Malaysia, sadly, seems to be a country in decay – a fact that’s becoming more apparent everyday.
Here are its four most telling signs:
A massive brain drain
Malaysia, a country which has long wanted to join the coveted developed nations club, is in no position to achieve it. How can it, considering Malaysia is losing its most talented, highest-skilled people by the boatload? This is a contentious topic that’s become front and centre of national conversation, thanks to a slew of recent stories about Malaysians who have made it big in other, more meritocratic countries.
This dangerous outflow of skilled labour from Malaysia has been increasing. From 184,014 people in 2000, it increased to 276,557 people in 2010 and 342,639 people in 2013. I shudder to think of what the number would be today.
A joint study by the United Nations Department of Economic and Social Affairs and the Organisation for Economic Co-operation and Development in 2013 found that Malaysia’s exodus of skilled labour was double the world average.
At this point, we should probably stop calling it “brain drain” and start calling it “brain bleed”.
TalentCorp, the GLC tasked with bringing back skilled Malaysians, has failed dismally. It brought back 272 people in 2017, 309 in 2018 and 276 in 2019. To call this a drop in the ocean would be generous.
The perks and higher salaries they might offer do little to mitigate Malaysia’s many systemic problems, the chief of which – according to research house Fitch Solutions Country Risk & Industry Research – is its race-based affirmative action policy.
It states: “…affirmative action policies favouring the ethnic Malay population (Bumiputera)… is likely to continue to cause a ‘brain drain’ where talented non-Malay members of the population seek opportunities overseas”.
Popular FMT columnist Mariam Mokhtar takes a similar stance, writing: “Many of the people who left did so reluctantly because they were denied opportunities, such as in education, and they didn’t want to suffer like their parents at the hands of the affirmative action policies. Less qualified people were able to get scholarships or jobs.”
She adds: “It is not just the non-Malays who stay away; for several years, many Malays have also decided that they have had enough of the stifling race-baiting and religious extremism in Malaysia.”
Another source of consternation for many is the relatively poor salaries offered by many companies here. We don’t even have to compare Malaysian salaries with American, European or Singaporean salaries as some might argue that they have a decided advantage due to their stronger currency, hence making it an unfair comparison.
Instead, let’s look at China, a country that’s been synonymous with cheap labour for decades. Today, the average pay for a software engineer in China is RM10,367 (RMB16,756) a month. In Malaysia, however, it’s a measly RM3,900. The situation is similar in other professions as well. How does Malaysia expect to stay competitive in the global market with such stark pay disparity? It’s no wonder highly-skilled people are leaving the country in droves.
Unfavourable business climate
When Grab – arguably Malaysia’s biggest ever startup – relocated its headquarters from Malaysia to Singapore, I was upset. Here was an ambitious, aggressive, regionally dominant, Uber-beating local startup that Malaysia had let slip out of its grasp.
Grab should have been touted as a national success and provided incentives to coax it to stay; it should have been made the basis for incubating other nascent, disruptive local startups. Instead, today, it is adding to the already flourishing Singaporean economy – providing it with high-paying jobs and plenty of tax revenue.
The United Nations Conference on Trade and Development added insult to injury, reporting that Singapore, Indonesia and Vietnam pulled in more than 80% of the record US$156 billion in foreign direct investment (FDI) that Asean countries attracted last year. Malaysia was left trailing with a dreadfully low 5% or RM31.7 billion.
Indonesia, especially, is seen as a lucrative, up and coming market, with its large population and exciting startup scene that’s seen the meteoric rise of companies such as Go-Jek, Tokopedia, Traveloka and Bukalapak. This has pulled in investment from not just American heavyweights Amazon and Google but also Chinese powerhouses Alibaba and Tencent.
Malaysia, which does not have the startup ecosystem of Singapore nor the burgeoning internet population of Indonesia, is the unloved middle child being left by the wayside.
Over-reliance on low-wage foreign labour
Malaysian employers have become so addicted to cheap, foreign labour that a stunning 81.5% of net jobs created in 2016 went to foreigners, most of whom were low-skilled workers, according to Bank Negara Malaysia. This is a precipitous rise from a minuscule 1.8% just two years prior in 2014.
Due to Malaysia’s over-reliance on and easy access to low-wage foreign labour, it isn’t incentivised to invest in high-tech, high-value manufacturing – something that is essential for propelling Malaysia to high-income nation status.
This is why for every 10,000 employees, Malaysia only has a paltry 34 industrial manufacturing robots, which is lower than the Asian average. China has double this number, while Singapore and South Korea have a high 488 and 631 robots per 10,000 employees respectively.
According to a Bank Negara report: “This results in foreign multinationals relocating lower value-added processes to Malaysia, while moving higher productivity and value-added processes to neighbouring economies such as Singapore and PR China. In the end, this self-reinforcing image further locks Malaysia into this low-cost bind that would require significant resources to undo.”
This influx of low-skilled foreign workers, coupled with the exodus of high-skilled locals is a poisonous cocktail that looks set to keep us in middle-income nation territory.
Education system in shambles
At the Programme for International Student Assessment (Pisa) 2018 – which assesses the proficiency of 15-year-olds in 79 high and middle income countries in reading, mathematics and science – Malaysia performed abysmally. We weren’t only below average, but were pathetically distant from chart toppers China and Singapore – with a more than 100-point gap separating us from them.
It’s no wonder many Malaysian parents have grown disillusioned with our crumbling national schools, compelling them to send their children to private and international schools. Tellingly, Malaysia now has the highest number of private schools per capita in all of Asia. We had 66 private schools in 2010, but by 2017, it had ballooned to a whopping 126.
Activist Marina Mahathir says that the “deteriorating” education standards and an “uncomfortable” emphasis on religion have driven many non-Malays to abandon national schools.
Even some Malays are presumably unhappy with national schools, as evidenced by the increase in Malay student enrollment in Chinese vernacular schools. Today, Malay students make up 15.33% of its total enrollment, up from 9.5% just a decade ago.
Malaysia’s inability to provide quality basic education pains me like no other issue. After all, how can we expect to become a developed nation if we can’t even properly educate our children?
The writer can be contacted at kathirgugan@gmail.com.
