The best-laid plans will fail if there is no regard for the right institutional structures.

As a final comment, it must be stated that there is not a lot in 11MP that is creative or original. Almost all the issues and strategies found in the document have been mentioned in one form or another in some earlier plan. The question of human capital development, the improvement of the education system and the movement towards a knowledge-based economy have all been dealt with before (in the Knowledge Master Plan) but they remain problematic.

There is no doubt that 11MP has its finger on the right problems. Malaysia’s future growth and development have to be based on greater productivity, efficiency, innovation and creativity without ignoring well-being, the environment and inclusivity. Good institutions have a crucial role to play and merit cannot be ignored.

But reaching developed nation status has to be more than a matter of indicators. Somehow or other, the average Malaysian’s quest for a better life has to be addressed in a tangible way. Hopefully, 11MP can do that.


Dr Shankaran Nambiar is the author of The Malaysian Economy: Rethinking Policies and Purposes. He is also a Senior Research Fellow at the Malaysian Institute of Economic Research. The views expressed in this article are his own.

This article first appeared in Forum, The Edge Malaysia Weekly, on June 1 - 7, 2015.

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