It is ironic that Prime Minister Najib find it necessary to talk about Penang and criticisms about his leadership while in India. If he is not happy that criticisms of his kleptoratic leadership and thinks it will scare away investors, imagine how investors will feel if they see everyone is silent about his abuse. Won’t they perceive that the whole country is complicit in the corruption and feel that there is no hope in Malaysia?
The Prime Minister would prefer this country to be like a kingdom where the emperor has no clothe. Everyone is supposed to pretend that the emperor is adorned in fabulous clothes when in actuality the kingdom has been conned by a bunch of thieving tailors.
The Prime Minister boasts about the billions in investments that he has supposedly brought in. Seasoned diplomats know that MOUs signed during state visits are just intentions and are not legally binding. Individual parties involved, mostly corporation still have to negotiate each deal. Sometimes not all the announced deals lead to actual investments. Even the recently signed deal between Saudi Aramco and Petronas is still being negotiated. So please don’t count the eggs before they hatch.
In any developing economy, there will always be inflows and outflows of investment. In many cases, the outflow is due to businesses seeking cheaper manufacturing location. This has been happening in Malaysia since the mid 1990s. Penang is no exception. What is exceptional about Penang is its ability to attract quality knowledge intensive investments.
Major technology companies like Intel continue to have a strong presence in Penang. And the flow of investment into Penang continues to be in the top 3 in the country over the last several years. MIDA’s data shows that RM4.29 billion flowed into Penang last year. At the same time, the state government managed to reduce its debt to only RM69 million compared to Kelantan’s RM1.3 billion debt, Pahang’s RM 2.9 billion debt and Sabah’s RM2.3 billion debt.
Now let’s turn to Najib’s performance as the Prime Minister. There are basic questions that have to be asked. If the Prime Minister is doing so well, why are there more than 400,000 youth currently unemployed. The Sun reported that by September last year 34 percent of university graduates are unemployed. This means one in three graduates cannot find a job. Some academicians even confided that even among those employed, many are underemployed is fast food restaurants and temporary or on short-term contract appointments. And almost no graduate will treat employment at a call centre as a lifetime career.
Even more damning is a recent report by Deloitte listing 15 countries that will remain attractive as low cost manufacturing locations. Malaysia is one of the 15 countries in this list. The report also says that 14 of these countries, including Malaysia, are experiencing declining competitiveness. In the 1960s, Malaysia was far more developed than South Korea, Taiwan and China. By the 1980s, South Korea and Taiwan has overtaken Malaysia.
China started growing to become a low manufacturing base. Deloitte’s list of 15 countries are countries that are expected to replace China as a low cost manufacturing base. In other words, even China is graduating out of the low cost manufacturing segment and leaving Malaysia behind. Hey, how else does one explain Malaysia now having to buy trains and warships from China? There goes Vision 2020 and the desire to become a high income country. Forget TN50.
Instead, Malaysia looks certain to remain stuck as a low and perhaps upper low income nation. We’ve been producing graduates that could not find enough jobs in high technology areas. Just ask the aeronautical engineering and bio-technology graduates.
Remaining as a low manufacturing location also means that many of the new jobs created will be in low skill and labour intensive positions. And Malaysia is bringing in many foreign labour to do these jobs. So, are young Malaysians supposed to be excited about the prospect of such a bleak future?
And there are more reasons to feel depressed. The cut in budget allocation and sponsorship for higher education has led to a reduction in the intakes of universities, especially private universities. UniKL which is owned by MARA and caters mainly for Bumiputera students has experienced a decline of almost 50 percent in student intake. Is this better for the Bumiputeras?
So Prime Minister, are your overseas trip really about improving the conditions in this country or a part of your impression management in the run up to the general election? Short episodes of showmanship on your overseas trip is not going to solve the fundamental problems in this country.
This is not Bollywood where people can be lulled into complacency with 1-2 hour of action and romance. Perhaps you should visit Penang and maybe you will learn something useful about good governance and competent management of the economy. And we can assure you, even though Penang leaders are modestly attired and they sure have clothes on.
SAIFUDDIN NASUTION ISMAIL
Strategic Advisor to Chief Minister of Penang
Saifuddin Nasution is also a PKR Secretary General