Penang: Efforts To Build And Retain Talent – The New Oil Of The 21st Century

Speech by Lim Guan Eng at Monash University Malaysia (MUM)
28 November 2015

Penang: Efforts To Build And Retain Talent – The New Oil Of The 21st Century

Congratulations to the graduating Class of 2015. Your hard work has paid off.

Congratulations to the parents. Your happiness today is the culmination of the very hard work you have put in to prepare your children for a Monash education.

Congratulations to Tan Sri Jeffrey Cheah for bringing Monash to Malaysia, and hence making this happy day possible for all of us.

Inside the classroom, Monash gave me the training in economics to become a qualified professional accountant. Outside of the classroom, Monash gave me the opportunity to serve as President of the Monash University Malaysian Students Union (MUMSU) and experience as a student leader.

Our intellectual tie to Monash is stronger than ever. One of my economic advisors, Woo Wing Thye, is a Vice-Chancellor’s Professorial Fellow at the Monash Sustainability Institute in Clayton and at the Monash School of Business in Kuala Lumpur. One just cannot get away from Monash because it is such a great educational institution for lifelong learning.

Malaysians are therefore right to demand that the Ministry of Education upgrade our universities to be able to deliver a Monash-equivalent education. This dream for our children is a moral imperative because this is their birth right and our parental responsibility.

The Battle for Talents

Back in 1943, Winston Churchill delivered a speech at Harvard University where he observed that “the empires of the future will be empires of the mind.” To make this switch to knowledge-led growth successful, Malaysia must now commit to implementing the following three actions seriously:

1. the training of human talents,
2. the retention of human talents, and
3. the welcoming of human talents from abroad — which in many cases means the welcoming back of talented ex-Malaysians from abroad.

Human talent is the new oil of the 21st century. We literally live or die by our wits alone. In short, Malaysia must now pay utmost attention to the battle for talents.

The first signs of this battle for talents are not encouraging.

On the training of human talents, Programme for International Student Assessment (PISA) revealed that the knowledge of science by 15 year old high school students in Malaysia is worse than Vietnam or Thailand. We expect to be worse than Singapore, South Korea, Taiwan, Hong Kong or Shanghai. But have we no sense of shame that we are behind Vietnam and Thailand in Science. Better not laugh when you meet Vietnamese workers.

On the retention of human talents in Malaysia, the findings of a 2011 World Bank report are so sobering that I would like to quote it at length:

“The [Malaysian] diaspora has likely reached about one million people in 2010, compared to about 750 thousand in 2000 … The brain drain is estimated at a third of the total diaspora. This translates into a number of 335 thousand in 2010, which is up from 217 thousand in 2000 ….

“One out of ten Malaysians with a tertiary degree migrated in 2000 to an OECD country—this is twice the world average and including Singapore would make this two out of ten.

The Penang Institute reported that 36% of Malaysia’s brain drain population are top-level professionals such as mathematicians, architects and doctors; and that 10% of the brain drain are medium-level professionals like stock brokers, and technicians.

So do not be one of them. If you have to migrate, come to Penang. Come to where the freedom is, freedom to be yourself where we value you for what you are rather than who you are or where you came from. Where freedom is celebrated as essential to foster creativity and innovation because Penang has the 3Ts of Talent, Technology and Tolerance for new ideas.

In order to enable Penang to become the first state in Malaysia to break out of the middle-income trap and achieve high-income status, Penang focuses on generating new ideas and transformative technological innovations as they are the enablers of social progress, good governance and economic prosperity.
Attracting Human Talents to Penang

Our strategy to attract human talent to Penang has three main components:
1. make Penang the most liveable state in Malaysia;
2. unleash the entrepreneurial creativity of the private sector; and
3. catalyse economic growth by adopting good governance practices and providing crucial physical infrastructure.

Boosting the Liveability of Penang

A highly liveable city has multiple appealing dimensions, and they include a lively intellectual atmosphere, a vibrant arts and culture scene, and a pleasant natural environment. First is respect and commitment towards the practice and observance of civil and political rights. Penang is the only state in Malaysia with a Speakers Corner that guarantees not only freedom of speech but also freedom after speech.

The Penang government has launched many initiatives to preserve and boost the cultural heritage of the state. Street art in Penang was the first to be valued and appreciated in Malaysia. You can draw anything in Penang so long that it is good, you will not be punished even if you criticise the government.

Ask Ernest Zacharevic, the world-famous Lithuanian artist, – he was threatened in a town in Malaysia with fines of RM 2,000 whilst his street drawings were erased. In Penang if your street art is good we are likely to give you RM 2,000!

We have a very successful annual month-long George Town Festival, an extravaganza of performing arts and culture. In 2013, the travel guide Lonely Planet could only credit Penang for being the world’s best destination for food. By 2015, Lonely Planet could identify George Town as the fourth-best in the world on its Top 10 Cities list for Best in Travel 2016.
Unleashing the Creativity of the Private Sector

The second front in the battle to attract talents is to allow talents to prosper in the private sector. The Penang state government believes that the business of a government is to stay out of business and allow the private sector to drive the economy through productive investments. The best example for this is Penang’s fish farming industry which grew from basically nothing in 2008 to a RM1.2 billion industry today. This amazing transformation was done without spending a single penny. The transformation came from the reinvention of government bureaucracy to allow the private sector to thrive.

The previous government benefited its cronies by giving a few chosen individuals thousands of hectares of sea, which would they then be sub-let for a huge profit to genuine operators under the classic rentier system. This has been described by some as predatory capitalism.

Unlike predatory capitalism, we in Penang believed in being an entrepreneurial state. We stopped this crony capitalistic practice and gave permits only to owner-operated fish farms up to a maximum of 8,000 square meters each. Rental was fixed at RM 3,600 annually.

Furthermore, we instituted a check list system where approval must be given if all the boxes were ticked. And the outcome of approval must be given within 3 months. Applications flooded in and we have now over 300 fish farms on the sea. This is how a billion ringgit fish farm industry was born out of nothing at all.

My government has invested in accelerator programs to promote creative and technology start-up’s. The first location selected for the program is the heritage building of Wisma Yeap Chor Ee. For those of you who aim to be entrepreneurs in the new economy, I invite you to come to Penang to establish your high-tech start-up’s. Penang will provide the right environment for your start-up via managerial programs on business development, marketing and other strategic partnership opportunities.

Catalyzing Economic Development

The third arrow in our battle for talents is the provision of good institutional infrastructure and good physical infrastructure. Institutional infrastructure refers to the good governance practices of Competency, Accountability and Transparency; and they were what that allowed the explosive growth of fish farming in Penang.

Likewise, implementing an open tender system for State Government procurement as well as public declaration of assets by leaders including myself are important features in eliminating the scourge of corruption. As a result from 2008 to 2014, Penang recorded annual budget surpluses of RM503 million.

This cumulative 7-year surplus of RM 503 million is more than the RM373 million in budget surpluses recorded in the previous 50 years. Not just annual budget surpluses but Penang has managed to reduce our state government’s debt by 90%.
By instituting clean governance, the additional resources could now be allocated for better use, especially in the provision of hard infrastructure and in the training of talents and also social assistance to make Penang a sustainable welfare state.

In building infrastructure, The Penang State Government has appointed a Project Delivery Partner for the RM 27 billion Penang Transport Master Plan to reduce traffic congestion by “once and for all” combining air, water, rail and road. We hope to be connected by LRT, under sea bed tunnel and a cable car by 2030.

Cultivating Human Talents in Penang

Human capital formation does not happen only in the university classroom. The scientific attitude and entrepreneurial spirit need to be stimulated and nurtured early. We facilitated the creation of the Penang Science Cluster (PSC), where in collaboration with the private sector, we seek to establish Penang as a centre of excellence for science and technology and to embed a science-based culture. We set up Penang Science Cafes to teach our kids robotics. Now our kids are winning international robotics competition.

The PSC is the main organizer of the annual Penang International Science Fair (PISF), the largest science fair in Malaysia. The number of exhibitors has grown from 12 in 2011 to 45 in 2015, and attendance has increased from 12,000 to 60,000 people.

We have also established the Penang Future Foundation that awards merit-based scholarships to Malaysians to study in local universities, including private universities like Monash University Malaysia. Upon graduation, the scholarship recipients would only be required to work in Penang for a period either in the public or the private sector. That should be an easy choice to make because Penang is the most liveable city in Malaysia with the best street food in the world!

We are proud to launch Malaysia’s first ever German Dual Vocational Training Programme on 1 September 2015. Students in this world-renowned German vocational training program will study and work in the factories at the same time. The Penang state government is donating RM2 million to pay school fees, and the students will have an allowance equivalent to the minimum wage of RM1,000 monthly. In other words, the students are paid to study. The 500-600 places that would be available would be open first to Penangites. We plan to spend another RM6 million to expand the program by another 1,500 students open to all Malaysians.

The Rational Choice

Finally we have to embrace not just cognitive education of skills and learning but also non-cognitive skills of teamwork, communication and leadership. What is the use of knowledge that you cannot apply or impart to others due to your poor communication skills? Imagine how powerful knowledge is when combined with leadership and teamwork in bringing about change.

Always make the rational choice by relying on your mind to mine facts before making a decision. But follow your heart no matter how difficult or impossible it may seem. Only when you follow your hearts can you follow your dreams to make them come true. Even if you do not succeed, at least we fail trying than fail to try – nothing beats the exhilaration and excitement of chasing your dream. And that is where we in Penang have the passion to make Penang the platform of freedom and equal opportunity to make your dreams come true.

Even though Malaysia is mired in a critical mess today, I am always confident that there is light at the end of the tunnel. The desire for social change and economic progress is strong in people everywhere. We need to offer Penang as a model for inclusive economic growth and sustainable economic development that can ensure not just social justice but also upward mobility for us to make our dreams come true.

Thank you, and congratulations to all of you.

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