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M. Bakri Musa

Seeing Malaysia My Way

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Location: Morgan Hill, California, United States

Malaysian-born Bakri Musa writes frequently on issues affecting his native land. His essays have appeared in the Far Eastern Economic Review, Asiaweek, International Herald Tribune, Education Quarterly, SIngapore's Straits Times, and The New Straits Times. His commentary has aired on National Public Radio's Marketplace. His regular column Seeing It My Way appears in Malaysiakini. Bakri is also a regular contributor to th eSun (Malaysia). He has previously written "The Malay Dilemma Revisited: Race Dynamics in Modern Malaysia" as well as "Malaysia in the Era of Globalization," "An Education System Worthy of Malaysia," "Seeing Malaysia My Way," and "With Love, From Malaysia." Bakri's day job (and frequently night time too!) is as a surgeon in private practice in Silicon Valley, California. He and his wife Karen live on a ranch in Morgan Hill. This website is updated twice a week on Sundays and Wednesdays at 5 PM California time.

Wednesday, February 27, 2008

Towards A Competitive Malaysia #46

Chapter 6: People: Our Most Precious Asset (Cont’d)

Keeping Malaysians Healthy

The third element to a productive populace would be health. It is widely assumed that Westerners are healthy because of their superior medical care. Wrong! Yes, they have superb hospitals and doctors, but that is not the primary reason. In fact there is very little correlation between expenditures on healthcare and the outcome.

With economic development Westerners could afford better nutrition, clothing, and housing; these contribute greatly to good health. Civil engineering marvels as water and sewer treatment, and public health measures like immunizations and stringent food hygiene contribute more to good health than hospitals and doctors. Even the availability of electricity improves health through better food refrigeration. Better engineering and modern financing like long-term mortgages make homes affordable. In Northern Canada, pneumonia in the young was reduced dramatically not through the availability of antibiotics or pediatricians but through better-designed homes with vestibules to the front door and double-paned windows to reduce the cold draft. Even the simple invention of soap contributed greatly to enhancing personal health.

The major factors contributing to morbidity and mortality in the developed world are lifestyles: smoking, alcohol, overeating, and lack of exercise. Physicians and modern medicine cannot do much to resolve those problems except to repair the inflicted damages. In the developing world, the leading causes of death and disability are trauma (from wars and accidents), infectious diseases (AIDS and malaria stand out), and under- and malnutrition. Modern medicine has only a minor role in preventing and alleviating such scourges.

Central sewers and water treatment plants are expensive but there are cheaper substitutes suitable for rural areas. The UN has designed a simple latrine that could be sold with subsidy if need be. The resultant improvement in health and thus productivity (fewer flies and worms, reduced enteric diseases) would more than recoup the investments. Similarly, the government could build in each village a deep well and a simple filtering system, as in Bangladesh.

Paul O’Neill related his moment of epiphany while visiting Uganda as US Treasury Secretary. He was distressed to see so many children suffering from diarrhea because of contaminated water. It was wrenching. He quickly inquired on how much it would cost to build a deep well and lay the pipes. Only a few hundred dollars! He then asked how many such villages there were and quickly calculated the total costs. To his amazement, it was only a few million dollars. Imagine the improvement in the well being of the nation for that modest investment.

The Ugandan official then gently reminded O’Neill that only a few years earlier an American-funded study estimated that it would cost $2 billion to supply the country with potable water. Stunned by the bloated estimate, O’Neill asked to see the plans. Sure enough, the facility was designed to the specifications of Cleveland, Ohio, not for a poor country. Thus it included expensive and unnecessary environmental impact studies as well as high-cost maintenance.28 Sometimes by thinking small and cheap, one can achieve much more, or even great things. Many foreign aids programs funded by such august bodies as the World Bank suffer from such massive leakages as well as through corruption.29

Malaria, which still plagues the Third World, used to be common in the California delta. By building levees, malaria is now no longer a threat. The intended purpose was not to control malaria but to reclaim fertile farmland and control floods, but the effect was to direct the water into swift channels where the mosquitoes could not breed. The economic benefits doubled: more fertile farmland and a healthier population.

Another example would be improved highway engineering like divided freeways, medians, cloverleaf intersections, and clear signs that help reduce accidents. Malaysian highways may rank with those of the West, but only superficially. I have never seen a police patrol car even during peak times, and because of that, the road is filled with dangerously overloaded trucks and buses rushing at frightening speed. There are no highway safety checks; heavy vehicles with worn tires and unsafe brakes have free rein. The tragic part is that the lives maimed and destroyed on these highways are those previously healthy and productive.

Even new diseases like the bird flu and Nipah virus meningitis are best tackled through better engineering and public health measures. Saskatchewan, Canada, produces more hogs than Malaysia. As they are raised under stringent hygienic conditions with better control of the waste, the animals are healthier and pose less of a health hazard to themselves and their handlers, and ultimately the public. There is also considerably less pollution. The Negri Sembilan coast is polluted because of hog farming along the Linggi River; this was also where the Nipah virus outbreak occurred a few years ago.

Avian flu is another major threat. Comparing a poultry farm in China with that in California would readily demonstrate why the disease started there and not in California.

The solutions to the major threats on health and lives lay for the most part outside the purview of medicine. The Works and Transport Ministries as well as the Police Force have more to contribute than the Health Ministry. I do not belittle the contributions of modern medicine. Today a patient with acute appendicitis has every expectation to be cured and out of hospital to resume his normal life in a matter of days. In the developing world, many still die of such readily treated maladies.

Many associate the miracles of modern medicine with such spectacular and expensive interventions like heart transplants. On the contrary, the true miracles are much less heralded, cheap, and taken for granted, like polio vaccines. Even relatively expensive vaccines (Hepatitis B) are still very cost effective. These proven basic public health measures should be provided to all even if they involve heavy subsidies. In reality they are not subsidies rather investments in our human capital, and a very profitable one at that. Besides, it is the right thing to do.

Many blame modern technology for the escalating costs of today’s medical care. Again this is a myth. The really true advances like polio vaccine are actually quite cheap. Expensive items like heart transplants are what Lewis Thomas called “halfway technologies.” He gave the example of polio. In the 1950s many polio victims were kept alive through expensive iron-lung machines. Similarly there were expensive and tedious operations aimed at strengthening the extremities damaged by the disease. Those were all “halfway technologies.” The real advance came with fully understanding the nature of the virus causing the disease, and with that the discovery of the vaccine. That is the real technological advance.

The distinguished economist Ungku Aziz, whose insight on rural poverty is unmatched, attributes the backwardness (mental and physical) of rural youths to their inadequate nutrition and chronic parasitic infestations. He astutely observed that even today rural Malays are shorter and smaller than their urban counterparts. Similarly today’s Asian children are taller and heavier than those of the immediate postwar period, reflecting their better nutrition. Genetics cannot explain such quick changes.

If such physical attributes could be readily improved within a generation through better nutrition and public facilities, imagine what could be done to enhance intellectual development.

Providing school meals is one effective way to improve the nutrition of rural children. America is doing this in its inner schools. To solve the high dropout rates, some economists suggest paying parents to keep their children in schools, as with the Progressa program in Latin America.30 Malaysia should do both. As for worm infestations (common among rural children and contribute to their listlessness), providing WHO-designed latrines would be far more effective than regular de-worming. I am against resorting to drugs as the first line of attack. When I was young, my parents insisted that I use wooden sandals that cost pennies. That is the cheapest, safest and most effective preventive measure; it beats regular de-worming hands (or pants!) down.

Another neglected aspect of public health is child and maternal care. Again, you do not need high-priced doctors to achieve this. Midwives, public health nurses, and dental hygienists could be trained at a fraction of the time and cost. The benefits to the citizens would be immense. Malaysia has been cited by the World Bank as a model for successfully investing in maternal health. This was the initiative of Tan Sri Majid Ismail, the Director-General of Health in the 1970s. Remarkable considering that he was an orthopedic surgeon, not a pubic health expert. Every village now has a modern-trained midwife; they are the unsung heroes of Malaysia’s remarkable improvement in maternal health. The prenatal environment is crucial in the development of the fetus, and of the baby.

Poor dental hygiene also contributes to ill health. Junk food, candies, and not brushing teeth are factors; another is the lack of water fluoridation. This can be overcome with supplements. When I was in primary school, there were regular visits by the dental nurse who would instruct us on basic dental hygiene as well as taking care of simple problems.

We lament the poor performances of rural pupils who for the most part are Malays. Implementing these simple measures would help tremendously. We cannot expect these poor rural children to perform at peak level mentally and physically when they are undernourished, chronically anemic, ravaged with worm infestations, and burdened with bad dentition.

These basic but essential healthcare items must be addressed first, even ahead of building new hospitals and medical schools. Tan Sri Majid Ismail once told me that healthcare is a bottomless pit. Unless prudently handled, it could bankrupt the nation. America is desperately trying to restrain its healthcare costs, currently consuming in excess of 15 percent of its GDP. Prudent healthcare spending means emphasizing basic public health, and providing basic medical care only for those who cannot afford it. It is not the government’s responsibility to subsidize healthcare to those who can afford it.

Healthcare policies must be part of the overall economic policy. With increased wealth, the citizens can take care of their own health, thus saving government resources. Also with economic growth, many would be lifted out of poverty. That in itself is health enhancing.

Next: Empowering Citizens

Sunday, February 24, 2008

Greater Scrutiny Needed For UM/PPC-MINT/Glomac Venture

The proposal by the University of Malaya’s governing board to let a private entity, PPC-MINT-GLOMAC, develop 27 acres of campus land deserves greater scrutiny. The university’s press release of February 9, 2008 did not contain sufficient details for the public or government to make an informed decision.

I am supportive of our universities going into partnership with private entities to develop campus assets, real estate and others. That would conserve the universities’ limited financial and other resources which they could then focus on purely academic matters. Creatively and properly structured, such partnerships would benefit the university and its community, the government and thus the public, as well as the participating private companies. Handled less competently and it would result in the rapacious stripping of valuable public assets to benefit only the lucky few. God knows, Malaysia has plenty of such examples, with the boondoggle Port Klang Development Project being the latest and most expensive. Taxpayers will ultimately be left holding the multi billion ringgit tab; it is criminal that our leaders would let such scarce funds be squandered.

According to the press release, the university would stand to collect at least RM312M, or RM200M plus the profit from the project, whichever is higher. Profit figures are tricky; they can be subjected to highly “creative” accounting. Enron posted record profits the year before it filed for bankruptcy. At the other end, it is the job of smart accountants to “reduce” profits (at least on paper) especially when reporting to tax agencies. A quick and dirty maneuver would be to simply inflate your expenses by paying your executives, consultants and directors outrageous compensations. Another would be to “expense” what otherwise would be capital expenditures; meaning, charging the expense in one year instead of spreading them over many.

Also not stated in the proposal is whether those profits would be a one time payment as when the developers would sell their finished projects, or a steady stream with the developers maintaining and operating their projects. The latter would produce a smaller initial payout but the university would benefit from the steady and predictable stream of income.

One significant financial improvement would be to tie the payments not to profits but to revenues. Top Hollywood stars know only too well the difference when their compensations are tied to profits as in the old days. Thus today they all opt for a share of the revenue, not profits.

Yet another improvement would be not to sell but to lease on a long term basis (with renewal options) the land to private developers. Those are valuable pieces of real estate; its value can only go up in land-starved Klang Valley. By leasing instead of selling, the university would not lose future gains in value.

In subsequent separate statement, UM’s Deputy Vice-Chancellor Amin Jalaludin indicated that the university will maintain ownership (title) of the land. This must mean some sort of lease arrangement. The university owes the public a duty to declare the terms of that lease.

These are but some of the major financial considerations. Others more financially savvy could come up with other creative and innovative financing schemes.

Non Financial Considerations

While financial considerations are important and a major determinant of the viability of the project, an equally if not more crucial consideration is to ensure that such a development and partnership scheme would enhance or further the goals and activities of the universities. Unfortunately on this important point, both the university and developers are curiously silent.

For one, what does the university intend to do with the money it would get? If the funds were to go into the general revenue for running the campus, then the future benefits would be minimal and impact not noticeable. However if the university were to dedicate the new money for specific projects like funding a new center for science research, expanding the library, or making the campus wireless, that would be much more meaningful and the impact more lasting and readily appreciated. With the benefits so tangible and readily appreciated, that would encourage further similar beneficial partnerships.

Similarly with the developer; it is not forthcoming on what it wants to do with the precious property. The company’s development plans should interest the university and the public. If the developer plans for a convention center, then that would be positive as it would complement the university’s goals. The university could use the facility for its convocations and for hosting conferences. The same benefit would accrue to the university with the building of a Research and Development Park.

On the other hand if the developer plans to build exclusive high-end condominiums, that would not add value to or enhance the university’s goals or benefit its community. For one, none of its professors could afford to buy or live in one of the units. However if it is for modest and affordable flats, that could alleviate the campus housing problem.

So in addition to the financial arrangements, the university must also get a clear commitment from the developer and impose restrictions on the use of the property. These should the minimal factors the university governing board members must deliberate. Anything less and they would not be fulfilling their fiduciary and other responsibilities. Minister of Higher Education Dato Mustapa must ensure these conditions are met before considering the venture.

Wednesday, February 20, 2008

Towards A Competitive Malaysia #45

Chapter 6: People: Our Most Precious Asset (Cont’d)

Preschool Education

Until recently, the government has ignored this field entirely, letting the private sector fill the need, which is substantial.

Despite the mushrooming of private “Tadikas (Malay acronym for TAman DIdekan KAnak Kanak (Children’s Guidance Nursery),” there is minimal regulation. It is strictly a case of buyer (or parents) beware! One would expect at least minimal safety and health standards. Consequently there are regular outbreaks of viral and other communicable diseases at these preschools; parents have to use their own judgment. Some are located near noisy, highly polluting industrial plants or at busy intersections. Like other private educational institutions, these preschools are also highly segregated racially. As they cater for the well to do, or at least those who can afford the fees, there is also social segregation.

The Ministry of Education (MOE) controls the curriculum and mandates teachers’ qualifications. Like all other MOE directives, there is little room for local creativity. The redeeming part is that these mandates are impressive only on paper; the reality is far different. Many of the establishments, especially those run by Islamic organizations, pay only lip service to the ministry’s mandates. Most of the facilities are extended “mom and pop” operations located in private homes. Non-governmental entities, in particular Islamic bodies, are also active. Major corporations who are eager to establish private colleges and universities have yet to discover this large, profitable and unmet market. I anticipate that in a few years they will; then we would have quality facilities that would be protective of their brand names. Today only the Montessori group is expanding.

The highest priority is for government-funded facilities in rural and poor

urban areas. Currently there are some facilities run by governmental agencies other than MOE. If the government were to involve itself in preschools catering for groups other than the poor, then it should be only through the general tax policies, like making tuition expenses tax deductible for those attending Tadikas that met strict state criteria like having their enrollments reflect Malaysian society. Exposing the young at an early age to a multicultural environment would be good for them as well as for the nation.

James Heckman, the Nobel Laureate in economics, notes that state intervention in pre-schools for disadvantaged children is not only socially just and morally right but also a sound economic investment with proven generous returns.

Most public policy initiatives like the NEP face the equity-efficiency dilemma; investment in preschool for disadvantaged children is the rare exception. Focusing only on the subsequent gains in earnings, such investments yield returns as high as 17 percent. Besides, there are other important but not readily quantifiable gains, such as reduced fertility, crime rates, and other dysfunctional behaviors like drug abuse.

A “good” family is the most reliable predictor of success for children, including their probability of going to college. It is the most important variable, more important than parental income or education. “Good” means a stable family headed by both parents with no absent father figure, and where the young are properly acculturated to the norms and values of society, and where the parents engage in such parental activities as reading to their children at bedtime.

Children from “bad” families contribute disproportionately to crime, drug abuse, and other dysfunctional behaviors. “Bad” is where the mother is divorced or abandoned, and the family is without a father figure. In America, such “bad” families are primarily among minorities, giving rise to the unfortunate association of race. However, similar dynamics are seen in “bad” white families, as those in rural Appalachia.

The benefits of childhood intervention are highest the earlier it is instituted. The government’s Tadika programs are for children five years old. Experiences with the American Perry Project suggest starting as early as three or four. At that early age the emphasis would be more on providing a good childcare environment.

The preschool years are critical to instilling positive values, habits, and other desirable traits. The benefits are seen in both cognitive (thinking) and non-cognitive (behavioral) areas like motivation, perseverance, and self-restraint. These skills if acquired early would ease future learning; skill begets skill; learning begets more learning.

Providing superior childcare and preschools to those from deprived families would help nullify the negative influence of the “bad” family. I would extrapolate Heckman’s observation by extending the intervention even much earlier, to the prenatal environment. Effective prenatal care, heavily subsidized if need be, would ensure healthy babies, and subsequent enhanced quality of human capital, but more on healthcare later.

This is the lesson from Scandinavia. There the rates of families headed by single mothers are also high, but because of the ready availability of subsidized quality childcare and preschool programs, their societies are not burdened by the same social pathology, and their workforce remains highly productive.

If Malaysia were to provide such facilities in rural and poor urban areas, it would have significant positive impacts. Additionally by freeing these poor young mothers to enter the work force, the economic benefits they accrue would help defray the subsidy. These mothers would also learn important life skills instead of being cooped up at home taking care of their young, a chore they are not good at anyway.

Providing preschool facilities would not be as politically sexy as building universities, but in the long term, that would prove to be the more fruitful investment.

Next: Keeping Malaysians Healthy

Sunday, February 17, 2008

Financial Autonomy To Universities A Good Start

The decision by Minister of Higher Education Datuk Mustapa to grant financial autonomy to public universities is a good start. He should not stop there however; he should also push to extend academic, management, and other freedoms. Our universities will forever remain trapped in mediocrity as long as they remain within the clutches of the civil service.

University of Malaya Law Professor Azmi Sharom says it best, “If we love our universities, we must set them free!”

It shows how cumbersome the administrative machinery of the government is that such a simple decision would take months if not years to implement. It would involve among others changing the various laws and regulations, right down to employment and procurement practices.

Further, with the coming elections, there is no assurance that Mustapa will remain in his present post. His successor may make yet another policy U-turn that regularly afflicts our education system. Even if Mustapa were to keep his present position, there is no guarantee that he could overcome powerful forces that would resist ceding control of our universities.

Yet those administrative changes, difficult though they may be to execute, would be the easy part. Much more challenging and trickier would be to adjust existing mindsets. Brought up under the present system, our academics and university administrators have long internalized the ethos and culture of the civil service. I am not at all assured that they are capable of leading or even adapting to the change.

Making Public Universities Accountable

Public universities are tax supported; consequently they must ultimately be accountable to the body politic, meaning the government of the day. However, there are other more effective ways to hold universities accountable without directly micromanaging them.

The matrix of the civil service is the very antithesis of academia. In the civil service, following established orders (“Kami menurut perentah” – We await directives!) is valued; in academia, you question established wisdom and assumptions. That is the only way to progress.

The currency of the civil service is the size of your department as measured by the number of subordinates and budget allocation; among academics, the number of publications and frequency of citations.

Meritocracy as practiced in the civil service is a completely different concept from that acknowledged in academia. Thus to have the Director of Public Service Department decide who should be promoted Dean or Professor would be a recipe for disaster. That is precisely the current problem with Malaysian public universities.

As I wrote in my book, An Education System Worthy of Malaysia, the government could exert effective influence on public universities more through the twin macro levers of the governing boards and budgetary process.

Appoint competent individuals with integrity who share the government’s broad policies and philosophy to the governing council of universities. If it is a choice between someone competent but does not share your political views versus someone who shares your views but otherwise incompetent and corrupt, I would opt for the former. It is far easier to convert someone to your viewpoint; more difficult to change or improve on someone who is incompetent and corrupt.

The other equally powerful lever would be the budgetary process, both operating and capital. With operating budgets, the government could tie them to the universities meeting certain prescribed goals. If they exceed the target; they would get bonuses; if they fail, they would be penalized financially.

These goals could be tied to the government’s polices. For example, the government’s oft-stated goal is to increase the number of Bumiputras enrolled in the sciences. Universities that meet or exceed that target would be rewarded financially. Similarly with the policy of encouraging graduate studies and research; reward those universities who award doctoral degrees (especially in the sciences) and whose faculty members publish scientific papers.

Similarly with capital budgets; the government could promise to underwrite 90 percent of the capital costs of any new programs or buildings; the universities would fund the remaining 10 percent. This would encourage universities to seek their own independent t funding.

However we should be careful that such incentives not be too generous that we reduce the vice-chancellors from being academic heads to champion fundraisers, as is happening on many American campuses.

With greater management autonomy, each university could find its own unique and ingenious ways of meeting its own needs. On many American campuses, private developers lease university land to build student residences and faculty housing. Similarly, companies like Marriott provide food services for many students. Such initiatives would free up scant academic resources. We could then send the Deputy Vice-Chancellor for student housing back to the lecture halls instead of wasting his time in making sure that students are being well fed and housed.

Such innovations are just the beginning; we would see many more if only we dare liberate our campuses.

Dispense with MOHE

By liberating the universities, the government may find that it does not need a huge bureaucracy to run them. It could dispense entirely with the massive Ministry of Higher Education (MOHE) and divert the considerable savings to fund campus libraries and research laboratories. We could hire a Nobel laureate to teach at one of our universities for the money we pay for MOHE’s Secretary-General, or the many Directors-General. Imagine the good such appointments would do to our universities.

Come to think of it, this is one reason why I am skeptical that Mustapa’s grand scheme of liberating our universities would be vigorously pursued. It would mean one fewer Secretary-General, and many more Directors-Generals out of a job! Then there are their deputies and assistants!

California has an extensive system of quality universities and community colleges, yet it has no Ministry of Higher Education. The state government exerts control through the budgetary process and through its nominees on the universities’ governing bodies. Professors and other university employees are not part of the state civil service. Malaysia would do well to learn from the Golden State.

The central question policymakers should answer is this: How can we make our universities serve the needs of our nation? We do this best by liberating them so they could find their own path to excellence. A mediocre institution serves nobody any good.

Thursday, February 14, 2008

Towards A Competitive Malaysia #44

Chapter 6: People: Our Most Precious Asset (Cont’d)



Tertiary Education

Once we have the schools in order, only then should we focus on tertiary education. Universities are even more important in the K-economy for the creation of new knowledge (research) as well as the dissemination (teaching) and application (development) of existing ones. Universities and other tertiary institutions are needed for training higher-level workers like professionals and managers.

Malaysia is aping the Western fad in democratizing higher education. Higher education is not for everyone. I do not know what the optimal number of high school graduates who should go on to universities, but certainly the American figure of 60 percent is too high. On the other hand, the Swiss figure of 15 percent is too low and makes universities unnecessarily too elitist.

The consequence of this democratization is the “dumbing down” of higher education. While studies regularly indicate that university graduates consistently earn more than those with only high school diploma, the more significant but less widely known fact is that there are wide variations in the earnings of graduates depending on the quality of their universities.

My guess is that the optimal number of high school students who should go on to universities should be between 25–35 percent. The rest should pursue the technical, vocational, or teachers’ colleges route. The American predilection (now also afflicting the British) of gushing up their technical and teachers’ colleges into universities is wasteful. Malaysia too is succumbing to this temptation. It would be far preferable and cheaper for Malaysia to have fewer but quality universities, and use the resources to improve schools and technical colleges.

University graduates should rightly command premium pay in the marketplace. This is not because they have learned something or acquired some skills that directly improve their job performance (this is true only in some professional fields) rather the degree is a surrogate indicator that the recipient is someone of above average intelligence, capable of hard work, and can focus towards some distant goal. Those are desirable traits in any worker.

As the market rewards those with university education, I see little reason to subsidize it. Currently in America, the difference in tuition costs between public and private universities is about five times; in Malaysia, ten. For professional courses like medicine, this differential is even greater in Malaysia while it is fast disappearing in America. I do not suggest that public universities should charge as much as private ones, rather the gap should be much narrower. By increasing the tuition, the government’s subsidy could be reduced substantially. The government could then use the funds to provide for more scholarships to poor students. Certainly the government should not subsidize university education for those who can afford it.

The government should subsidize research in universities, private and public as in America. Only the merit of the projects and the capabilities of the researchers should matter. After all, the resulting knowledge would benefit the nation. Malaysia is finally getting rid of the mindset that only the government could provide education. Letting the private sector play its rightful role would also free up scarce public resources that could then be diverted to the truly needy. The government has allowed for private colleges and universities (and also preschool) since 1996. It should extend that to schools.

The positive impact of allowing private colleges and universities is already being felt. It allows for more opportunities and greater access. The country also saves valuable foreign exchange from students who would have gone abroad, and earns revenue from foreign students coming in. The most important contribution is that they spur competition on public institutions. As most private universities use English, their graduates have a significant advantage in the marketplace. Public universities now have to follow suit. The recent impetus to the wider use of English in public universities has less to do with enlightened thinking and more the consequence of this competition.

The government has yet to fully optimize the role of private universities and colleges. The official attitude seems to be that they are a necessary evil instead of an important instrument in national development. Consequently the official policy vacillates between toleration and benign neglect.

There is minimal effective government supervision of private institutions, only reams of burdensome regulations. The Lembaga Akreditasi Negara (National Accreditation Council) supposedly monitors the quality, but it is a typical government agency: slow, ineffective, and unresponsive. To make it worse, it surveys only private but not public institutions, giving rise to the perception (and reality) of a double standard.

There is also no attempt to alleviate the dangerous racial segregation at schools and universities, both private and public. The student body of these institutions must reflect the general society; that should be a condition for accreditation. A diverse student body enhances racial integration as well as the learning experience. The rules on granting permits for these private institutions are lax and opaque. In the few years following 1996, permits were given literally to hundreds of new institutions. Many were nothing more that glorified tuition centers located in empty shop lots. Cases abound of students (especially foreigners) being stranded after paying outrageously expensive fees.

The authorities should at least ensure that the sponsors of these institutions have both financial strength and academic resources. Giving permits to businessmen who have yet to select their senior academic personnel is nonsense. These institutions should post performance bonds such that if their institutions were to close down, their students would get their fees and other expenses refunded, together with penalty compensation.

Yes, these are tough rules; they are meant to discourage the amateurs. Investments in education and training are important in enhancing the quality of human capital. We must take a much broader view of that investment to include learning in informal and nontraditional settings such as on-the-job and continuing training. Lifelong learning should be the norm, not just a slogan.

As for formal education, we must not be mesmerized by meaningless quantitative goals as the number of years of schooling or the percentage of students who go on to universities. The focus should be on quality.

For a plural nation like Malaysia, education should also serve to bring the young together, lest we risk becoming a highly educated but divided nation, another Northern Ireland. Were that to happen, all that investment would be for naught.

Investment in education is only a part—albeit an important part—of an overall sound economic policy. If the overall strategy is wanting and the economy stalls, the nation would not be able to support education. Nor will it be able to absorb the highly educated workers, and they would end up emigrating. Malaysia would then share the fate of India, whose universities serve the manpower needs of the developed world rather than itself.

Next: Preschool Education

Monday, February 11, 2008

Chief Secretary Should Not Be Chief Clerk

Judging from the gushing praises, Chief Secretary Sidek Hassan is performing miracles with his Special Task Force to Facilitate Business (Pemudah, its Malay acronym) committee to streamline the civil service. A reality check is in order.

It reflects how out of touch our top civil servants are from the realities on the ground that it took Sidek and his Director-General of the Public Service Department Ismail Adam to make an unannounced visit to a District Office in Selangor for them to realize how difficult it is to pay one’s “quit rent.”

Then they were shocked to find that the District Officer was out of his office. Again that reflects their naivety and ignorance of the current sorry state of the government machinery. Perhaps they put too much faith on the recent glowing report of IMD’s World Competitive Yearbook that placed the Malaysian government ahead of Japan and Germany in terms of efficiency. The Malaysian public knows better.

It is pathetic that these top civil servants are reduced to being chief clerks checking on the keranis (junior clerks) to make sure that they are at their desks attending to their customers.

Sidek’s unannounced visit is now fast becoming a legend, of a meticulous and diligent top civil servant paying attention to the smallest of operational details. Even previously cynical commentators are now heaping praises on the man. This chorus is repeated by the seasoned corporate figures co-opted into Pemudah.

If those corporate figures were truly impressed, then it does not say much of the crispness of their own management. Alternatively, they had such low expectations that any improvement would impress them. My hunch is that their praises are nothing more than shrewd maneuverings to be on the good side of the government. In a country where the nexus between government and private sector is fuzzy, this is expected. It would not surprise me that their companies do substantial business with the government.

Interestingly, although Sidek had been interviewed umpteen times, no one asked what disciplinary actions (if any) he took against that errant District Officer and, more importantly, his immediate superior.

If past experience is any guide, the poor underpaid kerani would bear the heaviest punishment, with the District Officer reassigned, and his immediate superior left untouched.

Misplaced Emphasis on Process Instead of Policy

Pemudah’s emphasis has been exclusively on administrative processes. It reflects the deep rot that a simple procedure that would have been simple only a decade or two ago would today be tortuous and drawn out. Nonetheless that does not stop Pemudah from trumpeting its easy victories. These administrative details should have been streamlined at the mid management level; they are essentially staff work.

What Sidek should be doing is to teach those middle manages how to identify, analyze, and solve their problems. That would have been far more effective than surprise visits and issuing edicts from high above. Sidek could not possibly know the operational problems at the various land offices; the issues in Ulu Selangor would be very different from that at Petaling Jaya. With the urban and more educated clients at Petaling Jaya they could try on-line payments, for example. That would not be possible in Ulu Selangor.

Tun Razak hired the American consultant Milton Esman in the 1970s to spruce up the civil service. Esman’s personal accounts are highly illuminating. For example, during his first meeting with our top civil servants, he was confounded that they behaved like little school kids. Their attitude was: “You are the expert; you tell us what to do!”

At Treasury, he asked them their major issues. Their immediate response: “Overworked and understaffed!” They could also have added, “Underpaid!”

They complained of the volumes of vouchers they had to scrutinize. Esman suggested that they study the bills they had already processed and group them by their face value. To their surprise, a substantial portion of the vouchers were under a certain amount, and those were routinely paid without further auditing. Esman suggested if they were to henceforth make a policy that all such bills be routinely paid or better yet, authorize the various departments to pay them without referral to Treasury, their work load would be reduced considerably. They would then have extra time to scrutinize the important big bills. As for the smaller vouchers, all they need would be to do random checks for quality control.

Through such exercises Esman taught those civil servants how to isolate and solve their problems. It was far more effective than lecturing and making surprise visits. Oh yes, Esman did not spend his time giving press interviews!

On a more substantive matter, by the time civil servants reach the top, certainly at the Secretary-General and Director-General levels, their concerns should not be staff, administrative, or operational details rather with policy analysis and policy making.

Consider the government’s recent decision to restrict the sale of subsidized essential goods to non-Malaysians. Such policies should first be vetted by senior civil servants, addressing such issues as their practicality and cost of implementation. Does that mean that we now have to show our passports or identity cards to shop? What about citizens buying for their non-citizen neighbors?

Similarly with the graduate employment scheme; what are the social, economic and other consequences for the government to assume the role of employer of last resort? Egypt has such a policy; it now has one of the most bloated and inefficient civil service, as well as a university system totally unresponsive to the needs of the marketplace.

Sidek Hassan and his colleagues should be studying and recommending solutions to the cabinet on the impact of the current American credit crunch and impending recession, not checking the time cards of clerks in a district office in Ulu Selangor.

Ambrin Buang, Not Sidek Hassan, The True Hero

Sidek need not look far to find examples of excellence; he could find it within his own civil service, specifically in the exemplary performance of Auditor-General Ambrin Buang.

Ambrin could have reduced himself to simply doing the traditional “bean counting” activities, of making sure that there are receipts for expenditures and other accounting minutiae. Make no mistake, those are essential details. The greater fallacy would be to assume that those are the only or even major duties of an auditor.

It reflects the diligence and professionalism of Ambrin that his Annual Report regularly grabs headlines. It also says much about our politicians and civil servants that they do not read those reports. He is not at all bashful in commenting on such boondoggles as the Sports Ministry’s planned facility in London as well as the RM50 screwdrivers.

Ambrin’s report gives a far more accurate (and depressing) picture of the sorry state of the government machinery, certainly far more realistic than that depicted by the IMD Yearbook or Pemudah’s too frequent glowing press releases. It is also revealing that Ambrin is not a member of Pemudah.

An insight on organizational behaviors is that public institutions, in particular the civil service, are not there to serve the citizens. Instead these institutions serve their own self interest while attempting to put a public face to it.

Recent policy initiatives as restricting the sale of subsidized items only to citizens and graduate employment scheme serve nothing more than to expand an already bloated civil service. The currency among civil servants is the size of their respective departments as measured by the number of employees and budget allocations, not whether certain policies would ease poverty or improve the education system.

The wisdom and success of President Reagan and Prime Minister Margaret Thatcher was their recognition of this essential truism. The folly of the Abdullah Administration is its naivety in believing that what is good for the civil service is good for Malaysia and Malaysians.

Wednesday, February 06, 2008

Towards A Competitive Malaysia #43

Chapter 6: People: Our Most Precious Asset

Quality of Education Critical

There are few studies comparing the quality of education across countries. One is The Third International Mathematics and Science Studies (TIMSS). Malaysia took part in the revised study of 1999 (TIMSS-R), and scored somewhere in the middle.22

TIMSS was rigorous and well designed. In America and elsewhere, its findings precipitated much public debate, with educators being held to account. TIMSS also stimulated many subsidiary studies elucidating its finer findings. Even though Malaysia expended considerable resources in TIMSS-R, that study did not precipitate much debate among the public, educators, or academics. Not many were aware of the study, much less its findings; nor did TIMSS stimulate further research. 2.

In going over the raw data for Malaysia,2 (I obtained them from TIMSS headquarters at Boston College, not the Ministry of Education. Nobody at MOE knew anything about TIMSS), many questions arise. For example, what is the breakdown in performance between rural and urban schools, between national and national-type schools, and most importantly, between religious and national schools? The last comparison is important as it cancels out the race factor, as students in both schools are Malays. Those studies are important in allocating resources.

Measuring quality is difficult, thus economists resort to comparing such easily collected data as years of schooling and formal qualifications. Hence the conflicting results. When the actual skills of workers are assessed and then compared across countries, the correlation is stunning. A Canadian study of OECD countries measured the actual literacy skills rather than formal years of schooling of workers entering the workforce from 1960 and 1995. The study identified a clear and significant association between literacy scores to increases in labor productivity and per capita GDP.23 Clearly, investments in human capital through education pay off.

This study involves rich countries where the background literacy rate is already high. If it were extended to include countries with much lower back-ground literacy rates, the difference would be even more impressive, as demonstrated by Barro’s other studies using data from TIMSS.24

When multinational corporations (MNCs) move their manufacturing plants to the Third World, they find that those poorly educated workers are just as efficient and productive as those in the West. Lack of formal schooling does not preclude them from being trained. MNCs by expending resources in training their workers readily overcome their lack of formal schooling.

In many Third World countries, Malaysia included, a stint with a MNC is an experience worth more than attending a university. In looking for chief executives to run Malaysia’s loss-ridden GLCs, one of the stated requirements was that the candidates should have senior management experience with a MNC. What an endorsement of the training and work culture of these MNCs! These companies provide excellent initial training as well as continuing education, a field that is completely neglected by the government and local companies.

I once asked the Editor-in-Chief of a Malaysian newspaper how much his company spent on the continuing education of his journalists. He was taken aback by my query. Obviously nothing. His reporters never get to attend writing classes, learn how to conduct investigative journalism, or hear from the luminaries in their field. Their work reflects this deficiency.

The hospital I work at here in California spends considerable sums for the professional development of its staff, from nurses and medical record librarians to physicians and executives. If I have not kept up with my continuing education, I would not be able to do half of the operations I now regularly perform. More significantly, I could not renew my physician’s license.

Despite their importance, these education and training in non-formal settings are never factored in the various comparative surveys.

Yet another important educational activity missed out in these comparative studies but contribute much to the productivity of workers are the various extension programs of universities and research institutes. In Malaysia, the Rubber Research Institute used to have an excellent smallholders division with an extension department that produced educational pamphlets in Malay. The institute also sent trained technicians to help rural smallholders. I do not see any similar program to help rice farmers and fishermen.

Malaysia should encourage through tax incentives for companies and industries to invest in the training and development of their workers. These expenditures are investments in the workers of company and country.

Next: Tertiary Education

Sunday, February 03, 2008

Believing Your Own Spin!

To hear Prime Minister Abdullah tell it, his government is ahead that of Japan, Germany and United Kingdom in terms of efficiency. He based this apparently on his reading of the 2007 World Competitiveness Yearbook compiled by the Swiss Business School, IMD.

The man can hardly stay awake long enough to flip through the thick volume much less read or comprehend it. When he made that assertion to the assembly of civil servants last Monday, January 28, 2008, he was merely uttering what his “bright boys” on the infamous Fourth Floor fed him.

That is scary. Those boys are now beginning to believe their own self-created legend and swallowing their own spin. If they truly believe that the Malaysian government is ahead that of Germany, they must be hallucinating, a deranged state of mind brought on through their prolonged isolation from the real world.

Hallucinatory state by itself is not dangerous as long as you are fully aware of it. The danger comes when you believe it to be the reality. Indeed the criterion for psychosis (or in layman’s term, madness) is your inability to differentiate reality from delusion. When individuals begin acting on their hallucination, then all hell breaks loose. They would then pose an immediate danger not only to themselves but also to society, and they would have to be committed to “protective medical custody,” an euphemism for the nut house.

Abdullah An Example of the Absurdity of the Claim

The absurdity of Abdullah’s claim is readily exposed by the manner in which he made his assertion. He chose his regular assembly of civil servants as the forum. This is his favorite mode of communication, a mass sermon. According to press reports about 9,000 civil servants were “privileged” to hear that special sermon from their leader. That represents the top one percent; presumably only the Secretary-Generals, Director-Generals, and important department heads.

Assume that those top civil servants each make an average RM$15,000 per month (a conservative estimate), and with the normal working day of seven hours and 22 working days in a month, their time would be worth (or more accurately, cost the public) about RM100 per hour, at the minimum.

Abdullah took about an hour to deliver his speech. Of course those civil servants would have to arrive early and then linger behind to socialize with their colleagues, including taking the obligatory group pictures. They would have spent at a minimum of two hours that morning just to listen to the Prime Minister’s homilies.

By my calculation, that morning cost the government (the public really) in excess of RM1.8 million (RM100 per hour times 2 hours times 9,000 civil servants). In addition there would be the cost of using that massive auditorium and the video transmitting facilities so the speech could be beamed to the various state capitals.

The biggest cost however, is hidden. The whole government machinery was paralyzed that entire morning. No important decisions could be made that morning as senior officers were out of their offices during the hour before, during and after the assembly. Where do you begin to quantify in monetary terms such a huge loss in productivity?

Unfortunately these giant assemblies are a favorite with Abdullah. He loves the captured, doting and uncritical audience. That gathering reminded me of my weekly school assemblies, with the pupils dutifully lining up in straight lines under the strict eye of our prefects before we would march obediently into the school hall. Then after we were all seated, the teachers would stroll in, with the junior ones leading and the senior ones plodding behind, desperately trying to put some gravitas to their steps.

Likewise with this assembly of civil servants; first to enter the auditorium would presumably be the “Superscale” G officers, (the lowest on the rung), followed by the F, E, and so on to A, meaning the KSUs and DGs. Then when they were all settled down, would Abdullah make his imperious entry.

Everybody would of course rise and the applause would be long, loud, and sustained. The little fellow would slowly make his way up the stage, nodding, grinning and shaking a few hands along the way, albeit not so regally. Up on the stage he would continue his wide grin, lapping every moment of this effusive display of manufactured affection.

In scale and grandeur, such shows would dwarf what the North Koreans regularly put on for their “Beloved Leader.” The mindset however, both among leaders and followers, is the same in both Pyongyang and Putrajaya.

In this day and age, a more effective way of communicating, and considerably much cheaper at that, would have been for Abdullah to videotape his speech and webcast it. Then civil servants or members of the public could hear it on their own free time. Of course those civil servants would not like it. Part of the reason they relish those assemblies is that they get to ponteng (escape) from their offices.

That is how CEOs of large multinational corporations communicate to their far-flung employees as it is very effective.

Abdullah and his senior advisors are still stuck on the school assembly mode of communication. That is also reflective of the “school boy” mentality of his advisors. It is also “efficiency,” according to the wisdom of Abdullah Badawi and his advisers. Unfortunately this is the kind of operational details that are frequently missed by foreign surveyors.

Widespread Disregard of Evident Reality

The IMD Yearbook report on Malaysia looks too good to be true. No matter how meticulous their research, those academics would have a tough time convincing Malaysians, especially those who have had any dealings with their government.

Yes, the Yearbook does say that based on certain specific criteria and prescribed framework, the Malaysian government is ahead that of Britain, Germany, and Japan. The big question is the relevance of those criteria and frameworks to everyday reality.

When something is too good to be true, chances are it is not true. Regardless how impressive the credentials of those who made the assertions, if their reports or findings have, in Lord Bauer’s memorable phrase, “widespread disregard of evident reality,” we must not believe them. This applies not only to economics but also to everything else in life.

Abdullah and his advisors are banking that the average Malaysian would not have access to the Yearbook. They are right. At nearly RM 3,000 for the cheapest print edition, few if any library would acquire the volume. Consequently few Malaysians would have the opportunity to read the full report and scrutinize the criteria and framework. That is an important caveat.

I can credibly make the claim of being the best surgeon if I choose my framework carefully, as for example, being the best surgeon this side of Coyote Creek. I may be factually correct but the issue is the relevance of that claim.

Malaysia has been favorably cited lately by two well known international bodies. One was the earlier World Bank Report on our Higher Education, and now this IMD Yearbook on competitiveness. It is instructive that Malaysia had engaged both institutions to do significant consulting work: the World Bank on our Higher Education, and IMD on development in Sabah.

May I suggest to all, especially foreign pundits and scholars, that the current circus that is the Royal Commission on the Lingam Tape gives a more realistic picture of the government machinery than the expensive IMD Yearbook. As for the World Bank Report, the government would have gotten the same ideas and recommendations by buying and reading my earlier book, An Education System Worthy of Malaysia. It would have been considerably cheaper too!

I fear that Abdullah, his advisors, ministers, and senior civil servants would treat the findings of this IMD’s World Competitiveness Yearbook as an endorsement to their maintaining the present course. That would guarantee dooming the country to perpetual mediocrity.