“the country’s per capita income had risen by 40% between 2004 and 2007, from RM15,819 (US$4,163) to RM22,345 (US$6,452). The Barisan Nasional Government is confident that we will get the people’s mandate again, based on the improved economic resilience”

A good thing there is something called the internets, where people can voice other truths. Tony Pua over at Philosophy Politics Economics explains:

Nor Mohamed Yakcop must either be completely out of his mind, or can no longer perform simple Mathematics or worse, attempting to insult the intelligence of ordinary Malaysians. Malaysia’s Gross Domestic Product (GDP) grew by 5.0%, 5.9% and an estimated 6.0% in 2005, 2006 and 2007 respectively according to the Government’s official statistics.

Based on the above growth rates over the past 3 years, Malaysia’s GDP grew by approximately 17.9% from 2004 to 2007. Therefore, it is completely inconceivable that our per capita income increased by 40% when our GDP grew by only 17.9%. Unless of course, the honourable Minister believes that our population shrunk by some 16%!

But, then again, there will always be people who use blogs on the Internet to criticise the rapid economic growth achieved by the Government.

UPDATE: Prime Minister Abdullah Ahmad Badawi dissolved the parliament on Wednesday 13 February. The election is likely to be held in early March

UPDATE 2: Elections are called for 8 March. According to the Economist:

No one expects Mr Badawi to repeat his storming debut in 2004, when he led the ruling coalition to a 90% sweep of 219 seats in Parliament. Defeat is unthinkable: the coalition has won every election since independence in 1957.

He tries to answer the question by exploring China’s economy, its political and legal system, and its record on civil, political and personal rights. Peerenboom’s answer is “yes”. At the forum of the Far Eastern Economic Review, Nicholas Bequelin has a review on the book. Bequelin is researcher at the Asian division of Human Rights Watch, so it’s no surprise that he disagrees with Peerenboom.

I haven’t read the book yet, and neither am I an expert on China. For me the question often pops up in my comparisons between Indonesia and Malaysia. Where some say that Indonesia might be ‘too democratic’, others might say Malaysia is too paternalistic and authoritarian. It seems that strict government control has helped countries like Malaysia and Singapore in creating a higher level of development than for instance the rather chaotic countries of Indonesia and the Philippines. So….is Peerenboom right? I think in the short term he might be. But for the long term, I sympathise with Bequelin’s critique. But let’s read the book first…

Earlier this month, the Malaysian Ministry for Higher Education and the World Bank hosted the Regional Higher Education Conference Strategic Choices for Higher Education Reform in Kuala Lumpur. The joint MOHE/World Bank conference was not a coincidence. The timing of the event coincided with the completion of a research report by the Malaysian Economic Planning Unit and the World Bank: “Malaysia and the Knowledge Economy: Building a World-Class Higher Education System” (pdf 1 MB).

The 258 page report presents a good analysis of the current situation and puts forward some sound policy recommendations. Most of these are in line with my own observations and my field work that I conducted in Malaysia last year. Below is an executive summary of the executive summary and a few additional thoughts and observations coming from my side:

Introduction

The progress of the Malaysia economy in recent decades has been nothing short of impressive, a reflection of strong macroeconomic management and political stability. However, Malaysia’s sustained competitive edge is not guaranteed. Recent efforts by the Government have brought about significant achievements, attesting that with appropriate funding, dedication, and high caliber leadership, Malaysian universities can achieve excellence. However, few Malaysian universities have achieved a competitive position internationally.

Steering and Governance

The attainment of world class status by Malaysia universities hinges, in part, on keeping a fine balance between two competing objectives: expanding the system and improving quality. Relaxing the administrative and financial rules and controls that public universities are required to conform to in their daily management would allow them to focus on important institutional development issues. The 1996 legislative framework that was designed to enhance public university autonomy as part of the “corporatization” reform should be fully implemented, along with some strategic additions.

Cost sharing and accessibility

There are clear indications that Malaysian students and families are willing to contribute to the cost of their education, provided they can enroll in universities perceived as offering good quality and relevant programs. However, as universities consider increasing tuition fees to promote cost-sharing, they must ensure that this does not have adverse effects on equity, particularly with respect to student loans and grants.

To promote greater efficiency and innovativeness in the use of public resources, the Government should consider expanding the amount of funds available to universities through performance-based funding mechanisms. To integrate its research universities into the global research community, Malaysia will need to consider several options for restructuring its research funding mechanisms. One of the most effective ways of allocating research funds is to promote the development of centers of excellence.

Quality

While quality education may be defined in terms of internationally accepted criteria and standards for academic programs and educational experiences, a “world-class” education implies achieving a much higher threshold of quality where academic performance and output are measured relative to a league of very select institutions. Academic programs could be reformed to enhance the transparency and quality assurance mechanisms of the Malaysian higher education system. High quality teaching and innovative methods of delivery, particularly at the undergraduate level, are key components of top level universities. This requires avoiding excessive teaching loads, enabling integration of research experiences in undergraduate courses, relating course evaluations to promotion considerations and applying transparent criteria for faculty promotion. The current faculty shortage can be addressed by reviewing the current retirement age of 56. Student learning must be enhanced so that graduates can succeed in the local and international labor markets.

Employability

Concerns about the workplace relevance of university education remain. The Government has responded to the rising numbers of unemployed graduates with numerous commendable policy initiatives. But the main challenge for policy makers is not simply ensuring that graduates find employment, but rather employment that best uses their education. The Government could focus on several longer-term policy priorities to encourage more efficient labor markets that will lead to improvements in labor market outcomes for university graduates and for other educational groups, and a more effective transmission of knowledge and skills from education and training institutions to the real economy.

The national innovation system

Malaysia’s quest to become a sophisticated knowledge-based economy is likely to be frustrated, unless policies to link Malaysian firms with universities and research institutes are strengthened. A world-class national higher education system is a sine qua non for improving the national innovation system. The Ninth Malaysia Plan sets the ambitious target that science & technology activities contribute at least one-third of Malaysia’s annual economic growth. However, Malaysia’s skills and technology upgrading policies did not have the intended effects. Besides support to the university system to achieve “world class” status, and the policy to ensure continued growth, prosperity, and rising standards of living, Malaysia must move towards becoming an innovative knowledge-based economy. This will both reinforce the demand for universities to produce students with skills for innovation and encourage a spirit of innovation throughout the education sector. A variety of complementary policy reforms can help to improve the efficiency of the Malaysian national innovation system in which universities will play a major role:

• Funding research competitively and selectively.
• Establishing professionally managed Technology Commercialization Offices housed in selected universities.
• Developing a Technology Broker program.
• Involving the universities in regional development efforts.
• Strengthening university-industry linkages.
• Building the institutional capacity for third mission activities.
• Developing entrepreneurship courses.
• Aligning the university culture with the business culture.

In conclusion

The Malaysian higher education system is at a critical point in its evolution. The Government has the potential to continue to build on past achievements and foster a system that meets the needs of a leading knowledge-based economy. At the same time, without focused and strategic reforms, the Malaysian higher education system may lag behind neighboring countries that are actively developing and rewarding the most innovative and accomplished universities. Such reforms will need to focus on:

1. choosing more effective governance and financing models;
2. improving the overall quality of the universities with a focus on academic programs, faculty management, and student learning;
3. equipping university graduates with the tools necessary for a knowledge-based economy;
4. strengthening the national innovation system by creating stronger links between Malaysian firms and universities.

Although the report appears to do a good job in diagnosing the problems and in finding the appropriate solutions for them, the crucial part will be in the way in which the recommendations will be actually transposed into policies and – even more important – whether the policies will actually be effectuated. I have come across many good initiatives that address the issues above, but many of them lack real results because they get stuck in government bureaucracy, in existing vested interests or because of contradicting governmental policies in adjacent fields.

The autonomy (or corporatisation) as foreseen in the 1996 reforms has never been actually implemented or realised. Therefore, the most important recommendation is to come to a true implementation of autonomy in Malaysian higher education. Hopefully this report marks the start of truly meritocratic policies and true freedom and autonomy of the Malaysian higher education institutions. This will in turn also enhance the innovative capacity of the Malaysian economy and the society as a whole.

Update: also take a look at Bakri Musa’s analysis of the report in Malaysiakini (subscription required, but reproduced at Education Malaysia).

Another book to add to my ‘to-read-list’: Asian Godfathers: Money and Power in Hong Kong and Southeast Asia. Newsweek has an article by the author of the book, Joe Studwell. Studwell had expected that the Asian crisis ten years ago would trigger the transition from crony capitalism to a market free of manipulation by bureaucrats and politicians. After the research for his book, he concludes that he was wrong:

The architecture of the Southeast Asian economy remains what it was 10 and 50 and 100 years ago. The domestic economies of Hong Kong, Singapore, Thailand, Malaysia, Indonesia and the Philippines are all still dominated by reclusive, enigmatic billionaires and their families.

He observes that inequality has persisted in Southeast Asia and Hong Kong and attributes this to the Asian Godfathers. These Asian billionaires can avoid the pressures for global competitiveness by prospering from concessions, monopolies and cartels. Southeast Asian crony capitalism might have followed quite different historical pats – often related to their colonial past – but throughout the region, it has led to the emergence of tycoons whose wealth is rooted in some form of state sanctioned monopoly. And the crisis has not changed this. As he describes for Malaysia, Indonesia, Thailand and the Philippines, the relationships between economic and political elites are enduring:

Malaysia, which imposed capital controls and raised a finger to the International Monetary Fund as the crisis spread, dealt with its fallout in traditional fashion. The businesses of Halim Saad and Tajudin Ramli, the leading bumiputra (or indigenous) tycoons with close links to the ruling United Malays National Organization, were bailed out with injections of government money and state share purchases.

Almost none of the big players was ruined by the financial crisis in Malaysia, Thailand or the Philippines, and so it was in Indonesia, despite the fall of Suharto. The old man’s closest confidant and golfing buddy, Hasan, was made an example of with a conviction for fraud; he served a couple of years in a special and commodious prison cell.

Studwell draws some comparisons with South Korea and Taiwan, where reforms were more successful than in Southeast Asia. He attributes this to measures such as land reforms, commitment to social equity, and the existence of independent organised labour. Also, although all of these countries backed family businesses, South Korea and Taiwan supported local manufacturers, while the Southeast Asian states backed their cosmopolitan trading elites.

Other important differences are related to principles of accountability and transparency and especially, to actually enforcing those principles. After 1997, South Korea’s Kim Dae Jung implemented reporting and compliance requirements in the Seoul stock market and supported the independence of the judiciary. South Korea and Taiwan now have a GDP which is three to four times higher than Malaysia and ten to twelve times higher than Indonesia and the Philippines.

Studwell is clear about the reasons for these different outcomes. Korea’s and Taiwan’s political choices have created free societies and global competitive companies. The political choices in other parts of Asia have led to the persistence of a superannuated economic aristocracy.

Studwell’s focus on the Asian tycoons might not provide a full explanation for all the problems, but I am sure it points to an important one. It emphasises the importance of stable and transparent institutions in economic development. It is pretty clear that the cronyism has all but disappeared after the 1997 financial crisis. Although anti-corruption measures are proving more or less successful in countries like Malaysia and Singapore, in Thaksin’s Thailand persistence of cronyism has been pretty obvious and Jakarta’s new titans are not free of this behaviour either.

The UNSW debacle in Singapore and the exit of Johns Hopkins last year, have dealt a serious blow to the Global Schoolhouse strategy of the Singapore government. Singapore’s neighbor Malaysia announced a similar strategy last year. With this strategy, Malaysia becomes one of the most interesting examples of the way that higher education is globalizing nowadays. A major exporter as well as importer of higher education, with foreign universities within its borders and Malay universities establishing branches outside Malaysia.

First of all, Malaysia has long been sending many of their students and university staff abroad, especially for postgraduate studies, because their own system could not absorb the increase of students in the last decades. In addition, the racial quota for public universities to enroll Malay forced a lot of students from Chinese and Indian backgrounds to pursue their higher education abroad. The last decade has seen a sharp rise in private universities and colleges that have been able to absorb many of these students and the Malay that were not accepted in the public sector. Despite this, the flow of Malaysian students abroad – especially to the English speaking countries – has remained substantial (see table).

Malaysian students abroad 1999-2004

In addition to sending students abroad to pursue their education, the Malaysian government has also admitted higher education institutions into Malaysia in order to meet the increasing demand of higher education in the country. The establishment of such branch campuses has to fulfill a wide range of legal requirement (on ownership issues, but also on the content of education), but this has not kept universities from establishing these branches. The best known examples are Monash University, Curtin and Swinburne from Australia and Nottingham University from the UK. Although these partnerships were usually based on so-called sandwich programmes (where part was done in the home country of the university), they now also offer full degrees in Malaysia.

But in recent years, both the flows of students as well as the flows of institutions are no longer one way but now go both ways. Although public universities in Malaysia do not undertake activities abroad – and probably they are not allowed to – the private ones seem to become more and more active. You can now actually obtain a Malaysian degree in London, offered by the Lim Kok Wing University, well known in Malaysia for its IT and Design programmes. And this university is not just a little office somewhere in London but is established in a beautiful old English building. But Lim Kok Wing did not stop in London. It’s also the first Asian university to establish a branch campus in Africa, in Botswana to be precise. Recently, other education institutions are following and are also expanding abroad.

And now the Malaysian government wants to make Malaysia a true education hub for the region, more or less like its southern neighbor. The Ministry of Higher Education has set a target of 100,000 students for 2010. Growth will probably mainly be sought in the region and in the Middle East. Together with Singapore, Malaysia probably offers the best quality higher education in Southeast Asia, although Thailand, the Philippines and Indonesia are catching up. Due to language (and cultural/religious) issues, Malaysia is popular for Indonesian students, especially for those that cannot get into the local public universities in Indonesia and cannot afford the top private ones or higher education abroad. For Chinese students Malaysia might be popular because of the widespread Chinese influences in Malay society, more apparent though in the private institutions than in the public ones. More recently, especially after 9-11, Malaysia has also become a popular destination for Middle Eastern students. Yesterday, the Star reported on an agreement between Higher Education Minister Datuk Mustapa Mohamed and his Saudi counterpart Dr Khaled Mohamed Al-Anqari on sending the Saudi students to Malaysian universities(*). In addition to the Middle East, students coming from Africa (especially Libya, Sudan and Kenya) are also on the rise (see table; click to enlarge).

Foreign Students in Malaysia 1999-2003

To reach the goal of 100,000 international students, the government will need to double the intake of foreign students. There are obviously pros and cons to a strategy like this. For many, a first reaction would be to ask why a government wants to increase the number of international students if it barely has the capacity to meet the demand of its own people? On the other hand, it can generate extra financial resources (if the fees for foreign students are profitable) by which the education of the Malaysian population can be supported. Obviously creating more multicultural campus will also have more intangible positive effects. And the quality of education can increase if these foreign students will be of such quality that they will positively influence the academic atmosphere and quality in the universities. And of course there are the economic effects through spending and consumption from the students and through the new jobs that are created for such an expanding higher education sector.

So…should the Singapore case make the Malaysian government nervous? Maybe not yet, but they better keep an eye on the developments in their neighboring city state. Malaysia’s plans are not as ambitious as Singapore’s ‘grand’ strategies and they are less dependent on foreign providers than is the case in Singapore. But I hope they will not become obsessed with the projected number of 100,000, and instead just focus on the overall quality of their higher education. Then the foreign students will follow automatically…

Saudi government officials have been traveling the world for the past months in order to find ‘a conducive environment’ for their students to study. Especially because it was getting harder for them to get visas in the UK and the US. I remember that one of their officials visited Australian campuses as well, in order to ‘ínspect’ the universities here. I have not heard anything about this issue since…maybe the Australian culture was not considered very conducive by these government leaders, that always know best what is good for ‘their’ citizens…

But even Malaysia was not perfect. Saudi female students had specific requirements: “They have to travel with their chaperone who are either their male family members or husbands, so visas can be a problem. Another issue is dressing – some female students want to keep their faces covered.” The Minister said he would look into these issues… Covering the faces is not allowed in Malaysian public universities. And I think universities shouldn’t change their values just to benefit more from the international higher education market. Believe me, I work in Australia, so I should know!

My research analyses the way in which nation states and universities respond to the increasing importance of knowledge for economic development and global competitiveness. One thing I’m particularly interested in is the extent to which a process of global policy convergence can be detected in these responses.

In later posts I will try to refer to some of the experiences I’ve had in these countries. For now, just a few short observations

Indonesia has come a long way, but is struggling. Indonesia’s elite universities are more and more relying on student fees and entrepreneurial ventures to sustain their operations. Just over 5 years ago, these universities were almost solely dependent on government funding and strictly directed by national regulations. It of course has also given them much more autonomy. I remember I had some interviews in Indonesia in 2001, just after some of its public elite institutions received the autonomy status. At that time they were clearly struggling with their newly gained autonomy. Compared with 2001, one now seems to be much more decisive on what directions to go.

I couldn’t have chosen a more interesting time to visit Malaysia. During my visits in Penang and Kuala Lumpur, the Times Higher Education Supplement issued its annual top 100 ranking of universities. One conclusion must be that the THES ranking is nowhere taken more seriously than in Malaysia. This however can be said for higher education as a whole. In politics as well as the mainstream media, higher education gets more attention in Malaysia than in any other country I know. But at the same time this has led to a remarkable progress in higher education and science. I’ve seen very interesting examples of cutting edge research, supported by impressive facilities. Also politically, Malaysia has proven to be fascinating. I won’t go into details here, but it has become clear to me that – due to its impressive economic and scientific progress – Malaysia’s tight political control seems to become less and less sustainable. If some of the governmental regulations won’t loosen up, Malaysia might become a typical example of the incompatibility between paternalistic politics and a creative knowledge society. Future will tell..

And than there’s the Netherlands. My visit coincided with the national elections, and if there is one word that best illustrates the result of the elections it is: conservatism. Dutch universities however, seem to become more and more innovative. My visits gave the impression that the traditionally rather rigid Dutch universities have become more flexible and are more open to change than they used to be.

But as I said: more posts to come on these issues…

“The Bologna process seems likely to have a profound effect on the development of higher education globally,” the paper says, acknowledging that other continents are considering it. “Lack of movement on Bologna compatibility will make it harder for Australia to demonstrate to the Europeans its bona fides in this area.”

“Its educational and administrative practices are modeled after American institutions, in particular the Wharton School of the University of Pennsylvania, which has played a central role in SMU’s development.”

Today, the New Straits Times reports that Malaysia is going to be home to a top-class business management institution, modeled on.. the Wharton School of Business. Special Envoy to the Higher Education Ministry Datuk Seri Effendi Norwawi said the business management institution will involve a tie-up with Wharton Business School at the University of Pennsylvania, one of eight Ivy League institutions in the United States. One of the Special Envoy’s chief tasks is to persuade top-notch universities to either set-up branch campuses here or work with other institutions here. Tony, a critical observer of Malaysian higher education, also reports on the issue.

I am currently working on a paper on international isomorphism and the global diffusion of higher education and research policies. I guess this makes a good example.

Update: I just noticed that the New Straits Time also has an interview with Effendi in today’s issue: ‘Roll out the red carpet for foreign students‘