Poor English skills, race quotas in way of Malaysian prosperity, says ST

By Clara Chooi
December 21, 2011

Najib previously said his reforms are only possible with a strong mandate. — File pic

KUALA LUMPUR, Dec 21 — Malaysia’s shortage of skilled, English-speaking workers along with ethnic-based quotas that complicate hiring practices will hamper the country’s economic momentum despite a rise in foreign investment, Singapore’s Straits Times said today in an editorial about the Najib administration.

The newspaper, which is considered to be a reflection of the establishment voice in Singapore, said the Najib administration must follow through with its current reform efforts.

However, further economic reform “may” only be possible if Datuk Seri Najib Razak strengthens his grip on the ruling Barisan Nasional’s (BN) lynchpin, Umno, through a “solid endorsement” from voters in the coming polls, senior writer Bruce Gale said in the story appearing in the newspaper’s Op-Ed page today.

He said although official numbers show that foreign investment in Malaysia had risen markedly this year, the country continued to lag behind its neighbours.

Gale said this was likely the result of the dearth of skilled, English-speaking workers and race-based quotas that “complicate hiring practices”, both of which he described as fundamental problems that have led the country into the middle-income trap.

“Several measures foreshadowed last year have either stalled or yet to fully materialise. Chief among these is the promise that ethnic quotas would be further relaxed,” he added.

But, Gale noted that abandoning race-based quotas was a move that would meet strong resistance from within Umno.

The writer also commended “reformist” Najib’s market-oriented changes as enshrined in the New Economic Model (NEM), pointing to a World Bank report in October on the ease of doing business that showed Malaysia moving up five notches in the bank’s global ranking.

Gale cited another report from consulting firm AT Kearny earlier this month, which placed Malaysia among the world’s top 10 most attractive destinations for foreign direct investment.

This year’s figures, he said, also showed that total investment approvals in Malaysia until October stood at RM26.4 billion — fast approaching the previous peak in 2007 of RM29.5 billion.

“Under Mr Najib, foreign banks have been permitted to set up fund management and advisory operations, and the minimum quota for Malay ownership in publicly traded companies has been lowered,” Gale added.

However, he warned that sustaining the surge “could be difficult” due to the global economy and the possibility that current investor interest “may simply be the result of the implementation of previously delayed projects”.

“All this suggests that the reform effort must continue if the current momentum is to be sustained,” he said.

In an international forum last month, Najib said his government’s political and economic reform plans can only take place if Umno delivers a solid win in the upcoming national polls, expected to be held within months.

Calling it a small challenge for BN’s biggest component party, the prime minister said Umno needed to work together with its partners to deliver results in order to be re-elected in the general election.

“We have to cross the bridge of the general election, it is very important to be re-elected for us to deliver real transformation, we need to get support from the people,” he had said.