By Tony Pua
The Prime Minister Datuk Seri Najib Abdul Razak has set the lofty goal of becoming a high-income nation earning US$15,000 per capita which all Malaysians must support.
However, the recent World Bank Malaysia Economic Monitor Report on “Brain Drain” serves up a stark reminder to Najib that such goals will be nothing but pipe dreams if critical reforms are not instituted. The Report finds that “Malaysia seems stuck in a middle-income trap, the predicament that prevents middle-income countries from fulfilling the next step in their development path towards high income.”
It adds that our “growing inability to remain competitive as a high-volume, low-cost producer coupled with the difficulty to break into fast-growing markets for knowledge and innovation based products and services.”
As a result, we are failing to achieve our income potential and it cited the damning but instructive example of South Korea where “four decades ago South Korea was markedly poorer than Malaysia, South Korea’s per capita income is now three times higher than Malaysia’s.”
To break out of the middle-income trap and to fulfil our growth and income potentials, the World Bank report confirms what many already know, that Malaysia must stem and reverse the acute brain drain faced by this country, where two out of every 10 tertiary-educated Malaysia leaves the country.
In fact, the World Bank survey has found that an overwhelming 87 percent of respondents suggest that a “paradigm shift away from race-based towards needs-based affirmative action” may entice a migrant to return to Malaysia. What’s more, the survey indicates that 60 percent of respondents cite “social injustice” as a key reason for their leaving the country.
Hence as an immediate measure to demonstrate Najib’s commitment towards achieving a high-income nation status, he must reinstate the “Equal Opportunity Commission” (EOC) which was proposed in the New Economic Model (NEM) Part 1, but was subsequently inconspicuously dropped due to strong protests from within Umno and from right-wing Malay rights groups such as Perkasa.
The EOC was proposed in the original NEM to “cover discriminatory and unfair practices” in both the public and private sectors, not only to promote “economic efficiency through competition”, but more critically, to ensure “inclusive growth”.
The late Zainal Aznam, who was deputy director at the Institute of Strategic and International Studies (Isis) and the Malaysian Institute for Economic Research (MIER), and who had spent 20 years with the Economic Planning Unit (EPU), was a key member of the National Economic Action Council (NEAC) that delivered the NEM (New Economic Model).
Zainal Aznam was highly critical of the federal government’s decision to drop the proposed EOC and said, “after more than 50 years of independent growth, we are no closer to being racially blind… Current and future conflicts in Malaysia will be fuelled more by an outraged sense of inequality and unfairness in economic opportunities…”
At a forum organised by think-tank Institute for Democracy and Economic Affairs (Ideas) in February this year, Zainal Aznam had revealed that reforms such as the EOC were “lambasted and strangled by right wing groups led by Perkasa. They wanted to burn part one (of the NEM).”
He lamented that “there is political will, but it is insufficient, like (what happened with) the Equal Opportunities Commission,” and added that he had “serious doubts (about) how far the BN government is willing to go.”
As a tribute most befitting Zainal Aznam who passed away last week, Najib should immediately announce the reinstatement of the proposed EOC, and introduce the necessary legislation in the coming parliamentary session commencing June 13. This measure will contribute positively towards helping Najib’s Talent Corporation succeed in convincing migrants to return, and curb the excessive drain on the country’s talent, so critical in achieving Malaysian’s high-income nation target.
Tony Pua is the Member of Parliament for Petaling Jaya Utara.