Dwindling competitive advantage- The Malaysian Insider
July 18, 2011 — There is a country built on oil money with glitzy infrastructure where citizens are pampered and armies of menials imported from overseas do all the jobs that locals think are beneath their dignity.
But hidden underneath are simmering tensions between the haves and have not’s, a broken education system, a bloated civil service that essentially keeps unemployment in check, endemic corruption and mediocre governance.
As government expenditure rises and oil revenue cannot keep pace with the demands of the population and prices rise, the citizenry expresses their disenchantment more and more vocally. Hitherto dormant or suppressed opposition finds its voice and the establishment starts to crack.
Certain nations around the world bloated with generations of easy oil money are facing this problem to varying degrees, from outright revolt or civil war to fleeing FDI, rising unemployment and inflation, culminating in dropping living standards and an increasingly fractious and demanding populace.
Some countries like the UAE came to this realisation early and embarked on a path of aggressive globalisation centred on Dubai, to attract and retain the best the world has to offer, mimicking and surpassing Singapore as a tourism and knowledge economy hub. On the other hand, Saudi Arabia has not yet even started considering its future post-oil.
In Malaysia there is a vision of becoming a high-income developed economy by 2020. Acknowledging that the world is moving towards a post-manufacturing knowledge-based paradigm is critical for export-dependent countries with limited domestic consumption such as Malaysia. Its earlier competitive advantage of oil money, a low-cost skilled workforce, multicultural population that was therefore multilingual and adaptable to the demands of global business, a stable and popular government and excellent infrastructure as a facilitator of entrepot trade are slowly disappearing.
Today national competitive advantage based on natural resources is being replaced by innovation and knowledge. Progress in this area from a governmental standpoint essentially boils down to accelerated development of human capital that can adapt and lead the knowledge economy.
For this quality education and the provision of opportunities based on talent and merit are key. In addition prudent fiscal management, transparent and investor friendly governance, free media and minimising corruption are all important.
But in reality on all of these parameters, Malaysia is seriously lagging. No Malaysian university is in the top 100 universities in the world. The flip flops over PPSMI will have serious consequences down the road. Freedom House ranks Malaysia at 102 in terms of freedom of the press and Transparency International ranks Malaysia at 56 in terms of corruption perception. The budget deficit at 7 per cent in 2009 was the highest in 20 years. A March 2011 report by Bank of America Merrill Lynch ranked Malaysia the second least popular market after Colombia among global emerging market fund managers, evidenced by plummeting FDI.
Add to this the narrowing of space for debate and dissent as evidenced by Bersih 2.0 and the remarkably one-sided discourse in the mainstream media, strident racial rhetoric and brain drain, and Vision 2020 seems further away than ever.
But there is a Malaysian first that is a world-famous innovation now: the Obedient Wives Club.
But hidden underneath are simmering tensions between the haves and have not’s, a broken education system, a bloated civil service that essentially keeps unemployment in check, endemic corruption and mediocre governance.
As government expenditure rises and oil revenue cannot keep pace with the demands of the population and prices rise, the citizenry expresses their disenchantment more and more vocally. Hitherto dormant or suppressed opposition finds its voice and the establishment starts to crack.
Certain nations around the world bloated with generations of easy oil money are facing this problem to varying degrees, from outright revolt or civil war to fleeing FDI, rising unemployment and inflation, culminating in dropping living standards and an increasingly fractious and demanding populace.
Some countries like the UAE came to this realisation early and embarked on a path of aggressive globalisation centred on Dubai, to attract and retain the best the world has to offer, mimicking and surpassing Singapore as a tourism and knowledge economy hub. On the other hand, Saudi Arabia has not yet even started considering its future post-oil.
In Malaysia there is a vision of becoming a high-income developed economy by 2020. Acknowledging that the world is moving towards a post-manufacturing knowledge-based paradigm is critical for export-dependent countries with limited domestic consumption such as Malaysia. Its earlier competitive advantage of oil money, a low-cost skilled workforce, multicultural population that was therefore multilingual and adaptable to the demands of global business, a stable and popular government and excellent infrastructure as a facilitator of entrepot trade are slowly disappearing.
Today national competitive advantage based on natural resources is being replaced by innovation and knowledge. Progress in this area from a governmental standpoint essentially boils down to accelerated development of human capital that can adapt and lead the knowledge economy.
For this quality education and the provision of opportunities based on talent and merit are key. In addition prudent fiscal management, transparent and investor friendly governance, free media and minimising corruption are all important.
But in reality on all of these parameters, Malaysia is seriously lagging. No Malaysian university is in the top 100 universities in the world. The flip flops over PPSMI will have serious consequences down the road. Freedom House ranks Malaysia at 102 in terms of freedom of the press and Transparency International ranks Malaysia at 56 in terms of corruption perception. The budget deficit at 7 per cent in 2009 was the highest in 20 years. A March 2011 report by Bank of America Merrill Lynch ranked Malaysia the second least popular market after Colombia among global emerging market fund managers, evidenced by plummeting FDI.
Add to this the narrowing of space for debate and dissent as evidenced by Bersih 2.0 and the remarkably one-sided discourse in the mainstream media, strident racial rhetoric and brain drain, and Vision 2020 seems further away than ever.
But there is a Malaysian first that is a world-famous innovation now: the Obedient Wives Club.
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