Malaysia: 50 Years and Beyond

Released by: The Edge
Date: 29 January 2007

Malaysia won its independence 50 years ago. It has grown from a small backward British colony to one of the leading developing countries in Asia. It has also progressed from an agriculture and primary industries-based economy to embrace high-technology manufacturing - emerging as an export powerhouse with relative ease, thanks to cheaper skilled labour and world-class logistic infrastructures like the North-South Expressway, Penang Bridge, West Port, Pelabuhan Tanjong Pelepas, KL International Airport, Multimedia Super Corridor and Putrajaya.

We owe much of this success to the vision and wisdom of our past leaders. We now have before us a greater goal - Vision 2020. We certainly have much to accomplish if we want to become a developed nation by then. Having survived the 1997-98 Asian financial crisis, we now face the challenge of increased globalisation, characterised by intense market competition, converging technologies, rapid changes in business models, sudden and often unexpected shifts in consumer demands and continued pressures on productivity and quality. The lack of knowledge workers is causing us to lose out on foreign direct investment (FDIs) and straining the resources of our industries.

On one side, we are competing with cheaper labour from Vietnam, Indonesia, India and China. On the other, there are strong players in the knowledge economy such as Singapore, Taiwan, South Korea and Hong Kong. The rules of the game have changed. Countries that can attract investments now are those that have superior infrastructure, offer a skilled and talented labour force, are stable and transparent and boast efficient legal and financial systems. Our government has to improve its delivery system, decrease red tape, reduce corruption and consistently attract new FDIs.

Role of LLCs and GLCs

Local large corporations (LLCs) in the banking, insurance and telecommunication industries, such as Maybank, Public Bank, CIMB, MAA, Kurnia, Maxis, Celcom, and government linked companies (GLCs) such as Malaysia Airlines, Proton, Tenaga Nasional and Telekom Malaysia, are expected to embrace transparency, operate efficiently and deliver better shareholder values. GLCs, in particular, have been undergoing a series of reforms in the last two years to improve their competitiveness. They provide mission-critical services such as utilities and infrastructure.

Transforming these GLCs into high-performance organisations will not only boost the companies but will also drive the economy to higher and more competitive levels. Petronas is an example of a well-managed GLC. Since 1974, when the government set it up with RM2 million, it has grown into a RM168 billion business with interests in 31 countries. It is the only Malaysian company in the Fortune 500 list. South Korea has 12 (including LG, Samsung and Hyundai), China (20), Taiwan (three) and India (six). So, how is it that Petronas can do so well but other GLCs or LLCs can't? Can they not adopt similar management practices of valuing and promoting high performance, integrity, diligence and commitment to success? The emphasis here is on attaining international success, not merely being a "jaguh kampung".

The reality is that it is easy to build world-class infrastructures but very difficult to develop positive minds, strong values and best practices - all the necessary foundations for sustainable success. True, it is easy to build the "hardware" but very difficult to transform the bad habits and to strengthen the "software" side of our economic development. The saying that Malaysia has first-class infrastructure but third-class mentality is a painful truth that needs to be addressed as the country enters the next 50 years.

High Performance, transparency and innovation

We must not only fully embrace a performance-driven culture and a transparent working environment, we must also learn to compete innovatively. With every company and every country fighting for more profitable and sustainable growth, we must battle just as fiercely to differentiate ourselves over a fast-shrinking resource and profit pool. We rushed through the development of our mega infrastructures but we have forgot to work on the development of our human capital, which will lift us from "jaguh kampung" to "jaguh dunia". Hence, it is good to know that this is the key thrust of the Ninth Malaysia Plan.

Needless to say, people or human capital development is at the very center of value innovation. More than ever, our willingness to invest time and money in building human capital is crucial as it will form the very foundation for Malaysia to compete in a knowledge economy, where creativity and innovation are the catalyst for a more sustainable and competitive advantage.

Human capital and talent management

So how do we prepare ourselves? Firstly, we need to create an environment that fosters innovation and holistic human capital development, encompassing knowledge and skills, with progressive attitudes and thinking and strong ethical and moral values. Swap the patronage system with a meritorious environment where only the best and most creative is encouraged and retained.

Next, we need to transform our human capital and talent management in both the public and private sectors. Managers for a start, should shed their "master" mentality and adopt a "teacher, coach and facilitator" role to leading by example and not treat employees as "slave" labour.

Malaysia has been trying to woo back our brightest minds from abroad but it must first reverse the current brain drain. Why is our human capital is so inadequate for the competitive landscape? It goes back to the Malaysian education system, which is truly in dire need of reform. We need to churn out competent teachers and workers with emphasis on life long learning, creativity and innovation rather than on exam-based regurgitation.

It was recently reported that there are 45,000 graduates who cannot find jobs when they are 237,000 job vacancies in the country. This clearly indicates that we have a flawed system that has been churning out inadequate workers. The Education Ministry has now taken on new initiatives to address systemic inadequacies.

Education reformation

The Education Minister must therefore have the political will to implement courageous changes and turn to outsiders with the creative knowledge and experience to lead the educational transformation from the top down. The school curriculum needs to be made more current. Take history, for instance. Are Malaysian students learning about IT successes such as Microsoft, Amazon.com, e-Bay, Hotmail, Yahoo, Google and so on? We want our students to be knowledge workers but we don't share with them the personalities that created these renowned IT global names.

Conducting the education transformation, in the piece-meal style of today is harming our future generations of workers because competition in the global marketplace is extremely fierce and unrelenting. China and India beat us hands down in terms of the number of graduates and potential workers being churned out from their schools each year and also in terms of low cost. We will need to fully utilise our limited human resources by priming our people well for the workplace so that, together with our relative economic affordability, language skills, political stability and enviable harmonious culture, we will be attractive to foreign investors.