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Category: Labour

Human resource is the key issue for many developing as well as developed countries. Its availability, whether skilled or unskilled is a determining factor for the inflow of foreign direct investments (FDIs) to many developing nations. Human resource is also an important factor in determining the competitiveness of individual companies as well as a requirement for developing industrial clusters. Penang depended on its abundant supply of literate and trainable labour force to attract investments in the export-oriented electronics industry since the early ‘70s. This labour force has gone through skills upgrading and enhancement in the past three decades and today, Penang can boast of having a pool of relatively skilled and professional labour force that is capable of handling and developing state -of-the-art technologies. Penang has been identified as the top region for the electronics industry in Malaysia1 and is also well known as the Silicon Island of the East. Despite these accomplishments, human resource, which was and remains the key factor in driving Penang’s economic growth, continues to be a development issue in Penang.  [Download]

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Category: Labour

This paper examines the relation of particular forms of social and labour market policy to economic development. Taking the history of Malaysian industrialization as its empirical case, the paper assesses the unintended consequences of redistribution policy, on the one hand, and migration policy, on the other, for the limited upgrading of the country’s electronics industry. It argues that, while the former has been central to social harmony in Malaysia’s multi-racial society, it has contributed to the underdevelopment of small and medium-sized firms capable of linking with the TNCs on the basis of knowledge-intensive and higher value-added operations. Migration policy, on the other hand, has allowed manufacturers to have continued access to supplies of low-cost, lower-skilled labour that have released the pressures that would otherwise have been there for technological and skill upgrading in the electronics industry. Only in Penang, where regional state institutions have intervened to encourage SME upgrading, has the national picture been moderated.

Malaysia’s industrialization project emerged at time when export competition in manufactured commodities was less intense than it is now. Largely as a result of federal government priorities and for other reasons explored in the paper, advantage was not taken of this ‘window of opportunity’. As a consequence, the country’s industrialization project - exemplified by its electronics industry - is now ‘stalling’ in the sense that it remains locked into low- to medium-technology operations. With the rise of China as a manufacturing exporter, this is a dangerous situation for a country’s principal industry to be in.

By Jeffrey Henderson and Richard Phillips.  Published on Economy and Society Volume 36 Number 1 February 2007: 78-102. Taylor & Francis Group.  [Download]
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Category: Budget

Programme and performance budgeting (PPB) was first introduced in Malaysia in 1969 and experience with operating and developing the system carries lessons for other countries. The initial introduction under the influence of external advisers, involved treating PPB as a mechanical exercise in which right procedures had to be followed. From 1972 the strategy changed to making the system serve to assist with utilizing and managing resources more efficiently in relation to programme objectives. The successful development of the system agency by agency points first to the importance of local rather than foreign expertise; second, to the need for the agency head to be committed and involved, rather than leave the introduction and management of the system to lower level experts; and third to the significance of the leadership role of the Treasury.

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Category: Good Governance & Transparency

  policy-paperMalaysia and post-apartheid South Africa stand out as middle-income countries that implement affirmative action (AA) in favour of a majority population group. Malaysia intensified AA amid continuation of a political order and consolidation of executive power, while South Africa democratized and devolved power while promulgating majority-favouring AA.

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Category: Budget

In a country in which the national budget constitutes a substantial percentage of the GNP, over time the policy decisions on both revenues and expenditures have far reaching implications for the well-being of the people and their economy. Taxation measures, including the grant of tax incentives to specific types of industries, have an important effect on the pattern of development in the economy. On the expenditure side, budget allocation decisions in relation to the choice of programs and their beneficiaries have a significant impact on equity, economic growth, employment, manpower development, and the standard of living for the masses. In short, whether the financial policies embodied in the budget of a country relate to revenue measures or expenditure programs, by virtue of its size and impact, budgeting has implications for all.

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