Malaysia has talent, but it’s losing the battle to build it as the country’s best and brightest – frustrated by a lack of opportunities – increasingly pack their bags and cross the border to neighboring Singapore.
Associated Press
Laborers work on a construction site in Klang, outside Kuala Lumpur, Malaysia. A new index shows Malaysia lagging Singapore in efforts to develop a skilled work force.
A new index that measures a country’s ability to develop its workforce recently ranked Singapore No. 3 out of 122 countries globally. Switzerland topped the list followed by Finland.
Malaysia didn’t do too badly, coming in 22nd and placing second in Southeast Asia, above Thailand at 44, Indonesia at 53 and the Philippines at 66.
But the index highlighted how a series of affirmative-action policies and an over-reliance on cheap, imported labor have kept Malaysia from building a skilled work force capable of competing with smaller but richer Singapore.
Published by the Geneva-based World Economic Forum, the Human Capital Index assessed things like health-care quality, infrastructure and education, to determine how capable countries are of developing a healthy pool of workers.
Malaysia has a young, moderately well-educated workforce, and unemployment has averaged less than 3.5% over the past 15 years. But it has also long relied on unskilled immigrants – mainly from Indonesia – to keep production costs low and attract the foreign capital that has helped it develop into one of Southeast Asia’s most industrialized economies.
The influx of foreign workers has left company owners with little incentive to raise wages or modernize their operations to boost productivity, say analysts.
The country’s top universities have also slipped in global rankings. None of them made it on to the latest Times Higher Education World University Rankings, an index of the top 400 universities globally.
Increasingly those in search of better education seek opportunities elsewhere. Twenty percent of Malaysia’s most highly educated now opt to leave for richer economies, according to a recent report by recruitment consulting firm Kelly Services. Most, according to government figures, have settled in Singapore.
The exodus of local talent means the country faces a shortage of skilled professionals, including bankers, researchers and engineers.
“Further contributing to the skills shortage is the reality that 60% of immigrants have only primary education or less, and the number of skilled expatriates has declined by 25% since 2004,” the report by Kelly Services said.
That matters a lot, according to World Economic Forum founder Klaus Schwab, who, in a statement during the index’s launch, called the “key for the future of any country” its ability to develop the skills and talent of its people.
Much of what economists say has stifled Malaysia’s economic potential in recent years stems from policies that favor ethnic Malays and other indigenous groups, collectively known as Bumiputra.
The policies were first put in place more than four decades ago and give advantages in employment, education and housing to Bumiputras, who comprise about two thirds of Malaysia’s population. Ethnic Chinese and Indians make up most of the remaining third.
While the goal was to eliminate poverty and redistribute 30 percent of the country’s wealth to the Bumiputra, many other races see them policies as unfair and charge that people close to the government’s ruling coalition have abused them.
Prime Minister Najib Razak had vowed to dismantle those policies and replace them with assistance based on need. But last month, amid pressure from conservatives in his party ahead of an upcoming leadership contest, Mr. Najib announced $9.4 billion in new measures to help ethnic Malays, including loans for entrepreneurs, job quotas at businesses linked to the government and new housing for the poor.
Singapore Is Winning the Talent Battle
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