M'sian budget lacks holistic emphasis

Summary:Exactly a week ago, Prime Minster Najib Rajak unveiled the 2011 national budget and since then there have been literally hundreds of comments--a lot of which are negative--made on online news portals, blogsphere and the usual social media platforms of Twitter and Facebook.In a nutshell, the budget received a lot of attention primarily because there was a lot of proposed spending that didn't seem to resonate with ordinary Malaysians.

Exactly a week ago, Prime Minster Najib Rajak unveiled the 2011 national budget and since then there have been literally hundreds of comments--a lot of which are negative--made on online news portals, blogsphere and the usual social media platforms of Twitter and Facebook.

In a nutshell, the budget received a lot of attention primarily because there was a lot of proposed spending that didn't seem to resonate with ordinary Malaysians.

Some of the more unpopular proposals include the emphasis on mega infrastructure projects such as the 100-storey Warisan (Heritage of Independence) Tower to be built at a cost of 5 billion ringgit (US$1.6 billion), and the proposed 26 billion ringgit (US$8.4 billion) KL International Financial District project.

Other proposals that various analysts have been critical of include the lopsided increase in operating expenditure by 10.6 billion ringgit (US$3.5 billion), or 7 percent, from 152.2 billion ringgit (US$50.7 billion) this year to 162.8 billion ringgit (US$52.5 billion) in 2011.

Critics also questioned why the government's development expenditure will drop by some 5 billion ringgit, or 9 percent, from 54 billion ringgit (US$17.5 billion) in 2010 to 49.2 billion ringgit (US$15.9 billion) in the coming year.

On the ICT front, there were a few sweeteners including 50 million ringgit (US$16.3 million) for the Multimedia Development Corporation (MDeC) to train graduates.

Mentioned at the budget speech also was the 119 million ringgit (US$38.9 million) to be allocated to the MY Creative Content Programme and the Malaysian Technology Development Corporation (MTDC) to be allocated a sum of 100 million ringgit (US$32.7 million) to provide soft loans for startups.

And then there's the allocation of 71 million ringgit (US$22.9 million) to establish a Special Innovation Unit (UNIK), which will serve as a one-stop center to formulate policies and strategies needed in an ecosystem to drive innovation.

On the human capital side of things, the government is set to establish a Talent Corporation (Talent Corp) in early-2011 and formulate a National Talent Blueprint with the aim of reversing the brain drain from the country.

Besides the excesses that seemed to flow from the broader proposals of the Budget 2011, industry watchers also had criticisms, specifically for the ICT portion of the budget.

For starters, one executive familiar with the funding scene in Malaysia, noted that the establishment of UNIK to boost the commercialization of R&D is a step in the right direction because local universities are almost universally awful in this area.

However, the executive adds that there are concerns the UNIK initiative involves far more powers and influence than what was hinted in the budget speech to be available to UNIK.

"There has been very little consultation on the proposed National Innovation Bill and the proposed act gives UNIK extensive powers, almost like a quasi-ministry on innovation," said the executive. "However, it's still unclear how they intend to solve the innovation issues as the focus has been more about getting UNIK wide extensive powers on intellectual property (IP) and funding."

Speaking of IP, another executive I spoke with not too long ago commented that while MDeC, the government's ICT custodian, has always identified the creative content industry as an area of growth, and while funds have been allocated to this area, there are still few local creative content players that have truly made headway globally in this sector.

As one who has succeeded abroad himself, this industry player noted that while Malaysians have the ideas, talent and the capability to exploit the creative content sector, not much have been seen in the way of actually creating IP.

"IP is where the true value lies in the creative content industry," he explained. "Someone talented can come up with something creative but to sustain a business, he will need to capitalize on the IP that he or she creates by using it to spawn other businesses from that IP, such as merchandising or selling that IP to content distributors. I don't think the industry gets this yet."

Another sore point with others in the industry is the issue of human capital, or should I say, the lack thereof.

Malaysia has long struggled with retaining the best and brightest in the country, with many young graduates and more seasoned professionals opting to leave the country to work abroad, including over 300,000 Malaysians in Singapore.

While setting up the Talent Corp is not wrong per se, industry watchers have questioned as to whether we are using the right strategy to attract and indeed, retain talent.

"The focus should not just be on highly-qualified returning Malaysians, but it should also include focus on top Malaysian talent in the country and whether they have been optimized and allocated in the right place," noted one tech industry CEO.

Besides this, I believe that attracting talent is not just a matter of offering the best salaries per se. Talents that come to Malaysia also live here and this begs the question as to whether the country has a conducive enough ecosystem in which they can truly enjoy their stay here.

Issues to do with housing, quality education for children, cultural diversity, environmental safety, as well as meritocracy, a level-playing field in the workplace and fair working conditions, need to be addressed.

Malaysia has come a long way since the 1990s, much of it by leveraging ICT as an enabler. But in order for it to continue forging ahead, the nation needs to move up the value chain as unlike in the yesteryears, competition from the region has upped the ante, and in some way, overtaken us.

Only by addressing the fundamentals--that of creating a more innovative society through the revamp of our human capital needs, the liberalization of our economy and the adding of value to our ecosystem--can Malaysia seek to redress its lost ground.

For if this does not happen, we will be left behind on the knowledge-economy value chain as more countries overtake us, long before we can achieve our so-called Vision 2020.

Topics: Malaysia, Asean, CXO, IT Employment, Legal, Social Enterprise, Tech Industry, Telcos

About

An engineer by training, Edwin first cut his teeth as a cellular radio frequency optimization engineer in one of Malaysia's largest telcos. After more than five years, he hung up his radio engineering boots to try his hand at technology reporting at The Star, Malaysia's leading English daily, where he won several awards for Best Online Te... Full Bio

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