AUGUST 24 — There are a number of challenges the MEF have to address. Otherwise, they can become impediments in the MEF journey. The discussion below does not address all the challenges faced by Malaysia but touches on some of the key ones.

Foreign labour

The MEF recognises the need to wean off Malaysia’s dependence on cheap foreign labour. For as long as companies can rely on foreign labour, there is little incentive to invest in automation and digitisation. However, a clear timeline needs to be set and the sequencing of sectors to be targeted should be made clear. The technologies needed to automate these sectors need to be identified and, in some cases, need to be developed. The timeline for reducing the dependence on foreign labourers must be a part of a comprehensive plan and it must recognise the time lag in adopting automation and the capacity building needed to support it. Otherwise, we will continue to see this roller coaster ride of the government at one time talking about reducing dependence on foreign labour and yet later on accede to demands for more foreign labourers from industry. Every time the government concedes to the demands from employers, it reinforces further their dependency on foreign labour.

Rethinking poverty eradication

Eradicating poverty and improving income is a concern addressed in MEF. The MEF mentions a number of current programmes that will be strengthened further. One additional idea that can help with poverty eradication is through supporting social enterprises (SE). SEs are business entities that serve the dual purpose of making profit while also helping the less fortunate.

Malaysia has SEs like What A Waste, Pepper Labs, Batik Boutique, PichaEats and Nasi Lemak Project that have been active in helping the less fortunate. Some of these SEs focus on marketing the products made by participants from marginalised and poor families. This way, participants of their programmes can focus on the production activities while the SEs deal with reaching the market. For PichaEats and Nasi Lemak Project, it is the food prepared by the less fortunate.

The typical SE tend to be small and have limited fund. The government can support SEs by creating provisions for the registration of SEs under a separate category in the SSM. Those who qualify as SEs will be given a lower tax rate so that they can reinvest more of their profit to grow their business and simultaneously help more people. The UK has a provision allowing SEs to incorporated as Community Interest Companies. California regulations allow for SEs to be formed as Benefit Corporations or Social Purpose Corporations.

The approach to poverty eradication also needs a rethinking. Prof Fatimah Kari and her peers at Universiti Malaya have been advocating the use of a Multidimension Poverty Index (the MPI). The MPI goes beyond looking at household income as a measure of poverty. Instead, it measures poverty in terms of the extent the poor are deprived of basic needs and services such as nutrition, healthcare, education and housing etc. Addressing poverty using the MPI helps reframes the problem and enables planners to develop a broader set of interventions to improve access to these needs and services to enable them to move out of poverty.

An example is the problem of children with stunted growth. A morbidity survey done by the Ministry of Health found that children who experience stunted growth tend to have mothers who themselves had experienced stunted growth earlier in their life. It also found that these children are undernourished, do not use the public health service and do not attend kindergartens. As a result, they tend to lag behind other pupils who had attended kindergartens when they enter primary school. This creates a vicious cycle that hinders further both their education and development. Any effort to resolve this problem has to addressed these multiple issues and not just rely on cash handouts. All these have to be supported by efficient and effective administrative processes.

Challenges in economic transformation

Economic transformation is analogous to the journey of a convoy. How fast the convoy can move is determined by the speed of the slowest vehicle in the convoy. It is necessary to assess possible impediments to the transformation envisioned in the MEF.

One of the vehicles in the MEF convoy is the civil service. The performance of the civil service is often tied to perceptions of ease of doing business and consequently national competitiveness. For the MEF to succeed, there is a need to look at the issue of civil service reform. It is time to ask how the Malaysian civil service of the future should look like. It is ironic to expect the private sector to change in order to create a leap for the nation whereas the civil service remains as it is.

Among the things that should be among the new competencies of the future Malaysian civil service should include the ability to navigate ambiguity, the ability to be anticipatory in seeing the future, possess good strategic sensemaking abilities, the ability to lead change and transition as well as develop a more organic work culture that encourages cross-functional and cross-ministerial collaboration. This includes creating a more open and less hierarchical culture that will enable younger talents to have more voice in decision making.

Some observers commented about the low strategic thinking capabilities among civil servants. Strategic thinking competency is important for leaders to lead into the future. It is also a competency needed to develop thought leaders in the civil service. The ability to provide thought leadership is important when the country is seeking to go beyond its comfort zone and venture into new areas.

A number of civil servants explain the deficit in strategic thinking as being due to the way the government was led in the past. At one time, most of the thinking and planning was done by Pemandu. The role of civil servants was reduced to providing information and reporting on KPI attainment to Pemandu. As a result, many civil servants were lulled into expecting their role to be mainly an operational one. It is not clear whether this view is an oversimplification of reality or an accurate depiction of reality. This impression needs further analysis and verification if we want the civil service to help steer Malaysia to the new future envisioned in the MEF.

In addition, the journey into the future cannot avoid having to deal with ambiguities and stepping outside the current comfort zone. Civil service leaders will have to deal with new developments and problems. Quite often they will have to deal with issues where it is not clear who has the authority over it. One behaviour common among some civil servants is the insistence on knowing the "punca kuasa” (source of authority) before doing something. This is important to ensure the legitimacy of an action, having a clear mandate and maintain the chain of command. However, it is sometimes used as a reason to avoid new ideas, reject new initiatives and maintain the status quo as well as avoid risks. "Punca kuasa” or the lack of it is also sometime used for turf protection behaviour and causing people to work in silos. It is perhaps time to rethink about this.

In addition, the legislation passed to establish statutory bodies were created a long time ago, often decades ago. The "punca kuasa” given in the legislation reflects the thinking and understanding of issues at that time. It is important to assess whether the role defined under these legislations are still sufficient to enable them to address the issues of the future. Otherwise, these organisations will continue to be constrained by the old provisions and "punca kuasa” and may fail to rise to the challenges in building the new future envisioned in the MEF. It is perhaps time to reverse the thinking and reflect about what is needed for the future and revise legislations to fit with future requirements.

An issue related to the role of statutory bodies is the effectiveness of the boards governing them. Quite often, the people elected to the boards are a mix of civil servants and political appointees. Yet, little effort has been made to develop the competencies needed for board members to provide the policy leadership at the board level. At times, it is not clear whether the board is leading or being led by the management team. This is important to be addressed because many of these bodies are the implementation agencies of some government programmes. The board need to be willing to stretch the achievement of the statutory bodies beyond their current performance level. Weaknesses at this level can hinder the final mile delivery of services and programmes.

Mazzucato’s work on innovation in the US found that many of the technologies that are ubiquitous today were originally developed by public research projects. The government were the early adopters of many of these technologies. These technologies later on make their way to the corporate sector. Likewise, more support from the civil service is needed to support the adoption of local inventions in Malaysia.

A complain often heard from some local researchers is the difficulties they encounter when promoting their invention to government agencies. A common argument for the refusal to accept these inventions is that they are "not proven”. Instead, these agencies prefer to use imported technologies. Some of these local inventors ended up having to market their invention overseas first before it is later on accepted in Malaysia. This is a viable route only for those with the necessary financial resource. The government has lab facilities that can actually test the new inventions to assess the efficacy and quality of local inventions. Somehow, those responsible shied away from doing this.

In addition to public sector reform, the MEF need to also address some challenges related to Malaysia’s human capital development. First, the 30,000 form five students who failed to take their SPM exam last year should be a red flag that needs attention. Was this indicative of the consequences of Covid-19 or is it rooted in their perception of the low value of higher educational qualification or is it due to some other psycho-socio issues that we do not yet understand?

Second, recent developments show that a high percentage of applicants who were offered places at the tertiary educational institutions did not accept the offer. According to one estimate this is close to half of the applicants who were offered places. This is another red flag that should raise concerns about our ability to develop the necessary talents to support knowledge-intensive activities in the future. Some of those who decided to not sit for their SPM and declined the university places offered to them may be motivated by the desire to become a part of the gig economy. But with low educational qualification, many of them may end may end up with low-end gig jobs. As a result, they will become the digitised poor.

Third, we need to examine whether there is a paradox in our higher education system. More of our universities are improving their position in global ranking but employers continue to complain about the quality of our graduates. In spite of the extensive bureaucratisation of our higher education system and the establishment of many standards by the likes of the MQA, this situation persists. Are all these requirements too focused on the trees that we lose sight of the forest? Likewise, the Ministry of Higher of Education had established AKEPT to develop leadership competencies among academicians. Shouldn’t improvements in the leadership competencies in our universities create downstream consequences in the form of programmes that produce better graduates?

Fourth, vocational training has received considerable attention in upskilling the work force in this country. Unfortunately, the effort is fragmented. A recent Penang Institute report describes vocation training in Malaysia as "a spaghetti bowl of overlapping jurisdictions and standards”. Some of these different jurisdictions replicate the effort of others and end up competing with each other, leading to a waste resource. Penang Institute’s study also found that there are also significant differences in the quality of instructors in the many vocational programmes. This situation should not continue in the future and steps need to be taken to rationalise the vocational education system.

Fifth, a study by Hallinger on educational reform in Asean countries (it included respondents from Malaysia) highlighted many practical barriers to educational reform. Have our policy makers taken a hard look at the findings of this study and seek to address the issues discovered by this study? The failure to address the weaknesses identified will become another major barrier in pivoting the Malaysian economy. If Malaysia continues to do the same things we’ve been doing in the past in reforming our education system and yet expect to realise the aspirations of MEF, we are the epitome of insanity.

Limitations in the public sector and weaknesses in Malaysia’s human capital development can create a suppressing effect on Malaysia’s ability to realise the aspirations of MEF. More funding without initiating reforms in these areas is like sponsoring an overweight person to compete in a marathon.

Epilogue

The strategy lens posits that sustainable competitive advantage requires developing layers of competitive advantage. This will make the configuration of Malaysia’s competitive advantage valuable, rare, inimitable as well as not easily described and understood by others. This will help create competitive distance from other countries who will be competing with Malaysia for resources, investments and markets. The various issues raised in this document can provide the basis for identifying the many capabilities needed to create these layers of competitive advantage. This includes addressing potential suppressors that can undermine Malaysia’s ability to realise the aspirations of MEF. We need to reflect how fragmentation in policy implementation is becoming the Achilles heel in trying to move ahead.

This document is meant to present some ideas and issues that should become part of the discourse on how to realise the ideals of MEF. The authors are fairly certain that there are officers in the civil service who are already aware of many of these issues. Our intention is to nudge these issues to the centre of the thinking on MEF and its subsequent development in the next national budget and the 13th Malaysia Plan.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.