Economics and Education – why one needs and contributes to, the other. First published in theSun on the 21st October 2011.
The vicious cycle
For the last two weeks, all eyes have been focused on the 2012 budget (themed “National Transformation Policy: Welfare for the Rakyat, Well-Being of the Nation” that was unveiled by the Prime Minister in Parliament, politicians and economists analysing its contents and what it means to Malaysians. Interestingly, this was also the first time the Pakatan opposition coalition launched its Shadow Budget, with three key thrusts of “Opportunities and Dignity for all Malaysians, Sustainability and Empowering Malaysians”.
Other analysts have elaborated on the budget’s details, a whopping total of RM232.8 billion. But is this, along with other initiatives, enough to shake the economy out of its doldrums? A global survey of financial professionals by the ACCA showed a deterioration in Malaysian confidence, for example, although this is exacerbated by negative sentiments of the stagnating economy worldwide.
Economic woes
Some major concerns have been expressed. First, economic growth. The Malaysian Institute of Economic Research (MIER) downgraded the 2011 GDP growth rate to 4.6 percent year-on-year, despite originally rosy government estimates of 6 percent. Najib’s 2012 budget speech hopes for economic growth in 2012 of between 5 and 6 percent, although other analysts have expressed their views this is unrealistic.
Second, the national debt. Independent think-tank Research for Social Advancement (REFSA) reports that the federal government has more than doubled our national debt burden from RM217 billion in 2004 to RM437 billion today. Although the 2012 budget hopes to reduce the deficit to 4.7 percent of GDP next year, this will only be achieved based on high economic growth. A budget deficit would be burdensome ultimately on tax-payers.
The responses by government officials have not been very comforting either. The economic planning minister Tan Sri Nor Mohamed Yakcop said that Malaysia does not need a contingency plan or “Plan B” to bolster growth even if the global economy weakens, saying that we already have an in-built system that can adjust itself. One wishes he would elaborate upon this “in-built system” to enlighten the rest of us.
It was also amusing to have our Prime Minister criticise the Pakatan Rakyat shadow budget as “right-wing”. It was only last month that all guns were blazing against a member of the Pakatan coalition for being sympathetic to the socialist movement. Never mind that Barisan’s pro-corporation and right-leaning economics form the bulk of its ETP, the likes of mega projects such as the Mass Rapid Transit (MRT), development of Sungai Besi land by 1MDB and the 100-storey Warisan Merdeka tower.
Education, Education, Education
The second alarming report coming our way this week was a World Bank study that cited race-based admission quotas and political interference in university management as reasons for the falling standards of Universiti Malaya. This was starkly contrasted with the National University of Singapore that prioritised research, kept English as a medium of instruction and a merit-based admissions policy.
It was found that the quality of the faculty and, ultimately, talent, was crucial in distinguishing a “great university” from a “good university”. These reasons seem to encapsulate everything that has gone awry with Malaysia’s education system, although in an immediate response the Ministry of Higher Education said that ranking was not a priority anyway.
What we need to realise is that Malaysia is shooting itself in the foot by failing to improve its standards of education. By failing to invest in probably the most valuable resource and asset of a country – its people – this alone will account for the country’s lacklustre economic performance.
A reliable, intelligent, critically-thinking and creative workforce would be able to contribute positively in leaps and bounds to a thriving economy. Think industries such as technology, service, banking and finance, creative arts and theatre, research and development, and so on.
Our economy would be more fiscally healthy if its debts were better accounted for, and so unnecessary expenditure could be curtailed: excessive spending to bail out failed companies for failed projects; employing an unnecessarily large civil service; paying lucrative amounts to external consultants for jobs that government servants are responsible for; maintaining subsidies because the low-income strata of society cannot afford staples otherwise – all these point to a system that bleeds the economy, for the simple reason that it is equally a system with poor human resource and talent management.
This is the vicious cycle that will spell disaster for us. As much as we worry over the national debt and economic growth (or lack thereof), it is even more crucial that we put our brains together to worry about the national education system as a first and foremost priority.
The 2012 budget gives tremendous incentives to private and international schools (in the “hopes” there will be “reduction of school fees”) but gives handouts to national and national-type schools which do not essentially reform the quality of the system. If we lose out again on crafting quality and consistent education policy, syllabus and educators to produce Malaysians who decide to stay and contribute to nation-building processes, we lose, period. The education and economic systems are intrinsically linked and we will need the strengthening of the former in order to propel the latter forward.
