NEP, brain drain holding back Malaysia, says World Bank

The Malaysian Insider
Apr 28, 2011

KUALA LUMPUR, April 28 — More than one million Malaysians live abroad, the World Bank said today, adding that policies favouring Malays are holding back the economy, causing a brain drain and limiting foreign investment.

In a Bloomberg news service report today, World Bank senior economist Philip Schellekens was also quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.

“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens told Bloomberg in Kuala Lumpur on Tuesday ahead of the report’s release today.

Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said.

Malaysia’s growth fell to an average 4.6 per cent a year in the past decade, from 7.2 per cent the previous period.

Singapore, which quit Malaysia in 1965, expanded 5.7 per cent in the past decade and has attracted more than half of its neighbour’s overseas citizens, according to the World Bank.

Malaysia has in recent years unveiled plans to improve skills and attract higher value-added industries.

The World Bank conducted an online survey in February of 200 Malaysians living abroad in conjunction with the Kennedy School of Government at Harvard University.

They cited better career prospects, social injustice and higher wages as their main reasons for leaving, the Washington-based lender said in the Bloomberg report.

Singapore has absorbed 57 per cent of Malaysia’s overseas citizens, with almost 90 per cent of those crossing the border ethnic Chinese, the World Bank said.

“If Malaysia has the investment environment of Singapore and also had the innovation and skills environment of Singapore, then foreign direct investment inflows into Malaysia could be about five times larger,” Schellekens said in the Bloomberg report.

“They need to boost productivity and strengthen inclusiveness.”

Prime Minister Datuk Seri Najib Razak has pledged to roll back the country’s NEP-style policies but he also told the Umno assembly last year that the government’s social contract of providing benefits to Bumiputeras cannot be repealed.

According to the Bloomberg report, Najib has eased some rules to woo funds, including scrapping a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 per cent of their Malaysian equity for indigenous investors. Last year, he unveiled an economic transformation programme under which the government identified US$444 billion (RM1.3 trillion) of projects from mass rail transit to nuclear power that it would promote in the current decade.

“If everything is implemented as they say, Malaysia is going to be a star economy,” Schellekens told Bloomberg. “The problem is implementation.”

  1. #1 by dagen on Friday, 29 April 2011 - 8:40 am

    Implementation a problem, bloomberg errr world bank? No. You people obviously dont know that implementation of projek kerajaan umno is actually umno’s specialty. And thank you world bank for your concern. Be assured. Our economy can and do grow. Our economic pie is the only economic pie in the world that do actually bakes itself. And yes, and it can grow itself too. For instance the PKFZ projek umno. That is a good example of projek umno growth. From something like 2billion to 12billion. Growth multiplicator here: yes a very impressive 6 times. An ordinary laptop costs (wot?) 2000 ringgit and in kerajaan umno’s hands it will immediately grow to 42000ringgit each. AND the growth multiplicator in this instance is even better. It is a whopping 20times. But there is a logical explanation for this. Smaller ticket items like laptops can and in fact do experience massive growth in value errr price err whatever. Well something has grown increase hmmmm multiplied. Became better somehow in the end. Yes. Better. 42000 is better than 2000. And 12billion is better than 2billion.

    In short, umno does not need non-umnoputras in this country, particularly non-umnoputras of the mata sepet and kaki botol variaties. Actually the chief of the world’s mata sepet, can just go home and take tremendous comfort in the fact that kerajaan umno had gratiously decided to recognise universities in the land of mata sepets.

    … BTW, I am writing this on behalf of cintanegara.

  2. #2 by Godfather on Friday, 29 April 2011 - 9:17 am

    This Jewish guy doesn’t know what he is talking about. Did the World Bank come up with an index for rambutans ? No. So no futures contracts for rambutans. So we sell spot, and what do we care about the future ?

    Did the World Bank analyze the ancillary benefits of the rambutan tree, like shade, use of the rambutan branches for fuel, use of branches for making handicraft ? No. So you see, we can justify our own decisions, thank you very much.

  3. #3 by drngsc on Friday, 29 April 2011 - 9:22 am

    We all know that. Even the brain drain from public to private sectors in Malaysia may be due to NEP. Academia are force to apply the NEP. Many of us leave Academia because of NEP, although they always blame the pull from private practice. Often there is also a tremendous push from public service.
    Have you all considered that this NEP policy in Public service may also be a form of ethnic cleansing of public service?

    Please, we need to change the tenant at Putrajaya

  4. #4 by boh-liao on Friday, 29 April 2011 - 9:26 am

    As far as UmnoB/BN r concerned, good riddance! They don’t want educated n thinking ppl around, esp Malays fr rural areas (too much brain power there will cause UmnoB/BN 2 lose votes)
    M’sia is blessed with rich natural resources n hard-working n docile pendatang
    UmnoB love d latter as long as they can b reined in (through their sidekicks MCA, MIC, Gerakan, SUPP, etc) n accept 1Melayu 1Bumi
    D nonMalay or even Malay smart alecks can GO, shooooooooo shooooooo, no loss 2 UmnoB/BN who continue 2 enrich themselves n b elected by C-not-hear-not simpletons

  5. #5 by k1980 on Friday, 29 April 2011 - 2:17 pm

    With the awesome standard of teachers in schools nowadays, there will be no ‘brain drain’, only ‘brain dead’. Example of Maths question set for Year 2 by its “teacher”(sic)—(Mind you, it is an urban school, not a rural one)

    “Zaini has sell 4 electric water heater which its type is instant water heater for Monday. He has sell 1 and 3 water heater on Tuesday and Wednesday. How many electric water heaters did he sell?”

  6. #6 by wanderer on Friday, 29 April 2011 - 4:35 pm

    Mr moderator, I was merely stating a fact in my comment, is that wrong?
    “If I don’t tell lies, at least, you don’t have to remember what I have said”

  7. #7 by Loh on Friday, 29 April 2011 - 9:29 pm

    ///”It (brain-drain) is not something that is happening now. It is a problem that has been happening for some time. But we are taking very concrete measures to address this,” he added.

    Najib was responding to the World Bank’s report that “accelerating brain drain” posed the greatest threat to Malaysia’s plans to achieve developed status in 2020, including attracting foreign investments.

    The Prime Minister refuted the World Bank report’s chief author and senior economist Philip Schellekens’ claim that a lack of investments and brain-drain were due also to race-based policies in favour of Malays.///

    Najib is right that brain drain did not just happen, and NEP has been for 40 years. NEP is the cause of brain drain, period.

    If Najib believes what he quote to refute the World Bank’s report, then we have the most stupid Prime Minister ever.

    NEP is the cause of the bastardized policies created by UMNO to discriminate against non-Malays. So the bulk of those who left are non-Malays. Happily Malays are following the footsteps of non-Malays because they could not stand the rampant corruption which has been institutionalized. Now trained manpower of all races are leaving Malaysia. NEP is not free lunch for the country, and I am happy that it is ruining this country because it proves that injustice cannot be a good policy..

  8. #8 by Loh on Friday, 29 April 2011 - 9:37 pm

    ///Shazryl took the oath on behalf of “Datuk T”, the nickname the trio behind the latest sex scandal had adopted.

    “I swear today that I and Anwar Ibrahim were in the video on February 21, 2011 and Anwar is the actor (in the video).

    “If what I said today is false, then may Allah curse me,” he said to a witnessing imam while holding the Quran.///–Malaysian Insider

    Najib has declared that anybody is free to take the oath and the government neither support nor discourage, but clearly took note.

    Najib himself also took an oath in a mosque.

    How we wish we are able to see God takes action against those who are evil, such as those who introduced evil government policy to remain in power should die young. We saw a case but then another person proves that God is not active.

  9. #9 by tak tahan on Saturday, 30 April 2011 - 2:13 am

    Hallo will impose the harsh punishment..not allowing to die young but man man pua cheh si

  10. #10 by CK-LA on Saturday, 30 April 2011 - 7:58 am

    NEP is the culprit and has to go. Don’t mind helping the poor Malays or any race as a matter of fact, but do not discriminate. The moment you do that, off the brains to any place that they can feel appreciated.

    As the study pointed out: “better career prospects, social injustice and higher wages as their main reasons for leaving” – get rid of social injustice and the other two will come naturally as the brains now have a mission to work for the betterment of the country. Just look across the causeway….they are laughing at our stupid policy and benefitting greatly. Now, how can you implement anything great when all your smartest people are overseas?

    Still think NEP is necessary? The intangible price we are paying for it are the brains that migrated. Let’s build a bigger pie (with brain powers) and not be fighting for the crumbs (thanks to that stupid policy with lots of racial politiking)!

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