That is the reality despite the efforts of Prime Minister Najib Razak, who is also the finance minister, and Second Finance Minister Johari Abdul Ghani, to put a face to what the government calls “successful” economic planning, The Independent Singapore reported.
“Unless the country starts looking at issues like producing more scientists and engineers, more university graduates that are labour-ready and of better quality, spending more on R&D, and improving its legal and regulatory framework, it is possible that Malaysia will not be able to attain high-income status,” Francis E Hutchinson was quoted as saying.
“It’s not a static benchmark.”
The report also alluded to Najib and Johari’s efforts as being part of election rhetoric in view of the likelihood that the next general election (GE14) will be held any time between this October and March next year.
The two finance ministers have been telling corporations and ministry workers how the country has been successful despite recent global economic shake-ups.
Still, according to the Singapore portal, this does not take away the reality of Malaysia having dropped five places in a list of the 63 most competitive economies as rated by the Lausanne-based Institute for Management Development (IMD).
Malaysia moved out of the top 20, falling to 24 in the latest rankings released by IMD.
This ranking dropped further to 32 when Malaysia was measured against other countries in the areas of basic, technological, scientific and human resources meeting the needs of business.
“Attempts to shift Malaysia’s economy towards one that is being driven by productivity will face limited success.
“It will be hindered by Malaysia’s inadequate education system and exacerbated by the nation’s ongoing brain drain,” BMI Research Singapore Asia analyst Chia Shuhui was quoted as saying.
According to the Independent, Southeast Asian neighbours Vietnam and Cambodia, with smaller and cheaper options, are reducing the competitive advantage of Malaysian manufacturers and becoming bigger contenders for foreign investment.
“Malaysia’s selling point can’t be cheap labour anymore.
“It really is important to move the skills of people, of talent, at the same speed and along the same line as the sophistication of your manufacturing capabilities and your productivity,” EU-Malaysia Chamber of Commerce and Industry chief executive officer Roberto Benetello was quoted as saying.
“European companies need workers who can operate in a high-tech environment and they bring it up as a critical issue for Malaysia.”
Summarising the report, the Independent said efforts by Najib and Johari to talk up the economy and the government’s efforts behind its “success” would not count for much, as this was purely to win votes.
“This at least seems the official policy of Barisan Nasional at this moment in time,” it said.