I find myself at a crossroads of belief. Readers with impressive memories may recall two earlier pieces written for this very same publication — in 2015, a piece entitled “I believe in Malaysia”, and in 2017, a reaffirmation of my hope, “I still believe in Malaysia”.
In my 2015 article, I suggested that our leaders would want to leave a legacy of success. I stated my belief in Malaysia because, throughout our history, when the final reckoning arrived, whatever failings may have come before, our leaders always did the right thing for the country.
In 2017, my focus was on our fellow Malaysians — we the people who had protested peacefully to ensure wrongs were righted. These are the hard-working and self-reliant people whom Malaysia is predisposed to produce. That is why my belief remained unwavering. We are diverse, but together.
These forces combined in 2018 to deliver a cross-cultural coalition of leaders who stood up to be counted. Yet, their task was still substantial and required a response to three interrelated forces sweeping not just through Malaysia but around the globe:
• Widening inequalities by race, religion and wealth, which threaten the heart of social cohesion;
• Increasingly disrupted industries as digital and analytical technologies dictate business success while transforming our economies; and
• Education and talent gaps as public education systems struggle to keep pace with evolving workforce needs.
Malaysia’s new government had just two years to prove itself before its untimely end. That offered a limited window to progress in tackling these challenges, let alone sustainably conquering these forces. That poses a serious question for the administration that follows.
To add to this challenge, Malaysia now faces a fourth threat, and one largely of its own making. We are at risk of losing our edge.
This is a nation blessed with a bounty of natural resources — fertile land, rich fields of oil and gas and resilient human talent. Agriculture is increasingly at risk from climate change. Oil and gas reserves are depleting, with some estimates suggesting 50 years remaining and others arguing much less.
We were, at one point, the most sought-after human capital in Southeast Asia. We spoke English with confident proficiency. We mingled with other races and understood Malay, Chinese and Indian customs, offering intimate cultural and consumer knowledge. Sadly, we let some of our best and brightest slip away. Perhaps the most prominent example is what could have been Malaysia’s only unicorn, Grab.
Boston Consulting Group’s own research reveals more than 70% of Malaysia’s digital talent would relocate internationally for work. That compares with just 38% for China. This workforce is the foundation of a digitally empowered future and we must ask what that future will look like if we are unable to attract and retain that talent.
We were also once a financially resilient nation. Our governments had surpluses and while we were not at Organisation for Economic Co-operation and Development (OECD) levels, Malaysia enjoyed easily the second-highest gross domestic product per capita in the region. Now, our government faces mounting debt. GDP per capita more than doubled from 2001 to 2011 but has been broadly stagnant since. Regional neighbour Vietnam has seen GDP per capita increase by almost 70% in the period from 2011. Both the Philippines and Vietnam have demonstrated sustained GDP growth of 6% to 7% since 2015, at a time Malaysia has battled to stay above 5%.
In short, we have lost our edge in key factors of economic production: land, labour and capital. There is, however, a silver lining. The new economic order relies less on these traditional factors and more on market access, technology and a future-ready workforce. It is by no means too late for Malaysia but we cannot be complacent. Though we have fallen behind, we are still blessed with the resources and human talent that can be harnessed and developed to achieve success in a future economy defined by these evolving competencies.
We are not a big country. Even in Southeast Asia, Indonesia, Vietnam, the Philippines and Thailand are significantly larger, with the smallest of the four — Thailand — boasting more than double Malaysia’s population. That means we must work to complement our economy through partnership.
We need expansive trade agreements for our goods and services, including digital, in order to access new markets. Malaysia ranks 12th on the World Bank’s Ease of Doing Business Index, second only to Singapore in Southeast Asia. We can continue to punch above our weight, with liberal regulations and an encouraging business-friendly environment offering a path to further economic opportunity.
We need businesses that can compete effectively with others in the region, and beyond. Malaysia still boasts a number of natural advantages that it must leverage to grow value-added downstream sectors rather than simply export materials only to reimport the finished product at a higher cost.
With the growing urgency of efforts to tackle climate change, and accelerating energy transition, Malaysia cannot afford to sit back and wait as its natural resources deplete. Equally, companies that rise to fill this economic gap must be based on globally competitive market practice and not simply designed to survive on the basis of lucrative government contracts. Overly protective national safety nets do not promote the growth of internationally successful businesses.
We need to school our population for the future and foster greater resilience and entrepreneurism to meet the needs of an increasingly dynamic global economy. Malaysia’s scores in the internationally recognised OECD PISA education rankings offer room for hope, with significant improvements across all the three categories of science, maths and reading in 2018. Consider, however, that Malaysia generated more than 50,000 first degree holder graduates in 2018 and, one year after graduation, nearly 60% of them still remained unemployed. This is surely a sign of a disconnect between the skills we promote and teach, and the skills the workforce needs.
It is not too late for Malaysia to acquire greater market access, produce more competitive businesses and develop enhanced human capital. The latter is the greatest gift we can give ourselves. Human talent is the true, perhaps the only, source of sustainable advantage. If we are to embrace these opportunities, we must not shy away from recognising the challenges that we face.
While the goal of politicians is to win elections, pandering to partisan politics risks compounding cultural divides that are ultimately to the detriment of the nation. We must compete not on who best appeals to focused demographic groups but on who sets out the most aspirational vision to improve Malaysia based on a shared nation for all. Tribalism does not unite us to succeed but only creates barriers to mutual success.
We need strong leadership that is prepared to tackle the hard truths of talent development — it is about removing the crutch and providing a springboard instead. Catering to focused interests to gain votes inevitably lends itself to the crutch. Committing to shared opportunity for all means a springboard for the nation.
The outside forces are evident. That means we must be unified internally in our commitment to the nation. This is the path to encouraging and attracting talent, embracing digital opportunity and ensuring equality for all.
We must get Bangsa Malaysia back on track and we must commit ourselves to that journey now. Otherwise, my statement of belief is at risk of turning into a question — can I still believe in Malaysia?
Vincent Chin is global leader of BCG’s public sector practice