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The push and pull factors Print E-mail
Sunday, 07 February 2010 18:25

THERE are reasons why people leave the country of their birth. Usually, it is for the sake of their children’s education and future. Or it could be their own personal professional advancement. Or it could be a slew of reasons to do with the socio-economic and political factors.

Whatever the reason may be, it is a decision that is not made overnight. As they consider the events that engulf them and the country and mull over their own experiences, they reach a conclusion – to stay or to go.

Sherilyn Foong... Many Malaysians have left the country for Singapore's Asean scholarship programme.

If they move on, they hope they are moving on to greener pastures. If they stay, they hope things will be better.

Below are some of the reasons why Malaysians leave the country they called home.

Meritocracy and education

The issue of meritocracy and education is perhaps one of the biggest reasons. The education system has flip-flopped with language switches, and its standards pushed to alarming levels.

The passing mark for subjects in public exams have fallen very low while the increasing number of distinctions have risen astronomically high with SPM students notching up to 21As, says a teacher from a secondary school.

Furthermore, there are questions on why a student’s race is encoded in his serial number during public examinations.

The other issue is that scholarships offered by government and government-linked corporations seem to favour one race.

The situation is working out in favour of Singapore. With a GDP per-capita and currency that is 4 times and 2.5 times respectively that of Malaysia, Singapore knows only too well the importance of nurturing human capital.

“Many Malaysians have left the country for Singapore’s Asean scholarship programme. After being bonded for 3 years to the Singaporean government, these young Malaysians take up permanent residence there,” says private equity manager, Sherilyn Foong.

AmBank Group economist Manokaran Mottain says that in many private Malaysian colleges, Singapore employers are waiting to hire them.

“There have been cases where scholarship holders purposely default on their scholarships and are willing to pay the penalty because they feel their new place offers a better prospects and a higher quality of life,” says Manokaran.

Manokaran Mottain... 'We are not tackling the real issue... there is the politics behind all these policies.'

He adds that many parents themselves, encourage their children to study and make a living abroad, as they have lost confidence in the Malaysian education system.

The quality of tertiary education is important in making it more attractive for people to remain.

“We are not tackling the real issue – and that is the politics behind all these policies,” he says.

A low cost model

Malaysian salaries are significantly lower than its neighbours.

Historically, Malaysia has driven its economy through a low cost model.

Some forty years ago, it started off as a manufacturing base assembling TVs, electric and electronic parts.

Because Malaysia did not do the design and research of the products, skills were not nurtured and salaries were low.

The Government also operated on a fairly strong subsidy policy – staple goods such fuel, chicken, sugar and flour were kept at artificially low prices.

Hence, people didn’t go in search of high salaries as they were able to make do with the situation.

At that time, providing a low cost environment was Malaysia’s competitiveness. This was important to get its people out of poverty. However, this policy also caused a wage disparity between Malaysia and other countries to widen.

“The Government has realised in the last five to six years that they have gotten themselves into a dead end. It is not competitive, and its industries do not permit high salaries. So now, the Government knows the importance of having an economy that is more knowledge centric,” says Stewart Forbes, executive director of the Malaysian International Chambers of Commerce and Industry (MICCI).

This low cost model has also caused the battle for the share of foreign direct investment (FDI) among our neighbours to become tougher. FDI now goes to countries like Cambodia, Vietnam and Indonesia.

“Malaysia is still a remarkably good place to invest, but it does not stand out,” says Forbes.

The Economic Planning Unit is targeting to have a Gross National Income (GNI) per capita of US$15,400 by 2020, which is roughly to double from current levels.

“While that is not easy to achieve, we must bear in mind that other countries will also be growing at a very fast rate over that period.

Singapore’s GNI per capita, by that time, will be US$50,000,” says Forbes.

The other issue that need to be addressed is protectionism. When there is so much protectionism, what is the incentive for these companies to grow and move up the value chain? Competition spurs innovation.

Malaysia’s indolence in phasing out uncompetitive industries and in implementing meritocracy perhaps explains why Malaysia’s development is behind economies like Singapore, Taiwan and South Korea despite having natural resources, infrastructure and an English speaking population.

“Hence, Malaysians with a high level of technological skills find that their skills are not suitable in Malaysia. They simply cannot find jobs here, so they leave for more developed economies,” says Foong.

Salary gap

The salary gap now is so significant that it is only natural for working professionals to be tempted by the high salaries of the more developed countries.

Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan says a mid-level manager in the US earns about US$100,000 a year (or RM30,000 a month).

In our survey, senior manager earns about RM20,000 a month only. No matter how much one loves the country, it’s hard to make that kind of sacrifice,” says Shamsuddin.

He adds that in attracting foreign talents, visa application is important.

“Singapore has made it hassle-free. After two years of working there, one can apply for permanent residence status. If it is above 5 years, he can be a citizen. In Malaysia, expats have to renew work permit yearly.”

As for the medical profession, who has not heard about the poor remuneration in government hospitals or about the compulsory three-year housemanship for returning doctors.

Apart from having paid so much to study medicine, the Malaysian government appears to be discouraging these doctors to return.

Recent, it was reported that the government is considering extending the compulsory public service period for medical graduates from the current three years to five or 10 years.

Health Ministry director-general Tan Sri Dr Mohd Ismail Merican, who is also Malaysian Medical Council president opposed the move. “I disagree with the proposal because whether the doctors are serving the government or otherwise, they are still serving the country,” he reportedly said.

The current housemanship period for medical graduates is five years, comprising two years of housemanship and three years of compulsory service. The housemanship period was extended last year, from only a year in three compulsory disciplines to the current two years.

The low pay aside, the environment is harsh due to the acute shortage of doctors. Sometimes these doctors work 36 hours continuously, which is unheard of in countries like Australia and Britain.

“Not even night shift workers work for 36 hours straight like some doctors do,” a reader complained to The Star’s letters column.

It was highlighted recently that a Malaysian medical doctor working in Australia applied to work in Malaysia had his application rejected on the grounds that his application was submitted after having returned. (See flashback)

Apparently, the application should have been submitted while he was in Australia. Is this not a poor excuse of attracting our talent back?

Brain gain

While it may not be possible to lure Malaysians to return, it is possible to make up for the loss of expertise by bringing in qualified expatriates.

Malaysia has some 38,000 expatriates today, but this number too is falling. Singapore is going a step further by trying to lock in these expatriates into their gene pool.

“If we don’t have the skills, we have to import them and stop having protection blinkers over our eyes. We cannot say ‘No’ to an FDI because it brings with it 20 expatriates and hence deny 20 Malaysians of a job. We need to look at the bigger picture,” he says.

Malaysia has to improve its environment and move up to being a knowledge based economy to attract both expatriates and the existing labour market.

Today, expatriates who come here take a more holistic view. They want to know the state of security in the country, the education system and the overall environment they will be living in.

In terms of advancement of broadband, Malaysia is still pathetic, and way below its penetration target of 50%. Its pick up in IT is very slow, and this could be due to some degree of protectionism.

Malaysia, however, scores high in its infrastructure of ports, dams and bridges. It also has a government that is business friendly. Its citizens can speak English, although that too, is declining.

“The Government is now talking about creating a more meritocratic education system. There is now talk of high merit schools and new curriculum. While these will take time to implement, hopefully it will prevent people from leaving Malaysia,” says Forbes.

His other suggestion would be to maximise the use of its labour resources.

There are people under the Malaysia My Second Home Programme who are not allowed to work. These are the skilled and educated wives of expatriates. Automatic PR could also be given to expatriates who have worked in Malaysia for a certain number of years.

“We could also allow people who have given up the Malaysian citizenship to reapply for Malaysian citizenship. They do not stop being Malaysians just because they have given up their citizenship. Do not penalise your people for making mistakes,” says Forbes.

NEP

One of the push factors lie in the New Economic Policy (NEP) policy and this needs to be addressed with urgency and sensitively.

Last February, CIMB Group CEO, Datuk Nazir Razak suggested a review of the NEP and how the country can attract the best talent.

“I hope the Government will embark on a holistic review of the NEP and all its instruments of implementation towards a framework for affirmative action that today’s Malaysians can accept and unite behind,” he said.

The key thing that is objectionable in the NEP is the method of implementation.

Private equity manager Sherilyn Foong shares this view. “No one had problems with the NEP. Problems only arose due to its implementation ... in the quotas and job reservation in the public and private sector, local universities and government linked companies.”

The NEP was introduced in 1971 in the aftermath of the May 1969 race riots as a policy tool to rectify racial imbalances, which was thought to have been one of the main causes of racial disharmony in the first place.

Says Forbes: “The introduction of the NEP was a good thing, but its implementation was not as effective as it could have been. The Government realises this, hence liberalising FIC regulation rules last year. I say we should reformat the NEP without artificially clamping down on other sectors. You can have your cake and eat it too.”

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/2/6/business/5614764&sec=business



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