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Showing posts with label competitiveness. Show all posts
Showing posts with label competitiveness. Show all posts

Sunday, February 25, 2024

Poor ringgit performance due to a lack of competitiveness in Malaysia, a 28-year-old problem as a result of 1MDB financial scandal and the subsequent corruptions.

 

The ringgit's poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist. Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

 

PETALING JAYA: The ringgit’s poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist.

Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

“Weak ringgit is ultimately a symptom of long-term decline in Malaysia’s competitiveness,” Apurva said on X.

The economist said while many Asian countries also slid following the 1998 financial crisis, Malaysia’s lack of reforms had affected its economy in the long run.

He added that Malaysia opted for short-term solutions to boost the ringgit in the immediate aftermath of the financial crisis.

Apurva said it consequently hurt the currency in the long run, adding that the government’s measures resulted in its GDP and exports falling.

He said the Thai baht and South Korean won outperformed the ringgit as both countries arguably reformed the most after the financial crisis.

Separately, Perikatan Nasional chairman Tan Sri Muhyiddin Yassin said the government should own up to its own failures instead of pointing fingers at others.

Muhyiddin said it is unreasonable for the government to blame the Opposition for the fall of the ringgit when they are the ones in power.

“They are the government of the day and have the responsibility, role and power to manage the country,” he said during his Pagoh constituency Chinese New Year celebration at a temple in Bukit Pasir yesterday.

The Pagoh MP was responding to former Sabah chief minister Datuk Seri Salleh Said Keruak, who said the Opposition’s constant claims about trying to topple the government mean they should shoulder some of the blame for the weak ringgit.

 
The ringgit's poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist. Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

 

PETALING JAYA: The ringgit’s poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist.

Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

“Weak ringgit is ultimately a symptom of long-term decline in Malaysia’s competitiveness,” Apurva said on X.

The economist said while many Asian countries also slid following the 1998 financial crisis, Malaysia’s lack of reforms had affected its economy in the long run.

He added that Malaysia opted for short-term solutions to boost the ringgit in the immediate aftermath of the financial crisis.

Apurva said it consequently hurt the currency in the long run, adding that the government’s measures resulted in its GDP and exports falling.

He said the Thai baht and South Korean won outperformed the ringgit as both countries arguably reformed the most after the financial crisis.

Separately, Perikatan Nasional chairman Tan Sri Muhyiddin Yassin said the government should own up to its own failures instead of pointing fingers at others.

Muhyiddin said it is unreasonable for the government to blame the Opposition for the fall of the ringgit when they are the ones in power.

“They are the government of the day and have the responsibility, role and power to manage the country,” he said during his Pagoh constituency Chinese New Year celebration at a temple in Bukit Pasir yesterday.

The Pagoh MP was responding to former Sabah chief minister Datuk Seri Salleh Said Keruak, who said the Opposition’s constant claims about trying to topple the government mean they should shoulder some of the blame for the weak ringgit.

 

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Soul-searching for ringgit solutions





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Soul-searching for ringgit solutions





argin-left: 1em; margin-right: 1em;">The ringgit's poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist. Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

 

PETALING JAYA: The ringgit’s poor performance can be attributed to a lack of competitiveness in Malaysia over the past 28 years, says a World Bank economist.

Apurva Sanghi said this was partly a consequence of the 1Malaysia Development Bhd (1MDB) financial scandal.

“Weak ringgit is ultimately a symptom of long-term decline in Malaysia’s competitiveness,” Apurva said on X.

The economist said while many Asian countries also slid following the 1998 financial crisis, Malaysia’s lack of reforms had affected its economy in the long run.

He added that Malaysia opted for short-term solutions to boost the ringgit in the immediate aftermath of the financial crisis.

Apurva said it consequently hurt the currency in the long run, adding that the government’s measures resulted in its GDP and exports falling.

He said the Thai baht and South Korean won outperformed the ringgit as both countries arguably reformed the most after the financial crisis.

Separately, Perikatan Nasional chairman Tan Sri Muhyiddin Yassin said the government should own up to its own failures instead of pointing fingers at others.

Muhyiddin said it is unreasonable for the government to blame the Opposition for the fall of the ringgit when they are the ones in power.

“They are the government of the day and have the responsibility, role and power to manage the country,” he said during his Pagoh constituency Chinese New Year celebration at a temple in Bukit Pasir yesterday.

The Pagoh MP was responding to former Sabah chief minister Datuk Seri Salleh Said Keruak, who said the Opposition’s constant claims about trying to topple the government mean they should shoulder some of the blame for the weak ringgit.

 

https://www.facebook.com/share/r/htSk5YiWYyri4v5M/?mibextid=D5vuiz





Saturday, May 7, 2022

Is education fit for the future?

 


EDUCATION is the most controversial of subjects.

 
 One thing is clear, whilst the quantity of educated manpower is critical to national strength, quality may matter more.

Parents quarrel about the quality of education for their kids, just as societies are deeply divided on education as it defines the future.

Is the current education system fit for purpose to cope with a more complex, fractious future, fraught with possible war?

According to Stanford University’s Guide to Reimagining Higher Education, 96% of university chief academic officers think that their students are ready for the workforce, where only 11% of business leaders feel the same.

As the population and work force grow, the gap between skills demanded by employers and the education received by school leavers is widening, so much so that many are finding it hard to get the jobs that they want.

As technology accelerates in speed and complexity, the quality of education becomes more important than ever. Is it for the elites or the masses?

The Greek philosopher Aristotle recognised that the aim of education is for knowledge, but there was always a different view as to have knowledge for the individual or whether education must prepare the individual to fulfil the needs of society.

Feudal systems hardly paid attention to the masses, whereas most ancient institutes of higher learning were for elites, either for religious orders or in Chinese history, to prepare for civil or military service, but blended with self-cultivation.

Conservative think tank American Enterprise Institute (AEI) has just produced a fascinating study on the implications of higher education for national security.

Covering the period 1950-2040, the study acknowledged that the United States attained uncontested power status, because it had the highest levels of educational attainment and manpower.

In 1950, the United States, with less than 5% of the world’s population, had 45% share of world population aged 25 to 64 with completed tertiary education.

In comparison, India had 5% and China about half of that.

By 2020, the United States’ share had dropped to roughly 16%, whereas China was catching up, whilst India had just under 10%.

By 2040, depending on different estimates, China may double its share to between 15% and 20%, whereas India would have overtaken the United States with 12%, leaving the United States third with 10%.

It is a truism that education matters for economic growth and power.

Every additional year of schooling for children is estimated to add 9% to 10% increase in per capita output.

If you add in “business climate” with improvements in education, health and urbanisation, these factors explain five-sixths of differences in output per capita across countries.

Under the liberal world order, America encouraged the spread of global education, so much so that the global adult illiteracy (those without any schooling) fell from 45% in 1950 to only 13% by 2020.

This worldwide expansion in education was good for the world, but it also reduced the comparative advantage of the education and technology front-runners, particularly the United States.

The AEI study reported that the share of global adult population with at least some tertiary education increased from under 2% in 1950 to 16% today and would approach 22% by 2040.

In 1950, eight of the top 10 largest national highly educated working age labour pool was in advanced countries. By 2020, their share was half.

By 2040, this is likely to be only three out of 10.

In essence, India and China would take the lead in total highly trained manpower, especially in science and technology, with the United States “an increasingly distant third place contestant.”

The AEI study illustrates why increasingly American universities will be more selective in their future foreign student intake, especially in science and technology which may have impact on national security matters.

As late as 2017, MIT manifested global ambitions in its strategic plan, “Learning about the world, helping to solve the world’s greatest problems, and working with international collaborators who share our curiosity and commitment to rigorous scientific inquiry.”

That global vision may be cut back in light of the growing geopolitical split into military blocs. Western universities may no longer be encouraged to train foreign students into areas where they can return to compete in key technologies.

In short, geopolitical rivalry will determine the future of resources allocated to education, research and development and technology.

No country can afford liberal education in which every student is encouraged to do what he or she wants to do.

Students today want to be more engaged in the big social issues, such as climate change and social inequality.

But at the same time, they expect more experiential immersion into careers that are more self-fulfilling.

Instead, institutes of higher learning are forced by economics to provide more shorter term courses to upgrade worker skills, using new teaching methods and tools, especially artificial intelligence, virtual reality etc.

At the national level, governments will push universities into more research and development and innovation to gain national competitiveness, including R&D on defence and national security sectors.

This means that the education pipeline or supply chain will also be bifurcated like global supply chains that are being disrupted and split by geopolitics.

The conversation on what should go into the curriculum for education is only just beginning. Much of this is to do with funding.

As higher levels of education are more expensive, especially in the high technology area, whilst governments budgets are constrained, universities will turn to private sources of funding.

The more society polarises, the more likely that such funding would turn towards entrenchment of vested interests, rather than solutions to structural problems.

Education is controversial precisely because it is either a unifying social force or a divisive one.

One thing is clear, whilst the quantity of educated manpower is critical to national strength, quality may matter more.

The Soviet Union had the second largest share of educated manpower during the Cold War, but it did not save it from collapse.

Will our future education system provide leaders who are able to cope with the complexities of tomorrow?

As the poet T S Eliot asked in his poem “The Rock” in 1934, “where is the wisdom we have lost in knowledge?”

That question is being asked not just in universities, but by society as a whole.

Andrew Sheng writes on global issues from an Asian perspective. The views expressed here are the writer’s own. 

Source link.

 

Related posts:

 

What ails our Malaysian universities ?

 

Malaysia's education policy must champion Meritocracy instead of Mediocrity system

 

Losing faith in reform of Malaysian education system

Friday, August 17, 2018

Governance woes behind US trade war

Illustration: Peter C. Espina/GT

For now, there is still no end in sight to the brewing trade war between the world's two economic heavy hitters. Ignoring voices of objection at home, the Donald Trump administration announced that the second tranche of tariffs on $16 billion in Chinese goods will take effect later this month. Though Trump has yet to fulfill his campaign promise to levy a 45-percent tax on Chinese goods, his logic on trade policy refuses to change.

The reason why the US has provoked and intensified the trade war lies in the incapacity of the global system. Specifically, division of labor in the globalized era has led to the exodus of the US manufacturing industry out of the country. Meanwhile, the US claims that China's "predatory" economy has developed itself into the biggest beneficiary in the system.

That's why the Trump administration insists on attacking China's "stealing" practice in the name of "safeguarding US national interests," regardless of the cost of torpedoing the existing international order.

The robust stock market and economic growth of the US as well as the decline in unemployment have further boosted Trump's confidence in escalating the trade war. His trade policy has gained more acceptance among Americans. However, the logic behind his trade war can hardly hold water.

The era of globalization has been an inevitable development of human society. As people in the global village are more interconnected, trans-regional flow of finance, technology, information, service and talent has re-optimized global production resources, inspiring the development of countries and regions.

The unprecedented development of productivity and international division of labor has prompted developed countries which boast capital and technology advantages to transfer their low-end industries to other countries where labor and land costs are relatively low. Then a great many multinationals have mushroomed, which has objectively precipitated the growth of developing countries.

Economic liberalism has become a paragon of democracy with which developed nations dwell upon with relish. It's also an important pillar for the postwar international order. When developed countries sat on the top of the industrial chain to reap benefits, they never complained about the unfairness of the system but instead became its most powerful defender.

Ironically, the US - the founder of the global system - has now become its most proactive opponent. The Trump administration attacks the "unfair" global system and views China as being complicit in bringing about the fall of the US manufacturing industry and loss of jobs. Such rhetoric has led people to believe that the stature of the US has fallen to a third world country's.

Globalization is not without problem. Apple is a paradigm of a globalized industrial chain, but it's not a nice story. Developing countries at the low end of the industrial chain can only get disproportionally meager profits while lucrative gains flow to developed nations. In this way, the US deficit is far less than the book figures.

More severely, low-end manufacturing has worsened the environment, putting the health of the public in jeopardy. But the US-led developed world just passed the buck.

Emerging economies like China are resigned to be just a factory of developed countries, so they work hard to develop hi-tech and produce high-value-added products to create a level-playing field with developed countries. This is the law of market economy, which, however, has become a threat to its national security and an enemy of its economy in the view of the US.

The strange logic can hardly justify itself.

Denying others a share of the spoils is not the essence of the era of globalization. If developed countries think there's something wrong with the global system, they can appeal to international organizations to carry out reform, instead of resorting to short-sighted practices like threatening with tariffs.

Trump's trade war actually stems from domestic conundrums notably industrial hollowing-out and loss of everyday jobs. The problems are not a result of globalization but of domestic mismanagement. It seems that forcing jobs back home will create jobs, but it can't last long because it will fail to stimulate the fundamental driving force of industrial development. If Trump can make more efforts at boosting the real economy instead of waging a trade war, he may get closer to "Make America Great Again."

Credit: By Zhang Tengjun Source:Global Times Published: 2018/8/15 The author is an assistant research fellow at the China Institute of International Studies. opinion@globaltimes.com.cn

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Tuesday, June 6, 2017

Arrest decline in productivity and competitiveness in Malaysia



COINCIDENTLY, two major reports were released on June 1 on the decline of our national productivity and competitiveness. The first was our own Productivity Report 2016/2017, which was launched by Minister of International Trade and Industry Datuk Seri Mustapa Mohamad (pic) and the second one was the World Competitiveness Yearbook WCY issued by the Institute for Management Development.

This coincidence in decline is understandable since both productivity and competitiveness are closely inter-related. Lower productivity leads to lower international competitiveness.

Productivity

Our labour productivity fell short of our 11th Plan target of 3.7% growth by 0.2% to 3.5% last year. This is a small decline and has been rightly explained with confidence by the Minister of Trade in positive terms when he said that Malaysia was “on track”.

I think he will agree that we must be concerned enough to ask what are the causes and whether this is just a mere slip or could it be the beginning of a trend.

We have to take this fall as a wake up call, in case this decline happens again next year and later on. We have to review many recurrent and uncomfortable issues like brain drain and unemployed graduates - who could number over 200,000 - also reflect the low productivity of many graduates who are newly employed. The lower productivity can be attributed to our low use of automation, high employment of unskilled foreign and cheap labour and the new challenges of the digital economy.

The Minister’s proposal for the Government and private sector to “join forces to embark on initiatives” to improve productivity in nine sectors “of lower productivity”, is most welcome. The private sector has to make profit unlike the Government. Hence it has a greater sense of urgency in wanting to improve not only labour productivity but productivity from all factors of production, including good governance and integrity and quality services to the public. Thus it will be very interesting for the public to be made fully aware of the productivity improvements that should materialise not only in the private sector, but for the Government as well. For instance government departments can learn from the private sector how to provide better or excellent services in the fields of health and education and counter services at police stations, Customs, Immigration, etc .

Productivity in both the private sector and the government machinery should improve to raise our total national productivity. Only then will our nation be able to compete much more efficiently and effectively in the global economy.

We can have the best Productivity Blueprint like that which was launched on May 8 but our productivity can continue to slip and even slide, if we do not ensure that the blueprint is fully implemented and its progress diligently monitored and improved along the way. One way to seriously pursue our goal to raise productivity would be to increase the small sum of only RM200mil for a new Automation Fund. Modern machinery and equipment are expensive but the returns in terms of higher productivity can be very significant. So let’s go for higher productivity with greater automation and not approach the challenge on an ad hoc and piecemeal basis. The Treasury would need to support the Productivity Blueprint much more productively!

Competitiveness


Malaysia registered its lowest ranking in five years in the WCY.

This reflects our decline in productivity as competitiveness is the other side of the coin. However, I am surprised that the relationship is so sensitive. Just a drop of 0.2% in productivity can cause a drop in our international competitiveness ranking from 19th place to the 24th!

What this could show is that while we are sluggish in our productivity, other countries are much more aggressive in improving both their productivity and competitiveness.

There is thus no point in taking pride that we scored better in our ranking compared to the industrial countries like Austria (25th) Japan (26th) and Korea (29th). They are highly developed countries which enjoy much higher standards of living and a better quality of life that we do. They have reached the top of Mount Fuji and other mountains, while we are still climbing up from a lower economic base.

The drop in our competitiveness is significant and we have to take this decline very seriously. Malaysia slipped in all four sectors, that is, economic performance, business efficiency, government efficiency and infrastructure. That is why it is essential to investigate in depth into all these major falls in performance and tell the public what is being done to improve our rankings and ratings.

It is appreciated that Malaysia Productivity Corp’s Director General Datuk Mohd Razali Hussain has established Nine Working Cluster Groups to examine these poor indicators and report on improvements that must be made expeditiously.

Conclusion

It is good that we have these reports on productivity and international competitiveness to benchmark our national performance against them. We have to take advantage of these annual indicators and ensure that we keep improving rather than falling in productivity and competitiveness .

Our efforts to improve will be watched closely by our domestic and particularly international investors and international competitors .

We can only hope that these declines are not just coincidental but are also not developing declining trends. This could spell pessimism and falling confidence in our socio-economic management.

Instead we should take these set backs as warning signals and rededicate ourselves to a greater commitment to higher competition, more meritocracy and building a better socio-economic and political environment in Malaysia.

TAN SRI RAMON NAVARATNAM

Chairman Asli’s Centre of Public Policy Studies

Related links:  

Launching of Productivity Report 2016/2017 - Ministry of International ...

 

World Competitiveness Rankings - IMD

 

Fix election processes before GE14

 

CM may have too much on his plate - Nation | The Star Online

 


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