MARCH 8 ― In January 2016, the Malaysian government made the decision to cut the amount of scholarship schemes available to those seeking to study overseas.
While this was shocking to many since no public consultation was involved, the move to convert over a thousand of these overseas scholarships to 744 local ones was even more baffling. The justifications given were external economic volatility and the need to tighten the budget due to freefalling oil prices.
To briefly summarise the occurences leading up to the decision, countries in the Organization of Petroleum Exporting Countries (OPEC) had been increasing output with the effect of lowering global crude oil prices.
This had the tacit aim of driving out producers and investments from the growing American shale industry.
Additionally, the recent lifting of trade sanctions on Iran has only served to further compound Malaysia’s revenue problems, as it relies on oil and gas royalties for 18 per cent of its total revenue (it was 40 per cent in 2009).
It is important that we set the scene for the arguments made by the conga line of ministers trying to justify their decision on scholarship cuts. In total, the removal of the scholarships deprived 2,400 students of various educational opportunities. This can be viewed in three ways: naïve, economic, and political.
The naïve approach
There are those who have made the argument that the cuts were an economic necessity. Wee Ka Siong, MCA’s deputy president, has argued that continuing the provision of overseas scholarships would result in an “unsustainable” cost of RM1 billion annually.
Secondly, students from wealthier backgrounds are being blamed for taking the majority of scholarship funding that could be better distributed through needs-based mechanisms. However, the argument of inequitable distribution completely side-steps the crux of the issue: scholarships are available to everyone, and it is JPA that is the awarding body.
So why punish more financially capable students for working within the framework of the system as it was designed? If the reason for cutting back on these scholarships was to protect against rorting by students from wealthy backgrounds, perhaps this should have been the first argument made, and not an ad hoc justification.
Or better yet, a review into the scheme should have been announced explaining how the notion of equality of opportunity combined with meritocracy will be adhered to during the selection process.
Parents are also being denounced for imprudence on this matter. The Chairman of the Parent Action Group for Education (PAGE) Datin Noor Azimah Abdul Rahim was quoted as saying “parents must realise that education is expensive and that the government does not owe you anything.”
This ignores the fact that parents are investing for their children’s future at every turn. Not to mention the tax paid by them that actually funds these programmes. Coupled with a suite of recent government decisions that have drastically increased the cost of living, you can see why it is inevitable that families feel that they are consistently being squeezed.
The economic approach
On many measures Malaysia is stuck in the “Middle-Income Trap”; a period of stagnating growth, unable to be revived merely by just increasing investment in capital and labour. Another ingredient is required if living standards are to be raised.
The key ingredient here is productivity. In the early 1980s, South Korea and Taiwan were just as wealthy as Malaysia in terms of GDP per capita ― but less productive. They have since become wealthier and productivity has soared. Malaysia, on the other hand has stagnated and achieved slower growth in GDP per capita and productivity.
South Korea now ranks 17 in the Human Development Index, while Taiwan sits at 21. Malaysia lags behind in 62nd place. The three countries were once equally rich ― how did this happen?
Long-term investment in education is one of the best ways to address the productivity dividend that Malaysia is clearly struggling with. This can be channelled in a multitude of ways, among them dispensing overseas scholarships in hopes of spurring the innovation needed to raise productivity.
However, as Malaysian economist Danny Quah has pointed out, innovation on its own will be insufficient. He has instead argued for an integrated package of reforms, citing the anaemic private investment rate as one reason for this.
Sadly, in the case of Malaysia, it is generally the government being the one leading investment efforts, and this comes along with all the leakages and misallocation of resources.
The political approach
Is it necessary to target a relatively small programme offering students the chance to study abroad? Surely, other areas of government could have been cut or streamlined instead?
Political analyst Khoo Kay Peng has suggested removing special envoys as one of the ways to cut expenditure and limit the crossover of responsibilities. There is also the issue of a bloated ministerial lineup. Are 36 ministers and 32 deputy ministers, along with all their associated costs, necessary for a country of 30 million people?
Australia is a country of 23 million people; they have 30 ministers in total while England, a country of 53 million have 30 ministers as well.
Furthermore, civil servants were given a pay rise despite heightened uncertainty in the global economy ― all one million of them. The cost of this is an additional RM1.6 billion, surpassing the “unsustainable” amount of RM1billion spent on overseas scholarships.
In arguing against the changes, the Democratic Action Party (DAP) has noted that the cuts could have come from trimming unnecessary programmes like TalentCorp and the National Civics Bureau. They have also highlighted unresolved scandals such as 1MDB, the Port Klang Free Zone, and Bank Negara Forex scandal.
While the party may be exploiting these shortcomings for its own benefit, the party has asked a reasonable question: why should these be prioritised over education spending?
These scholarship cuts are not as simple as “recession is expected, so scholarship cuts are necessary”, as the PAGE chairman flippantly suggested.
Tightening the scholarship criteria may help make the delivery system more efficient. But what will follow by cutting the amount of actual opportunities offered is against Malaysia’s long-term interests.
Targeting a small number of students is also another example of the government's unwillingness to prioritise good policies which are for the greater good over those that directly serve it.
It is just false to suggest that the decision to cut scholarships was inevitable. Like any other budgetary decision, it’s a political choice. And, while some may choose to put the nation first, others may choose themselves.
Too often in Malaysia, it is the latter case.
*This is the personal opinion the columnist.
