UPDATED VERSION. INVESTORS choose their centres of operations carefully, often by prioritising the proximity to human capital as a rule of thumb.
This investment requirement triggered a dilemma in Penang, which had recently lost out on a multi-billion ringgit foreign investment because it could not guarantee the adequate supply of experienced electrical and electronic (E&E) engineers.
Penang Chief Minister Lim Guan Eng, who is also a Paeliamentarian, recently told the House of Representatives that the state lost US$3 billion (RM10.2 billion) worth of foreign investment because it could not commit to supplying 1,000 engineers to the investors.
While rival political parties were swift to capitalise on the issue to criticise the Chief Minister for letting go a vast opportunity, the issue had exposed a new reality in Malaysia -- the country's position in global competitiveness.
It was imperative of Chief Minister Lim to clarify as Penang is considered as the country’s Silicon Valley. “I didn’t turn down their investment but they did not want to come because I could not give them a guarantee,” he was quoted in Singapore's Straits Times as having told The Star recently.
This difficulty in getting bulk numbers of experienced engineers in specific fields was acknowledged by the Human Resource Minister today.
The Penang Chapter of the Institute of Engineers Malaysia (IEM) today said that of the 1,350 engineers on its register, only 260 were trained in the field of E&E.
Penang hosts major manufacturing plants that carry international marques in the E&E industry, including Intel and Advanced Micro Devices, and photonics player like Osram Opto Semiconductors and medical device producer B.Braun.
Last year, Penang obtained RM10.2 billion worth of FDI, in contrast to the national total FDI of RM46 billion.
Brain-drain vs. Brain-gain
To give the issue a perspective and a context, I was actually contacted by the Straits Times on the same issue in my official capacity as the Chief Minister's Chief of Staff.
The issue we faced was that the specifications laid down by the potential investor from Europe were tough to be met with a guarantee.
It was a huge task to guarantee a steady supply of over 1,000 experienced E&E engineers in one go as most of them were currently employed in industries already entrenched in Penang.
I had grounded my observation based on supporting data from the state Human Resource Department and the Northern Chapter of the Federation of Malaysian Manufacturers (FMM).
Nevertheless, I also indicated that by recruiting foreign talents -- some suggested India for its English-speaking competency -- to fulfil the headcounts required may be contradictory to the objective of nurturing our human resource capital in the long run.
More importantly, I attributed the shortage of experienced E&E engineers to the decades-old brain-drain -- the exodus of good talents from Malaysia -- to the benefit of neighbouring economies. This was somewhat supported by a sidebar story in the Straits Times on the same day.
According to the Malaysian Employers Federation (MEF) quoted in the story, there are 785,000 Malaysians who work overseas, and an estimated two out of every three among them are likely to be professionals.
The MEF added that of the Malaysian professionals who work abroad, 44 per cent are in Singapore and 28 per cent in other parts of Asia, with the rest residing in other parts of the world.
It appeared that the government was well aware of the brain-drain issue as in 2000, it had launched a programme aimed at wooing them back to the country with offers of tax and duties exemptions. Professionals targetted included doctors, engineers and IT experts.
However, response had been lukewarm. The MEF said only 770 respondents were approved since then, which translates into an average of 85 each year.
That probably prompted the same government to announce a brain-gain programme recently.
On October 23, Prime Minister Najib Abdul Razak announced in his maiden budget speech that said new incentives will be offered to attract foreign talents. Besides making it easier for them to apply for permanent resident status, visas would also be granted automatically to working and dependent expatriate family members within 14 days.
However, critics were skeptical of the success as things often boil down to salaries and expectations.
Shamsuddin Bardan, the executive director of MEF, which is an umbrella trade body for 4,000 private-sector employers, pointed out that it all boiled down to salaries.
He gave an example: A senior engineer working in the US could make about RM30,000 a month, compared to about RM20,000 in Malaysia. The pasture was greener elsewhere, hence the exodus.
On the political ground, the opposition has long highlighted the serity of the brain-drain effect. The hypothesis had been that Malaysian professionals ventured overseas due to higher pay beyond Malaysia, and equal opportunity offered to the best talents irrespective of race and religion.
Meanwhile, the standard of the command of English among new entrants in the job market had been waning, largely due to the country’s education system that produced umemployable graduates.
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