World Bank Brain Drain Report: Useless and Politically Motivated?

April 3o, 2011

Report from Shannon Teoh (The Malaysian Insider)

ALOR STAR, April 30 – Tun Dr Mahathir Mohamad described the World Bank as “useless”, saying today that it was politically motivated for putting out a report that pro-Bumiputera policies are stunting the country’s economy.

The former prime minister said the World Bank report was politically motivated as it wanted a change of prime minister, seemingly referring to Opposition Leader Datuk Seri Anwar Ibrahim, a former chairman of its development committee.

“We have been critical of the World Bank since my time. We said that they were useless. “They dislike us and want to have their good friend become prime minister,” Dr Mahathir (picture) told reporters today.

The World Bank said on Thursday that more than one million Malaysians live abroad as policies favouring the Malays are holding back the economy, causing a brain drain and limiting foreign investment.

World Bank senior economist Philip Schellekens was quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.

He said Malaysian migration was increasingly becoming a skills migration with one-third of the one million-strong Malaysian diaspora now consisting of the tertiary educated and expected the trend to continue.

Prime Minister Datuk Seri Najib Razak has pledged to roll back the country’s pro-Malay policies from the New Economic Policy (NEP) but also told the UMNO assembly last year that the government’s social contract of providing benefits to Bumiputeras cannot be repealed.

According to the Bloomberg report, Najib has eased some rules to woo funds, including scrapping a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 per cent of their Malaysian equity for indigenous investors.

Last year, he unveiled an economic transformation programme under which the government identified US$444 billion (RM1.3 trillion) of projects from mass rail transit to nuclear power that it would promote in the current decade.

However, Dr Mahathir said today that while it liberalised the economy, the government should “be fair to the poor and make sure that they have opportunities as well.”

Reversing Malaysia’s Brain Drain

April 30, 2011

Reversing the Brain Drain

by P Gunasegaram* @http://www.thestar.com.my

Young Malaysians: Take Care of Them without Favor or Lose Brain Power

Unless Malaysia succeeds in developing, retaining and attracting talent, its cherished dream of attaining high income by 2020 may be dashed to bits.

PROBABLY for the first time ever we have had substantial facts and figures on Malaysia’s brain drain – and it has taken the World Bank to come out with this (see our cover story this issue).

The World Bank simply defines brain drain as the migration of talent across borders. It is instructive what it says:

“For Malaysia to stand (sic) success in its journey to high income, it will need to develop, attract and retain talent. Brain drain does not appear to square with this objective: Malaysia needs talent but talent seems to be leaving,” the World Bank said in its report on Malaysia. Let’s look at some of the figures as a gauge of the seriousness of the problem. The worldwide Malaysian diaspora is conservatively estimated at one million in 2010, quadrupling over the last three decades.

Singapore alone accounts for 57% of this with the rest dispersed mainly through Australia, Brunei, Britain and the United States. Ethnic Chinese account for nearly 90% of the diaspora in Singapore and are similarly over-represented in other developed countries. And here’s one frightening statistic: “One out of 10 Malaysians with a tertiary degree migrated in 2000 to an OECD (the club of rich countries, but which does not include Singapore) country – this is twice the world average and including Singapore would make this two out of 10.”

In other words, it is very likely that 20% of our best graduates end up in other countries. The reasons why they leave are also instructive: 66% cited career prospects, 60% social injustice and 54% compensation.

The situation is serious and as Malaysia is wont to do under such circumstances, it is resorting to ad hoc measures such as tax rebates on those returning and a corporation to attract talent into the country.

These will only chip away at the massive outcrops of declining educational standards, a badly implemented social restructuring policy, a poor system of rewards and the unwillingness to move away from low labour costs to high value-added manufacturing and services amongst others. The changes that are needed are deeply structural. First, everything possible has to be put into raising educational standards to improve the quality of those entering the workforce. South Korea had one third Malaysia’s per capita income in 1970 but now it is three times Malaysia’s. Such change would not have been possible without a super educational system at every level.

Developing talent at every level simply has to start with education and we have to put the best talents, facilities and other resources into this. Right now only the most dedicated or those who don’t have other choices go into teaching because it is neither rewarding nor respected as a profession.

Next we need social re-engineering to gear towards giving equal opportunities for advancement instead of a premature equalisation of outcomes whether in terms of wealth ownership or employment creation.

Otherwise the ultimate result might be plain mediocrity and creating a small class of privileged wealthy who have done little or nothing to deserve their wealth. Otherwise too, the talented who get little or nothing face despair and look elsewhere for their rewards.

Then we need too the unfettered opportunities, entrepreneurship and incentive for talent to flourish and to be adequately rewarded. We can’t continue to base our competitiveness on low wages and costs. In this respect, a weak currency and its attendant poor purchasing power is a sure way to chase talent out of the country.

That’s how we can retain talent and attract it too, realising that we must be open and free to import the best the world has to offer in terms of people, goods and services at the best prices. For these things to happen and be sustained what we need is honest policy and implementation untainted by corruption so that the most can be done with the resources at our disposal instead of frittering these away through all sorts of leakages in the system. It is no accident that the least corrupt countries are often the most developed and have the highest income.

If there is a lesson from the World Bank report, it is that we must return to the basics and work ourselves up from there. There is no shortcut, but once critical mass is reached progress grows in leaps and bounds.

*Managing Editor P Gunasegaram believes that an uncompromising stand towards excellent and quality education bereft of political and other pressures will do more towards a high income Malaysia than almost anything else.

Ramon says: Take the World Bank Report seriously

April 30, 2011

http://www.malaysiakini.com

COMMENT : World Bank reports are authoritative and they are therefore taken seriously by international observers, especially foreign investors.

Malaysia’s own economic estimates and assessments will be compared to the World Bank and International Monetary Fund estimates for accuracy and integrity. Our estimates will lose credibility if they are quite different from international analysis.

The World Bank has estimated Malaysia’s growth at 5.3% for 2011, and 5.5% for next year. These projections are lower than our internal estimates. Our domestic outlook for inflation could also be underestimated as the World Bank stresses the build-up taking place in inflationary pressure that could dampen private consumption and economic growth as well.

Hence the message is clear. We are going through trying times and economic strains, particularly with the continuing global economic uncertainties.

What is more worrisome is the World Bank’s highlighting of the adverse effects of the brain drain on our economy. This is having a significantly more serious negative impact on our economy than we realise, and is undermining our struggle to get out of our middle-income trap.

Interestingly too about 57% of our diaspora have been attracted to Singapore. We know why, but we are doing so little about it. The brain drain is not exclusively due to higher salaries, but the sad lack in practicing “inclusiveness” amongst all Malaysians.

One major point raised by the World Bank Report 2011 is the lack of political will to push the pace of reforms in the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP). In regard to the New Economic Model (NEM), the World Bank mentions the “limited headway on this front”.

Poverty worst in Sabah

The findings that poverty has increased and shows an imbalance within racial groups gives much concern and underlines the need for much more urgent action to be taken to combat the malaise.

Sabah has a whopping 42.9% share of national poverty, Sarawak has 12%, while even Kedah and Perak have dismal shares of 9.8% and 8.4% respectfully. This is unsustainable without some systemic interventions.

All these World Bank findings do not encourage confidence in the socio-economic and even political prospects in the near term for Malaysia. It is imperative  that the well-thought out ETP and GTP should be revised to give much higher priority to overcome the fundamental weaknesses in our economy and society, that the World Bank has honestly but politely highlighted.

We have to answer its “call for action” with a greater sense of urgency or continue to face greater risks of more economic and social decline.

One major source of encouragement, however, is that all Malaysians, except the powerful vested interests and the extremists, will rally around the government for more rapid transformation for the benefit of all Malaysians.

*Tan Sri Ramon Navaratnam was an Economist and Senior Treasury Official. He is now Chairman, ASLI Center for Policy Studies

Dr. Zainal Aznam Yusof dies: Al-Fatihah

April 30, 2011

NEAC’s Dr. Zainal Aznam Yusof dies

by Debra Chong@http://www.themalaysianinsider.com

National Economic Action Council (NEAC) member Datuk Dr Zainal Aznam Yusof died of heart attack earlier this morning, just a few days short of turning 67.

Institute of Strategic and International Studies (ISIS) director-general Datuk Dr Mahani Zainal Abidin was reported by TV3 to have confirmed Zainal Aznam’s death at about 10am at the Universiti Hospital’s intensive care unit.

The former Bank Negara adviser (Assistant Governor) was buried at the Bukit Kiara Muslim cemetery near his Taman Tun Dr Ismail home here just after Asar prayers today.

The Late Dr. Zainal Aznam Yusof–The Thespian

The Ballot Box: The Ultimate Arbiter in a Democracy

April 30, 2011

 … Come, my friends,
     ‘Tis not too late to seek a newer world.
     Push off, and sitting well in order smite
     The sounding furrows; for my purpose holds
     To sail beyond the sunset, and the baths
     Of all the western stars, until I die.
It may be that the gulfs will wash us down;
     It may be we shall touch the Happy Isles,
     And see the great Achilles, whom we knew. (56–64)

—Alfred Lord Tennyson, Ulyssess

by Terence Netto @http://www.malaysiakini.com

COMMENT Because the ballot box is the ultimate arbiter of distempers in a democracy, Malaysian voters must be anticipating the next general election – the 13th in their history as an independent country – with unusual keenness.

The fact that the number 13 is freighted with an ominous significance because it connotes a tragic chapter in Malaysian history – the May 13 riots of 1969 – renders added frisson to the anticipation.

The thunderheads that have boiled up on the political horizon to set voters on edge present an idiosyncratic mix of issues of personal sexual morality and ones of grave national import.

Just now an issue concerning the sexual morals of a contender for the prime ministerial position, Anwar Ibrahim, has taken centre stage, to the exasperation of legions of his supporters, not because they do not think that it matters, but because they view the rules for adjudicating it as hopelessly rigged against him.

Also, it is of little help to their serenity that they see at least one of his accusers, in the case of the video allegedly showing him in a transaction with a sex worker, as tainted with same brush that is now being used to blacken Anwar. Few things are as annoying as the pot calling the kettle black. Likewise, few things can be more exasperating that attempts to infer an aspirant’s moral credentials to govern from his or her private sexual morals.

One does not have to subscribe to Plato’s dualism of the mind and body to hold that it’s best to keep the spheres of public and private morality separate, especially private sexual morality. But because to the majority of Malaysians religion is a public matter, these spheres cannot be held to be separate.

No precedent in modern history

No politician has done more in the last four decades in Malaysia to make religion a public matter than Anwar Ibrahim. So there is a rough kind of poetic justice to the travails he has now to endure.

It is hard to find a precedent in modern history for the very public and humiliating trials by innuendo and insinuation he and his family have had to endure – in Sodomy I, Sodomy II and now in the sex video controversy – over the last 13 years.

Perhaps the closest comparison one could find would be the hounding of the American civil rights Martin Luther King Jr by FBI director J Edgar Hoover in the 1960s. Hoover kept up a steady stream of pressure on King and his wife by circulating aural evidence of the civil rights leader’s sexual misdemeanors. But, in the main, that pressure was applied away from the public gaze. Consequently, the psychic hell that King and Loretta had to endure was private.

In contrast, Anwar and family have had to endure very public tribulation which the ordinarily decent are loath to justify. The fact that elementary standards of due process have been denied him in this odyssey of public humiliation adds to the repugnance felt by the decent over his and his family’s treatment.

That is why at this juncture the 13th general election is being awaited with mustard-keen anticipation.There are issues of grave public moment that should compete for the public attention’s but right now the manufactured sensation of Anwar’s private sexual morality has taken centre stage.

It makes you want to believe in the truth of the concept of the wound and the bow, the literary principle that the psychic wounds one suffers on the way up in life become the bow that launches the effort at grand rectification.

One hopes that would be true about Anwar. He has had to endure much; would that eventual vindication and rectification be proportionate to his travails.

Congratulations to HRH The Duke and HRH The Duchess of Cambridge

April 30, 2011

The Beautiful and Elegant Royal Bride

April 29, 2011

HRH Prince William and Miss Kate Middleton were pronounced husband and wife in a glittering ceremony filled with traditions and history at the Westminister Abbey in London. The Duke and Duchess of Cambridge made their vows in front of 1,900 guests and the eyes of the world (over 2 billion people were glued to the television to watch the occasion).  We offer our sincere  congratulations and good wishes to their Royal Highnesses.

Official Wedding Photograph

The  wedding ceremony passed without hitch, with the only moment of tension provided as Prince William struggled to put the ring, fashioned from Welsh gold given to Prince William by the Queen, on his bride’s finger. Otherwise, it was indeed a sparkling display of what Britain is all about–flawless  planning, organisation and execution. It was described by commentators as a fairy tale wedding, not seen since HRH Prince Charles-Princess Diana marriage.

Taking a Leisurely Stroll

After the vows Rowan Williams, the Archbishop of Canterbury, declared: “I pronounce that they be man and wife together, in the name of the father, and of the son, and of the Holy Ghost. Amen.”–Dr. Kamsiah and Din Merican

Let their Hands be strengthened