{"id":3707,"date":"2010-09-26T17:20:58","date_gmt":"2010-09-26T09:20:58","guid":{"rendered":"http:\/\/buletinonline.net\/v7\/index.php\/2010\/09\/human-resources-required\/"},"modified":"2010-09-26T17:20:58","modified_gmt":"2010-09-26T09:20:58","slug":"human-resources-required","status":"publish","type":"post","link":"https:\/\/buletinonlines.net\/v7\/index.php\/human-resources-required\/","title":{"rendered":"Human Resources Required!"},"content":{"rendered":"

\"http:\/\/buletinonline.net\/images\/stories\/berita34\/etp.gif\"– For Economic Transformation Programme<\/strong>
The \u2018Open Day\u2019 for the Economic Transformation Programme or ETP by DS Idris Jala from the Pemudah comes after a decade of admitted economic stagnation. The ambitious ETP is designed to address the ceaseless economic and investment setbacks that have had a demoralizing effect on economic actors in Malaysia.<\/p>\n

ETP is Part 2 the New Economic Model (NEM), following the announcement of Part 1 (Strategic Reform Initiatives or SRIs) at the end of March during Invest Malaysia 2010.<\/p>\n

ETP has set the key economic targets for the next 10 years. In essence, the country\u2019s real GDP need to grow by 6% p.a. during 2011-2020 to raise the Gross National Income (GNI) to RM1.7trillion (USD523b) by 2020 (2009: RM661b or USD188b) that will lift per capita income to USD15,000 (RM48,000) by 2020 (2009: USD6,700 or RM23,770).<\/p>\n

131 Entry Point Projects (EPP) have been identified to contribute to 41% of the rise in GNI next 10 years, with 60 Business Opportunities (BOs) to be realized over the next 10 years which would contribute another one-third of the projected GNI increase.<\/p>\n

The proposed projects for implementation (\u2018entry point projects\u2019 or EPP) in each sector were revealed with some details.<\/p>\n

All these are under the 12 National Key Economic Areas (NKEAs) announced much earlier that will be the economy\u2019s drivers for growth, investment and job creation. These NKEAs are Electrical & Electronics; Oil, Gas & Energy; Palm Oil; Financial<\/p>\n

Services; Tourism; Wholesale & Retail; Education; Healthcare; Agriculture; Business Services; Communications Content & Infrastructure; and Greater Kuala Lumpur.<\/p>\n

This Member of Parliament from Kuala Selangor is from the Pakatan Rakyat and an MP from the Islamist Party of Malaysia, PAS. I have no qualm to say that the plan is massive, comprehensive and perhaps admittedly impressive.<\/p>\n

To the layperson and the uninitiated, it is about the be-all and end-all of a development \u2018blueprint\u2019 to propel us to become the newly industrialized country (NIC). This MP hates to take away the much-needed-feel-good factor we all yearned for. But as usual, he will be frank and objective about his critique.<\/p>\n

For the umpteenth time, he will say that he wants all government programmes to succeed. It\u2019s wrong for anyone especially the opposition to think otherwise. It hurts the rakyat further nor does it benefit the opposition to take over a failing or a failed state.<\/p>\n

But being an opposition MP, he has to do his constitutional duty \u2013 to \u2018check and balance\u2019 the government of the day. In the final analysis, it is back to the basic question: Will we be better off or worse off with this ETP?<\/p>\n

<\/span><\/p>\n

In all objectivity and earnestness, let\u2019s us get down to scrutinising the numbers game.<\/p>\n

Growth numbers?<\/strong><\/p>\n

6% p.a. real GDP growth target for 2011-2020 is to raise the Gross National Income (GNI) to RM1.7trillion (USD523b) by 2020 from RM661b (USD188b) in 2009, and lift per capita income to USD15,000 (RM48,000) by 2020 from USD6,700 (RM23,770) in 2009.<\/p>\n

(For the uninitiated, Pemandu\u2019s use of GNI is perhaps deliberate. GNI is GDP plus incomes of its nationals outside (interest and dividends) less (minus) similar payments to other countries. A Singapore-owned company operating in Malaysia will count towards Singapore GNI and Malaysia GDP, but will not count towards Malaysia GNI or Singapore GDP).<\/p>\n

I\u2019m not going to dispute the projected growth of 6% per se if the government is insistent that it\u2019s doable. A reminder, however, that we failed to achieve our targeted growth in both the 8th<\/sup> and 9th<\/sup> Malaysia Plan (MP) is in order. Despite the good time, 8th<\/sup> MP only saw a growth of 4.7% per annum, while the 9th<\/sup> MP averaged out at 4.2%. Conceding that the <\/span>impact<\/span> of the global financial crisis of 2008 adversely affected these numbers. There is still no grounds for believing that 6% will be achieved going forward. But are we about to see a repeat? Yes, very much so. Why?<\/p>\n

We are rudely reminded of the vulgarities of the global economy with the possibility of the \u2018double-dip\u2019 lurking dangerously ahead. The scenario where governments and consumers of the advanced economies \u2013 US, UK and Europe \u2013 will be spending less and are more concerned with de-leveraging their debts. Meanwhile those with a high national saving and have been saving too much \u2013 China, Asia, Germany and Japan \u2013 are not willing to spend and produce more for obvious reason to compensate for the fall in demand by the de-leveraging countries earlier.<\/p>\n

Hence you have a \u2018double-whammy\u2019 situation of diminishing global aggregate demand in the recovery exacerbating the softer and lower economic growth. Our optimism is thus as baffling as it is misplaced.<\/p>\n

So how are we driving our growth?<\/strong><\/p>\n

ETP puts it that RM1.4trillion in funding and investment (I-factor) are required to achieve the above targets. Of this total, 92% will be private investment with a 73:27 split between domestic direct investment (DDI) and foreign direct investment (FDI), and a 65:35 split between non-GLCs and GLCs.<\/p>\n

The 8% balance is public sector investment (G factor), which should be pure Government investment as the GLCs are classified under private sector. Saddled by public debt, it is best that the government restrain their gearing lest it will hurt our sovereign rating. They must also refrain from cannibalizing our national saving and shortchanged our future generation resources, namely oil and gas.<\/p>\n

A closer look at our historical records grimly reminded us that these macroeconomic numbers are unrealistic.<\/p>\n

In terms of total value in nominal terms (not taking account of inflation), private investment during the 9th<\/sup> MP was RM356.1 billion of which 72% was private domestic investment and 28% was foreign direct investment (FDI).<\/p>\n

While the split between the domestic and foreign remains at ~70\/30, the target of RM1.4 trillion in private investment and funding seems to be a very tall order for the period of 2011-2020 as opposed to RM356.1 billion that was achieved for the 9th<\/sup> MP. It is almost 4 fold more than the 9th<\/sup> MP while the GDP are expected to grow from RM661 in 2009 to RM1.7 trillion for 2020 or at best 2.5 fold. How that numbers jive with Pemudah in their projection is again perplexing.<\/p>\n

These numbers will be even more intriguing if we were to take into account our recent performance in enticing private investment both locally, much worse from abroad or the FDI. Judging by the World Investment Report, Unctad 2010, it is dismal to say of the least. I shall not repeat the numbers here at they are now ubiquitous and very painful.<\/p>\n

A perusal of the data below is clearly evident that contribution from private investment (I-factor) as % of GDP has markedly dwindled from 33.9% in 1995 to hardly above 8% at the end of the 9th<\/sup> MP period.<\/p>\n

<\/a><\/p>\n

Despite all these historical records, Pemudah with its head, Idris Jala boldly announced that they are going to generate 4.5 times more of private investment to propel the 6% growth. That\u2019s indeed arguably laughable. Worse still, they have not put in place in ETP, of concrete measures to overcome the investors \u2018brain barriers\u2019 that go beyond economics consideration i.e. judiciary etc.<\/p>\n

What about the EPPs and the BOs?<\/strong><\/p>\n

ETP were said to be a significant departure from the existing medium-term\/ long-term development plans like the Malaysia Plans, Industrial Master Plans or the Outline Perspective Plans. It was alleged that in ETP, we get to know the \u201cspecifics\u201d on how to achieve the macroeconomic targets outlined earlier i.e. details on investments, projects, funding, actions, timeline, targets, deliverables etc, rather than a \u201cgeneric\u201d document or blueprint that talks about vision and mission, strategic intent, basic thrusts and general plans.<\/p>\n

Just as we are about to take consolation of the many projects and businesses that have been lined up in the pipeline, Idris Jala is honestly admitting that only a few of the 131 EPPs and 90 BOs are in place after all. Projects include big tickets item like the MRT, semi-conductor upstreaming, tourism, wholesale and retail, greater KL (high speed rail) etc.<\/p>\n

Despite knowing that the ETP requires \u2018quick-wins\u2019 to showcase that there are projects that are \u201cready-to-go\u201d, a perusal of it in detail is regrettably discouraging. Much to the disgust of this Kuala Selangor MP and many others, what were hyped as a surge of projects in the pipeline are only referring to 7 that are close to implementation with serious investors (RM119b) with 12 others rated as almost or partial commitment by investors (RM33b). 27 EPPs involving the Green Technology, Greater KL (River of Life) with a total investment of RM171 billion have yet to be discussed or may not see the light of the day. How these projects are to be managed, ie direct nego or open bidding, is not transparent for now.<\/p>\n

The MRT is a case in point and SPAD is said to be relegated and superseded by MMC-Gamuda in term of mastery of the entire project dubbed as the biggest infrastructural project. Are we back to square one in the heyday of the first wave privatisation wave of Tun Mahathir? God forbid!<\/p>\n

Let us all pray that these EPPs and BOs will not suffer the same fate of the various Corridors of Tun Abdullah. Of the targeted investment of RM245 billion, only a meager RM40 billion or 28% were actually invested in the 9th<\/sup> MP. Will these EPPs and BOs suffer the same fate? Only time will tell.<\/p>\n

ETP workforce requirement<\/strong><\/p>\n

ETP will create 3.3 million new \u2018middle class\u2019 jobs, of which half will require diploma or vocational qualifications. The EPPs are said to be spread across the country and not concentrated in any particular states or regions. 25 EPPs will directly benefit the rural communities which housed 8.7m people. The above will create between 320,000 to 400,000 jobs in the rural sector.<\/p>\n

However, we are reminded that only 30% of Malaysians obtained higher education qualifications (2005), compared to Singapore\u2019s 46%, Thailand\u2019s 41% and South Korea\u2019s 89%. 80% of our workforce have only received secondary level (SPM) education (2007) and only 25% of our workers are high skilled (2007), compared to Singapore where 49% are highly-skilled, Taiwan 33% and South Korea\u2019s 35%.<\/p>\n

Hence the greatest stumbling block and \u2018bottle-neck\u2019 in achieving the various objectives of the ETP and EPPs is again related to human resources. The low quality of our workforce is compounded by inefficient education services delivery.<\/p>\n

In 2007, the percentage of Malaysia education expenditure as % of GDP was a high 4.5%, compared to the Philippines\u2019 2.6%, Singapore\u2019s 2.8%, Hong Kong\u2019s 3.3% and South Korea\u2019s 4.2%. Secondly, the rising tertiary education costs, lower education quality. Malaysia has 20 public universities and 627 institutes of higher learning.<\/p>\n

Under the 10MP, selected public universities will be corporatized and combined with private institutions of higher learning, the fee-paying structure will see fees increase from an average of RM10,000 to RM50,000 per student and it is projected that 90% of tertiary education students will be enrolled not in public but private institutions.<\/p>\n

This makes accessibility and affordability for quality education (only 4% of private institutions compared to 33% of public institution\u2019s academic staff has a PhD) a challenge in producing an educated workforce.<\/p>\n

In 2006 World Bank data indicates that Malaysia\u2019s R&D expenditure was 0.6 % of GDP, compared to South Korea\u2019s 3.2%, Singapore\u2019s 2.3%, Australia\u2019s 2.2% and China\u2019s 1.4%. Malaysia has a lot more to do to prioritise its spending.<\/p>\n

Based on the number of R&D researchers per million population, Malaysia had 372 researchers per million population. While South Korea had 4,187 per million, Singapore had 5,736, Australia 4,231 and China 927 per million population. Malaysia has to prioritise its human capital development.<\/p>\n

Where is the NEM of the ETP?<\/strong><\/p>\n

Be that as it may, the most critical question is perhaps to ask Pemudah as to where, in the ETP is the NEM.<\/p>\n

It must be reminded that the ETP as a significant part of the NEM is meant to bring about a transformation of our economy that was trapped in stagnation \u2013 a middle-income trap with a low-value added economic activities and low productivity.<\/p>\n

While I\u2019m all for infrastructural projects, as it spurs the economy, we must not be taken for a ride again that it\u2019s back to bricks and mortar. Perusing the various NKEAs, we all concur on one thing ie that to implement the EPPs and BOs, the greatest stumbling block or the \u2018bottle-neck\u2019 is again on the gap of \u2018skilled workers\u2019.<\/p>\n

More importantly, the proposed \u201cNew Economic Model\u201d (NEM) by the Prime Minister Datuk Seri Najib Abdul Razak has correctly identified some of the fundamental problems with our economy which has led to our fall from grace, as well as proposing some key measures to restructure our economy.<\/p>\n

Very unfortunately he has repeatedly backtracked from the NEM and shown little political appetite to implement the critical policies which will lead to transparency, accountability, integrity and greater competitiveness in our economy. He must quickly put in place \u2018inclusivity\u2019 and a genuine \u2019level-playing field\u2019 for all i.e. GLCs versus Non-GLCs and Cronies versus non-cronies.<\/p>\n

It\u2019s high time that he must address \u2018extremist\u2019, racist elements and religious bigotry that scare away investors. He must be willing to dismantle institutionalized cronyism and the endemic abuse of power and corruption that have resulted in serious leakages in the delivery system.<\/p>\n

The ETP requires a doer not a talker.<\/p>\n

Dr Dzulkefly Ahmad,
PAS Central Committee<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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