Selangor Retrenchment Helpline

Selangor has a state retrenchment task force set up to aid those who have lost jobs and, the task force is expanding its scope to also tackle unemployed graduates.

The state’s career and resume clinics are being held at local government offices throughout the state.

At these clinics, retrenched workers can register themselves and obtain aid or advice.

.

Apparently, there are officers from the state's Lembaga Zakat and Welfare Department present to help retrenched workers get assistance while consultants from Jobstreet.com are also in attendance to help find new jobs for them.

Tricia Yeoh, speaking as the Selangor state research officer is quoted as saying that the consultants will have a list of available jobs and can help workers apply for them.

“This includes cleaning up their resumes and preparing them to go for interviews.”

Applicants can also obtain information on retraining programmes which are available under the Human Resources Ministry at these clinics.

It appears that to-date most seeking help are blue-collar workers with only secondary education but these training programmes are an opportunity for them to upgrade their skills.

And, to-date 3,264 retrenched workers in the state have registered themselves either online or at municipalities and district councils.

These are good moves to deal with unemployment.

Apart from Selangor, other states should highlight their job placement, re-training and social safety net schemes.

For those who are in need do click on the Selangor Retrenchment Helpline link that I have embedded. And, good luck in your job placement!

Kudos to the Selangor State Government for this socio-economic programme.

Dodgy thinking dogs levy policy

Part of the stimulus package involves the doubling up of levies on foreign workers. The idea, quite obvious really, has several prongs. The obvious one is to enable Malaysians to take over the jobs. The less obvious one is to compel Malaysian businesses and enterprises to ratchet up the value chain by introducing some trite innovations and processes.

Here, we have a call made by the MCA Youth Chief (who also doubles as Deputy Minister of Education) Wee Ka Siong, that the Government (that he is a part of) should reconsider its decision to double the levy on foreign workers as this may end up hurting businesses.

From The Star, “MCA Youth is in support of such a move if it actually proves to help retrenched locals but our feedback is that despite advertisements, many are still reluctant to work in restaurants or factories,” said Dr Wee, adding that the movement had prepared a memorandum to be presented to Deputy Prime Minister Datuk Seri Najib Tun Razak.

I have some observations on this:

First, what happened to the principle of collective Cabinet responsibility. Even a Deputy Minister should be subjected to this constitutional provision. This is breaking the ranks. I suppose this is one dodgy version of democracy as understood by the MCA Youth Chief.

Second, this smacks of crass pandering to lazy and overweight businesses that are used to years of cheap foreign labour. That a member of the ruling coalition and, a Deputy Minister to boot, should support this myopic call only demonstrates the paucity of genuine visionary political leaders in this country.

Third, as I understand it and, I may be wrong since my understanding is based on official statements and speeches and what is reported in the Mainstream Media (MSM), the Second Stimulus Package is largely predicated upon Malaysians working to increase efficiency. What is the efficiency of reverting to the usage of cheap and unskilled foreign workers?

Fourth, which dovetails from the preceding third point, the eateries, hawker stalls, kedai mamak and warungs should move towards some form of self-service principle. And, factories that are labour-intensive need to either close down or increase their automation processes (the loans are available under the Second Stimulus Package). In due course these measures will result in a demand for higher skills (and, hygiene, in the case of the restaurant and food sector). This means better pay. This will attract Malaysian workers.

Presently, the archaic, unsafe and unhygienic workplaces in Malaysia are suitable only for cheap, unskilled foreign workers. No Malaysian who is used to a higher standard of living and sanitary conditions (I hope) will step into the industrial and F&B cesspools.

So, why, YB Wee, are you calling for a review of the policy to reduce Malaysia's dependence on unskilled foreign workers?

Why do you insist on championing the cause of inefficient Malaysian businesses?

Do you not understand that the Second Stimulus Package offers an opportunity for Malaysian businesses to restructure their erstwhile inefficiencies and ratchet up to the next few levels?

Or, do you doubt the effectiveness of the Second Stimulus Package?

EPF to pay only 4.5% dividends

The word is that the Employees Provident Fund (EPF) is going to declare only 4.5% dividends for the 2008 period.

I'm quite certain this will raise the ire of many, many working Malaysians who work hard for an honest living.

The capital markets did take a beating in 2008 shrinking, if memory serves me, by about 40% or so in value.

The EPF board is now required to be super-transparent in tabling the basis for arriving at the paltry 4.8% dividends. The hardworking Malaysian workers require an explanation.

No opaque postures. No nebulous statements. No fudging.

Open the books.

EPF's financial results and, it's dividend policy is not a state secret. Nor should it ever be regarded as such.

It's the money that belong to all Malaysian workers who've worked hard and, will depend on the EPF after they retire from active work. So, let's be open about the performance basis.

Getting casual with safety nets

I think it is about time I weighed in a bit on the very important issue of employment in the wake of the unravelling economic conditions in Malaysia although, by way of disclosure, I, myself, am an employer.

The likely order of priority for conscientious employers whose business is threatened by falling sales turnover must be to pare down costs. These should include basic stuff like reducing inventories, re-negotiating supply contracts, reviewing freight charges, restructuring borrowings and, re-locating premises. Only after all these should employers look at employment issues such as cutting pay, reducing working hours and (Heaven forbid), retrenchment and lay-offs. I am obliged to call upon employers NOT to do the dirty thing by putting deliberate pressure on certain employees to pressure them to resign. That is unethical and sinful conduct.

Getting casual

Having said all that, I anticipate that one growing trend in employment may be for employers to start sourcing for casual workers to meet work demands as it orders rise and ebb from week-to-week or, month-to-month.

Permanent staff are a fixed labour cost that employers will start having great misgivings over compared to the flexible cost provided by casual staff. Casual staff has no major protection under employment laws (which are tedious and cumbersome and, open to abuse by nasty employees). Casual staff are not entitled to EPF privileges. Benefits are very marginal and few.

But, the worst case scenario is, of course, unemployment. This is where social safety net policies need to be looked at in Malaysia.

Comparative social safety nets in other countries

This is what I have obtained from an interesting Businessweek piece:

The United Kingdom - In the United Kingdom, the system provides a very basic payment of the equivalent of USD100 per week, known as income support. Literally anybody is eligible for this income, even foreigners living in the UK. This has the great advantage that people don't starve to death in the street or in their flats. Beyond that basic level, people in the UK can apply for an old-age state pension, free health coverage, tax credits for the low-paid, and housing allowances or free government housing. Unemployment benefits are, therefore, regarded as part of a menu of poverty alleviation measures.

Japan - The Japanese ethos is said to be more puritanical. Medical costs are subsidised by 70%, for example, rather than 100%. And benefits take the form of insurance, rather than welfare. In other words, you only get paid in bad times if you have contributed in good times. The application process is stricter than in the UK, with suspicious and powerful case officers dropping around for home visits. Resigning from a company means you have to wait three months for unemployment benefits; and you must have worked at least six months in the past year to qualify. Unemployment benefits cease after one year.

The main problem is thus that while core constituencies of the economy are protected (those with regular jobs, married mothers, and old people who have paid unemployment and pension contributions), the welfare system does not sufficiently cover the workers who have been marginalised in the interests of efficiency. It is this number which has been growing, especially following former Prime Minister Koizumi's labour market reforms in 2004. These people, on low wages, may be unable to pay unemployment, health and pension contributions.

Germany - Germany has a hybrid system whereby workers work half-time for half-pay—but the state makes an extra contribution, leaving the worker with around two-thirds of his original income. 

Malaysia?

The interesting issue is whether Malaysia has adequate social safety nets in place at the present time. We do know that regardless of whether we are Malay, Chinese, Indian, Dayak, Kadazan, Bajau, Kelabit, Kedayan, Orang Ulu and so on, when we become unemployed and, cannot find a job immediately, we balik kampung to our parents' home. That is our social safety net...our parents.

But, policy makers should note that many employees have established families replete with spouse, children, housing loan, car loan, furniture loan and other financial obligations AND, above all else, many employees are too old and too embarassed to bring the whole retinue to camp out in their parents' home. 

Perhaps, it is timely to look into this. I believe that this task should go to Ng Yen Yen's ministry. She's got the right stuff. She's got the energy. She should do it. And, of course, the fact that she leads the Ministry of Women, Family and Community Development is apposite.

Or, should the job go to the Minister of Human Resources?  

Oh, well, somebody should look into this.

Bad vibes

The economic challenges are increasing. The First Minister of Finance has stated in Parliament that the 3.5% GDP growth projection is no longer a viable target.

And, thus, it is coming to pass that reality has bitten the country's economic managers.

As if to further underline this candid albeit gloomy prognosis, we now have to watch the incidence of credit card defaults which are expected to escalate in the coming months.

To make matters even more dire, the SMI Association of Malaysia has reportedly indicated that about 1.35 million small and medium industries (SMIs) in the country will face an operational crisis due to dwindling revenue if the government does not raise domestic consumption in the next six months.

There are 1.5 million companies and businesses registered under the Registrar of Companies or Companies Commission of Malaysia, and of these 90% come under the micro- and small-industry categories.

It is estimated that of the 11 million workers in Malaysia, 56% are employed in SMIs and these SMIs are facing survival test in the next six months.

Semi-skilled foreign workers to work in SCORE?

This latest post by Dr Brian Anthony at the Dayakbaru Weblog contains a highly relevant set of questions that the BN Sarawak State Government led by Taib Mahmud should answer. I am reproducing the post here. This is a wake-up call for BN Sarawak that the end is near with these types of myopic and self-serving policies that are dressed up under the guise of economic development that does NOT provide any direct benefit the people of Sarawak in such a basic area as semi-skilled employment:

The below news is exactly what I have expected and this is totally unacceptable by the people of Sarawak. Dayakbaru will take the lead to protest this move. SCORE is said to be created to generate 1.5 million job. Before we even begin, the Chief Minister already started to play his manipulative hand on labour requirement.

You can expect the Chief Minister’s next step - he will announce that Sarawak will import semi-skill labour from a specific country. Before that, a certain arrangement would be made to put labour supply business under a limited monopoly.

What is Happening?

KUCHING:

“Sarawak will relax its immigration policy to open up the state in a controlled way to allow semi-skilled immigrant workers to be employed in the various sectors in preparation for the implementation of the Sarawak Corridor of Renewable Energy (SCORE).” (Borneo Post)

Internal Labour supply

What is the number of labour that is needed and what classification / category of skill are required?

The Sarawak government led by the Chief Minister is always issuing very “blur and sweeping “statement that is almost of no use to the people of Sarawak. Can the Labour Department or SCORE issue a specific information on the labour requirement.

Otherwise I can only thing of dubious intention of certain politician to make money out of labour supply at the expense of Sarawak workers.

This is an open challenge to the intellect (senility) of the Sarawak Chief Minister.

These are simple question for a man who may be too senile to answer. We know that the ADUN - BN members are all turning into “stone” now thus the questions.

• How many semi-skill worker do SCORE need and of what skill is required and when?
• When is this labour requirement needed?
• Can we train our current unskilled labourer to be semi-skill using a robust system of training - practical approach.
• What wage scale are the government going to offer this group of semi-skill imported worker and what would be the salary scale given to home grown semi-skill worker?
• If imported workers are semi-skill in category do you accept that the local workers would be the “general labourer” earning less in their own country compared to foreign worker?
• Are you not ashame of not being able to produce semi-skill worker in your great and progressive Sarawak?
• Is Malaysia ( Sarawak) less develop than the country where you are suggesting to import workers?

I would proposed that SCORE or whatever authority is involved to identify the type of skill required in SCORE and set up training centres to produce these workers among the local population. If the government is thinking of giving peanut then of course you will get monkeys.

How much money and resources is required to set up this training centres in Sarawak? In the first place Sarawak should be equip with more technical and practical training centres to increase the capability - human capital development in Sarawak.

What is the State Minister in-charge of Human Resources development doing about Human Capital development. These training centre is unlike setting up of universities - it doesn’t cost that much money. More money is spent in projects in Sarawak that is not contributing to the well-being of the people of Sarawak.

What is SCORE requirement for professional and Managerial people?

My questions are:

• has the State government took specific and focus action to generate the correct graduate that would be able to serve SCORE
• why is SCORE still “blur” or “silent” about their requirement - are you sure you know what you are doing.

The State Government cannot continue to mislead the people or not showing good managerial skill in managing SCORE so much so almost everything and requirement are on “urgent mode”. Or is it possible that those working in SCORE now are made up of LAZY people and with no INITIATIVE in their work?

Choosing an easy way out

The State government MUST not choose the easiest way out of lack of skill workers problem in Sarawak. Malaysia has been talking about developing human capital and why are we building dam that we do not need. Why are we going into Kuching beautification program intensively when that is not helping the poor people. Why are we developing unnecessary service - broad band services for poor areas in Sarawak when even Kuching wifi services is still poor.

The government must invest in technical training centres. We must have proper refresher training program otherwise how will the government open up new opportunities for the people of Sarawak and improve their living standards. SCORE is an example - where the government fail even to exploit the potential of earning for te Sarawak population. The Government shown have known and do something about iy.

Sarawakian working outside Sarawak

The Sarawak State is not even shameful that it cannot provide job for its people in Sarawak. The West Malaysian State accepted Sarawak workers and train them. In the most unfortunate manner, the Sarawak State Government do not seem to have training centre to train the Sarawak people across sarawak. It is only Oil and Gas related industries that is doing the training for its workers - permanent or otherwise.

We should not talk of vocational school only for young people. The working people or those people who are without work should be call for training and given allowance. The Federal government spend almost $54million for such scheme to train graduate - now can’t the state government their population into semi-skill workers.

The Sarawak State Government must act more responsibly to its own people.

Shame to the Sarawak Government

The State government talk and promote BIG BUSINESS and they can’t even develop the skill of their population to make them productive. The government prefer to import semi-skill workers and the unskilled workers in Sarawak will become labourers. The big money will go back to foreign country while the local unskilled workers in Sarawak suffers and living below poverty line. Where will be their hope and future.

Conclusion

That is the problem Mr. Chief Minister when you overstay in your job and get too rich. You will not listen to what the people tell you. You will be blind to their problem and because the power that you have build in Sarawak you will use it to find an easy way out of your problem.

Then the poor people remain poor and come election you pay them some money to vote for you and promise them “give away”. Then they will return you. If these people of sarawak are helpless and cannot think for themselves - you being the Chief Minister must see to it that this should not be the case.

Change your approach or if you cannot think too much - leave your post. You are sick and old already. If you think that Sarawak still cannot go without you it is because of you.

We Sarawakian will be able to look after ourselves without you - so say goodbye. Dayakbaru wish you all the best and enjoy your retirement.

Dayakbaru says:

Don’t sell out semi skill job to foreign workers - we produce our own in Sarawak.

Retrenchments, pay cuts & knowledge workers

Let us assume that 2009 is not that rosy. Let us also assume that some employers may have a need to trim costs or, Heaven forbid, slash costs due to pressures of declining sales turnover.

One of the largest cost items in any organisation's profit and loss statement is labour or staff cost.

There are only 2 ways to deal with labour cost. One way is to institute retrenchment. Some employers use the unsavoury method of putting extra pressure on staff to force them to leave.

Another way, more enlightened, is to institute pay cuts.

The management guru Peter Drucker suggested that cost-cutting should be a routine exercise. It shouldn't be something that management does only during downturns. Drucker said, Businesses that actually succeed in cutting costs don't wait until they have to cut costs.

While watching costs and bottom-lines employers need to be more enlightened not just in the best of times but, even in the worst of times.

Investing in Knowledge Workers
Investing in productive assets should be a regular, everyday function. A modern organisation's greatest asset has to be its knowledge workers. It's human resource. It's human capital.

Rick Watrzman of the Drucker Institute gave the example of K.H. Moon, the former chief executive of Korean consumer-products maker Yuhan-Kimberly.

It was during the late 1990s, amid the Asian financial contagion, that Moon looked around and was disgusted by what he saw, that at almost all companies, the management just followed the old wisdom—massive layoffs.

Yet Moon felt that simply to slash employment was irresponsible, and he began to persuade his colleagues that there was a better way to go—not just to survive but to grow and prosper. He felt that it wasn't the correct time to lose jobs but to build capability, personally and companywide.

To get there, Moon took several bold steps. One was to accelerate a push to a new staffing system, moving from a three-crew, three-shift arrangement to a four-crew, two-shift model. By spreading out the work this way—Moon has likened it to job sharing in Western countries. The company figured it has been able to employ 25% more mill workers than it otherwise would have.

.
Lifelong Learning
Because of this setup, employees work fewer hours overall. But they're encouraged not to be idle.

Yuhan-Kimberly pays for them to attend classes so they can improve their technical acumen as well as increase their general knowledge. It's all based on a philosophy of lifelong learning which was regarded as the company's true source of competitiveness and sustainable growth.

This counterintuitive approach to dealing with human resources has much to commend it.

The upshot is that by providing a healthier work-life balance, by giving the rank-and-file the opportunity to enhance their skills continually, and by taking other steps to create a self-directed team culture, Yuhan-Kimberly has seen job satisfaction among its 1,700 employees soar.

So has productivity (along with market share and revenue)—so much so that workers' wages have also risen substantially.

This formula won't work for everyone; implementing it involves real costs and, thus, real risks. What's more, there's no avoiding the fact that layoffs are inevitable during a recession, no matter what is tried.

Even Drucker, who so admired Japanese industry for its commitment to lifetime employment, recognized this ideal was bound to crack amid the unrelenting pressures of globalization.

But what Yuhan-Kimberly reminds us is that shedding thousands of positions doesn't necessarily have to be management's automatic response to a bleak economy. When things seem darkest, it's time to innovate, not just eliminate.

Think about it.

Full employment and structural unemployment

It is a theoretical given that since Malaysia has millions of foreign workers, there should be no fear of unemployment. Yet, even in the best of economic times, Malaysia has a 3% rate of unemployment.

Why is this so?

The obvious answer is the phenomenon of structural unemployment. Structural unemployment is regarded as a long-term unemployment phenomenon that arises from imbalances between the skills and other characteristics of workers in the market and the needs of employers.

It involves a mismatch between workers looking for jobs and the vacancies available often despite the number of vacancies being similar to the number of unemployed people.

In this case, the unemployed workers lack the specific skills required for the jobs, or are located in a different geographical region to the vacant jobs. Structural unemployment is usually a result of structural change.

The government can mitigate the problem by providing an infrastructure that offers training in these areas so that the demand for these jobs can be met.

This is where technical colleges and institutes are very important. They have an important economic role to ensure more Malaysian workers can have the opportunity to increase their skills, which in turn increases the supply of labor in skilled areas.

But, how available are these technical colleges? The resources seem to have been poured into building universities. Vocational and tradesman skills seem to have been neglected. Why is this?

Perhaps the Minister of Education and the Minister of Higher Education can explain this. And, while we're at it, can someone please explain again why there needs to be two education portfolios?

In the coming few years, the economic challenges are going to become worse. No, Datuk Seri Najib, I'm not talking Malaysia into a recession. I am addressing a key economic management issue.
.
Malaysia's economic managers make platitudinous comments about skills training and knowledge capital. We can create as many tertiary graduates as we can. We can create thousand of university graduates every year. But, anyone watching war movies can tell you that it is not the captain or lieutenant that drives the platoon. It is always the experienced sergeant that really holds the troops together.

In the context of the economy, the sergeant is the trained supervisor and floor worker. These people are the real engine of the Malaysian economy. And, we need to address their needs.

And, we need to build more technical colleges and institutes to keep the feeder line of workers so that the SMEs and industrial corporations can keep moving up the value chain in terms of the manufacturing and production.

If the government anticipates unemployment in the coming year, it must surely accelerate plans for more places to re-train these workers to ensure that the phenomenon of structural unemployment is fully addressed. Are they?

Who's in charge of creating technical and vocational colleges and institutes in Malaysia?

Is it the Minister of Education?

Is it the Minister of Higher Education?

Or, is it the Minister of Human Resources?

So many Ministers, so few thinking and forward-planning Ministers.

So much politicking, so little economic planning.

This issue of full employment and structural unemployment is only one aspect. I hope to blog further about related issues such as minimum wages and the abdication of responsibility by Malaysian unions

Economic caveats

The pronouncements emanating from the Economic Council is music to the ears of this blogger. It signals an intention to strengthen the important features of the Malaysian economy at a time when the global economic recession is just beginning to set in. It won't be a smooth ride. The job of the Malaysian economic managers is to keep the economy on as even a keel as possible.

Having set aside some time to ruminate, this blogger is ready to examine the Economic Council's pronouncements a little deeper. The blue sections are extracted from the Star Online report.

The Government-initiated Economic Council is working on a “New Strategy Package” to focus on medium and long-term structural issues affecting the economy.

The government will need to provide more details on this nebulous term structural adjustment which can be taken to include matters such as:

• Cutting social expenditures, also known as austerity,
• Focusing economic output on direct export and resource extraction,
• Devaluation of currencies,
• Trade liberalization, or lifting import and export restrictions,
• Increasing the stability of investment (by supplementing foreign direct investment with the opening of domestic stock markets),
• Balancing budgets and not overspending,
• Removing price controls and state subsidies,
• Privatization, or divestiture of all or part of state-owned enterprises,
• Enhancing the rights of foreign investors vis-a-vis national laws,
• Improving governance and fighting corruption.

As you can see, the phrase structural adjustment can mean any or, all of the above and more. Let's have some more details as soon as possible, please.

Minister in the Prime Minister’s Department Tan Sri Amirsham Aziz said the council would identify constraints on the economy and re-look at development strategies. “These measures include attracting more foreign direct investments from high-surplus countries, stimulating domestic investment, taking advantage of China’s and India’s growth, promotion of tourism and construction activities.

First, attracting FDIs is the conventional wisdom for generating economic growth. To-date, FDIs in Malaysia have exhibited an interest in Malaysia as a relatively competitive venue for semi-skilled labour. Malaysia is quite far away from being a high-skilled labour venue despite over a decade of government talk about building knowledge capital. As this blog has said over and over again, the starting point is primary and secondary education. Without a strong foundation in the technical subjects of Science and Maths taught in the English language, the pipeline carries only low-quality products that are good only for low-skills and semi-skilled labour.

Second, domestic investment can be stimulated by lowering the lending rates, something that the Bank Negara is expected to do, perhaps by 50 basis points resulting in a 0.5% reduction in lending rates. The caveat I offer is that domestic investment depends on domestic and export demand and consumption. The SMEs will not invest unless there is demand. So, stimulating demand is also on the cards. This is not a quantitative game of pouring money into the economy from the supply-side and demand-side and, expecting stimulation. Rather, it is a qualitative game of identifying the sectors of the economy that has genuine multiplier effect. I can tell you that the property sector isn't the correct place to suntik modal...the multiplier effect of that sector is dodgy. But, let's leave that for another blog post.

Third, tourism is a no-brainer. It's already the third largest contributor to Malaysia's GDP. Tourism has genuine multiplier effects on the economy. But, there are so many structural problems in the Malaysian tourism sector. Public toilets need to be even cleaner. Taxi services are still appalling. Public transportation, in general, is very badly connected from one sector to another...and, yes, it affects tourism because many, many tourists like to move around by themselves.

Finally, construction is a nebulous term. Construction for infrastructure must also be qualitative not, quantitative. More money needs to be given to local councils to repair infrastructure. The Second Penang Bridge needs to get going even faster. But, tenders must be kept open. The days of negotiated tenders are over.

Amirsham said the country needed to rely less on low-skilled foreign workers and step up human capital development to move up the value chain.

“We have plans to reduce reliance on low-skilled foreign workers in the construction, manufacturing and services sectors to 300,000 from the current 600,000 over the next two years,” he said.

Well, if you've read earlier entries in this blog, you will know how well-received these words must be to this blogger. The Minister needs to quickly unveil the plans. And, this blogger is very, very curious about how the low-skilled foreign workers that are mostly involved in the construction and plantation sectors will be replaced by Malaysian workers. The key factor to facilitate the shift from foreign workers to locals must lie in the wages. Will there be a national minimum wage policy. RM1,300 to RM1,500 is a good range to start with.

And, as for human capital development and moving up the value chain, the starting point, just to reiterate, must be in the education system. No solid Mathematics, Science and English grounding and we may as well file the Minister's words as pure rhetoric.

Economic Planning Unit director-general Tan Sri Dr Sulaiman Mahbob said the reforms being looked at included liberalisation of business and professional services, a high-income policy and flexibility in employment of foreign experts.

My position on liberalisation is quite strongly made earlier. However, I am in a generous mood this morning. I am now prepared to agree with liberalisation. To Hell with the consequences. Maybe Malaysian professionals need a swift kick in the backside to get going. So, bye-bye low-skilled foreign workers, welcome skilled foreign professionals. Maybe the unemployable local graduates can be re-trained by the foreign skilled professionals or, replace the low-skilled foreign workers in the construction and plantation sector....why not?

He (Sulaiman Mahbob) said measures to promote entrepreneurship included reviewing rules and regulations pertaining to the Foreign Investment Committee.

The FIC rules are a protectionist disincentive to Malaysia's competitiveness in attracting FDIs. With the rise of Vietnam, Malaysia's past attractiveness is fast losing its allure. Like a narcissistic ageing Hollywood actress, Malaysia badly needs elective surgery to get a facelift and various augmentations. Eliminating the 30% Bumiputra equity in more and more industrial and manufacturing enterprises is long overdue. But, I want to warn Pemudah that talk is cheap. From experience, we hear all these pronouncements. But the FIC administration has a mind of its own. It will still issue conditional approvals with a 30% Bumiputra equity. Wanna bet? And, they wonder why investors complain...

He said for long-term sustainability, there was a need to broaden and raise the efficiency of revenue collection, review subsidies and accelerate the implementation of projects.

Efficiency of revenue collection is one thing. But, it is very strange that the Inland Revenue has revenue collection targets. It's a scary thought that a revenue collection body behaves like a sales and marketing entity. And, if you know the income tax laws, you will know that the principle is pay first, talk later. I believe that the revenue collectors must be taught some sensitivity to the likelihood that they may be one key factor in dampening the investment climate by treating taxpayers in their usual roughshod manner. The last time I checked, the Income Tax Act and Customs Act were classified as economic regulations, not penal codes.

“Moving forward, we’ll promote projects with higher domestic content, less leakage and higher returns while looking at the efficiency of expenditure,” Sulaiman said.

This awareness is necessary. But, again, the economic managers have to identify the areas where Malaysian SMEs can be assisted to enter into the higher value-added sectors that produce the components are currently being imported. This will plug the leakages from the economy.

On human capital development, he (Sulaiman Mahbob) said there would be a review of the wage structure.

“Measures include strengthening skills training and retraining, firming up collaboration between industry and universities as well as raising productivity,” he added.

Review of the wage structure. Is that a reference to the national minimum wage policy that I touched on above? The are many salutary effects to having a minimum wage policy. But the major caveat is that minimum wages MUST come together with higher productivity. This is the challenge for all stakeholders in the Malaysian economy.

Electronics industry needs sufficient human capital

There is a need for sufficient human capital for the electronics industry, as it is a significant contributor to the Malaysian economy, said the Minister of International Trade and Industry Tan Sri Muhyiddin Yassin.

The industry is the largest sub-sector within the manufacturing sector in Malaysia in terms of output, employment and exports, he added.

“For the period January to July 2008, the industry recorded a 28.8% of total employment in the manufacturing sector,” he said in his speech at the Panasonic Scholarship Award 2009 ceremony here yesterday.

Muhyiddin also said from last year until August 2008, the electronics industry recorded the second largest investment of RM16.3 billion (147 projects), after basic metal products which had a total capital investment of RM39.5 billion (93 projects).

The electronics industry was mainly driven by foreign investment with projects approved accounting for 95.9% of the RM15.6 billion total in 2007.

Muhyiddin said the initiative by Panasonic would complement government efforts to provide a sufficient supply of human capital for the industry. Apart from upgrading the skills of employees locally, the group also sends them to Japan for training. Source: Edge Daily

The Minister has shown an awareness that the workers of Malaysia need sufficient skills to support the Electrical and Electronics (E&E) industry.

Will there be a plan to improve education and skills training for Malaysians?
Now, will the Minister earnestly work with the Minister of Human Resources, the Minister of Education and the Minister for Higher Education to improve the education and training pipeline to ensure that there is sufficient education and skills for the E&E industry and all other industries in Malaysia?

Will there be a strategy to increase SME involvement in E&E?
Will the Minister earnestly put in place the necessary policies that will help Malaysian SMEs in the E&E sector and all other manufacturing sectors to move up the value chain with new production technology so that Malaysia does not remain overly dependent on FDIs to drive the E&E sector?

Will there be consultation and financial support for SMEs?
And, will the Minister consult with the SMEs and provide financial support to the SMEs to ensure that the goal of increasing the SMEs share of the E&E sector is met?

Will the Minister keep us informed?
Finally, will the Minister keep the Malaysian public informed of all measures planned?