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ATimes: It's all about education, stupid
By Anil Netto
23/10/2001 3:39 am Tue
[Kakitangan kerajaan mungkin akan merasa seronok bergaji baru tetapi tunggu
dulu. Bukankah ramai yang tinggal jauh dari Putrajaya yang sudah tentu
perlu membakar lebih banyak petrol sebenarnya? Dan semua makanan yang dijual
di medan selera di sana dan di mana-mana sahaja perlu dibawa oleh kenderaan
petrol juga. Hampir semua benda sekarang ini menggunakan minyak sebagai sumber
kuasa dan ini termasuk tenaga elektrik juga. Tambah di sini korek di sana - dan
yang banyak dikorek itu adalah kita.
It's all about education, stupid
By Anil Netto
PENANG - Malaysia's economic planners are banking on a turnaround in
global economic conditions in the second half of next year to achieve
what look like overly optimistic projected economic growth figures for
The 2002 budget unveiled in parliament on Friday projects economic
growth of 4-5 percent for 2002.
Over the past year, Malaysia has been overly optimistic in its
economic forecasts. After recording a heady 8.3 percent growth in
2000, the government had initially projected 7 percent growth for
2001, but that has been revised twice to the present 1-2 percent.
Even before the September 11 attacks in the United States, private
analysts had projected that growth this year would be probably only 2
percent at a time when the government was forecasting 5-6 percent. The
latest estimate of 1-2 percent growth for 2001 still appears too
optimistic. A more realistic projection would be growth of 0.5
percent, zero growth or even a recession.
But the government is obviously hoping that its moves to boost
consumer spending and pump-prime the economy will compensate for
flagging export sales. Much will depend on how soon and whether the
additional 7 billion ringgit (US$1.8 billion) in pump-priming stimulus
packages announced earlier this year will filter down through the
To improve consumer spending, the government has sliced income taxes
by 1-2 percent, and awarded 850,000 civil servants a 10 percent pay
hike and a half-month bonus (with a minimum payout of 1,000 ringgit).
To make up for the loss in revenue, it has raised petrol and diesel
prices by about 10 percent and hiked up taxes on cigarettes and
tobacco by 20 percent.
Critics have pointed out that the tax cuts will benefit the higher
income groups most. Those with annual chargeable incomes of 250,000,
for instance, will save 3,800 ringgit in taxes compared with tax
savings of only 200 ringgit for those with chargeable incomes of
Still, the budget has been generally seen as pragmatic and balanced
though there was some disappointment that the corporate tax rate was
The key question now is whether the projected growth of 4-5 percent
for 2002 is achievable. Much will depend on whether the turnaround in
the global economy materializes in the second half of next year. The
government is hoping that the electronics sector - Malaysia's main
revenue earner - will recover soon. It appears to be counting on
higher fiscal spending in the United States on military electronics
equipment for surveillance and communications to boost the recovery
The budget projects that the manufacturing sector will expand by 6.5
percent in 2002 after recording an estimated growth of just 0.2
percent this year. That could prove beyond reach as Malaysia's main
export markets - the United States, Japan and Singapore - are all
experiencing slumps in varying degrees.
Total exports are expected to decrease by 10.8 percent in 2001 as the
merchandise and the current account surpluses fall again.
One area where the government could do better is in the construction
industry. It has forecast growth of only 4.3 percent for 2002 in this
sector (compared to 4.9 percent in 2001). An economist in a TV panel
discussion said he couldn't understand why this figure was so low when
there is an insatiable demand for low-cost houses, which are in short
supply. A massive low-cost housing construction program could help
jump-start the construction industry and provide other spin-off
But despite the concerns over flagging external demand, Malaysia's
macroeconomic fundamentals look fairly sound. There is a projected
current account surplus of 25.1 billion ringgit for 2001, a balance of
payments surplus of 0.5 billion ringgit for the year, external
reserves of US$30 billion (enough to finance 4.7 months' retained
imports or 6.3 times higher than the country's short-term foreign
debts) and an official inflation rate of just 1.3 percent for 2001.
Worryingly though, the nonperforming loans ratio for the first six
months of 2001 crept up to 8.3 percent from 6.3 percent at the end of
2000 - though this was said to be due to a "reclassification" of loans
to aid the banking restructuring process.
Perhaps the most pressing concern - and this is something that the
budget alone cannot tackle - is how Malaysia is going to climb up the
technological ladder when its human resource skills level is still
wanting. The budget makes some attempt to address this concern. Some
900 million ringgit is allocated for rural schools with 100 million
ringgit for six new rural matriculation colleges. It allocates 205
million ringgit for the computerization of schools - a sum that seems
inadequate when some 5,000 schools throughout the country still lack
sufficient PC facilities.
But no amount of money spent on education will be enough when what is
needed is a qualitative revamp of the education system. Almost
everything related to the education system - the selection of teachers
and lecturers, their training, the curriculum and teaching methodology
(which does not encourage students to think and to be creative) -
needs an overhaul. Malaysia badly needs a competitive edge over its regional rivals in
its human resources skills level to draw in much-needed new
investment. Indeed, in the long run, a revamp in the Malaysian
education system would do more than any budget package to take the
country to a new level of economic competitiveness and self-reliance.
Malaysia badly needs a competitive edge over its regional rivals in its human resources skills level to draw in much-needed new investment. Indeed, in the long run, a revamp in the Malaysian education system would do more than any budget package to take the country to a new level of economic competitiveness and self-reliance.