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APRIL 7 — The World Bank’s recent report: “Aiming High: Navigating the next stage of Malaysia’s development” is a timely reminder that Malaysians have only two choices after the mandate for change was stolen, flight or fight.
The World Bank’s key message is that for Malaysia to make the transition to a high-income and developed status projected to be sometime between 2024 and 2028, an enhanced social contract and tough reforms are needed. The report mentioned six broad and inter-linked reforms: (1) revitalising long term growth; (2) boosting competitiveness; (3) creating jobs; (4) modernizing institutions; (5) promoting inclusion; and (6) financing share prosperity.
The Covid-19 crisis provides an opportunity to undertake the much-needed reforms. The World Bank reports that the country must adopt a new course for greater knowledge-intensive and productivity-driven growth. To boost productivity, while ensuring equitable access to good jobs. Malaysia needs to remove barriers to fair competition, make better use of underutilised sources of labour; adapt and improve the education system so that workers are prepared for the jobs of the future.
In order to produce the economic growth through innovation, productivity and efficient allocation of resources, the World Bank said the government needs to encourage competition in the domestic economy. Firms that face vigorous competition have strong incentives to reduce their costs, innovate and become more efficient and productive than their rivals.
The World Bank reports that the existing social contract gives preference to firms connected to the state and individuals based on their ethnicity. Without fair competition, resources are inefficiently allocated. Output is lower and domestic firms do not offer high-quality jobs that attract the most qualified workers. Meanwhile a pool of underutilized labour – women, youth and the diaspora – are excluded and either stay at home or leave the country for better opportunities. And despite best intentions, a significant portion of the population is not receiving the quality of education necessary to succeed in the modern economy. In short, good jobs are hard to get, and many people lack the incentives or qualifications to pursue them.
The report said that an enhanced social contract will need to be established with buy-in from all segments of the population. This enhanced contract must ensure equality of opportunities for all Malaysians, providing for upward mobility and incentives to remain and invest in Malaysia.
The World Bank warns that if a large proportion of the population believes that growth benefits a minority, the political support for the reforms necessary to achieve structural transformation will be insufficient to enable the government to implement them effectively.
The report notes that a significant share of the country’s most educated and skilled citizens left the country for lack of opportunities at home. Ac
cording to the UN, more than 1.83 million people born in Malaysia lived outside the country in 2015, mostly in Singapore. One-third of emigrants were high-skilled, accounting for 20 per cent of Malaysians with a tertiary degree. While emigrants generally left for better career opportunities and compensation, many cited discontentment with Malaysia’s inclusiveness policies (or rather more precisely, policies that lack inclusiveness).
Women constitute another significant underutilized source of labour. While women outperform men in terms of education outcomes, the female labour force participation rate of 55 per cent is considerably lower than the male participation rate of 80 per cent and female participation rate in most of Malaysia’s peer countries. Increasing it requires reducing or eliminating barriers to economic opportunities for women through legal reforms, introducing more economic and societal support for parents and addressing gender norms and attitudes that perpetuate disparities.
Finally, the existing social contract is failing those most in need, leaving many lower-income students ill-prepared to enter the workforce. Malaysia has done well in terms of school enrolment. However, learning outcomes remain significantly lower than most high-income countries and standout regional peers despite a relatively high government spending on education. A deeper analysis of the relative learning shortfalls in Malaysia suggests that a disadvantaged economic, social or cultural background – remains the biggest contributor to learning deficits among low-performing students. These disparities are then magnified over time and eventually leave many lower-income students ill-prepared to enter the workforce.
The World Bank’s recommendations are neither new nor surprising. They serve to confirm what Malaysians know too well. Critical structural reforms are not only required but are long overdue. After all, Malaysians are the ones facing these problems daily. They are paying the price for the wastage, corruption, poor and incompetent services while the rent-seekers, political patrons and economic elites are laughing all the way to the bank. Malaysians watch in pain and grief at their children’s falling standards of education while their business and the nation’s competitiveness goes down the drain.
The majority of Malaysians did aim high for reforms in the last elections but were brought down by those who shot low.
Unfortunately, the person who rode on the bandwagon for reform did not believe in them. For 22 months he stalled the reforms to push his divisive racial policies. Like the scorpion that stung the frog in midstream, his true incorrigible recalcitrant nature was unmasked in the Sheraton Move. He chose to drop the baton for Mahiaddin Md Yasin (whose glamour name is Muhyiddin Mohd Yasin) to pick up rather than handing it over to Anwar Ibrahim. Anwar Ibrahim, for his audacity to choose social inclusiveness over narrow ethnocentric policies, he has been more sinned against than sinned.
The frustrations and anger of those whose trust have been betrayed are justified. We are disheartened by the few who fell into the temptations of power and wealth. We should be encouraged that through this crucible of fire, compared to the few who fell, many more were forged by their steely resolve in staying true to their principles. We now have a group, tried and tested, for the coming battle. Covid-19 reveals that with the incidences of Asian Bashing ongoing, racial prejudice and discrimination are everywhere. There is no place to flee. The World Bank’s report cautions us, unless we revive our spirit for reform, we are back on the road to serfdom.
*William Leong Jee Keen is the current Selayang MP
** This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.