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Setting the

A

N TIONAL GENDA DIMENSIONS FOR CHANGE (ORIGINAL DOCUMENTS)

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Towards 2057 : Setting the National Agenda Dimensions for Change (Original Documents) First Printing 2009 / Cetakan Pertama 2009

Š 2009 All right reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopy, recording or any information storage and retrieval system, without permission in writing from Ketua Penerbit UMT, Universiti Malaysia Terengganu, 21030 Kuala Terengganu, Terengganu, Malaysia.

Hak Cipta Terpelihara Š 2009. Tidak dibenarkan mengeluar ulang mana-mana bahagian artikel, ilustrasi dan isi kandungan buku ini dalam apa juga bentuk dan dengan apa cara sekalipun sama ada secara elektronik, fotokopi, mekanik, rakaman, atau cara lain sebelum mendapat izin bertulis daripada Ketua Penerbit UMT, Universiti Malaysia Terengganu, 21030 Kuala Terengganu, Terengganu, Malaysia.

Published in Malaysia by / Diterbitkan oleh Penerbit UMT Universiti Malaysia Terengganu (UMT) 21030 Kuala Terengganu, Terengganu. http://www.umt.edu.my/penerbitumt E-mail: penerbitumt@umt.edu.my Perpustakaan Negara Malaysia

Cataloguing-in-Publication Data

Towards 2057 : setting the national agenda : dimensional for change : dimensions for change (original documents). ISBN 978-983-2888-98-7 1. Education--Aims and objective--Malaysia. 2. Education and state--Malaysia. 370.595

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Contents INTRODUCTION

2

ASPIRATIONS FOR ONE MALAYSIA

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DIMENSIONS FOR CHANGE Dimension 1: Economics and Finance Dimension 2: Social and Welfare Dimension 3: Human Security Dimension 4: National Defence Dimension 5: Sabah and Sarawak Affairs

8 10 58 100 132 142

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INTRODUCTION The National Feedback Council has initiated ‘towards 2057 – Setting the National Agenda’ project which is A Study on the Wish-List, Hopes and Expectations of Malaysians on The New Leadership. This project is undertaken in conjunction with the incoming ascendency of Dato’ Seri Mohd. Najib Tun Abdul Razak as the new Prime Minister of Malaysia in March 2009. The main purpose of the project is thus to generate insights and input from Malaysians of various backgrounds to be forwarded to the new leadership for consideration in charting the future direction of the country. The Ministry of Higher Education (MOHE) is responsible for generating feedback from the academics. A series of meetings were already held among Vice Chancellors and other parties which form the main Task Force to outline the approach and strategy in undertaking this task. The Task Force consists of five sub-committees which are responsible for generating insights on five respective areas namely Economics and Finance (UPM), Social and Welfare (IIUM), Human Security (UKM), National Defence (UPNM) and Sabah and Sarawak Affairs (Unimas and UMS). Consequently, UMT was given the challenging task to collate, edit and pull together a coherent final document for submission to the Ministry of Higher Education (MOHE). The outcome of this project i.e. a document consisting of wish-list, hopes and expectations of Malaysians on the New Leadership regarding these five aspects will be presented to Y.A.B. Dato’ Seri Mohd. Najib bin Tun Abdul Razak.

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ASPIRATIONS FOR ONE MALAYSIA In the year 2057, Malaysians will be encountering the centennial independence of the country. What kind of a scenario the country might be in? This section depicts a scenario about the future of Malaysia in the next fifty years or up to 2057 (100 years after Independence). After 100 years of Independence, we hope to see Malaysia as an independent nation which is truly free from the dominance of other countries. We ought to strive to be less dependent on American technology, Japanese work culture, British administrative system or any other foreign influences. Our vision will enable our children to compete and be able to stand tall amongst developed nations and other citizens of the world. The new Malaysia will be built on the nations strengths to trigger a development process which ensures broad-based improvement in the quality of life of the people. In order to avoid negative impact of development, projects will be planned using the concept of a balanced and sustainable development. The country will look for other sources of energy, other than hydrocarbon. The country calls for improved energy efficiency and expansion of renewable and nuclear energy sources. Development in Malaysia will promote growth and conservation which include conserving water, creating a sustainable habitat, preserving the highland ecosystem, creating a green Malaysia, creating sustainable agriculture, reducing the harmful gas emissions and, finally, inculcating what we called a strategic knowledge platform for preventing global warming. The government will ensure that rural areas will be developed fully by the 2057. The whole country will have proper infrastructure and public amenities that are comparable with other developed nations. Rural development strategies and programs will be reformed and the Government will give top priority to capital funding for farmers to create value added enterprises. Farmers will establish small business and this will at the same time eradicate poverty in rural area. Consequently, the nation will have the highest level of indicators of human development in the region such as literacy and education rates, maternal and infant mortality rates, life expectancy and health indicators. In the urban areas and small town, the community living in those areas will have an Integrated Plan for building a resilient society. This plan provides an organic integration of work, living and recreation. Public money will be spent on efficient public utilities, goods and services. Where workers are technically educated and have a say in the management. Where no one drops out of the society and there is an easy mobility of classes because the opportunities are abundant. Where variety and differences is encouraged and there is pride in the nation. Racial assimilation will be achieved and at the same time there will be racial equality under the law. Malaysia is a country with a matured democratic society where democracy is practiced at all levels, starting from the JKKK or Jawatankuasa Taman Perumahan, up to City Councils and State Assemblies. A person seeks public office only because he or she desires to serve for the good of the rakyat. 4

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Ultimately, communities in Malaysia will become one community or one Malaysia. One Malaysia is a group of people with shared values, norms, and living in relatively close proximity, sharing common sense of interaction and is concerned with the wellbeing of all members of the community. We need to take the best from each culture, for example, one should emulate the spiritual strength of the Malays, follow the work ethic of the Chinese, engage in the technological prowess of the Indians, and marvel at the religious/cultural tolerance of the communities in Sabah and Sarawak. These are the strength/traits required as ingredients for a respected Malaysia. The focus here is to maximize on cumulative strength. In doing so, it will minimize the weaknesses. Moreover, one cannot impose one’s culture onto another ethnic group. All these aspirations can only be achieved if the government remains strong and maintain an efficient delivery system. The nation must have a transparent delivery system so the public can understand how the government governs and trust that the tax dollars is well spent. Our nation will have the clean government at all level, wasteful spending will be cut, able to provide excellent services without inefficient bureaucracy at all level. Those who manage public dollars will have to be accountable. Therefore, politicians and the government servants have to fulfill the needs of the public. The government will also listen to the unusual and unpopular opinions. The government will also encourage the NGOs, local and international to become partners in development. NGO will be used as a platform to act as Public Service Centers to give services to the public in a more effective manner to complement the government machineries. Malaysia is a confederation of 13 states with parliamentary democracy. The federal government holds considerable power in areas of national concern, such as education, the military, health, immigration, etc. State Governments have authority over religion, land and natural resources, etc. At the moment, our concept of federation is not a perfect union of the states. There are many overlaps of power between the state and local authorities with Federal Government. By year 2057, state authority and Federal power will be reorganized and coordinated so that it will form a new, fair and better concept of Federalism. Education will act as a catalyst and major drive for the socio-cultural and economic development and for achieving the goal of national integration and unity. Therefore, Malaysia will have to develop a single national school system where primary school students can study under the same roof unlike the present system. This can only be done by devoting certain portions of the school hours to the national curriculum in the national language and another portion to subjects from children’s culture, mother tongue (other than Malay language) and traditions. This would require a single school session. It might be difficult because the Chinese population desires to retain its roots.1 For a start, pilot the idea first with the existing Vision schools. Public Safety: Public safety relates to the most fundamental human rights-the right to life. It has to be admitted that the public safety issues in Malaysia are serious. In 5

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addressing such problems, the government will maintain its focus to restore public confidence in the police force, to revitalize rukun tetangga, to reactivate rakan cop, reinforce drug prevention, to address the issues of marginalized groups such as Indian, orang asli and other. Hence, Malaysia will be a peaceful country, complying with human right principle, imbibed with civic consciousness and free from serious social, economic, environmental and business crimes. ECONOMICS AND FINANCE For the economic sector, Malaysia will have fair trading partners with other countries; open the gate for the free flow of good and services from outside. For that, our manufacturers must be efficient and able to compete at the global level. By this, Malaysian company will be allocated enough funds to conduct research, develop new technology and innovations. Many developed nations spent more than 3% of GDP for R&D to develop a strong manufacturing and agriculture (high value added) based products and to enhance global competition. Malaysia should also target the same portion of GDP for R&D. Malaysia will be the top 10 largest trading nation in the world. Malaysia will lead the world in creating new advanced products related to wood, rubber, oil palm, tin, electronic chips, home accessories, biotech products, certain food products such as tropical fruits, aquaculture and maritime products, etc. To promote local industry in these areas, the Government wills guarantee-backed loans to [viable] small and medium size enterprises. Malaysia will adopt Islamic economy model, Islamic Banking System and create an ethical economy with rapid growth to ensure prosperity to every sectors in our society. The country will become the international center for gold dinar, Islamic bonds and halal products. The government will also liberalize the service sector under the AFTA allowing up to 70 % (foreign) equity in year 2015. For food security, Malaysia will increase food production and productivity to achieve self-sufficiency. Economic gap or income inequality among the races shall be eliminated by the year 2057. The income growth for the Malays needs to be at an annual rate of 11% (with others remaining at 8%) for them to be able to catch up with other races by year 2020. After year 2020, the income amongst the races should be the same.

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NATIONAL SECURITY As the nation moves toward achieving the developed nation status, it will not neglect the national security. The national security encompasses 3 dimensions, i.e community, human and environment. Community security will be achieved through the creation of “One Malaysia�. The environment is the casing of the community. Without a sustainable environment, a community will not survive. Therefore, Malaysia will preserve its environment using the concept of sustainable development. Healthcare is fast becoming a priority public issue in the years to come. Malaysian must be healthy in order to be productive. The long-term solution to the high cost for healthcare financing lies in the provision of personalized healthcare for all. NATIONAL DEFENCE Malaysia as a peace loving nation that believe in promoting global and regional peace and stability. Our defence policy will be closely linked with our foreign policy and diplomacy. Our armed forces will be seen as a credible force, capable for depending the nation and act as a credible deterrent to would be aggressors. We will continue our military cooperation with our neighbors to address common security issues and as part of regional confidence building measure. The above scenario is possible to achieve by the next 50 years. The achievement however will depend on the steps taken now by the present government. Why is this so? Malaysia is now 51 years old and has achieved an enviable growth; from agriculture based economy to an industry based society. Now, Malaysia has entered the 9th Malaysia Plan period (2005-2010) and has achieved impressive record of growth in every sector of development. Malaysia can now grow and develop as a nation using its own strength and create its own model of successful development similar to the above scenario. Thus, it is timely for Malaysia to measure the pulse of the country, and take necessary steps towards creating pragmatic goals in order to ensure the wellbeing of the country by 2057.

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DIMENSION 1

ECONOMICS AND FINANCE submitted by

Universiti Putra Malaysia

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PART I THE 2008 FINANCIAL CRISIS 1. Impact of the Crisis on the Developing Countries The 2008 mortgage meltdown that has its roots from the most sophisticated financial market in the world demonstrates the strength of the link between the functioning of the financial system and the functioning of the economy. It is evident that the downturn in housing construction not only had direct adverse effects on the actors of the financial markets but also weakened real economic activity. Sliding housing prices triggered a genuine crisis in financial markets and generated a severe credit crunch. The credit crunch, in turn, has left households and many firms with fewer resources to finance spending. Lower consumer spending causes economic slowdown and unemployment to rise. Economic contraction and higher unemployment undermine households and the housing sector, which worsen the credit crunch, which cause spending cuts and set up the momentum of an adverse feedback between the financial system and the real economy. Too many countries are in recession or nearly so with banking and financial system in disarray. Recent forecast projects by IMF, 2008 (IMF’s Global Financial Stability Report) that the credit growth in the US, the euro area and the UK will slow to near zero over the next year before picking up again in 2010. Instability has surged from sector to sector, first from housing into banking and other financial markets, and then to all parts of the real economy. The crisis has hit the household and firms balance sheets and is now affecting the public sector’s balance sheet as well. It has surged across national borders within the developed world and now there are reasons to fear that the crisis will spread and affect emerging markets and other developing economies as well. The economic progress achieved by the emerging and developing economies over the last few decades is now at risk. A year after the break of the crisis and it remains unclear how deep and long the economic recession will last as investors’ confidence in credit and financial markets has been badly shaken. Justin Lin (Senior Vice President and Chief Economic Advisor at World Bank) has reminded us that the main focus of policymakers has been on the actions of governments in developed (rich) economies—US, EU, Japan and Korea --where the financial turmoil started. Emerging market and developing (poor) countries are also at risk due to current economic instability—inflation and exchange rate uncertainties. Additionally, there are about 1.4 billion people who live in extreme poverty in the developing world. Any economic crisis will have severe human consequence on them. For the emerging markets and developing countries, the road ahead will get rockier, 10

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even after the global recession has weathered. What will be the likely effects on these countries? a. Reduction in exports Many developing economies rely on external demand and the global economic slowdown is expected to have profound negative impacts on their growth prospects. World trade is expected to shrink following the global slowdown. The recession in many large economies is expected to persist into 2009 and will lead to major drop in demand for exports from the emerging markets and developing economies. Recent estimates by IMF projected an export volume of about 4.1% in 2009 compared to 9.3% in 2006. Developing economies will also experience decline in terms of trade as they will all suffer from falling commodity prices. Commodity prices are expected to fall by one-fifth in 2009. Many scholars believe that the full negative effects will be manifested in 2009. A slowdown in the major industrialised countries means increased chances of slowdown in Asia and the other developing world. We can expect the risk of job losses and associated problems such as social unrest to increase before things get better. b. Negative effect on investment The contribution of foreign capital to economic progress in the developing world, particularly foreign direct investment (FDI) is well documented in the economic literature. External funding (including FDI) is expected to fall following the first-round effects. Developing countries that are able to gain excess on a very competitive basis to external funds will have to pay higher interest rates because of increasing risk premium. Investment in middle-income countries is expected to grow at less than half the 2007 rate of 13%. As investment spending drops, there is also concern about second-round effects. Incomplete projects will certainly change bank balance sheets due to non-performing loans. Even when the project is completed, there is concern about problems associated with excess capacity and this in turn will add to the risk of deflation. Lower growth and weaker foreign capital flows will drive a credit crunch in emerging markets. c. Second-round effects Apart from falling investment and export earnings, emerging markets may experience a crisis of their own if their own domestic asset market bursts. Sharp falls in stock markets in developing countries have already signalled investors’ concern about the medium-term future. Malaysia, for example, experienced a drop of about 40% in 11

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portfolio value from its peak in 2007. China and India are also feeling the pain as their markets have lost more than 60%. Raising new capital has become harder and this makes it harder for the corporate sector to repair their balance sheets. Portfolio flows into the emerging markets have slowed or reversed because of exposure to global business cycle. As a consequence, share prices dropped sharply. The experience from the 1990s crisis indicates that investors will take time--about 2 years or more-to return to the markets. Empirical evidence suggests that declining stock prices has substantial negative wealth effects on consumption (spending), and will worsen the effect of economic slowdown. Hence, countries with high balance- of- payments and fiscal deficits are at higher risk because the authorities may fail to act datively to restore confidence in the financial markets. d. Exchange rate flexibility and currency adjustments Countries with relatively-large domestic capital markets and high trade integration (Malaysia & Thailand, to name two) have lower probability of experiencing capital flight. These countries need smaller exchange rate depreciation to restore external balance. Others countries which have the opposite characteristics such as Pakistan, Philippines, Argentina and Russia will have to suffer more. Past experiences suggest that fixed exchange rate is a poor defense against capital flight. e. External and Internal Balances Lower oil (commodities) prices will push oil-exporting countries into deficits or shrink current-account balances. Higher deficits (or lower surpluses) are expected globally as weaker exports are reflected. Higher fiscal deficits are expected as countries continue their efforts to stimulate aggregate demand with higher government spending programmes. Indeed, fiscal deficits will mount nearly everywhere. Past experience suggests that policies to tackle systematic instability need to be consistent and coherent across the affected countries. Table 1 shows the economic forecast of key macroeconomic variables for the Asian countries, including Malaysia, up to 2010. On average, the economies of Asian are expected to grow at 6.9 - 5.6% with a low inflation rate of 3.5 – 7%. The current account balances are expect to be in surplus while fiscal deficit are in the range of -1.0 – 1.9% of GDP. For Malaysia, the economy is expected to pick up in 2010 after an economic slowdown. Inflation will be at its lowest level (2.4%) in 2010. A large current-account surplus is forecasted for the near future, although some concern of the budget deficits is expected in the coming years (-5.0 in 2009). According to World 12

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Bank, the most disruptive flows in 2007 and 2008 were not in trade and services, but financial flow (debt flows, portfolio and FDI). We know from the literature that foreign capital is important for the emerging markets and their sudden stop may adversely affect the growth process in countries. According to recent estimates, the decline in capital inflow is expect to hold in 2009. Table 1: IMF Economic Forecast—KEY INDICATORS, 2008-2010 GDP Growth

CPI (Average) Inflation

Current Balance (% of GDP)

Fiscal Balance (% of GDP)

2008F

2009F

2010F

2008F

2009F

2010F

2008F

2009F

2010F

2008F

2009F

2010F

ASIA

6.9

5.6

6.6

7.0

2.7

3.5

6.8

5.3

4.9

-1.0

-1.9

-1.9

Bangladesh

5.7

5.1

5.5

8.0

6.2

5.5

-1.4

-2.3

-2.0

-5.0

-4.9

-4.7

China

9.3

8.2

8.5

6.1

1.4

3.5

9.4

7.2

6.4

-0.2

-1.2

-1.6

Hong Kong

2.5

0.3

2.3

4.5

2.7

2.2

10.8

8.6

8.4

-3.0

-4.5

-3.0

India

6.8

5.5

6.6

10.5

5.0

4.5

-3.5

-2.1

-1.3

-6.6

-6.0

-5.5

Indonesia

6.0

3.8

5.0

10.2

6.0

5.0

1.0

0.4

0.0

-1.3

-1.5

-1.5

Korea

4.2

2.0

3.8

4.7

3.0

2.5

-1.0

2.0

1.5

3.0

1.2

1.0

Malaysia

5.2

3.1

4.9

5.7

3.6

2.4

15.7

12.0

13.0

-4.8

-5.0

-4.5

Philippines

4.3

3.0

4.6

9.5

5.3

3.9

1.3

2.1

1.1

-0.9

-1.4

-1.0

Singapore

2.2

-1.2

3.8

6.6

1.2

2.1

13.0

10.0

15.0

6.0

2.0

4.0

Sri Lanka

6.0

4.8

5.5

23.0

15.0

10.0

-7.1

-8.0

-7.2

-7.0

-6.5

-7.2

Taiwan

2.1

1.5

3.0

3.6

1.0

1.2

5.0

7.8

8.4

-1.1

-1.7

-1.5

Thailand

4.5

1.0

3.1

5.6

1.1

2.5

0.4

2.0

1.3

-0.4

-2.9

-1.5

Vietnam

6.3

5.2

5.6

23.3

7.5

6.5

-12.9

-7.5

-7.3

-1.7

-2.4

-3.0

Source: National Sources, Haver Analytics and Citi.

Table 2: Emerging Markets-Capital Flows (US Dollars in Billions) 2006

2007

2008E

2009F

380

436

378

338

Private Flows

566

899

619

562

Equity Investment

230

296

219

263

Direct Investment

173

302

288

282

57

-6

-69

-20

Private Creditors

336

602

401

299

Commercial Banks

208

401

245

135

Nonbanks

128

201

155

164

Net Official Flows

-61

20

3

8

IFIs

-34

3

5

7

Bilateral creditors

-27

17

-2

1

Current Account Balance Net External Financing:

Portfolio Investment

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Net Resident Lending/ Other

-336

-4.01

-309

-308

Reserves (- = Increase)

.549

-953

-691

-600

Source: International Institute of Finance

Figure 1 shows the Citi resiliency index computed by the World Bank. Briefly, the index includes 20 variables and is designed to quantify a country’s ability to withstand external shock (real or financial). Countries in Central and Eastern European Markets (CEEMA) are among the most vulnerable, with Hungary leading the pack. Meanwhile, the Asian countries like China, Taiwan, Korea, Malaysia, Thailand and India are high in the ranking of resilience and, as such, they are the least likely to be affected by the 2008 financial crisis. Most of these countries have strong fiscal and current-account balance, low inflation, and fairly-valued currency. Figure 1: Citi Resiliency Index, November 2008

Notes: The Resiliency Index above scores each country’s trade openness, FDI activity, remittances, government debt and the TOT, Inflation, fiscal balance, current account and others. Source: IMF, World Bank, Fitch Ratings, Moody’s, data collected by Haver Analytics, Citi Estimates.

IMF studies have shown that discretionary fiscal policy can have a quick effect on spending power and many countries, including Malaysia, have shown a strong inclination towards fiscal responses to the global recession. It is worth noting here that the success of fiscal stimulus will partly depend on whether its financing results in crowding-out effects that push interest rates higher. This, in turn, depends on the degree of monetary policy accommodation as well as concerns related to public debt. The expected path of inflation and the level of public debt could also be a significant constraint on both the scope and the effectiveness of fiscal stimulus. Of all the emerging 14

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markets, China, Korea, Singapore, Malaysia, Peru and Russia may have the greatest scope for fiscal stimulus, given their sound fiscal and debt positions in the recent years. A high stock of government external debt can hold back fiscal expansion. Without the necessary fiscal stimulus and governmental responses, it is unlikely that the undesired consequences of the financial crisis can be overcome. To provide an indication of a country’s vulnerability to swings in risk appetite in the emerging markets, Figure 2 plots the size of a country’s gross external-financing requirement in comparison to its foreign reserves. A clear picture that emerged from the figure is that countries like China, Malaysia and Thailand show no such risk. The proportion of government external debt can be a severe constraint on policymakers in emerging markets. A high stock of foreign debt can limit the scope of fiscal policy expansion, especially during recent years where foreign capital is scarce. As shown in Figure 3, Argentina and Venezuela have a large stock of government external debt while the Asian countries like Taiwan, India, Singapore Hong Kong, South Korea and Malaysia hold smaller percentage of government debt to net International Reserves. Figure 2: Selected Emerging Market External Financing Requirement as Percent of Foreign Exchange Reserves 250% 200 150 100 50 0 50 na hi C sia ay al M nd la ai Th a si us R le s hi C pine ilip Ph il az Br a di In bia om a ol C esi n do In o ic ex M a re Ko el ra Is tina n ge Ar a ric Af S y e rk Tu ia an om y R r ga un H d n la

Po

Note: 2009 current account deficit, 2009 external amortizations, short-term external debt/foreign exchange reserves. Source: BIS-IMF-OECD-World Bank Statistics, International Monetary Fund and Citi.

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Figure 3: International Government Debt Securities as Percent of Net International Reserves

Source: Source: BIS-IMF-OECD-World Bank Statistics, International Monetary Fund and Haver

2. Impact of the Crisis on the Malaysian Macroeconomic Variables a. Output Gross domestic product (GDP) growth is one of the primary indicators used to gauge the health of an economy. It is drawn up as a combination of the change in volumes of several hundred goods and services categories that comprise the classifications of the national accounts. As for Malaysia, the country has experienced above-average GDP growth rates for over three decades. The annual average GDP growth rate was between 6.5% and 8.8% in the 1960s, averaging 8% in the 1970s, and has been among the fastest-growing economies in the world in mid-1980. The most common explanation is the success of expanding non-resource-based exports, especially electronics. The steady growth rates were interrupted by the Asian contagion of 19971998. During this landmark event, output growth declined by 6.9% (after 12 years of uninterrupted expansion) and this historical event demonstrated how vulnerable the economy is to external shocks. Two years after the crisis, the economy is back on its growth tracts and this was possible because of robust domestic demand, driven by strong private consumption, spending and investment activities as illustrated in Figure 4. Between the period 2002 to 2008, growth rates averaged about 5.5%, compared to that of the world economy which was around 3-4% for the same period. A major concern in the aftermath of the 2008 financial crisis is the expected increase in output volatility. Malaysia should secure market access for exports through bilateral trade 16

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arrangements in order to reduce GDP volatility and its negative effect on the overall economy. Figure 4: Malaysia’s GDP Growth (1990-2009)

GDP Growth 12 10 8 4

2009f

2008e

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

-4

1992

-2

1991

2 0 1990

Percentage

6

-6 -8 -10

Source: Department of Statistics & International Monetary Fund.

b. Current Account A persistent current-account deficit of 5% or more of GDP is usually regarded as unsustainable in the long run and this may be used as a warning signal of an approaching crisis. The potential role of current-account deficits as a source of disruptive tensions in the financial markets and real sectors has been frequently highlighted in the economic literature. For instance, Corsetti et al (1999) reported that several Asian countries whose currencies collapsed in 1997 had experienced somewhat sizeable currentaccount deficits in the 1990s. The current-account position of Malaysia has been one of deficit since 1987, and it increased markedly during the early and mid-1990s due to foreign borrowing. A noticeable aspect of Figure 5 is that Malaysia’s currentaccount deficits were large and more persistent during the period preceding the 1997 financial crisis. The external deficits for Malaysia widened to about 10% of GDP in 1995 and, after recording a deficit of 8% of GDP in 1997, the current-account reversed and recorded a surplus equivalent to about 14% OF GDP in 1998. The surpluses of 1999 to 2008 were brought about directly by a reduction in foreign investments (foreign savings) and this in turn improved the current account by reducing imports which were also a major input in the production of exports. Importantly, it must be mentioned that the accumulated surplus in recent years has been mainly attributed to investment draught rather than savings glut.

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Our own assessment on the sustainability of Malaysia’s current account over four decades revealed that Malaysia’s current account was consistent with optimum consumption-smoothing (Hamizun and Baharumshah, 2008). This means that the solvency condition was met, and there was no evidence to show that there was excess volatility in capital inflows. It also means that Malaysia had little difficulty in the past in smoothing consumption through borrowing and lending during events involving exogenous shocks. Figure 5: Malaysia’s Current Account Balance (1990-2009)

Current Account Balance (% of GDP) 20 15 10 5 2009f

2008e

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-5

1990

0

-10 -15

Source: Department of Statistics & International Monetary Fund

c. Budget Deficit A large and growing deficit would lead to a worsening of the current account and the appreciation of real exchange rate. From a policy perspective, a sustainable fiscal balance is one of the core requirement for sustainable growth in a stable macroeconomic environment. It is well recognised that fiscal policy has an important role in maintaining output level close to its potential, more so during the current global recession. The governmental responses—The September $700 billion bailout package in the US; the October package, 50 billion pound in the UK., 500 billion Euro in Germany, 360 billion Euro in France; and the November 4 trillion Yuan stimulus package in China—are some examples of how fiscal policy is important in moving the economy out of the global recession. In the context of the current global recession, fiscal policy (government spending) can be an effective instrument stabilising the macro-economy. Throughout the 1990s, Malaysia practiced prudent fiscal management (resulting in budget surpluses) and 18

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this provided a cushion against a relatively less-severe initial impact in 1998. For this reason, Malaysia has not had as serious a problem with managing its budget compared to other East Asian countries. However, Malaysia’s fiscal budget balance shows the overall drift toward strong negative balances after the 1997 Asian financial crisis. As illustrated in Figure 6, Malaysia enters the current crisis with sizable fiscal deficits (5-6% of GDP). The big question is, should the deficit of this magnitude be a cause of concerned for policymakers in Malaysia? One major justification for restricting the size of public deficit (say 3% of GDP) is the notion that larger deficits results in higher interest rates and thus adversely affect economic growth. A survey by Barth et al (1991) of 42 studies on the empirical linkage between budget deficit and interest rate showed that the empirical evidence is mixed. More recently, Garcia and Ramajo (2004) found the budget deficit in Spain did not appear to raise long-term nominal interest rate. Aisen and Hauner (2008), however, found a strong positive link between budget deficit and interest rates. According to these authors, the crowding-out effect is smaller when the initial budget deficit and debt are low and financial development is high. Given the sound public debt position (10% GDP in 2009) and the country characteristics, we believe that there is some scope for additional fiscal stimulus to jump start the Malaysian economy. Figure 6: Malaysia’s Federal Government Finance (1990-2009)

Federal Government Finance (% of GDP) 3 2 1

2009be

2008e

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

-2

1991

-1

1990

0

-3 -4 -5 -6

Source: Department of Statistics & International Monetary Fund.

d. Inflation and unemployment A body of work has investigated inflation growth nexus and argued that the level of inflation is detrimental to growth. The mechanism through which inflation would have an impact on growth are those of savings, the structure of the tax system, the impact of the activities of financial markets, the impact of inflation on macroeconomics like 19

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interest rate and exchange rate (see Temple 2000). Policy measures aimed at lowering inflation (and uncertainty) will reduce the negative consequence on real economic activities. This is because high inflation (volatility) is associated with slower growth. Malaysia is remarkable for maintaining price stability. As shown in Figure 7, Malaysia experienced a low inflation rate (in average below 4%) over the past 18 years except for, 1991-92, in 1998 during the Asian financial crisis) and in 2008 during the recent oil price shocks. Policymakers may not need to be concerned about recent inflation because, with the global recession, inflation is expected to fall in anticipation of lower demand due to the recession. Fear of inflation has receded in the recent months following the sharp fall in commodity prices. Additionally, note that the risk of wageprice spiral is low compared to the other developing countries. Figure 7: Malaysia’s Inflation Rate (1990-2009)

Inflation Rate 6

Percentage

5 4 3 2 1

2009f

2008f

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0

Source: Department of Statistics & International Monetary Fund.

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Figure 8 shows the unemployment rate over the past 10-year period. In 1998, unemployment stood at about 5.2%. Recent forecast by Department of Statistics (Malaysia, DOS) estimated that the unemployment rate was around 3% for 2008:Q3. It is worth noting here that the figures do not include foreign labour and that Malaysia now imposes restriction on foreign labour. Layoff and wage cuts have started to take place in the job market. Recent unemployment records show that more than 10,000 Malaysians have lost their jobs in the first month of 2009. The unemployment figures are expected to rise in the months ahead, particularly in the manufacturing sector. Figure 8: Malaysia’s Unemployment Rate (1990-2008)

Unemployed Rate (% of Labour Force) 6 5 4 3 2 1

2008e

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0

Sources: Department of Statistics & International Monetary Fund.

e. Investment Investment is a core variable in growth equation. Theory predicts that the correlation between investment and economic growth is positive. Malaysia, like the other East Asian countries, is characterised by very high rates of investment in the past three decades. A recent study shows that the impact of public investment is in fact larger than private investment for the case of Malaysia. This finding is consistent with the notion that matured economies managed public capital stock more efficiently and hence tend to benefit more from infrastructure expansion. Figure 9 shows the time profile of both private and public investments over 1990-2009. Interestingly, we find that, in the post-1997 crisis era, the contribution of private investment as a percentage of total investment showed a downward trend. While we know that public investments will be an important variable in stimulating the economic in light of the current economic downturn, more efforts will be needed to encourage private investment once the economy turns around.

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Figure 9: Malaysia’s Investment (1990-2009)

Investment (% of GDP) 50 40 30 20 10

P ublic

P rivate

2009f

2008e

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0

Total

Source: Department of Statistics & International Monetary Fund.

f. Trade flows As an open economy, Malaysia’s economic growth has been widely attributed to rapid growth in the international trade. Net exports has increased substantially since 1990s. With the expansion in domestic demand in the Asian economies, the cumulative market in the region has increased extensively, thus increasing the prospects for mutually reinforcing intra-regional trade. BNM, in its 2007 Annual Report, documented that the current-account surplus recorded in 2007 (or 15.8% of GNI) was significantly supported by a large trade surplus in that particular year. The trade surplus in 2007 was underpinned by strong commodity exports as a result of high prices of palm oil and minerals. As shown in Figure 10, there is no evidence to show that both exports and imports are declining. In fact, trade surplus is growing for the case of Malaysia. We note, however, that the crisis is on-going and, as such, the trend may not continue in the future. Although Malaysia is more resilient compared to the other emerging markets, the situation may change if the global economies worsen.

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Figure 10: Malaysia’s Exports and Imports (1990-2009) 900000

Exports and Imports of Goods and Services

800000

RM Million

700000 600000 500000 400000

E xports

300000

Imports

200000 100000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008e 2009f

0

Sources: Department of Statistics & International Monetary Fund.

g. Stock market The movement of the Kuala Lumpur Stock Exchange Composite (KLSE) index is given in Fig 11. Two landmark events are of interest here. The first is the 1997 Asian financial crisis and the second is the sub-prime mortgage crisis. Interestingly, the figures show that the crisis in the 1990s led to the sharp fall in the KLSE index to 400 levels which is even lower than the current crisis (more than 800). It took more than two years before investors returned to the markets. We note that, while it is too early to know the impact of the current crisis on the stock market, most observers are unsure how long the market will recover from the recent shocks as the world economy has not recovered from the crisis. Malaysia enters the recent global financial crisis with much strength. Debt is better managed than at the time of the Asian crisis and the current exchange rate regime makes it easier to partially absorb shocks through exchange rate adjustments.

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Figure 11: Malaysia’s KLSE (1990-2008)

Kuala Lumpur Stock Exchange Composite Indices

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1600 1400 1200 1000 800 600 400 200 0

Source: International Monetary Fund

Figure 12: Mean Monthly Gross Household Income (in RM) Distribution among Ethnic Groups 5000 4500 4000 3500 3000

Bumiputera

2500

Chinese

2000

Indians

1500 1000 500 0 1970 1979 1984 1987 1990 1995 1999 2004 2007

Source: Economic Planning Unit, various issues.

3. MALAYSIA’S Responses to the current crisis Like the other countries, it is important to take quick, decisive and systematic measures to avoid credit crunch and bank failures. The government must ensure that the short term measures undertaken now will not create longer-term vulnerabilities. BNM has responded by easing the stance of monetary policy and enhancing the market liquidity. To turn things around, the central bank has cut the base lending rate. BNM has reduced

24

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the Overnight Policy Rate (OPR) by 75 basis points to 2.5%. The Statutory Reserve Requirement was reduced from 3.5 to 2% (effective February 2009), lowering the cost of borrowing. The actions are necessary to cushion the direct impacts of the financial turmoil on the real economy and to disconnect the feed-back relation between economic weakness and financial stress mentioned in an earlier section. Governments all around the world are developing massive fiscal stimulus packages in light of the current development in the global economy. According to IMF (supported by many economists), a successful fiscal policy package should address both the financial crisis and the fall in aggregate demand. Therefore, the stimulus must be aimed at getting the financial system back to health and the other is to stimulate aggregate demand. Consumers wealth has declined following the sharp fall in stock prices. This, together with an increase in precautionary savings in the face of uncertainty, adversely effect consumer spending and hence aggregate demand. Addressing the problems plaguing the stock market, the government has injected RM5 billion into the stock market to support undervalued stocks. Reduction in interest rates would lower the carry costs and theory predicts that the return of stock will become more attractive. With the increase in stock price, net worth of firms increase, adverse selection and moral hazard problems will decrease; this will increase bank loans, then investment through Tobin’s q and GDP will increase then. Malaysia’s fiscal response to the crisis is summarized in Table 3 and we are expecting another stimulus package soon. An important omission in the current stimulus package is funding for R&D that is now unfunded because of limited grant. Additionally, the stimulus package should include some fiscal incentives for smallholders to produce food in order to create employment in the rural community and reduce the food exportimport gap. It is worth noting that the size of the fiscal response should depend on the extent of the expected decline in the private sector demand and should be reviewed in light of new developments. Table 3: Malaysia’s Fiscal Stimulus RM1.2 billion

Build 25,000 units of low-and medium-cost houses

RM500 million

Upgrade, repair & maintain police stations, living quarters, army camps & quarters

RM600 million

Channeled to minor projects under the public & basic infrastructure project maintenance programme (maintaining village roads, building community halls & small bridges)

RM500 million

Repair & maintain public amenities such as roads, schools & hospitals

RM500 million

Build & upgrade roads in rural areas, villages & agriculture roads including in Sabah and Sarawak. 25

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PART II The New Economic Policy (NEP) 1. Introduction The NEP was a 20-year strategic development plan that began in 1971 and ended in 1990. It was conceptualised based on the need of the time and situation. The nation’s scenario in the 60s was one of an imbalanced multiracial society where the Malays were economically and socially weak compared to the immigrant Chinese and Indian. The ensuing racial tension culminated in the 1969 racial riots. The NEP was designed to be a long-term solution to the problem at hand. Its mission was to correct the racial imbalance. Its philosophy was wealth redistribution in an expanding economy. Its objectives were to eradicate poverty and to restructure society so that race identification by jobs will be erased. The strategies were to provide assistance, privileges and preferences to the Malays and Bumiputeras so that they would experience higher rates of growth and development compared to other races. With this accelerated growth it was hoped that, in due time, the Malays and Bumiputeras would be able to be on par with other races in terms of economic and social well-being. The implementation of the NEP focussed on aspects that, among others, include: rural development (roads, clinics, schools, etc.); job creation through industrialisation, modernisation of the agricultural sector; provision of technical training, education and democratisation of education; restructuring of corporate ownership; and encouraging Malays and Bumiputeras to be more involved in commercial and industrial activities. 2. Is the NEP Still Relevant? At the end of the NEP period, records showed unequivocally that it had been “successful�. Although the achievements may not match the desired targets, there were ample evidences of marked improvement in the socio-economic standing of the Malays and Bumiputeras, as shown in the following tables. Tables 4 and 5 show the impact of NEP in its poverty-reduction objective. Table 4 shows that the household income had increased for all races, with the growth rate for the Malays marginally greater than the rest. Also, the growth rate for the rural sector was marginally higher than that for the urban sector. Table 5 shows that the reduction of poverty level was experience by all races. The Malays recorded the largest reduction over the 20-year period.

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Table 4: NEP Results: Poverty reduction – monthly household gross income 1970 (RM)

1990 (RM)

Bumiputera

172

940

Average annual increase, % 8.8

Chinese

394

1,631

7.4

Indians

304

1,209

7.1

URBAN

428

1,617

6.9

RURAL

200

951

8.1

West Malaysia

264

1,167

7.7

Source: Economic Planning Unit

Table 5: NEP Results: Reduction in poverty level 1970 (%)

1990 (%)

Bumiputera

65.0

20.8

Average annual reduction, % 5.9

Chinese

26.0

5.7

7.9

Indians

39.0

8.0

8.2

URBAN

21.3

7.3

5.5

RURAL

58.7

19.3

5.7

West Malaysia

49.3

15.0

6.1

Source: Economic Planning Unit

On the second objective of the NEP, there were considerable achievements due to the policies of providing greater opportunities for the Malays and Bumiputeras in public universities and in distribution of scholarships to study abroad. While the number of Malay professionals has increased in almost all areas, the percentages are still below the non-Malays. The encouragement and the provision of various support and incentives to encourage Malays to enter the business and commercial sector have also met with partial success. In fact, the successes of a few selected Malay business individuals have been a subject of controversy surrounding the implementation of the NEP. As regards to corporate restructuring strategy, the achievement at the end of the NEP period was less than 20% and this is way behind the 30% target. Although the explicit objectives of the NEP are to eradicate poverty and social restructuring, the philosophical objective is in fact to solve the socio-economic imbalance between the major races, particularly between the Malays and the Chinese. Looking at the income disparity issue as shown in Figure 12 and Table 6, it is very clear that this issue is largely unsolved. Therefore, the NEP needs to be continued or a similar policy be put in place. This is to ensure long-term stability and national unity.

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Figure 12: Mean Monthly Gross Household Income (in RM) Distribution among Ethnic Groups 5000 4500 4000 3500 3000

Bumiputera

2500

Chinese

2000

Indians

1500 1000 500 0 1970 1979 1984 1987 1990 1995 1999 2004 2007

Source: Economic Planning Unit, various issues.

Table 6: Income Disparity Ratio between ethnic groups Chinese/Malays

Indians/Malays

Chinese/Indians

1970

2.29

1.77

1.29

1979

1.91

1.54

1.24

1989

1.70

1.29

1.32

1999

1.74

1.36

1.27

2004

1.64

1.27

1.28

Source: Poon Wai Ching (2008), pg. 143.

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In the 14-year post-NEP period (1990-2004), all the major races experienced more-orless similar annual household-income growth, i.e. Bumiputeras 7.8%, Chinese 7.4% and Indians 7.3%. Table 7 presents two possible scenarios in year 2020. Scenario A shows monthly household-income projection by assuming the current growth rate prevails. Table 7: Possible scenarios of monthly household income in Year 2020 (rounded-up to nearest 000) with different growth rates Scenario A

Scenario B

Bumiputeras

9,000

14,000

Chinese

14,000

14,000

Indians

11,000

14,000

Chinese/Bumiputeras

1.57

1.00

Indians/Bumiputeras

1.26

1.00

Chinese/Indians

1.30

1.00

Scenario A: Projections at current growth rates, i.e. Malays 7.8%, Chinese 7.4%, Indian 7.3%. Scenario B: Projections at strategic rates, i.e. Malays 10.8%, Chinese 7.4%, Indian 9.1%.

It shows that income disparities between races do not change significantly. Scenario B shows income projections, assuming a drastic change in income growth of the Malays and the Indians, that will lead to income equality in year 2020. The income growth for the Malays and the Indians needs to be at increased annual rates of 10.8% and 9.1% respectively for them to be able to catch up with the Chinese by year 2020 (assuming the growth rate of the Chinese remains unchanged at 7.4%). 3. The NEP: An Analysis For the last three decades, beside the successful story of the goal achieved, the New Economic Policy (NEP) has also generated a great deal of controversy. In the twelfth General Election on 8 March 2008, it impacted upon the electorate in two ways. The Opposition’s pledge to abolish the NEP (technically, the NEP does not exist any more since its life span came to an end in 1990) gave hope to a lot of non-Malays and nonBumiputeras that privileges accorded to Malays and Bumiputeras in various spheres of society would cease. It was one of the main reasons why a substantial portion of the non-Bumiputera vote swung to the Opposition. At the same time, the Opposition’s criticisms of how the NEP has been allegedly abused to serve the interests of a coterie of politically well-connected Malays resonated with a significant segment of the urban Malay working class and a huge section of the expanding Malay middle class.

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It explains the severe erosion of support for UMNO among urban Malays in Kuala Lumpur and in states such as Selangor. It is of course true that this time, unlike the past, these two arguments, one directed at the non-Bumiputeras and the other directed at the Malays, produced the desired results for the Opposition, partly because of the increasing cost of living and the general economic malaise. It is because there is a negative perception of the NEP which is quite pervasive that it is incumbent upon the sixth Prime Minister to undertake a review of the NEP and its achievements and failures. An honest evaluation of this important policy would have a salutary effect upon the public. Any evaluation will have to begin with an open acknowledgement of the many achievements of the NEP. It has not only reduced absolute poverty among all communities – the first prong of the policy – 49.3% in 1970 to 3.2% in 2008 but has also accelerated social mobility on a massive scale. Few other societies in the world have witnessed such a monumental transformation of the social structure in such a short time. This generational transformation is reflected in the professions, in commerce and in industry where Malay participation is much more significant than it ever was in the entire history of the community. In that sense, the NEP has also accomplished a part of the objective contained in the second prong of the policy. Nonetheless, it has to be conceded that the NEP has had limited success in increasing Malay equity capital. There is still a paucity of successful Malay-owned commercial enterprises, just as there is a dearth of Malay-owned industries. If there are pluses and minuses in the NEP’s performance, there are also positive and negative consequences arising from the impact of the NEP. On the positive side, the NEP, by strengthening the economic and social position of the Malay community, has contributed in no small measure to political and social stability. If the socio-economic situation that prevailed within the community prior to the NEP had persisted the last 30 years, there would have been utter chaos since no nation can hold together for long when stark economic disparities coincide with intolerable ethnic dichotomies. It goes without saying that the reduction of ethnic disparities in the economy is partly responsible for the inter-ethnic peace that Malaysia has enjoyed since the NEP. Violent ethnic conflicts with their roots in economic disenfranchisement have sometimes ripped apart certain multi-ethnic societies. Such communal violence has been kept in check in Malaysia which remains one of the few countries in the world where affirmative action as a policy has succeeded to a certain degree. 30

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It is equally true that the relative success of the NEP is one of the reasons why there is a functioning democracy in Malaysia. If the majority Bumiputera community had felt marginalised in the economy and saw no hope for redressal through the democratic process, the process itself would not have lasted. The temptation to replace the democratic system with an authoritarian order that ostensibly would be able to address the economic woes of the majority community would have been difficult to resist. While the NEP has been beneficial to the country as a whole, there are certain negative consequences that should be taken into account. There is no denying that it has created considerable unhappiness amongst a big chunk of the non-Bumiputera population. Since the NEP provides special assistance to the Bumiputera community, it is perceived by non-Bumpers as ‘unfair’ and ‘unjust’. From their point of view, it underscores their unequal position in the nation. As we have seen, a lot of Malays are also unhappy about the NEP, albeit for different reasons. Working-class Malays are acutely aware of the growing gap between them and the small wealthy Malay elite. This relative deprivation leads to anger and frustration. Some of them conclude that it is through abuse of power and corruption that this elite has emerged. The NEP is viewed by working-class Malays and even middle-class Malays as a conduit through which an elite has accumulated wealth at the expense of the community.

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PART III Islamic Banking Islamic Banking This section provides a brief overview of the development of Islamic banking and then proceeds to discuss various challenges faced by Islamic banking in its effort to provide a viable alternative to conventional banking. 1. Introduction Models for Islamic banking appeared in the mid-1950s, but comprehensive and detailed concepts for interest-free banking only appeared in the late 1960s. The first experiment in Islamic banking was set up undercover in Mit Ghamr, Egypt in 1963. The model for the experiment was the German Savings Bank modified to comply with Islamic principles, i.e. it was barred from charging and paying interest. The second Islamic Conference of Foreign Ministers in 1973 adopted a document on the “Institution of an Islamic Bank, Economics and Islamic Doctrines�. In 1974, the Islamic Development Bank (IDB) was established as a result of this conference. The member states of the OIC became members of the IDB. The IDB helped to establish a number of Islamic banks in various countries: Dubai Islamic Bank in 1975, Faisal Islamic Bank of Sudan in 1977, Faisal Islamic Egyptian Bank and Islamic Bank of Jordan in 1978, Islamic Bank of Bahrain in 1979 and the International Islamic Bank of Investment and Development, Luxembourg in 1980. Islamic banking has been adopted at the national level in Pakistan, Sudan, and Iran, and they have decided to Islamise the whole banking system. The most important departure of Islamic banking from conventional banking is the prohibition of Riba, and promoting Profit and Loss Sharing (PLS) as an alternative to Riba. An Islamic bank is a financial institution that conducts its operations in accordance with Shariah principles. The difference between an Islamic bank and a conventional bank is that the latter earns the major portion of its revenues and expenses on the basis of interest, the former earns the same on the profits. In the operation of an Islamic bank, profits therefore assume the place of interest in a conventional bank. Islamic banking operates under a number of contracts under fiqh muamalat. Amongst the widely-used concepts in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musyarakah), cost plus (Murabahah) and leasing (Ijarah). 32

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In Malaysia, the first Islamic bank, BIMB, was established in 1983. In 1993, commercial banks, merchant banks and finance companies were allowed to offer Islamic banking products and services under the Islamic Banking Scheme (IBS banks). The Islamic banks and IBS banks must ensure that their operations comply with the principles of Shariah. Each institution is therefore required to set up a Shariah Committee to provide advice on Shariah issues and to ensure that its operations and activities comply with the Shariah principles. In addition, the Shariah Advisory Council at Bank Negara Malaysia (BNM) is the highest Shariah authority set up to provide advice on the Shariah matters pertaining to Islamic banking in Malaysia. Malaysia is now recognised as an Islamic banking hub for the East while other major financial centres like London, Singapore and Hong Kong are also entering business partnerships with Middle Eastern banking institutions. There are now Islamic financial institutions operating in more than 75 countries worldwide. In recent years, Islamic banks and institutions have grown at a considerable pace and studies have indicated that the industry should continue to grow at a rapid pace in the coming years. According to Arabnews.com, as of January 2008 the Islamic banking industry is set to achieve an estimated 20% growth annually. Management consultants McKinsey & Co have forecasted the sector to reach USD1 trillion in assets by 2010. 2. Challenges Faced by Islamic Banks Since its establishment, Islamic banking has gone through several changes. Facing intense competition from its conventional counterparts that have enormous experience in financial activities, Islamic banking faces several challenges to ensure its sustainability as well as to conform to the Shariah principles. In pursuing the dual task of developing viable non-interest bearing products and ensuring social justice in its implementation (the spirit behind the abolition of interest), Islamic banking is confronted with many challenges. Three major issues are addressed here, namely: (1) the challenges of operating commercial banking in an Islamic framework; (2) the challenges of practicing equity-based financing; and (3) the challenges of sustaining the Islamic financial institutions in the global market. a. Operating Commercial Banking in an Islamic Framework Some operating problems faced by the Islamic commercial banks relate to: (i) losses incurred on mudarabah deposits; (ii) defaulter and compensation issues on murabahah financing; (iii) consumer credit and (iv) government borrowing needs.

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(i) Losses Incurred on Mudarabah Deposits The absence of a guaranteed positive return on deposits in an Islamic commercial bank might diminish voluntarily deposit money for the bank. This is due to the fact that the depositor may have to share a certain amount of losses in mudarabah (profit-sharing arrangement) deposit accounts if banks incur losses. This means there is no risk-free asset in Islamic banking, thus denying itself a sizeable amount of demand deposit from those who need a riskless investment. One way to address this problem is to ensure that banks will not suffer losses on their lending activities. Islamic banks may employ, for example, the 6C’s approach (character, capacity, capital, collateral, conditions and compliance) used by the conventional bank in accessing loan application. This would minimise the likelihood of incurring a loss besides having a provision to create a loss off-setting reserve from banks’ annual profits. On the other hand, some Islamic scholars argue that using the procedural evaluation of capital and collateral may be unjust to small-loan applicants since they might be less attractive as compared to rich business corporations. Hence, it is a challenge to the Islamic banks to develop a comprehensive assessment tool to ensure the benefit of the depositors and the society as a whole. (ii) Defaulter and Compensation Issue of Murabahah Financing By using a fixed-rate mode of financing, Islamic banks land themselves into a problem of excessive loan default. This is due to the fact that murabahah (cost plus) contracts generate debt obligation against buyers. In other words, while murabahah financing permits a higher sales price than cash sales, it creates a high-risk asset in the form of murabahah loans. If the buyer defaults on his installments, banks cannot charge extra profit because, according to some Islamic jurists, that is equal to taking ‘riba’. Thus, the mark-up price of murabahah financing indirectly promotes immoral buyers to default. If this phenomenon continues, the soundness of Islamic banks would be in jeopardy. However, in light of the principles of maslaha, some Islamic scholars permit banks to request for compensations because the damage has been caused by the defaulter as well as preventing wealthy immoral buyers to default. Up to date, this issue still remains unresolved. (iii) Consumer Credit One of the major roles of commercial banks is to supply consumer credit to purchase consumer durables such as computers, furniture, electrical appliances, etc. Demand for consumer credit has been increasing due to the desire of lower-income and middleincome groups to upgrade their standard of living. Notwithstanding the fact that Islam 34

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does not encourage living beyond one’s means, Islamic banks must not ignore this product line since there is a huge demand for it. Otherwise, people will walk into the interest-based bank to fulfill their needs. The challenge for offering consumer credit is that it is very costly and risky and Islamic banks may have difficulty to cover the cost of operations, let alone making a profit. One possible source of cheap funds is a zakatbased deposit in Islamic bank. To what extent this will work remains a question but the Dubai Islamic Bank has already collected zakat-based deposits as one of its sources of fund to finance consumer loans. (iv) Government Borrowing Needs When the funds collected from taxation are inadequate, the government has to borrow from the commercial banks. The question remains as to how the Islamic banks find the sources of fund and the costing of this type of loan. We may offer a solution by requiring the banks to divert twenty percent of their demand deposit to the government to finance social projects. The rational is that since demand deposit belongs to the public; part of the benefits is meant for the public. For the case of costing, the government should be obligated to pay only a service charge imposed by banks in mobilising and rendering the demand deposits. b. The Challenges of Equity-based Financing The future of Islamic banks depends heavily on its ability to find a viable alternative to interest-based financing. Scholars and practitioners of Islamic banking have come a long way to establish the Islamic banking system as it is today. However, the ability of Islamic banking to present a viable alternative to the interest-based banking has been only partial and they have to go beyond the conventional banking framework in search for a satisfactory alternative to interest. The way ahead for Islamic banking is by moving towards equity-based as against to debt-based financing, whereby the capital provider and user would be co-participants who share the risks as well as the rewards. Relying on equity-financing means the structure of the Islamic banking would be on a very different footing to encounter several accounting problems regarding equity-based financing. Those challenges relates to the issue of liquidity, asset valuation, information cost and cost of fund.

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(i) Liquidity Islamic banking stands for the use of money as a medium of exchange, not as an intermediary between surplus and deficit units as in conventional banking. The profitloss sharing principle of Islamic banking indirectly exposes banks to higher risks than the conventional banks because of the limited facilities existing under the Islamic banking system. Bank loans are not self-liquidating. Loans in commercial banks are paid off out of future earnings of the borrower, and are liquid by their nature. In contrast, Islamic bank loans are not based on the same principles. Islamic banks are investing in assets represented by commodities, shares in companies or working capital of companies, which theoretically are less liquid and more difficult to ascertain their value. Thus, Islamic bankers must acquire skill and knowledge to challenge those needs. (ii) Asset Valuation Being in equity-based financing, Islamic banks are exposed to dual risks: (1) the ‘moral risk’ due to the lack of integrity and honesty of the borrower, and (b) the ‘business risk’ arising from unanticipated market movement. If the valuation of bank’s asset is not properly done to account for both types of risk, this will expose depositors to higher risk. In extreme cases, banks could just be passing on all the risks to their depositors, which may lead to bank panic and banking crisis. Another problem in valuation of bank’s asset is in determining the amount of profit or loss to be distributed to the depositors due to the periodic evaluation, especially for long-term investment principles like alMudaraba or al-Musyaraka. This is because the value of those investments would fluctuate due to changes in the expected cash flows and the cost of capital. Besides, in the absence of an active market in those investments, the valuation process could be imprecise and costly. (iii) Cost of Information In equity-based financing contracts, bank finances the working capital of business venture, the monitoring cost as well as the cost of writing and enforcing contracts would be higher in Islamic as compared to conventional banking. As a partner to the customer, bank officers must have skills and knowledge in evaluating real profitable business proposals. This will increase the cost of acquiring personnel.

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(iv) Cost of Funds Conventional banks can definitely determine their level of profits as they know the cost of funds in advance. With regards to profit and loss sharing, Islamic banks have no idea of the cost of funds. The depositors are paid based on a portion of the bank’s profit. It should be highlighted that while the deposit of conventional banks are guaranteed, that is not the case with Islamic banks. Therefore, the rate of return on the mudarabah depositors of Islamic banks should be comparable to the conventional banks, or higher due to higher risk. Consequently, if the return expected by the depositors does not materialised, the Islamic banks could face a liquidity crisis as depositors start transferring money to the conventional banks. Hence, it is a serious challenge for Islamic banks to balance the cost of funds and the operating risk. c. Making the Islamic Banks Work in the Global Market In a global world, there is the growing economic interdependence of countries through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows and also through rapid and widespread use of information and communication technology. Since the world markets are converging into a single market, it presents both benefits as well as challenges for Islamic banks. On the one hand, globalisation offers benefits in terms greater opportunities to expand the use of the profit-sharing mode through international portfolio diversification, for example, and by expanding the Islamic banking operation to non-Muslim countries. This is becoming relevant in the wake of the current financial crisis when many economic and finance experts are looking for better lending and borrowing alternatives. On the other hand, Islamic banks are exposed to several challenges which relate to three aspects: building proper institutional framework; increasing the scale of operation of Islamic banks; and global acceptance of Islamic banking products. (i) Building Proper Institutional Framework Building proper institutional set-up is the most serious challenge for Islamic finance since Islamic banks alone cannot cater for all institutional requirements such as providing alternative ways of fulfilling the needs of venture capital, consumer finance, short-term capital, long-term capital, etc. Therefore, there is an urgent need for a few mutual-supporting institutions like security markets, investments banks and equity institutions (mutual fund, pension fund, etc.) to perform those functions in an Islamic way comprehensively and interactively.

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(ii) Increasing the Scale of Operation In preparing for the intense competition from conventional banks, the size of Islamic banks needs to be increased. Although the scale-efficiency relationship is inconclusive, studies have shown that larger banks are better in terms of obtaining optimal mix and scale of outputs. Furthermore, larger capital base could affect positive credit rating as it represents the shareholders’ obligation. This becomes crucial when a bank wishes to raise additional capital to finance its excessive demand for loan. Finally, it is a well-known fact that larger banks are more capable to minimise risk through portfolio diversification. Hence, it is desirable that the size of Islamic banks be substantially increased, either by merging or forming strategic alliances. (iii) Global Acceptance of Islamic Banking Products Because of the religious element of Islamic banking, all banking products have to be approved by the Shariah board. The role of Shariah board continues even after the product is launched to ensure the actual practice complies with the Shariah requirements. Unfortunately, some Malaysian Islamic banking products have not been recognised by other Muslim countries, especially in the Middle East, due to different views and schools of thought. Thus, steps to standardise the universal standards regarding this issue are urgently needed for the long-term survival of Malaysian Islamic banks in the global market. In this regard, we need to train more scholars with dual specialisation in both modern finance and Shariah ruling from various schools of thought. In this way, our Islamic banking products stand a better chance of worldwide acceptance.

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PART IV Food Security 1. The Need for a New Agenda in the Agriculture Sector The time is now right to recast this sector as one of the future engines of growth of the economy. Timmer (2005) cites three major factors why agriculture is back in the agenda again. They are; firstly, the vast opportunities of productivity improvement through biotechnology and other genetic improvement. Most developing nations are yet to tap this vast potential. Secondly, the retail revolution provides opportunities for small farmers to integrate into the new paradigm of sophisticated marketing of highquality and safe food. This should provide the impetus much needed by the backward farmers to retool old farming techniques to a modern and sustainable method. Thirdly, agriculture development entails the whole package of productive and sustainable use of resources, human resource development, poverty eradication and economic growth. With these imminent calls, does Malaysia have the capacity to jumpstart its agriculture again? Let’s first examine the major issues and problems facing the sector, followed by some suggestions for a new agenda that may place the sector in a higher curve of growth. 2. Issues in Malaysian Agriculture i) Natural decline of agriculture despite three National Agricultural Policies; but its slow growth was avertable Under RMK9, the targeted growth for the agriculture sector was 5% but, as of 2007, the achieved rate was 3.8%. The targeted rate of growth for this sector under RM9 has been revised to 4.1%. With the exception of the services sector, the targeted rates of growth under 9MP were not achieved in the year 2007. These targets are further revised (Malaysia, 2008). Based on these data, the 9MP’s target of making agriculture as the third engine of growth did not materialise. However, the slow growth of agriculture was avertable. Undeniably, economic forces were at work, to direct resources where they should be, i.e., to sectors that give higher returns. However, the agriculture sector requires more nurturing efforts as it is susceptible to nature’s dictation in the face of growing population and food consumption. Food security concerns are relevant in all contexts; more so when poverty prevails in the country’s landscape. Shrinking arable lands and stiff competition with non-agriculture sectors, all made the agriculture sector the victim of rapid industrialisation. With lesser commitment and concerns from the government, it is no surprise that it lagged relative to the other sectors.

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ii) Food security policy has been “paddy/rice-centric� while the other food sectors were left to compete with aggressive industrial sectors As shown in Table 8, the level of self-sufficiency in rice reached its peak in 1975 when Malaysia was able to secure 95% of its domestic requirement through home production. However, this level was not sustainable by 2005, as it had been reduced to 72%. Malaysia is self-sufficient in the production of fruits, pork, poultry and eggs but has to depend on high imports for dairy products, beef and mutton and to some extent fishery products. Table 8 : Malaysia: Self Sufficiency Level in Food, 1971-2005 Year

Rice

1971 1975 1980 1965 1990 1995 2000 2005 2007

87.4 94.6 88.8 73.6 79.4 75 71 72 72

Fruits

Vegetables

Beef

Mutton

Pork

Poultry

Eggs

Dairy

106.3 114 127.8 121 121

109 114 139 113 114

4.3 4 4 5 5a/

Fishery products

Na 110.4 103 91.3 117 105

75.2 87 88.5 74 89

23.8 22 22.7 23 25

10.5 6 6.4 8 9

113.9 101 80 107 116

91.1 91 89 91 97

Data for 1971-1975 refers to Peninsular Malaysia only. Malaysia (various years). a/: refers to 2005

In response to this crisis, the government has announced a new Food Security Plan aimed at increasing food production and productivity to achieve self-sufficiency; to provide adequate incentives and income to producers to produce more food and to ensure adequate safe and quality food to consumers. The government has identified four major commodities that are considered strategic to food security, they are: rice, fisheries, livestock and vegetables. This policy is right though a little too late. However, a more encompassing framework is needed to ensure a sustainable developmental growth of food production and hence security in the future. This entails a bigger investment in infrastructure, human resource, R & D, application of advanced technology and ecological agriculture. iii) The investment in agriculture has declined, despite persistent structural deficiencies, labour-intensive farming and slow growth in food production The public development expenditure on agriculture has declined significantly from 17% in 1990 to 3.8% in 2007 while its contribution to GDP and employment stood at 7.7% and 14.8% in 2007 (Table 9). Although this is expected in line with the declining role of agriculture, it was a costly oversight. This is because, with the exception of 40

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the palm oil sector, the other agriculture sub-sectors are plagued with unchanged structural problems while other sectors are progressing with technological advances and productivity. Most of the subsectors in agriculture, particularly food, vegetables, livestocks, fisheries, fruits and vegetables have not improved on all fronts. The total import bill reached RM9.7 bn in 2007 and the country has remained a net food-importer in the last 3 decades. Table 9: Malaysia: Economic Role of Agriculture Sector, 1955-2007 (%) Item

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2007

23.6

20.0

26.0

24.0

22.0

21.3

17.1

7.4

4.2

5.8

3.8

33.3

26.9

29.0

27.7

22.9

20.9

18.7

10.3

8.9

8.2

7.7

Na

6.3

5.5

7.1

8.6

5.8

8.0

6.7

8.7

4.7

6.1

Agriculture

Na

4.0

6.8

4.8

3.9

3.4

5.4

4.6

2.0

1.2

3.8

Construction

Na

17.9

4.1

6.6

12.6

8.1

8.3

0.4

13.3

-1.1

2

Manufacturing

Na

11.1

9.9

11.6

13.5

4.9

12.2

13.7

13.3

9.1

5.1

Service

Na

7.4

4.7

9.3

6.6

5.1

8.2

4.9

7.7

4.1

8.5

67.6

62.9

55.7

46.9

39.7

34.8

26.0

18.7

15.2

12.9

14.8

62.1

51.0

55.0

48.3

39.7

28.3

7.9

11.7

6.1

7.0

8.7

55.1

38.7

33.4

21.9

16.4

7.6

3.8

2.6

0.7

1.1

1.2

2.69

5.6

9.3

29.6

23.3

36.9

30.3

42.4

54.9

60.7

5.2

3.5

5.3

5.5

6.4

3.6

4.4

4.3

2.4

1.7

2.0

2.3

26.0

22.3

18.3

16.4

10.4

10.1

5.8

4.1

3.7

4.1

4.6

Public development expenditure on agriculture a Agriculture contribution to GDP b Growth rate of GDP c

Agriculture share of employment d Agriculture share of total exports e Rubber Palm oil Share of food from total exports Share of food imports of total imports

NAP1 (1984-91) (1992-8)

Agriculture policy

NAP2

NAP3 (19982010)

Note: a - 1960-2000, data are sourced from Malaysia (2003): Malaysia Economic Statistics, 2002. Data for the 2005 was from Malaysia (2006). Data for 2007 is provisional (EPU, 2008). b - does not include agro-based products . 1960-2000, data are sourced from Malaysia (2003): Malaysia Economic Statistics, 2002. Data for the 2005 is from Malaysia (2006), data for 2007 is calculated using data from www. treasury.gov.my c – Growth rates are from Malaysia (various years). d – Data for 1960-2005 are sourced from Malaysia (various years). Data for 2007 are calculated from data provided by Dept of Statistics at www.statistics.gov.my and www.treasury.gov.my e – Data for 1960-2005 are sourced from Malaysia (various years). Data f0r 2007 was calculated from Bank Negara at www.bnm.gov.my

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iv) Palm oil dominates Malaysian agriculture: The lure of biodiesel may conceal costly tradeoffs Exporting biodiesel is a major thrust for the biodiesel industry in Malaysia. In August 2006, Malaysia started its exports with 8 thousand tonnes to stand at about 48 thousand tons by the end of the year and in 2007 the volume of exports jumped to 95,000 tonnes (MPOB, 2008), mainly imported by USA (58%) and Europe (28%), with less shares in Australia and Asia. However, the biodiesel diversion has a number of downsides that require serious rethinking. Palm oil plantations are land intensive, i.e., require vast surfaces of arable land that will not be available for other purposes such as food purposes. Biodiesel production may have other environmental consequences, including soil erosion. Land clearing causes considerable increases in topsoil run-off, disturbs stream-flow and increases sediment loads in rivers and streams. The intensive use of agro-chemicals in the oil palm plantation sector (around 25 different pesticides may be used) is a serious hazard to mankind, particularly when there is loose monitoring of workers in the plantations. Most of all, the clearing of land for expanding palm oil plantations will pose a major threat to biodiversity and animal diversity, precious assets that only a few countries in the world have. The growing dominance of palm oil and other industrial crops are reflected in the landusage pattern (Table 10). The table summarises a number of observations. Firstly, in the 1960s, these crops accounted for more than 70% of the land use. However, by 2005, it has increased to 83.7%, indicating a continuous dominance of these crops. This means that less land is dedicated to food crops. As at 2005, only 16.3% of the land is devoted to food crops such as rice, vegetables, fruits, coconuts and others. Secondly, in the last three decades, the composition of crops in both sectors (industrial and food crops) has changed significantly. In the case of industrial crops, palm oil has surpassed the rubber plantation in terms of areas and production. The share of palm oil of the total land area has increased from a mere 2.1% in 1960 to 63.4% in 2005. The reverse has happened in the case of rubber. It has declined from two-thirds in 1960 to 19.6%.

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Table 10: Malaysia: Land Usage, 1960-2005 (%) Crop Industrial crop Rubber

1960

1965

1970

1975

1980

1865

1990

1995

2000

2005

68.5

71.7

68.0

69.3

71.7

76.1

81.3

77

80.2

83.7

65.7

66.9

58.6

51.2

45.1

39.3

44

30.6

26.1

19.6

Palm oil

2.1

4.0

8.4

16.5

23

29.9

30.4

37.9

48.8

63.4

Cocoa

0.0

0.1

0.2

0.7

2.8

6.1

6.3

7.9

4.7

0.5

Pineapple

0.6

0.6

0.6

0.5

0.3

0.2

0.1

0.2

0.3

0

Tobaco Food crops Paddy

0.1

0.1

0.1

0.3

0.3

0.3

0.2

0.2

0.2

0.2

31.5

28.3

32.0

30.7

26.8

22.6

17.9

21.7

18.8

16.3

17.5

16.8

20.8

19.5

16.5

13.1

10

11.3

7.5

7.1

Coconut

9.2

8.1

8.7

7.4

7.9

6.7

4.7

5.7

4.1

2.8

Vegetables

1.3

0.7

0.5

0.3

0.3

0.3

0.5

0.3

0.8

1

Fruits

1.5

1.6

1.6

1.7

2.1

2.4

2.7

4.3

6.4

5.2

Others

1.9

1.1

0.4

1.9

1.5

1.4

0.9

1.3

1

0.3

100.0

100.0

100.0

100.0

100

100

100

100

100

100

2667.0

3066.0

3445.0

3887.0

4446.6

4952.4

6636.3

5716.3

5368.3

6382.0

Total Total hectarage

Sources: Malaysia (various years) Note : paddy – Based on harvested area, vegetables (only for Peninsula), inclusive of leafy, fruit and root vegetables. Fruits do not include pineapples.

In the case of food crops, a structural composition also has taken place, although not that drastic. Most of the food crops have experienced a decline in land areas with one notable exception, i.e., fruits. The share of fruits area has increased from 1.5% in 1960 to 5.2% in 2005. The rate of growth of production for this commodity has expedited, starting in the 1980s after the NAP I. The increase in fruits area was driven by good demand for this commodity, local and export markets. The vegetables area has also increased, albeit at a lower rate in the 21st century after being dormant in the last three decades. The share of vegetables area has increased from 0.3% in the 1970s till 1990s to 1 % in 2005. Again, like fruits, the increase in income per capita and changing lifestyle has increased the demand for fresh produce among the consumers. The NAP III was partly responsible in increasing the fruits and vegetables production through various programmes and incentives. Paddy areas have declined from 20.8% in 1970 to 7.1% in 2005.

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Table 11: Ratio of Land and Production of Industrial Crops 2000

Crop

Ratio of Production: Land

2005

Land

%

Production

%

Land

Rubber Palm oil Cocoa Pineapple Tobacco

1400 2622.2 250 14.7 10

32.6 61.0 5.8 0.3 0.2

927.6 11,803.8 70.3 71.0 11.7

1,126.0 14,961.7 28.0 85.4 9.4

6.9 92.3 0.2 0.5 0.1

Total

4,296.9

100

12,884.4 100.0 5,357.7 100.0 16,210.55 Sources: Malaysia (various years)

100.0

7.2 91.6 0.5 0.6 0.1

%

1250 4049 33 14.7 11

Production

23.3 75.6 0.6 0.3 0.2

%

2000

2005

0.22 1.50 0.09 1.61 0.39

0.30 1.22 0.28 1.92 0.28

v) Balance of Trade Plan for Food: Comparative Disadvantage in Food Malaysia has been a net importer of food in the last four decades or so. The deficit of food trade however has widened from RM 1 bn in 1990 to RM9.7 bn in 2007 (Figure 13). The need to ensure enough food for her population, to reduce import bills and to spearhead the growth of the food industry has prompted the government, to devise a surplus balance of trade for food of RM1.2 bn in the year 2010 (Malaysia, 2006). The strategy was indeed appropriate and timely in view of the growing instability of world food supply amidst climate change and resource depletion.

Figure 13: Malaysia’s Balance of Food Trade Plan (RM mn) 30,000

25,000

20,000

Export Plan

15,000

Import Plan

5,000

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

0

BOT Plan

1990

RM mn

10,000

-5,000

-10,000

-15,000

Im port BoT (Im port)

Export BoT (Export)

BoT BoT Plan

Source: Ministry of Agriculture and Agrobased Industries (2007).

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As at 2006, the country was in deficit of RM8.5 bn. In terms of export composition, the two major export items were “Fish crustaceans, molluscs and aquatic invertebrates, and preparations” (accounting for 19.6%) in 2006 and “Coffee, tea, cocoa, spices, and manufactures”, 22.6%. Both have shown an increasing trend. The other export items that showed an increasing trend were “Miscellaneous edible products and preparations” from 6.3% to 20.2%. The rest of the food items – registered a declining trend (e.g. “Meat and meat preparations”, “Birds eggs”, “Sugars, sugar preparations and honey”, “Feeding stuff for animals”. The ratio of export and import is presented in Table 12. In 2006, food items that showed export to import ratios higher than 1 were: birds eggs, live animals, fish products and miscellaneous food products. Table 12: Food Trade - Export to Import Ratio Commodity

1990

1995

2000

2005

2006

Live animals

5.70

3.94

2.18

2.36

1.76

Meat and meat preparations

0.18

0.19

0.08

0.08

0.09

Dairy products

0.18

0.17

0.19

0.24

0.29

11.02

6.48

20.58

15.96

29.23

Fish crustaceans, molluscs and aquatic invertebrates, and preparations

1.66

1.07

1.18

1.20

1.12

Cereals and cereal preparations

0.11

0.18

0.22

0.25

0.24

Vegetables

0.34

0.23

0.27

0.30

0.28

Fruits

1.16

0.76

0.91

0.66

0.61

Sugars, sugar preparations and honey Coffee, tea, cocoa, spices, and manufactures Feeding stuff for animals

0.45

0.24

0.33

0.35

0.30

6.26

1.91

1.42

1.06

0.73

0.93

0.56

0.39

0.36

0.45

Miscellaneous edible products and preparations

0.64

1.06

1.08

1.07

1.25

Total

0.75

0.57

0.57

0.60

0.57

Birds eggs

Sources: Malaysia (various years)

A critical examination of the plan suggests a number of observations. • The food balance of trade plan is farsighted but the assumptions of the target must have been based on unrealistic rates of growth There was no one year that the food export-import gap was showing a convergence tendency (even after the plan was implemented). The import grew at a higher rate of growth for majority of the food commodities. • Secondly, although a number of serious measures have been implemented towards this end, such as Permanent Food Production Parks, livestock’s Targeted Area of

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Concentration (TAC), Zones of Aquaculture Industry (ZAI) and a number of other infrastructural and support packages, the achievement has been limited. • Thirdly, the food sector in general does not have the clear comparative advantage compared to the export crops such as rubber and palm oil. Spots of achievements have been observed in some sectors such as poultry meat, birds eggs, fisheries products, selected fruits and vegetables and, most of all, processed food (ricebased, cocoa based, packaged and processed food). These sub-sectors may hold the key to future growth of the food sector. • Lastly, the increase in high-value food imports such as beef, mutton, dairy produce, fresh temperate fruits and vegetables, food and beverages and processed and prepacked food, merely indicates the changing consumption pattern among Malaysian consumers as their income per capita increases. vi) Low productivity and technological progress Despite a vast array of technological inventions available in agriculture, progress made in the agriculture sector in Malaysia has been relatively slow and low. The evidence of slow progress in production and marketing technologies is as follows: the post-harvest losses for fresh produce are significantly high between 20-40%, the recovery rate of rice has declined from 65% in the 1970s to about 55-60% in the 1990s, the oil extraction rate for palm oil has not improved over the years, hovering around 18%-19% in the last decade, the average yield of paddy has not increased beyond 4 tonnes/hectare, rubber tapping and palm oil harvesting are still done manually, failure in complying to phyto-sanitary requirements on some of the local fruit exports and so on. The key to technological advancement is Research and Development (R&D). Malaysia recognizes the importance of this strategy and has translated it into an increase in R&D funds from 0.2% of GDP in 1995 to 0.4% in 2000. The allocation of IRPA (Intensified Research Priority Area) funds for agro-based industry research was 25% of the total value of research. The major issues in R&D in agriculture are: a lopsided approach towards production-oriented research rather than post-production or marketing problems. The advent of globalisation necessitates an efficient post-harvest handling and marketing, where the technology developed for these purposes has been minimal if not unavailable. Secondly, there is a lack of clear understanding of the research interest of the public sector versus the private sector. Private sector research is basically problem-oriented in nature, where it provides solutions to their production/ processing/marketing problems in order to maximise profits. However, for public research institutions such as the institutes of higher learnings (IHLs) like universities, public research institutions such as PORIM, RRIM and MARDI, their stakeholders are 46

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the public. Hence, their research may not necessarily be geared towards problemsolving but also for the economic, social and environmental well-being of society at large. This would include basic research as well as social research, either to extend the frontier of knowledge or to solve economic and social problems. 3. Forces of Change and Opportunities The vulnerability of world food supply, like in the past, may continue this time around with environmental and resource concerns becoming paramount. Managing vulnerability with the right instruments may hold the key towards sustainable agriculture in the future. This section attempts to outline the major force of change that may shape the future direction of the sector and hence policy implications. i) Technology Agriculture in the 20th century took off, driven by technological innovation which began in the industrialised world and spread to the developing countries through the Green Revolution. While highly controversial, biotechnology has the potential to transform the very nature of farming, the identity of commodities, and the character and structure of markets. The increase in productivity growth rate alters the food systems which brings fundamental changes to institutions and organisations. It has created a whole set of new policy issues which are currently undergoing rigorous debates worldwide. These issues include: intellectual property rights; equitable sharing of benefits; consumers acceptance; food labelling requirement; segregation; barriers to trade; and impacts on biodiversity. Biotechnology has proven to be effective in increasing yield such that countries that do not embark on the adoption of biotechnology face the risk of losing their competitive position. Biotechnology is impacting the structure of agribusiness with the integration of genetics, seed production, and agricultural chemicals. The convergence of biotechnology with other innovations such as ICT, satellites, and global-positioning software (GPS) has altered the farming and marketing system. For instance, precision farming is made possible by the integration of biotechnology and ICT and GPS. The new supply chain is shorter, made possible by efficient logistics which utilise a combination of technologies to ensure the delivery of quality products in the right time, form and place. Many studies have shown the high rates of return from agricultural research investments. And now biotechnology is opening new research frontiers that can lead to lower use of chemical inputs for pest and disease control, lower production costs, improve product 47

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qualities, higher yields, and new and more profitable products. Additional research investments that yield high private and social returns will improve agricultural productivity and contribute to the overall economy just the same as productivity increases will in other sectors. National policy should focus on the needed investments in public goods that stimulate private investments and productive efficiency in the broad agricultural industry. ii) Retailing Revolution Marketing functions are no longer the same with the revolution in the retailing sector that has taken place worldwide in the late 1990s. The “revolution” refers to innovations in the marketing concepts of goods where efficiency is achieved at all levels and functions. The new system focusses on the supply chain system which is short, consumercentric, quality-driven and technologically-based. The revolution is pushed by external and domestic “drivers”. The external driver is basically the rapid development of large retail chains in the developed economies which are encroaching into the developing economies for market expansion, made possible by globalisation, ICT and free flow of capital across borders. These large multi-national retail chains integrate the wholesale function within their own companies to become self-distributing chains. Operating on a big scale, these retail chains were able to introduce cost-saving innovations such as centralisation of procurement, use of preferred-supplier registries, formal contracts with suppliers and the promulgation of private quality standards. If, under the traditional marketing set-up, the wholesalers are the focal agents, under the new supply chain, this role has been taken over by the “new global retailers.” The domestic drivers are consumers’ income and changing consumption pattern and lifestyles. Malaysia is classified as an upper-middle income country, and considered as one of the most developed of the developing countries. A little less than two-thirds of Malaysia’s populations live in the urban areas. The industrial-urban expansion has created new consumers who have more purchasing power and changing preferences and hence dictating strong influences on the agro-food system. Those consumers demand high-quality produce which are based on international standards. They prefer processed/ easily prepared home-meal replacements on the one hand, and healthy, safe and fresh agro-food on the other. Besides, they demand year-round supply of same quality agro-food regardless of the seasonal and location-specific nature of agricultural production.

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This new development has been shown to side line the small farmers and retailers. With many structural deficiencies, the small producers are not able to meet the rigid demand from the large-scale retailers which require consistent high quality and quantity of produce. To integrate the small farmers into the new supply chain system requires support from the government in term of institutional restructuring, encouraging contract farming, marketing infrastructures, extension (business and technical), R & D and incentives. Since small farmers are dealing with powerful buyers, they have to strengthen their bargaining position through cooperatives organise their production and marketing. To do this, the farmers have to be empowered with knowledge, skill, technology and entrepreneurship to be able to participate and compete in a highlycompetitive and sophisticated supply chain. The whole marketing infrastructures such as distribution centres at the farm level, physical infrastructures (more so “soft� infrastructures such as market information) have to be made available to farmers and traders to increase their market access. iii) Food Safety Food safety has become a major concern in the early 1900s after the incidences involving E coli bacteria in hamburger, Salmonella in poultry, and Listeria in dairy products. This concern was heightened recently with the discovery of bovine spongiform encephalopathy (BSE or mad cow disease) initially in Europe and later in Northern America. The BSE incidence has become a public concern as it was transferable to humans. Many pesticides have been banned from the market because they have been found carcinogenic in test animals. The recent outbreak of bird flu has cost human lives in some parts of the world. As a result of these incidences, consumers are demanding for the ability to trace food-safety problems from the consumer products to the farm. Food retailers and manufacturers increasingly view hazard analysis critical control point (HACCP) and traceability as crucial risk-management tools. The demands on agriculture extend beyond a safe food supply to a safe environment with animals treated humanely. This covers a wide range of issues from that affecting water quality to maintaining open spaces and safeguarding endangered species. iv) Environment Closely related to the issue of food safety is the concern for the environment. The intensive production system is affecting the environment in many ways. Agricultural conservation policy has evolved from a main concern about soil conservation to contemporary issues such as water and air quality. Production of animal on a large 49

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scale, confined facilities creates environmental and health issues. The most pressing issue of all is how to deal with limited resources. While, arguably, all environmental issues involve limited resources such as clean air and water, the concern here is with issues such as availability of water for irrigation, farmland preservation, the related issue of maintaining open spaces, and the preservation of endangered species. Much more attention has been given to the environmental costs of agribusiness growth than to its benefits. The most important sources of environmental damage are deforestation, air pollution from burning vegetation, water pollution from chemical contamination and organic wastes, and aggravated water scarcity from irrigation. There is increasing social and political pressure to seek ways to reduce these environmental impacts. This need also implies that rural poverty must be addressed since the rural poor are responsible for much resource degradation. These issues of pollution and resource degradation will keep the agribusiness complex in the forefront of the struggle to reconcile growth with protection of the environment. PART V Conclusion and Policy Recommendation Financial markets can run into trouble. Japan’s housing bubble in the late 1980, Sweden’s housing bubble in the late 1980s and the US dot-com bubble in 2000 as well as the housing bubble of 2007 are a few examples. The damage due to falling asset values and tight credit have taken a heavy toll in terms of loss of output, jobs and wealth. The destabilising boom-bust cycles in asset markets have damaging effects on real economy. An important policy lesson to be learned form the recent US housing bubble is that policy interventions should be aimed at rescuing institutions, but not their managers. History tells us that if the central bank cannot control asset-price inflation (bubbles) then it cannot achieve its other objective of maintaining price stability and full employment. In other words, financial stability is at least as important as maintaining price stability or full employment. Policymakers should consider carefully whether controlling asset-price inflation should be added to the mandate of monetary authorities. The issues regarding managing expectation and targets to reduce asset-price volatility, especially in a period of economic slowdown, need further investigation. The world is now very much interconnected after transforming from a heavily-regulated financial system to an open one, based on the functioning of markets. Countries with well-developed financial and legal systems may find themselves in deep crisis. Judging from the vast literature on the host subject, no nation is immune to crisis if the 50

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global economy goes into deep recession. The scale of the problem demands greater creativity and imagination, and we cannot be constrained by the limits of the structures and approaches designed for a world before globalisation. Policymakers need to ensure that our regulatory infrastructure does not allow any form of collusion between the commercial banks, the investment banks and the insurance companies. This will allow these institutions to compete and work independently in the interest of the market participants and investor confidence. In this context, it might be a good idea to create a separate agency (like the Financial Services Authority, FSA of the UK) to regulate the financial institutions and allow Bank Negara to concentrate on managing the inflation and regulating the banks. There must be an in-built infrastructure for the FSA to effectively communicate with the BNM to avoid any oversights in regulating these institutions. As pointed out by Bernanke (2009) in his speech on “The Crisis and Policy Response”, the issues of capital regulations, accounting rules and other aspects of the regulatory regime should be revisited to ensure that they do not induce excessive procyclicality in the financial system and the real economy. Financial firms of any type (particularly those that are categorised as “too big to fail”) whole failure would pose a systematic risk must accept close regulatory scrutiny of their risktaking. Financial reforms generally failed to lead sustained increase in bank lending to private firms, especially to small and medium-size ones. Government guarantees for loans to finance promising investment projects of firms that otherwise may have very limited access to bank credit may be envisaged. Clearly, such policy effort may entail fiscal costs when a project under the programme fails. However, it must be noted that the costs have to be weighed against the total increase in investments that can be made only because of such guarantees, and the dynamic income effect that the additional investment may generate. In fact, this could develope a new channel for financing economically-viable and socially-important project activities (agriculture and manufacturing) and actors (small and innovative firms) which tend otherwise to be marginalised. The global crisis was not of Malaysia’s making but it would hurt Malaysia as it was hurting every other country (e.g. US, Japan, Germany, Singapore and others) when they slipped into recession. Integration at the global (or regional) level offers benefits and, as the current global financial crisis has demonstrated, it comes with costs. It is evident that regional trade integration has provided a buffer against declining export demand from G3 countries. Strong and growing domestic demand in China and India provides a cushion for the regional exports. More efforts to increase regional financial 51

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integration would also foster cooperation in terms of crisis prevention and management. This is also in line with the notion that global problems require multilateral solutions. Almost two decades after the end of the NEP period, there is still a big gap in income distribution between races, with the Chinese being far ahead of the Bumiputera and the Indians. If we want to achieve income equality by year 2020, and assuming the Chinese income increases at the existing 7% rate per annum, our analysis shows that the Bumiputera income has to increase by 11% per annum, which is considerably faster than the current rate of about 7%; and the Indian income must increase by 9%. In order to achieve the above growth in income for the Bumiputeras, strategies that have been proven effective under the NEP need to be continued. These include for example: rural development strategies, modernisation of the agricultural sector, better schools and teachers in the rural areas, more higher-education opportunities for the Bumiputeras and technical and vocational training. For the Prime Minister to be perceived as a leader of integrity who is passionate about social justice, he should be totally committed to narrowing the socio-economic gap between the ‘have-a-lot’ and the ‘have-a-little’ in Malaysian society. In this regard, the wages and incomes of the lower 40 percent should be allowed to rise significantly over the next 5 years or so. A minimum living wage should be set as soon as possible which synchronises private and public sector remunerations. In order for wages at the lower echelons to rise, foreign labour has to be reduced drastically over the next few years. It is the extraordinarily huge foreign worker community that is employed in the plantation, construction and services sectors, apart from those who work as domestic maids, that has depressed wages at one end of the scale. If Malaysians had been employed in these sectors they would have to be paid better wages, while receiving all the other perks that they are entitled to. There is a noticeable “trend” in public universities whereby Bumiputera students are offered places not in the fields of their choices. Perhaps these students are not accepted by the faculties of their choice due to low merit point. Hence they are taken up by unpopular faculties. Although this maybe seen as “helping” the students, it results in frustration and misery when students are “forced” to study something not of their interest. Further frustration awaits when they are jobless. The Government should build more colleges and community colleges to cater for students who are not admitted to public universities. Strategies to encourage the development and formation of the Bumiputera Commercial and Industrial Community (BCIC) need to be continued, perhaps with greater vigour. 52

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Efforts thus far do not seem to bear much success. Provision of capital, training, facilities, infrastructure and business-coaching must be intensified. In the spirit of racial harmony, the Government may promote the establishment of Bumiputera-Chinese genuine business partnerships to help the former carve a niche for themselves in business. Tax incentives or the like may be considered for such genuine inter-racial partnership. Dayaks, Kadazans, Indians and Eurasians should also be brought into the picture. As businesses and industries become more multi-ethnic, especially at the level of capital, there should also be a parallel effort to make the public sector more multiethnic. Over the years, the public sector has become overwhelmingly Malay. This has to be rectified. Ensuring that no sector of the economy is identified with a particular community is indeed in line with the second prong of the NEP. Similarly, when it comes to low-cost housing or land for tenant farmers, ethnic considerations should be set aside. One very strong negative perception of the NEP is that it has been surrounded by abuse of power and corruption, especially in providing business privileges to Bumiputera. The government should, through deeds, prove that the powerful and the wealthy do not in relative terms benefit much more from the NEP and other policies. The government should be firm and unyielding in eradicating abuse of power and corruption. One of the results of the NEP was an increase in the number of Bumiputera professionals. However, the achievements were still significantly lower than the 30% target. Factors that lead to this situation include: lacklustre attitude and performance of Malay students in schools and universities, and general preference of Malay students in arts and humanities fields of studies. One of the factors that led to this problem is their feeling of having job security. The Bumiputera students believe that they just need to pass a degree and they will have a job. But, in reality, to occupy a high position in the private sector and to go into professional careers needs more that just a “pass” performance. The Ministry of Higher Education needs to find ways to improve the performance of Bumiputera students in schools and universities. Another factor that contributes to weak performance of the Bumiputera students is related to their socio-economic situation. Most Bumiputera students live in the rural areas and in urban-low or lower-middle income housing areas. There is a general lack of “competition culture” among them. The Ministry of Education must find ways to inspire the competitive spirit and the desire to excel among these students. The 53

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Government’s effort in the 70s and 80s to encourage Bumiputera students to study science and technology has bourne fruit. In view of this, the government may consider re-introduction of the S&T drive among the Bumiputera students. Financial incentives may be introduced to induce parents and students to be S&T-oriented in their studies beginning from primary schools. Banks looking to move into the Islamic banking market first need to appoint a Shariah board or a Shariah counsellor to ensure conformity and minimise Shariah risk. These boards and counsellors are carefully selected by the hiring body based on their reputation or experience in fiqh muamalat. To be effective, Shariah scholars must be competent in both fiqh muamalat and conventional banking. Currently, there is a dearth of competent Shariah scholars and existing ones are spread too thinly across numerous institutions. There is therefore a pressing need for a systematic training to produce competent Shariah scholars to accommodate the industry need. Additionally, there is a lack of standardisation in the qualification of Shariah scholars. There are significant variations of interpretation of the Shariah laws and hence the implementation of Islamic banking across different countries, notably between the Middle East and Malaysia. The Islamic Financial Services Board (IFSB) is an international standard-setting organisation. One of their missions is to promote the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding industry principles. Outside of the Middle East, however, these standards and principles may not have as strong a hold. Due to the advanced knowledge of our Islamic bankers and scholars, Malaysia should play a more dominant role in the IFSB. At this time, when the conventional banking sector is facing many challenges related to the credit crunch, there may be even more migration to Islamic financial services in certain countries. This results in increased interest among conventional banks to offer Shariah-compliant products. The entry of large multinational banks with Islamic banking windows into Muslim countries is heightening competition. Facing this global competition, it may be prudent for smaller Islamic banks, including the Malaysian Islamic banks, to begin to consider consolidation in order to strengthen their operation. Although the scale-efficiency relationship is inconclusive, studies have shown that larger banks are better in terms of obtaining optimal mix and scale of outputs. Current issues facing the Islamic banking community include the need for money market instruments that are Shariah compliant. There is also an immediate need for short-term money market investments and tools for liquidity management, an area 54

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that could benefit immensely from the introduction of new instruments. Most available conventional banking instruments for liquidity management are interest based and therefore not Shariah compliant. Until new products or solutions are developed, this is going to severely hinder development of the Islamic inter-bank money market. Traditionally, Islamic banks have relied on Murabahah for short-term investments and liquidity management; however, this leads to an inefficient use of funds due to its low returns. Only now are Muslim scholars learning and devising methods to replicate the conventional inter-bank markets into an Islamic equivalent. The International Islamic Financial Market (IIFM) has been tasked with developing an active secondary market where Shariah-compliant financial instruments are used in an effort to facilitate liquidity management among Islamic banks. Malaysia should play an active role in ensuring the existence of an active secondary Shariah-compliant financial market. The need for product innovation is currently of paramount importance. There is currently a lack of Shariah-compliant banking products that are acceptable by all Islamic banks in different countries. For example, Bai al-inah and Bai al-dayn practiced in Malaysia are not acceptable by Islamic banks in the Middle East. It may be a long journey before Islamic banking and financial markets can be considered having a complete market (having a product to cater for every need), but serious efforts have to begin now. Product innovation is also important in order to overcome the weaknesses of existing products. Mudarabah financing is a case in point. Mudarabah is a profitsharing arrangement or agreement between a capital provider (Islamic bank) and an entrepreneur. The entrepreneur is provided with funds by the capital provider to undertake a business activity. Any profits made will be shared between the capital provider and the entrepreneur according to the pre-determined profit-sharing ratio. However, losses shall be borne by the capital provider. This product has an obvious weakness due to serious agency problems and moral hazard issues. Islamic banks offering this product are certain to suffer losses from non-performing loans. The absence of guaranteed positive return on deposit in an Islamic commercial bank may be a serious drawback compared to conventional banks. A depositor in an Islamic bank may have to share a certain amount of losses in mudarabah (profitsharing arrangement) deposit accounts if banks incur losses. This may result in Islamic bank losing a sizable amount of its loanable funds. One way to address this problem is to ensure that banks will not suffer losses on their lending activities. Islamic banks may employ, for example, the 6C’s approach (character, capacity, capital, collateral, conditions and compliance) used by the conventional bank in accessing loan application. 55

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By using fixed rate mode of financing, Islamic banks land themselves into a problem of excessive loan default. This is due to the fact that murabahah (cost plus) contracts generate high-risk loans. If the buyer defaults on his installments, bank cannot charge extra profit because it is equal to taking ‘riba’. Thus, the mark-up price of murabahah financing indirectly promote immoral buyers to default. If this phenomenon continues, the soundness of Islamic banks would be in jeopardy. Do banks have recourse to these non-performing loans? Up to date, this issue still remains unresolved. Although Islam does not encourage living beyond one’s means, Islamic banks must not ignore the demand for consumer credit as there is a huge demand for it. Otherwise, people will borrow from the interest-based bank for their personal loans. The challenge for offering consumer credit is that it is very costly and risky and Islamic banks may have difficulty to cover the cost of operations, let alone making a profit. One possible source of cheap funds is a zakat-based deposit in Islamic bank. To what extent this will work remains a question but the Dubai Islamic Bank has already collected zakatbased deposits as one of its sources of funds to finance consumer loans. Building proper institutional set-up is the most serious challenge for Islamic finance since Islamic banks alone cannot cater for all institutional requirements such as providing alternative ways of fulfilling the needs of venture capital, consumer finance, short-term capital, long-term capital, etc. Therefore, there is an urgent need for a few mutual-supporting institutions like security markets, investments banks and equity institutions (mutual fund, pension fund, etc.) to perform those functions in an Islamic way comprehensively and interactively. Due to its unique requirements, Islamic banks not only must be efficient in providing banking services, but also providing services that are Shariah-compliant. Among the uniqueness of Islamic banking operations include the absence of a risk-free deposit, lack of liquidity in assets, valuation difficulty due to increased risk, increased agency cost in mudarabah financing and uncertainty in cost of funds. Hence properly-trained Islamic banking personnel are required in greater numbers in the light of rapid increase of the Islamic banking sector. The recent hikes in food prices may just be another short-lived phenomenon, but it could also represent a structural change in the world food economy. In the medium to long-term food crisis must be tackled through investment, innovation and productivity growth. Indeed, this will require bold [large] investments in the sector, which include infrastructure, water supply, improved seeds and fertilizer, education and agricultural R&D as practiced in the developed countries. There were some innovations made, but 56

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insufficient to drive the sector to a new frontier. This is proven by the fact that in the last four decades, the sector virtually depended on imports for almost all input items. We noticed that expenditures on R&D are more generous in other parts of the world, especially in developed countries. There are certain food sub-sectors that are able to penetrate the export markets, but not extensive enough in terms of value and scale. The inability to internalise the recent food crisis was partly due to the structure of the industry and dependence on imported food such as rice, beef, dairy products and food and beverages. The prospect of more palm oil plantations in Sabah and Sarawak to produce feedstock for biodiesel, may prove a bad move to food (i.e., less land for food), environment, biodiversity and animal diversity. It is becoming clear that R&D, technology applications and incentives are required to equip the agriculture industry to weather through a highly-challenging time ahead. The R&D in agriculture and food has to be stepped up and the opportunities of biotechnology and advanced technology application should be the main R&D agenda, particularly on sustainable agricultural practices. International evidence has shown that these two instruments, R&D and development of infrastructures are the key towards poverty reduction and production growth. Developed nations spend more than 3% of GDP for R&D to develop a strong manufacturing and agriculture (high value added) based products. Another concern is that there is a strong need to improve the market access to both local as well as global supply chains through organised or contract farming and cooperatives. Automation and mechanisation are the partial solution to high wages and limited land availability.

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References Bernanke, B. (2009) Bernanke’s Speech on “The Crisis and the Policy Responses”, Council on Foreign Relations, January 13. Hamizun, I. and Baharumshah, A.Z (2008) Malaysia’s current account deficits: An intertemporal optimization perspective. Empirical Economics, 35, 569-590. Rose, A.K. (1995) After the deluge: Do fixed exchange rates allow inter-temporal volatility? NBER Working Paper, No. 5219. McKinnon, R. (2001) After the crisis, the east Asian dollar standard resurrected. In J. Stiglitz and S. Yusuf (Eds.), Rethinking of the east Asian miracle (pp. 197-246). World Bank and Oxford University Press. Chow, H.K. and Y. Kim (2006) Does greater exchange rate flexibility affect interest rates in post-crisis Asia? Journal of Asian Economics, 478-493. Temple, J. (2000) Inflation and growth stories about short and tall, Journal of Economic Surveys, 14, 395-426. Barth, James R., George Iden, Frank Russek, and Mark Wohar. (1991) The effects of federal budget deficits on interest rates and the composition of domestic output. In The Great Fiscal Experiment, edited by Rudolph G. Penner. Washington: Urban Institute Press. Corsetti, G., Pesenti, P. and Roubini, N. (1999) What caused the Asian currency and financial crisis? Japan and the World Economy, 11, 305-373. García, Agustín and Julián Ramajo. (2004) Budget deficit and interest rates: empirical evidence for Spain. Applied Economics Letters 11: 715-718. Aisen, A. and Hauner, D. (2008) Budget deficits and interest rates: A fresh perspective. IMF Working Paper, WP/08/42. Chowdhury, K. (2004) Deficit Financing in LDCs: Evidence from South Asia, Working Paper 04-18, Department of Economics, University of Wollongong. IMF (2008) Financial Stress and Deleveraging Macrofinancial Implications and Policy: Global Financial Stability Report, International Monetary Fund. Malaysia (2003).Malaysia: Economic Statistics, Department of Statistics, Putrajaya. Malaysia (2006): Ninth Malaysia Plan 2006-2010, Putrajaya: Percetakan Nasional Berhad. Ministry of Agriculture and Agrobased Industries (2007). Pelan Tindakan Imbagan Perdagangan Sektor Makanan, Putrajaya. Malaysia (2006). Ninth Malaysia Plan (2006 – 2010). Kuala Lumpur: Government Printers. MPOB, Malaysian Palm Oil Board (2008). Malaysian Palm Oil Statistics 2008, Bangi: Malaysian Palm Oil Board. Timmer, P. (2005) Agriculture and Pro-Poor Growth: An Asian Perspective, Center for Global Development. 58

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DIMENSION 2

SOCIAL AND WELFARE submitted by

Universiti Islam Antarabangsa Malaysia

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PRE-AMBLE

SOCIAL & WELFARE

The National Feedback Council has initiated ‘Priority March 09 – Setting the National Agenda’ project which is A Study on the Wish-List, Hopes and Expectations of Malaysians on the New Leadership. This project is undertaken in conjunction with the incoming ascendency of Dato’ Seri Mohd. Najib Tun Abdul Razak as the new Prime Minister of Malaysia in March 2009. The main purpose of the project is thus to generate insights and input from Malaysians of various backgrounds to be forwarded to the new leadership for consideration in charting the future direction of the country. The Ministry of Higher Education (MOHE) is responsible for generating feedbacks from the academics. A series of meetings were already held among Vice Chancellors and other parties which form the main Task Force to outline the approach and strategy in undertaking this task. The Task Force consists of four sub-committees which are responsible for generating insights on four respective areas, namely: economic and finance (UPM); defense (UPNM); security (UKM); and social and welfare (IIUM). The final outcome of this project i.e. a document consisting of wish-list, hopes and expectations of Malaysians on the New Leadership on these four aspects will be presented to Y.A.B. Dato’ Seri Mohd. Najib. As indicated above, IIUM was given the task of generating inputs on social and welfare issues. As such, a university-level committee chaired by IIUM Rector, YBhg. Prof. Dato’ Seri Dr. Syed Arabi Idid was formed and has met regularly every week since 26 December 2008 to accomplish the task. The full membership of the Committee was given above. Due to its vast coverage, the committee decided to confine the scope of social and welfare to four sub-areas, namely: education; public safety; socioeconomics and race; and religion; culture and values, as graphically illustrated below. For social and welfare sector, the committee agreed to propose, 1) the national unity, 2) the role of family and 3) the humane and humanistic aspects of individual and societal development as overarching guiding directions. Meanwhile, for each of the sub-areas one group is responsible for identifying relevant issues for the area and the committee agreed that each identified issue would have to be deliberated based on a few common aspects. Thus, each issue is discusses with varying degrees of depth in terms of its justification, relevant policies, practices or programmes, the gap that may exist from which the wishes, hopes and expectations are derived/generated followed by some humble recommendations for consideration. A summary of the social and welfare issues is given below for easy reference. It must be said here that the issues identified and recommendations forwarded are not necessarily of the same level of importance and priority and therefore their selection will be left entirely to the main Task Force when it exercises its consolidation efforts, especially in light of input and feedbacks received from other committees that might overlap with one another.

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Also, we need to mention that, due to the time and other constrains, deeper consultations of more authoritative references and sources was not possible. This explains the limitations of this ‘Discussion Notes of our Focus Group’.

SUMMARY OF SOCIAL & WELFARE ISSUES

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EDUCATION Issues 1.1. Racial Polarization in Educational Institutions 1.2. Quality of the National Education System and Higher Education 1.3. Status of Bahasa Melayu as the National Language 1.4. Inability of the Core National Primary Schools to Attract Non-Malays 1.5. Increase in Social Ills Crippling Malaysian Youth PUBLIC SAFETY Issues 1.1. Crime 1.2. Traffic Accidents 1.3. Disaster (Natural and others) RACE, RELIGION, CULTURE AND VALUES Issues 1.1. Race and Ethnic-related Issues (3) 1.2. Religion-related Issues (4) 1.3. Culture and Values-related Issues (3) SOCIO-ECONOMICS Issues 1: Divorce 2: HIV/AIDS 3: Incest 4: Domestic Violence 5: Rape Cases 6: Outrage of Modesty Cases 7: Social Ills 8: Drug User 8: Unemployment Rate 9: Population % below poverty line

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EDUCATION Introduction Education is considered one of the major vehicles for the national, socio-cultural and economic development of Malaysia. In fact, it is the means for achieving the goal of national integration and unity. For the purpose of unity, the Malay language was set as its backbone as evident from the Razak Report (1956). The aim of the Report was to establish a “national system of education acceptable to the people of the Federation as a whole which will satisfy their needs and promote their cultural, social, economic and political development as a nation, having regard to the intention to make Malay the national language of the country whilst preserving and sustaining the growth of the languages and culture of other communities living in the country (Para 1a).� The Report implies accepting cultural pluralism rather than assimilation as evident from the recognition of national vernacular schools in both primary and secondary levels until 1961 when the Rahman Talib Report and the Education Act 1961 allowed for the pluralistic vernacular and primary schools but only English and Malay-medium national secondary schools, for the sake of national unity. Main Issues Based on studies and observations, the following are the major issues in Malaysian education that need to be addressed: a. b. c. d.

Increasing racial polarisation in educational institutions. Declining quality of the national education system and higher education. Declining status of the Malay Language as the national language. Inability of the national primary (Malay) schools to attract non-Malays.

1.1.

Racial Polarisation in Educational Institutions

Despite fifty years of independence, there is an increase in racial polarisation in educational institutions today. This is evident in the enrolment of the national and national-type primary schools in 2006 (Refer to Table 1), where 98% of the Malay cohort attended the National schools, 94% of the Chinese cohort attended the National-type Chinese Schools and 51% of the Indian cohort attended the National-type Tamil Schools. The enrolment figure of the various races in the National secondary school is better in comparison to the primary school. However, the number of Chinese Independent High Schools increased from 14, when the Education Act 1961 came in force, to 60 today. The pattern is the same in the tertiary level, with the Chinese forming almost 90% of enrolment in private colleges and universities while it is more proportional in the public universities. Racial polarisation is on the rise and this situation is critical because it results in very little interaction and communication between the ethnic groups which is necessary for understanding, respect and national unity. 65

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1.1.1. Related Present or Past Policies, Programmes and Evaluation Schools: - - - - -

Pupils Own Language (POL) – failure due to lack of teachers and school support. Integrated Schools – failure due to opposition from Dong Zong and Jiao Zong. Vision schools – not much study done as yet. Mother tongue and third language education – still new Integrated curriculum with emphasis on the inculcation of universal moral values.

Universities: - Provision of quota in public universities – successful in public universities in terms of educational access for the Bumiputeras but might be unfair to some who did better but did not get admission 1.1.2. The Main Gap - The main difficulty is the absence of primary schools that are heterogeneous during children’s formative years, as the English schools prior to 1970s. The educational policy admits pluralism for this level.

1.1.3. Wishes, Hopes and Expectations - A school system that enables Malaysians of all races to study together in the same environment, yet be able to preserve their languages, cultures and traditions. - A school system that enables Malaysians to nurture the Malaysian identity and foster patriotism. 1.1.4. Recommendations - Develop a single national school system where primary school students study under the same roof, unlike the present system. This can be done by devoting certain portions of the school hours to the national curriculum in the national language and another portion to subjects from children’s culture, mother tongue (other than Malay language) and traditions. This would require a single school session. It might be difficult because the Chinese population desires to retain its roots.1 For a start, pilot the idea first with the existing Vision schools. - Introduce a component of the religious and cultural traditions of major ethnic groups in existing school subjects, either civics education or moral or Islamic education 66

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that emphasises common, universal values and dispels ethnic prejudices and stereotypes and fosters mutual respect and public interest. - If the authority still wants to maintain the existing set up, then create activities such as academic or recreational camps, that will involve students from the national and national-type, independent and religious schools being together for a few days. 1.2.

Quality of the National Education System and Higher Education

The lack of our students’ quality in school – whether perceived or real - is affecting the universities, which are now also expected to provide them with skills they are supposed to have acquired in basic schooling. The situation is worse for the rural students in comparison to the urban students. Consequently, our university students are passive and cannot communicate. They still bring with them the mentality of studying for the exam, instead of exploring their talents and potentials. In addition, some of our university faculty members are also not competitive and some do not reach the level of competency demanded of academics. They could not provide a model of diligence, communication fluency, creativity, analytical and critical ability and innovativeness to the students. Despite investing so much in education, ICT and teachers in smart schools and universities, the returns have not been satisfactory. Teachers and lecturers are still applying the same conventional methods of getting their ideas across and the mode of assessment remains the same. The ranking of our universities is rather low in comparison to international standards. The ability of our students in the various literacy skills is not impressive although we did not perform badly in TIMSS. Our teachers themselves lack the 21st century skills. We should arrest this decline in quality of education. If not, Malaysia will slide further down in her economic competitiveness and the richness of her human capital. 1.2.1. Present or Past Policies, Programmes & Evaluation •• Smart school – slow but is progressing and more widespread after the Prime Minister issued the order to make all schools smart. •• English language mastery – only a small percentage became competent despite 11 years of exposure to all students in schools and the strong presence of English in Malaysian media. •• Stronger base for S&T through ETeMS & ICT – lots of problems because lack of planning. Puts a lot of pressure on teachers. •• Upgrading teachers and lecturers’ knowledge and skills through in-service training (PKPG, PTK and CLA) – is still going on but the philosophy behind these is not clear. Presently it is mainly for evaluation in promotion exercise. 67

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•• Formulation of Education Development Master Plan (PIPP) 2006-2010 with 6 strategies including cluster schools, nation building, and teacher improvement – progressing especially cluster schools and teacher upgrading (from non-degree to degree). •• Malaysian examination board & council – policy is shifting toward more schoolbased and process-based assessment. 1.2.2. The Main Gap The main gap is the differences between what is provided in the learning environment and the product expected by society and the industry. 1.2.3. Wishes, Hopes and Expectations An advanced learning environment that emphasises the appropriate knowledge and skills, that enables our students to compete locally and internationally but at the same time they have good characters and values as their guiding principles. They are knowledgeable and skillful in ICT, master both the national and English language, and possess other 21st century skills. Rural education will be equally as good as urban education. 1.2.4. Recommendations/Strategies • Raise awareness among lecturers and teachers about the changing world, especially the impact of globalization, because many are still not aware of its specifics and most in-service training programmes have not been able to highlight this. They provide the skills without the rationale or philosophy behind them. • Incorporate the 21st century skills into the curriculum and design the best pedagogy for developing them in all levels of education. Get a panel of experts to revise the curriculum for this purpose. • Recruit a few good or reputable foreign professors and teachers to teach in our local universities and schools respectively to provide the model of good academics teaching and research as well as competitiveness and to improve ranking. • Stop the practice of sending our best students abroad for their basic degree. We could use the fund for recruiting good instructors from abroad to teach in our universities. Besides, they will help improve our local universities. If we need to, only send the ‘real’ cream. Instead, send our students only for graduate works to acquire the latest in their fields through research. • Create more technical, vocational, trades, arts and sports schools, polytechnic, and institutions to cater for students with varying interests and talents. The university is not the place for all. Because of this, it is producing unemployable graduates.

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• Make the selection of teachers and lecturers more competitive. • Introduce bilingual education in schools i.e. Malay and English. Teach a few living subjects from among Physical Education, Mathematics, Computer Science or ICT, Civic Education and Geography in English, but not Science because of its social and economic impacts. This should not be regarded as against the spirit of Education Act 1961 or 1996 because we have to cater for our period (zaman) as encouraged in Islam too. • Teach some courses in the fields of sciences and mathematics in English at the university level. • Invest more in rural education and education of ‘orang asli’ with respect to concept (for example residential secondary school), policy, teachers, infrastructure, facilities and ICT to bring it on par with urban education. • Proper integration of ICT in curriculum and instruction, especially from upper primary level onward – training, modelling and guideline for teachers. 1.3.

Status of Bahasa Melayu as the National Language

The status of the Malay Language as the national language is being threatened with educational policies developed to meet the challenges of globalization, such as English for the Teaching of Mathematics and Science (ETeMS), and English for Science and Technology in the universities. There is less pride in the Malay Language as the Malaysian national identity as evident of its use as the lingua franca of the region, especially in the socio-cultural and political spheres. The language was the language of the existing arts and sciences then, the language of communication and expression that also unites and gives, not only Malaya but also the region, its Malay identity. Since 1970, the language has been elevated to a language of S&T with the existence of UKM and later the other public universities. Through the use of this language, Malaysia has produced its professionals and scientists that are recognised in the West. However, with the dawn of the ICT era, most material on the Internet is in English and no effort was made to increase the presence of Malay language material in the Web like the quantity available in Japanese or other languages. However, the national language is crucial because it is the soul of a nation and its identity. If one looks at Singapore and India today, they do not seem to have an identity except Hinduism being associated with India. There is fear that the Malaysian identity, which is set in the constitution to be the Malay language and Islamic faith will be watered down only to become symbolic and not translated and realised. 1.3.1. Present or Past Policies, Programmes & Evaluation - Medium of instruction for national schools and universities – succeeded in producing professionals and graduates even recognised and accepted in Western universities. 69

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- Dewan Bahasa dan Pustaka – published original and translated work but the rate is slow, although they received many works. - National Institute for Translation Malaysia (ITNM) – the rate of translation is slow and the quantity is small. - Bulan Bahasa Kebangsaan in the 1960s which was filled with a lot of programmes and was also broadcast – successful in raising awareness and sense of pride among non-Malays. 1.3.2. The Main Gap There is lack of resources for S&T and other fields of knowledge as well in the national language, whether in the hard media or in the cyberspace, and lack of good educational programmes targeted for all Malaysians in the electronic media. 1.3.3. Wishes, Hopes and Expectations All Malaysians are fluent in the national language like citizens of Indonesia, regardless of ethnic groups. 1.3.4. Recommendations/ Strategies - Increase available materials on the internet in our national language through more effort and investment by the government (especially through higher education institutions, industry and organisations) - Work with Google or Yahoo to have translation from English to Malay and viceversa to assist students in schools as young researchers. - Revive Bulan Bahasa Kebangsaan - Provide materials that reflect Malaysians from all walks of life in Malay TV programmes – shows, dramas etc. - Increase the pool of freelance translators to translate foreign works and pay them well. Tap on students who have been sent abroad in various countries to study - Study how other advanced countries such as those in the Scandinavia and East Asia do it – modernised and yet retain their language and cultures. 1.4.

Inability of the Core National Primary Schools to Attract Non-Malays

The core national primary Malay-medium schools have failed to become the premier national school in the country, especially at the primary level, when parents have a choice of schools for their children. This trend is also happening in the secondary schools

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and the tertiary level where there are also more choices than previously. This does not augur well for the country’s future racial relationship because it means segregation by choice. The national and public educational institutions must be investigated for the cause of their aversion, which needs to be arrested and addressed. 1.4.1. Present or Past Policies, Programmes & Evaluation - English schools were the convergent point for all the various races (about 22%, see Table 2) and the popular choices of parents for economic reasons - Able to gel Malaysians. - Vernacular national schools became more popular after the 1970 policy of conversion of national English-type schools. This policy solved the problem of unequal educational opportunity and educational access especially for higher education, but the side effect was it sowed the seeds of racial pluralism. - KBSM or the Integrated Curriculum emphasises universal values but is perceived by non-Malays as Muslim and Malay values (through National-type Chinese primary school principals 2007 and Educational Policy Group NGO meeting December 2008). - The core national schools are also perceived as not nurturing discipline and diligence as in the National-type Chinese schools (through National-type Chinese school principals 2007 and Educational Policy Group NGO meeting December 2008). - The increasing number of Malays studying in the National-type Chinese schools for the reason of acquiring Mandarin is perceived by the Chinese (ref as above) as attesting to the quality of their schools. - Over-enthusiastic principals and teachers who were not tactful and sensitive of pupils of different cultures i.e. multicultural education. - Lack of non-Malay teachers in schools that could be due to poor economic return, low status or lack of Malay language proficiency. 1.4.2. The Main Gap Lack of understanding of the nature of Malaysian cultures and its translation in the school environment to create a win-win situation for all. 1.4.3. Wishes, Hopes and Expectations A national school that is able to accommodate the cultural and religious values of all Malaysians. There are suggestions by some, especially the non-Malays, to transform the schools into secular schools devoid of religion (Educational Policy Group NGO meeting December 2008), but that will be contrary to the values of the Malays and the constitution of the country on the position of Islam.

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1.4.4. Recommendations/ Strategies • Transform the national school to accommodate all Malaysians, that is by providing cultural spaces and facilities for them but with Islamic values as the basis or thrust – not to infringe upon others but to enable Muslims to live by their faith where Islamic values permeate their life. • Translate the common universal values in KBSM to reality rather than studying for examination. • Improve the quality of national schools as suggested in 1.2 • Introduce a component that deals with the culture, religion and traditions of Malaysians as suggested in 1.1 • Provide space for cultural expressions of all ethnic groups using provision of National Culture Policy. 1.5.

Increase in Social Ills Crippling Malaysian Youth

There has been an increase in social ills plaguing Malaysian youth today, in particular the Malay masses, the most serious being an increase in juvenile delinquency, drug addiction leading to HIVs and AIDs, and premarital sex leading to abandoned babies and establishment of homes as temporary shelter for the ostracised teenagers and women, which have significant impacts on the family. This is evident from the statistics. Recent studies (University, Harian Metro 2009 etc) revealed that many teenagers are sexually active. There are many factors leading to these social problems and it needs the whole society to correct them.. 1.5.1. Present and Past Policies, Programmes and Evaluation - - - - - - - -

Rakan Muda Youth Clubs and Associations Pre-Marriage courses Parenting courses School counsellors and counselling sessions Sex and drug education NGOs activities for youth Religious talks, forums etc.

1.5.2. Main Gap Urban development has not lent its ear to the needs of the youth, but more to materialistic purposes i.e. how much money can we make from this project.

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1.5.3. Wishes, Hopes and Expectations A balanced society that is well-developed physically and materially but at the same time also culturally, aesthetically, morally and spiritually. Not so much gap economically i.e. a big middle class. There is room for everyone (Japan is an example). A society that is ‘clean’ and ‘caring’. Vision 2020 and Islam Hadhari. 1.5.4. Recommendations/ Strategies - Conduct study on the total need of our youth and provide for holistic and healthy development. - Conduct study on family problems, especially where both parents are working and overcome them - Provide social, recreational and aesthetic spaces that are community- based in the community. Revive the traditional arts for the youth to express their potentials and energy such as gamelan, wayang kulit, joget, lion dance and makyong. - Make marriage and parenting courses compulsory with appropriate objectives in Form Three and again in Form Five. Don’t wait until the university because some are not able to enter it. Advise parents to instill good manners (especially to think about others or not be selfish, empathise or be considerate, fear God) and discipline to their children. - Provide students with some kinds of activities during school holidays organised by schools, preferably soft skills, vocational or recreational activities and not academic, spiced with Islamic values. - Fine parents who do not take care of their children eg latchkey children (leaving school-going primary school children by themselves). They must be able to provide means of full supervision of their children if they need to work. - Solve the drug addiction problem by nipping its bud i.e. arrest and punish drug pushers and distributors and its sources. - Eliminate pornographic materials available in all sources. - Solve the problem of premarital pregnancy through prevention. Make sure the couples are wedded (this can be confirmed by DNA and the girl herself), not like what is happening today where their offspring are given for adoption. There would be no lessons and responsibilities for the couples who committed the act. They get away scot free.

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References: Relevant Statistics Table 1 Enrolment in Primary Schools by Ethnicity in Malaysia in 2006 Race/School National National-type National-type Malays

2228395

(Chinese) 46145

(Tamil) 222

Chinese

(97.96) 36788

(2.03) 579214

(0.01) 32

Indians

(5.97) 90109

(94.02) 8703

(0.01) 101665

Others

(44.95) 45452

(4.34) 5248

(50.71) 122

(89.43)

(10.33)

(0.24)

Table 2: Enrolment in Assisted National Primary Schools by Medium before and after 1970 Medium

1968

(%)

1972

(%)

1986

(%)

Malay

606,664

44.5

807,419

54.1

1,568,649

70.3

English

307,984

22.6

171,337

11.5

Chinese

367,565

26.9

435,266

29.2

582,104

26.1

Tamil

81,428

6.0

78,758

5.2

81,051

3.6

Total

1,363,641

1,492,780

2,231,804

Source: Ministry of Education, Educational Statistics in Malaysia 1968, 1972, 1986, and 2001 (Kuala Lumpur: Dewan Bahasa & Pustaka). 1 The report of UCSCAM claimed that the main reason so many Chinese parents send their children to Chinese school is that Chinese parents generally hope their next generation can become “A person that is like a Chinese people”, with love and awareness of nation, love their own culture and traditions, ethnic pride, and most importantly to have ethnic “root”. Mr. Lim lian Geok (Chinese educationist in the 1960s), known as the “Soul of ethnic Chinese” said: “One’s culture is the soul of one’s ethnic, its value as important as our lives.” And if any of you (Chinese) want to inherit Chinese cultural heritage, and if any of you (Chinese) want to live a “root” Chinese, your children must be sent to Chinese school. (see http://www.absoluteastronomy.com/topics/Chinese_Independent_High_School accessed 17 January 2009)

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PUBLIC SAFETY Introduction Public safety relates to the most fundamental human right—the right to life. It involves the prevention of and protection from events that could endanger the safety of the general public from significant danger, injury/harm, or damage, such as crimes or disasters (natural or man-made). In the Malaysian Quality of Life 2004, published by the Economic Planning Unit of the Prime Minister’s Department, the public safety index is measured by crimes per thousand population and road accidents per thousand vehicles. We can add to this notion of public safety a current concern among Malaysians, i.e., security from natural disaster. As a whole, while the Malaysian quality of life has increased, there is also a worrying trend of rising crime rate, increase in traffic accidents and also casualties from natural disaster (such as the recent Bukit Antarabangsa tragedy). It is therefore a challenge for the country’s leadership, especially the incoming one, to guarantee public safety to the citizens. The discussion that follows below illustrates a brief observation of the current state of crime, traffic accidents and natural disasters in Malaysia. It also highlights the current government policies in tackling those issues. Generally, it observes that the policies, laws and regulations the country has are adequate to address these issues. Nevertheless, their implementation needs to be strengthened and reinforced. In order to tackle these issues, the government needs to regulate policies, laws and regulations that can improve public safety in the country. This includes the strengthening of the police force (and making it more representative of the country’s ethnic groups), regulation of traffic rules and strict enforcement of hillside development projects. In addition to these, the government should emphasise citizen’s participation, e.g., support for residents’ initiatives in neighbourhood watch and various civil society’s activities in improving the living standards of the citizens.

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Issues 2.1.

Crime

2.1.1. Justification Crime rate is rising. Incidences of index crime were 121,176 in 1997, and it has increased to 156,455 in 2004. There is also a correlation between economic slowdown and crime rate as the statistics in 1998 and 1999 recorded the highest incidences of crime in the said period (1997-2004). In the first 10 months of 2008, the rate of crime was 772 per 100,000 population in 2008. Although the number is low compared to other countries, e.g., 1,166 per 10,000 in Hong Kong or 1,569 per 10,000 in Japan, it is still a cause of concern as it is an increase from just 624 cases per 10,000 that Malaysia recorded in 2000. 2.1.2. Related Policies The government announced, in early 2008, that it would increase the police force by 60,000. The visibility of the police force can help reduce the crime rate. In addition, the police force has also introduced “Rakan Cop” to encourage participation in combating crime among the public. The government’s strategy in combating crime, then, is a combination of the strengthening of the police force and public participation. 2.1.3. Gap/Brief Assessment The Royal Malaysian Police has the reputation as one of the most effective police forces in the region. However, the main complaint against the police is its credibility. In addition, the reputation of the police is affected by its failure to solve a few high-profile cases, e.g., Nurin and Sharlinie. 2.1.4. Wishes, Hopes and Expectations As the nation moves toward achieving the developed nation status, it should not neglect the public safety. The public needs security guarantee from the government, and the government should also encourage citizen’s participation in combating crime. In the wake of the current economic slowdown, the police should be on high alert on the rising crime rate.

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2.1.5. Recommendations It has to be admitted that the public safety issues in Malaysia are serious. In addressing such problems, the government should maintain its focus in strengthening national unity. It may also consider the following general policy directions: • To restore public confidence in the police force. To improve perception on public safety. • To increase the number of the police force. The government has announced in January 2008 that it would increase the police force by 60,000 more personnel. This policy shall continue, with the continued emphasis on enrollment of more nonMalays into the police force. • To revitalise “Rukun Tetangga.” To promote closer relationship between the “Rukun Tetangga” and the police force. • To support local initiatives at combating crime. Some housing areas hire security services from private firms. This should not be seen as the failure of the government to provide public safety. The government should support the local initiatives as manifestation of people’s participation in public safety. • To support and consider the advocacy works of the Malaysia Crime Prevention Foundation (MCPF). • To encourage “Rakan Cop” members to actively participate in reducing crimes. • To specifically address the issue of crime among the Indians. One of the contributing factors is urban poverty. Special focus on reducing crimes among Indians will not only decrease crime rate in the community, but can also regain Indian support of the government. • To educate the youth to undertake healthy activities and abstain from criminal activities. • To address economic issues (root causes) and impact of urbanisation. Displacement, dislocation. • Drug prevention. Assumption is drug problems lead to other crimes. • To address the issues of marginalisation, e.g. Indian, Orang Asli and other indigenous groups in Sabah and Sarawak. • To improve on the whole perception of the legal process. 2.2.

Traffic Accidents

2.2.1. Justifications Cases of traffic accidents are serious. In 2007, there were 363,314 traffic accidents, resulting in 6,282 deaths. Compared to similar cases in 2006, it was an increase from 341,252 accidents, and a slight reduction from 6,287 deaths. In addition, taking into account the number of deaths per 10,000 vehicles, there was an improvement

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from 3.98 deaths in 2006 to 3.73 deaths in 2007. When calculated against 100,000 populations, there was also an improvement: from 23.6 deaths in 2006 to 22.8 in 2007. Overall, there is a steady improvement compared to the statistics of 10 years earlier: in 1998 there were 6.28 deaths per 10,000 vehicles or 25.5 deaths per 100,000 populations, whereas the 2007 numbers were 3.73 and 22.8 respectively. However, the Malaysian fatality rate is still comparatively high. Due to lack of comparative data, the official statistics from the Royal Thai Police of 2002 can be used for comparison. In 2002, Thailand recorded 20.9 deaths per 100,000 populations, whereas Malaysia recorded 25.3 deaths the same year. Traffic accidents have always been a major problem, especially during the festive seasons. For example, during Ops Sikap XVII between 24/09/2008 and 08/10/2008, there were 15,996 traffic accidents, of which 186 were fatal ones, with 208 deaths. However, this number was lower than the Ops Sikap XIII (of the previous year), where there were 15, 911 accidents, of which 208 were fatal ones, resulting in 225 deaths. In addition, fatalities due to road accidents reduced considerably from 7.4 per 10,000 registered vehicles in 1990 to 4.9 in 2002 despite the rapid increase in vehicle and driver population, and volumes of traffic. There is also a serious concern regarding the phenomenon of Mat Rempits who pose danger to road users. 2.2.2. Related Policies The government has undertaken positive steps at reducing the number of road accidents and casualties. This is especially visible during the festive seasons with the many Ops Sikap. The various agencies of the government are also active in holding road safety campaigns to different target groups, including schoolchildren. The government has also enforced the rear seat belt rules since January 2009. 2.2.3. Gap/Brief Assessment The government has done its responsibility in regulating the traffic and reducing traffic accidents. Nevertheless, a significant part of the blame on traffic accidents has to be apportioned to the road users too. Malaysians are almost notorious for their dangerous driving, and this needs to be addressed. 2.2.4. Wishes, Hopes and Expectations The public would benefit from a safer road for everyone. Other than government’s regulation, Malaysian roads need responsible drivers and road users. The ultimate wish for the nation is for less traffic accidents.

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2.2.5. Recommendations • While the laws of the country are sufficient to help reduce the number of traffic accidents, the major grievance is that of lack of enforcement. The police and JPJ need to be tough in enforcing the traffic laws. • Systematic education for road users. • Enforcers need to be visible to deter dangerous drivers from harming other road users. This cannot be adequately addressed by “saman ekor.” The enforcers need to show that they are regulating the traffic laws in person. • The government should provide safe roads for the public. It should also expedite repairs on damaged roads. • Continuous monitoring of the traffic conditions. • Improvement of road conditions: • Motorcycle lanes • Paving of road shoulders • Improvement of dangerous curves • Pedestrian crossings • Street lighting • Constant road maintenance, etc. 2.3.

Disaster (Natural and Others)

2.3.1. Justifications Although no one can prevent natural disasters from happening, the impact of such disaster can be minimised through responsible government policies. The tragedies of Highland Towers (1993) and the recent Bukit Antarabangsa (2008) can actually be avoided through strict regulations of hillside development. There is fear that other hillside housing areas would experience the same fate as Bukit Antarabangsa. Another recurring issue is flood, which is seasonal in affected areas; and also flash flood in poorly irrigated areas. 2.3.2. Related Policies The government has clear laws, policies and guidelines with regards to hillside development. The government has also undertaken many drainage projects throughout the country. The problem is that these issues keep on recurring. 2.3.3. Gap/Brief Assessment Policies and laws with regard to hillside development are clear, but their enforcement is lax.

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2.3.4. Wishes, Hopes and Expectations While natural disasters cannot be controlled, the public can be protected from danger through conscientious public policies. The public must also debunk the myth that living in hillside areas is prestigious.

2.3.5. Recommendations • The government should be strict on the enforcement of prohibition of hillside development. • The enforcement of EIA, in addition to SIA, for all new development projects. • Monitoring of existing hillside housing areas, and projects still under development. • Efficient rescue operations. • Severe punishment to errant developers. RACE, RELIGION, CULTURE AND VALUES 1. Introduction Religion, race, values and culture play a paramount role in enhancing national unity and progress of the nation. Proper orientation of the issues of religion, race, values and culture would result in strong national unity and create the environment for better understanding, relations and contribution to the overall development of Malaysia. The government of Malaysia has always been mindful of the importance of these elements in national unity and nation building. For instance, the initiation of national culture policy (1971), inculcation of Islamic values into administration policy (IIV 1981/1986), introduction of Islam hadhari approach (2004) and others, bear witness of the importance of religion, values and culture in national unity. On the other hand, the government under the leadership of Tun Abdul Razak bin Hussein, the 2nd Prime Minister of Malaysia (1969-1976), introduced the (NEP) to cater, among other things, for the eradication of poverty and enhance racial unity through economic function and wealth distribution. Furthermore, with the adoption of Rukunegara, national education policy and national language policy, the government has clearly advanced the cause of national unity, development and progress. As a matter of fact, IIV policy initiated under the leadership of Tun Dr. Mahathir aspired towards instilling Islamic values in government administration so as to ensure that the moral values become part and parcel of work environment and culture. This policy emphasised values such as trustworthiness, responsibility, sincerity, dedication, moderation, diligence, cleanliness, discipline, cooperation, integrity and thankfulness.

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(See Panduan Penerapan Nilai-Nilai Islam (Inculcation of Islamic Values Guide), Prime Minister’s Department, 1986 and Dasar Baru Kerajaan (The Government’s New Policies) (Kuala Lumpur: Ministry of Information, 1986). 2.

Issues

The following are some challenges and issues on race, religion, culture and values that need to be addressed: 2.1.

Race and Ethic-related Issues

2.1.1. Main Issues Increasing trends of politicisation of the Malay status and rights enshrined in the constitution and implied in the NEP • Challenge of negative impact of Westernisation on Malay identity and heritage (Challenge of detachment from the Malay tradition in favour of Westernisation). • Challenge of strengthening Bahasa Melayu vis-a-vis other languages (English, Mandarin, Arabic, Tamil…). 2.1.2. Strategies • Enhancing Malay status and rights as stipulated in the constitution and NEP. • Expanding the opportunities and benefits to other ethnicities and races. • Balancing traditionality and modernity in Malaysian society and protection of Malay identity and language. • Strengthening the awareness of the new generation with regard to historical and heritage facts. • Maintaining and strengthening Bahasa Melayu as a national Language and proving more opportunities to other languages. • Enhancing ethnic relations and harmony so as to shape and sustain the common “Malaysian identity”. 2.1.3. Recommendations • Revisiting some aspects of the NEP. • Strengthening Bahasa Melayu and encouraging the learning of another two languages such as English, Mandarin, Tamil… • Ministry of Culture, Arts and Heritage can consider the possibility of establishing a national body involving all races to focus on devising policies and policy recommendations on enhancing the “Malaysian Identity” agenda.

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2.2. Religion-related Issues 2.2.1. Main Issues • Limits to religious freedom as proclaimed by certain groups. • Politicisation of Religion and undermining of religious co-existence and tolerance. • Weakening of proper presentation and teaching of religion leading to tension and discontent. • Weakening of the social impact of the common religious values in disseminating values and dealing with social ills and problems. (Religion as a value-added factor in developing the nation and maintaining national unity). 2.2.2. Strategies • Enhancing freedom of religious expression without contradicting the position of Islam as stipulated in the constitution. • Enhancing the social role and impact of religion, instead of its politicisation. • Enhancing common religious values and practices for the purpose of enhancing national unity and religious relations among all races and religions. • Proper packaging, presentation and teaching of religion and common religious values to various walks of society. • Enhancing the role of religious values related to development, unity and combating of social ills and crimes. • Enhancing the role of education and family in disseminating common religious values. 2.2.3. Recommendations • Establishment of central (coordinating) authority to be in charge of the religious matters • Introducing subjects to teach common religious values starting from primary education. • Providing more space in the mainstream media for the presentation of common religious values and religious relations. • Enhancing the concept of “Religion for Development and National Unity”. • Introducing a national index on religious tolerance and relations.

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2.3. Culture and Values-related Issues 2.3.1. Main Issues • Space for cultural expression and cultural relations among the various races. • Diminishing role values in enhancing development environment and the moral fabric of the community. • Concerns over the cultural rights of various ethnic groups. 2.3.2. Strategies • Enhancing the rights of cultural and ethnic groups. • Preservation and sharing of common cultural values and heritage for the purpose of national unity and development. • Revitalising the role of values in enhancing development environment and national unity agenda. 2.3.3. Recommendations • Revisit the IIV policy (1986) in order to enhance its practical impact and revitalise the role of values in administration and combat of corruption. • Revisit the national culture policy (1971) to enhance the cultural relations and common cultural values. • Teach common values and cultural norms to Malaysians through introducing new subjects in lower and higher education institutions. • Establish a national council (which will include experts from all cultures) to develop strategies and action plans in order to enhance for “Common Cultural and Civilizational Values and Heritage” for the purpose of national unity. • Introduce a national index on “Role of Values in Work Environment and Administration”. This would assist in revitalising the role of value. • Creating a national common data base on culture and common value.

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SOCIO-ECONOMICS Issue 1: Divorce 1. Justification/Statistics

NEGERI/ 1995 1996 TAHUN PERLIS 234 216 KEDAH 2,099 1,765 P.PINANG 626 243 PERAK 719 849 SELANGOR 1,103 1,333 K.LUMPUR 237 553 N.SEMBILAN 425 446 MELAKA 143 514 JOHOR 1,315 1,199 PAHANG 689 763 TERENGGANU 759 637 KELANTAN 1,711 1,577 SARAWAK 201 358 SABAH 1,187 546 W.P LABUAN 26 54 MALAYSIA 11,474 11,053

Reported Cases (1995-2007) 1997

1998

1999

2000

2001

209 288 221  188 186 1,729 1,914 1,660 1,168 1,549 601 613 656 647 717 601 1,024 1,134 1,234 1,103 1,102 1,454 1,568 2,075 1,878 897 894 711 499 721 416 572 528 625 564 528 521 343 463 475 1,442 1,083 1,551 1,942 963 1,069  1,221 1,118 1,016 1,042 632 903 958 1,005 1,046 1,814 1,905 1,918 1,784 2,042 358 514  342 486 602 339 357   420  433 311 40  54 27  40 79 11,777 13,317 13,155 13,605 13,278

2002 226 1,133 911 1,975 1,977 798 629 530 1,627 894 813 1,472 634 161 61 13,841

2003

2004

2005

2006

2007

253 164 228 326 247 1,085 1,474 1,737 2,006 2,188 925 916 913 813 917 1,363 1,508 1,475 1,577 1,551 3,158 3,136 3,030 3,295 3,722 885 1,296 1,250 1,423 1,141 684 638 807 867 907 589 553 612 726 758 1,612 1,690 1,521 1,647 1,931 917 616 1,505 1,541 1,502 897 1,172 1,285 1232 1,537 1,926 1,952 1,900 2,014 2,257 652 826 820 974 910 570 514 582 923 924 28 50 84 99 37 15,544 16,505 17,749 19,463 20,529

2. Recommendations • Extend and expand pre-marriage course, which includes parenting course. • Compulsory marriage counselling after 5 years of marriage • Lack of extended family support and, perhaps, arranged marriages may be encouraged • Policies that encourage women to work from home for those that wished to do so. Issue 2: HIV/AIDS 1. Justification Reported Cases from 1986 to 2007 YEAR

HIV INFECTION Male

Female

TOTAL

AIDS CASES Male

Female

TOTAL

AIDS DEATH Male

Female

TOTAL

1986

3

0

3

1

0

1

1

0

1

1987

2

0

2

0

0

0

0

0

0

1988

7

2

9

2

0

2

2

0

2

1989

197

3

200

2

0

2

1

0

1

1990

769

9

778

18

0

18

10

0

10

1991

1741

53

1794

58

2

60

10

9

19

1992

2443

69

2512

70

3

73

44

2

46

1993

2441

66

2507

64

7

71

50

5

55

1994

3289

104

3393

98

7

105

74

6

80

84

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1995

4037

161

4198

218

15

233

150

15

165

1996

4406

191

4597

327

20

347

259

12

271

1997

3727

197

3924

538

30

568

449

24

473

1998

4327

297

4624

818

57

875

655

34

689

1999

4312

380

4692

1114

86

1200

824

50

874

2000

4626

481

5107

1071

97

1168

825

57

882

2001

5472

466

5938

1188

114

1302

900

75

975

2002

6349

629

6978

1068

125

1193

823

64

887

2003

6083

673

6756

939

137

1076

633

67

700

2004

5731

696

6427

1002

146

1148

951

114

1,065

2005

5383

737

6120

1044

177

1221

882

102

984

2006

4955

875

5830

1620

222

1842

896

80

976

2007

3,804

745

4,549

937

193

1,130

1,048

131

1,179

TOTAL

74,104

6,834

80,938

12197

1,438

13,635

9,487

847

10,334

Source: AIDS/STI Unit, Ministry of Health Malaysia , Prepared by Resource Center, Malaysian AIDS Council

2. Recommendations • Education – at secondary school level. Sex education can be included under civic syllabus • Create awareness through campaigns at both local and national levels. • Talks at secondary school, higher learning institutions. • Religious education be increased in school. • Continuous public education on HIV and AIDS through media, exhibitions etc. Issue 3: Incest 1. Justification STATES/ NEGERI PERLIS KEDAH P/PINANG PERAK SELANGOR K/LUMPUR N/SEMBILAN MELAKA JOHOR PAHANG TERENGGANU KELANTAN SABAH SARAWAK TOTAL/ JUMLAH

From 2000 to 2007 2000

2001

2002

2003

2004

2005

2006

2007

1 21 6 16 29 9 7 13 29 13 16 9 24 20

1 12 13 14 32 15 17 8 34 18 18 21 30 13

4 31 11 27 47 10 10 10 47 35 15 16 27 16

1 21 3 29 35 9 14 15 47 19 6 11 29 15

4 28 11 27 40 21 22 14 52 21 13 16 44 22

4 32 4 33 41 12 14 17 39 13 21 10 38 17

2 34 8 39 57 10 13 15 27 25 19 17 46 20

3 31 7 36 46 17 17 17 61 32 13 21 37 22

213

246

306

254

335

295

332

360

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2. Recommendations • • • •

Religious study at all level and for all discipline at. Campaigns through mass media Severe punishment for distribution of VCDs that contain illicit materials TV programmes for children to be strictly controlled. Even some cartoons are not suitable.

Issue 4: Domestic Violence 1. Justification From 2000 to 2007 STATES/ NEGERI

2002

2003

2004

2005

2006

2007

PERLIS

21

16

26

30

44

27

KEDAH

39

63

26

66

102

54

130

131

154

131

184

216

80

131

145

172

147

185

SELANGOR

412

368

474

446

498

816

K/LUMPUR

269

153

287

415

435

444

N/SEMBILAN

40

55

67

124

147

171

MELAKA

24

65

64

26

31

55

JOHOR

115

156

126

115

91

163

PAHANG

27

8

38

56

91

46

TERENGGANU

20

17

33

16

41

23

KELANTAN

11

31

51

14

8

19

SABAH

17

19

21

0

0

19

SARAWAK

36

176

144

189

180

41

LABUAN

1

1

0

0

0

0

TOTAL/ JUMLAH

1,242

1,390

1,656

1,800

1,999

2,279

P/PINANG PERAK

2. • • • • • •

Recommendations Campaigns through media Set up a special bureau for the victim Counselling Courses on marriage be offered and encouraged even after marriage Cost of such course could be given tax exemption Less reported cases. Proper policy needed to honour relationship and mutual respect of gender through direct communication between parties encouraged. 86

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• Counselling by trained professionals. • More time and attention for the children by the family Issue 5: Rape Cases 1. Justification 2000 – 2007 (By States) STATES/ NEGERI PERLIS KEDAH P/PINANG PERAK SELANGOR K/LUMPUR N/SEMBILAN MELAKA JOHOR PAHANG TERENGGANU KELANTAN SABAH SARAWAK TOTAL/ JUMLAH

2000 12 110 61 91 216 67 59 43 194 74 48 52 109 81 1,217

2001 10 123 75 79 269 97 82 43 234 79 48 74 94 79 1,386

2002 13 132 73 100 253 120 62 57 235 79 45 70 115 77 1,431

2003 11 119 70 118 280 77 69 67 312 70 38 66 111 71 1,479

2004 21 127 89 121 289 116 89 100 323 102 58 82 149 94 1,760

2005 26 163 71 148 368 111 97 77 324 84 99 90 156 117 1,931

2006 28 221 115 183 421 142 103 125 343 143 127 152 199 129 2,431

2007 27 313 161 226 562 221 153 139 473 194 130 167 196 136 3,098

2. Recommendations • • • • • •

Education Counselling Parenting Course Capital punishment be imposed on offenders as a deterrence Control of illegal VCDs is also important Islam says in-laws are found in close proximity. Thus they are major source of these types of cases. Hijab and unnecessary close proximity before marriages between unmarried relatives could be minimised.

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Issue 6: Outrage of Modesty Cases 1. Justification From 2000 – 2007 STATES/ NEGERI Perlis Kedah Pulau Pinang Perak Selangor Kuala Lumpur Negeri Sembilan Melaka Johor Pahang Terengganu Kelantan Sabah Sarawak TOTAL/ JUMLAH

2000

2001

2002

2003

2004

2005

2006

2007

16 104 123 74 244 111

8 116 100 61 340 187

8 121 86 87 342 149

9 97 105 121 302 81

17 136 88 126 340 103

24 146 128 123 343 136

19 170 127 141 362 200

18 161 139 201 427 308

71

90

80

97

115

111

112

115

36 199 44 49 49 52 62

37 211 49 37 67 42 48

78 214 72 31 81 92 81

51 204 69 46 76 65 76

60 266 101 48 82 105 74

60 214 121 55 92 125 68

110 262 101 66 94 153 55

102 233 132 55 82 161 109

1,234

1,393

1,522

1,399

1,661

1,746

1,972

2,243

2. Recommendations • There is a need for severe punishment and to be made public, so others may learn lesson. Issue 7: Social Ills Recommendations • Courses on marriage and parenting may help. • Bad impact of peers during free time and away from parents. • Night clubs and other life centres may be curbed or strictly regulated

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Issue 8: Drug User Justification Statistik Januari - Disember 2005 (Sumber AADK) TABURAN PENAGIH MENGIKUT NEGERI    

BARU 15389

BERULANG 17419

JUMLAH 32808

Recommendations • • • •

NGO and government agencies to work together. Severe punishment for the drug pusher be prescribed. Incentives for informer and their security be guaranteed. Religious education.

Issue 8: Unemployment Rate Recommendations • Maximise the local work force and give better incentives, especially for the blue collar job • Create tax incentive for the employer • A nice balance between labour-intensive work and automation to absorb extra supply of working age groups to minimise unemployment problem Issue 9: Population % below poverty line Recommendations • • • • • •

Rural Development Accelerated. Use of idle land. Enforcement on CSR Tax incentive Introduce subsidies Better spending of zakat disbursement

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Appendix – Road Safety ROAD SAFETY RECOMMENDATIONS TO THE NEW PRIME MINISTER From The Malaysian Institute of Road Safety Research (MIROS) 1.0

MOTIVATION

1.1 1.2

This recommendation note is prepared by MIROS to be submitted to the upcoming Prime Minister of Malaysia Malaysia is still considered as one of the nations in the world with high and unacceptable death rate due to road crashes. Figure 1 shows this fact.

Figure 1: Comparison of Malaysian Road Fatalities/10,000 Vehicles with other countries

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1.3 1.4

Malaysia has progressed reasonably well in terms of fatality rates but has not really progressed in actual terms of fatalities due to road crashes. Figure 2 and 3 show the figures. As can also be seen from Figure 3, motorcyclists are the most vulnerable group and have consistently made up 55 – 60% of road fatalities annually. If the road safety record of motorcyclists is improved, Malaysian road safety record would have been improved significantly. Figure 2: Comparison of Road Fatalities with other Countries

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Figure 3 : Important Road Safety Trends for Malaysia

2.0

ROAD SAFETY BACKGROUND

2.1

Road Safety progress over the years

2.1.1

As can be seen in Figures 1, 2 and 3, since 1998, Malaysian road safety record has been painstakingly slow. In 1997, a drastic improvement was achieved and behind the success was the introduction of an integrated approach towards road safety interventions using the so called “Haddon- Matrix” approach. Table 1 shows the approach, which covers the user –vehicle-roads perspectives, with pre, during and after measures.

2.1.2

Figure 4 illustrates the effects of the Haddon Matrix in 1997, and the need for Malaysia to find more catalysts to further improve the road safety record drastically, especially to meet the international standards for road safety.

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Table 1: The Haddon Matrix Approach for Road Safety Interventions: Behind Success of 1997

Figure 4 : The Progress Chart for Malaysian Road Safety

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2.2 2.2.1

Malaysian Road Safety Plan 2006 – 2010 The Malaysian Road Safety Plan for 2006-2010 was introduced to achieve better results in line with the international aspirations. Specifically, the Road Safety Plan aims to achieve the followings:

a. b. c.

2.0 road fatalities per 10,000 registered vehicles from 4.2 for 2005 10.0 road fatalities per 100,000 population from 23.0 in 2005 10.0 road fatalities per 1.0 billion vehicle-kilometre-travelled (VKT) from 18.0 in 2005

2.2.2

The nine strategies adopted and deployed during this period are as follows: i. Enhance educational and psychological approaches ii. Towards effective enforcement iii. Enhance engineering initiatives iv. Enhance community participation v. Encourage public transport use vi. Optimize cost benefit for resource deployment vii. Priority to high risk road users viii. Effective legislation ix. Public and private sector synergy in funding

3.0

THE PRESENT PLAYERS

3.1 The Road Safety Department (JKJR) was established under the Ministry of Transport in 2004, and has been the primary mover and coordinator of road safety programmes in Malaysia. 3.2 In January 2007, the Malaysian Institute of Road Safety Research (MIROS), was established under the Ministry of Transport to provide the R&D support for road safety. MIROS has since its establishment, carried out the followings: i. provide the evidence and justification for road safety interventions ii. helped JKJR in the planning and implementation of road safety interventions iii. monitored and evaluate the performance of the interventions, and iv. carry out supporting research (fundamental and applied) to help improve the road safety situation in Malaysia v. facilitated and be the prime mover behind any road safety programmes, locally and globally

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3.3 The Major Road Safety Interventions 3.3.1 In order to achieve these targets several major road safety interventions were initiated between 2006 and 2008, and they are as described in Table 2: Table 2 : Interventions introduced and Planned for the Period 2007 - 2008 Intended Outcome

Interventions introduce/Planned 1. UNECE R66

Stronger superstructure for buses

2. UNECE R80

Stronger seat anchorage for buses

3. Guardrails

More compatible guardrails – by JKR

4. SHE Implementation

Transport sector with safety quality systems and practice

5. New driver training curriculum

More appropriate learning outcomes

6. Rear seatbelt implementation

Protect rear passengers from fatality and serious injuries

7. Road safety education in schools

Creating road safety culture among school children

8. Community Based Programme on helmet

Getting local communities to help create safe culture

9. International Road Assessment Programme (IRPA)

Assessing and rating the safety state of our roads

10. Motorcycle Lanes

Protecting motorcycle from main traffic stream

11. Automated Enforcement System (AES)

Provide support for enforcement activities

12. Social Marketing Efforts

Create awareness through programmes such as advertisements and advocacy programmes

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3.3.2

Many of these interventions have been sanctioned by the cabinet, or have been made policies by the Ministry of Transport and other relevant ministries. Some of them have been fully implemented (Social marketing efforts, Road Safety Education and rear seat belts - through legislation on the 1st January 2009), and some others have been carried out as pilot or trial runs (IRAP, SHE (Safety, Health and Environment) implementation). Nevertheless, there are also other interventions that have not been implemented as a result of constraints to the implementing agencies.

4.0

THE FUTURE OF ROAD SAFETY

4.1 The “Safe System Approach” 4.1.1 The interventions described in Table 2 have its potential to reduce fatalities as estimated in Table 3.

4.1.2 4.1.3

However, many of the interventions fail to deliver as expected as Malaysia usually faces institutional issues. The present move internationally, is towards the “safe system approach”, which may be represented by Figure 5.

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Figure 5: The Safe System Approach

THE SAFE SYSTEM APPROACH Social Costs Final Outcomes Intermediate Outcomes Outputs

User, Vehicle and Road/Environment Pre, during and post crashes

Results Focus Coordination Legislation Funding and Resource Allocation Monitoring and Evaluation Research and Development Knowledge Transfer

4.1.4 Malaysia needs to get all the players and stakeholders to work together in a coordinated manner towards achieving the road safety goals. 4.2 4.2.1 4.3 4.3.1 4.3.2 4.3.3

The Institutional requirement There must be greater synergy to ensure that the aspirations of road safety are met in a more coordinated manner, with full conviction from all players and stakeholders. The importance of Road Safety Research Road safety research will continue to be needed to provide the evidence, charter the implementation, monitor the progress and effectiveness, and promote its sustainability to ensure that Malaysian roads remain safe for the present and future generations. Continuous research must also be carried out to ensure the capability and the capacity of the nation to support the road safety agenda is sustained over time. Sustaining the R&D efforts for road safety will ensure that the innovation and creativity will always be produced to support the road safety agenda of the nation and for the global needs.

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5.0

RECOMMENDATIONS

5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5

The followings are some of the recommendations : The government shall continue putting a high priority agenda for road safety as it is fast becoming the major killer for Malaysians. The government shall continue to support and provide resources to support road safety interventions as and when proposed and backed by research carried out by MIROS and other bodies. The government shall facilitate and help to coordinate the efforts of all players and stakeholders relating to road safety. The government shall facilitate the efforts for capacity and capability building to support the road safety agenda. The government shall support the “safe system approach�, especially in the institutional management functions.

Prepared by Professor Dr. Ahmad Farhan Mohd Sadullah Director General Malaysian Institute of Road Safety Research (MIROS) 3 February 2009

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DIMENSION 3

HUMAN SECURITY submitted by

Universiti Kebangsaan Malaysia

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MALAYSIA’S PROGRESS TOWARDS 2057: SUSTAINABLE HUMAN SECURITY (INPUTS FOR MOHE ON VISION 2057) UKM 2009

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INTRODUCTION In the year 2057, Malaysians will be encountering the centennial Independence of the country. What kind of a scenario might the country be in? Below are three possible scenarios: Scenario 1: Malaysia is an exemplary country for other developing countries to emulate. There is a mature political system based on political coalition of a few strong parties that share the common goal of ensuring the well-being of the people. Bangsa Malaysia lives in communities with high ethnic and religious tolerance. The literacy rate is 100% and people are able to have adequate food and shelter. Mechanisms are in place to react to any natural or man-made disaster. Not a perfect country but a good country to bring up the next generation of Malaysians. Scenario 2: Malaysia is a fragmented society with an unsustainable political coalition in its governing structure. The uncertainty leads to inability to attract investors or tourists alike. Many environmental disasters occurred either man-made or natural. Citizens feel insecure in carrying out their daily activities. There is inadequate medical care for the masses due to high insurance rate as a result of deregulation in the health sector. A country embroiled in ethnic and religious conflicts. Scenario 3: Malaysia is in a state of stable tension. The present political system will continue and the economic development will be managed in an appropriate manner, taking into account the regional and international environment. However, within the country, the continued uneasy ethnic tension will persist, but without outward, violent outbursts due to strong state intervention. Incremental changes will be instituted to meet the needs of the time. The above scenarios are possible depictions of the Malaysia in 2057. The three scenarios are possible outcomes depending on the steps taken now by the present administration. Why is this so? At the age of 51, Malaysia has achieved an enviable growth. Except for the 1969 riot, the country has been relatively peaceful. The government with Barisan Nasional (BN) at the helm has been able to develop the country from an agriculture-based economy to an industry-based society. In doing so, the country has undergone an amazing socio-economic transformation. However, the transformation has also incurred costs- both tangible and intangible. Examples of tangible cost relates to the environmental degradation, increase in crime rate, and a rise in the cost of living. Examples of intangible cost are Malaysia’s partial dependence on regional development, the seemingly-increasing immorality among the youth, and 103

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overboard religious prescription. In other words, while development can promote wellbeing and security of the society, it can also bring about conflict and uncertainty. There are perceptions of threats, and experiences of peace faced by the people. Thus, it is timely for Malaysia to measure the pulse of the country, and take necessary steps towards creating pragmatic goals in order to ensure the well-being of the country by 2057. Therefore, this report addresses: 1. 2. 3. 4.

present realities of Malaysia and the need to focus on human security three human security issues (community, environment, and health) three goals to be achieved by 2057, strategies for achieving the goals

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FUTURE EXPECTATIONS This chapter focusses on the future expectations based on an understanding of security from a non-traditional manner. I.

RETHINKING SECURITY: GOALS OF 2057

In order to prepare for the future that would lessen the chance of conflict while increasing the possibility of peace, one needs to think in terms of the relationship between development and security. Development must be holistic and sustainable, while the understanding of security needs to be expanded. Security in the traditional sense focusses on the issues of inter-border conflicts, defense management, and internal peace. While it is recognised that development and security are interlinked, security has always been seen as the prerogative of the state. The state (through various state instruments) has the obligation to protect its people. However, with the complexity due to globalisation (from economic and cultural dimensions), one has to refocus the next 50 years of development from a broader perspective of security, i.e. in terms of human security. It is not adequate to address development purely for economic reasons and security from the point of view of the state. Instead, one needs to take a bottom-up approach while understanding the need to govern through policies and programmes. As such, Human Security emphasises on the people (what the people want from the state) with elements of protection and empowerment.   It is about “freedom from fear, and freedom from want”. Human security has a direct link with development.  Freedom from want is maximised through empowerment, and freedom from threat is minimised through protection. Thus, this approach, while still placing the state as an important agent of change, shifts the emphasis to the citizens, requiring the state to be more accountable and responsible to the constituents. Human security has seven dimensions: Environment, Health, Economy, Food, Personal, Community, and Politics. It has been modified for the Malaysian context; human security is translated as Keselamatan Insan . Here, the word Insan is more encompassing since it places importance on both productive capacity as well as the spiritual beliefs upheld by the Malaysian people (FRGS UKM). Ultimately, the goal is the sustainability of human well-being (Kesejahteraan Insan) All dimensions are important. However, it is felt that the three dimensions that need critical attention for the next 50 years are the Community, Environment, and Health. This is because the community is the unit that can make or break the nation. The environment is the space and holds the resources to sustain or eliminate the community, and health of the community and the environment is the prerequisite for the longevity towards the creation of ONE MALAYSIA (SATU MALAYSIA)

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II.

EXPECTATIONS FOR 2057

There are three goals to be achieved: 1. 2. 3.

The creation of ONE MALAYSIA Environmental Sustainability as a Basic Tenet Personalised Health Care for a Productive Malaysia

THE CREATION OF ONE MALAYSIA: The ultimate goal is to create a Bangsa Malaysia. Bangsa Malaysia with be citizens/netizens formed from a composite of multi-ethnicity, religious plurality, political understandings, and strata of economic wellbeing. The creation of Bangsa Malaysia can only be possible when all citizens respect one another for the strength of one have, and help to minimise the weaknesses that exist in one another. In other words, at present we recognise that the crux of the problem is the lack of respect that people are showing toward one another. Thus, the goal is to work toward the creation of a Respected Malaysian (RM). RM is a person who is knowledgeable, self-confident and has good work ethics. She/he will show respect for others despite differences in languages, culture, religion, age and gender. S(he) has great respect for the environment and values the need to cater for the next generation. ATTRIBUTES OF A CITIZEN OF ONE MALAYSIA •

SELF RESPECT – KNOWLEDGABLE – SELF CONFIDENCE – GOOD WORK ETHICS

RESPECT FOR OTHERS – LANGUAGE, CULTURE, RELIGION, GENDER, AGE

RESPECT FOR THE ENVIRONMENT

Environmental Sustainability: The focus on preservation of the environment, especially within the context of climate change and the need for fresh water. The usage of resources must be with the view of not endangering access of the new generations. More importantly, environmental sustainability must be in line with sustainable development. At the same time, we acknowledge the fact that Malaysian as a sovereign state within the international system, lives in a state of interdependence. We are linked up to our immediate neighbours through shared borders and flows of citizens. We are impacted by natural disasters that know no boundaries or the colour of the skin. Despite the interdependency, we must strive to become a nation where the interdependency does not make us vulnerable. 106

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PRESERVATION OF THE ENVIRONMENT – CLIMATE CHANGE – FRESH WATER – BIODIVERSITY MANAGEMENT AND USAGE OF RESOURCES WITHOUT ENDANGERING ACCESS OF FUTURE GENERATIONS ADHERANCE TO THE THRUST OF SUSTAINABLE DEVELOPMENT

Personalised Health Care: In order for continued productivity, Malaysians must be healthy. Thus, there must be an emphasis on prevention rather than cure of sicknesses. Here, the use of genomics promises alternatives towards prevention of diseases. Healthy lifestyle will be the key to lower the cost of health care. • EMPHASIS ON PREVENTION BETTER THAN CURE • POSSIBLE USE OF GENOMICS TO PREVENT DISEASES • LOWER COST OF HEALTH CARE

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IDEAS AND PRESENT REALITIES The chapter focusses on the present realities of the Malaysian state from four dimensions In order to set our priority for the future, it is necessary to conduct a self assessment of the state of nation. Since gaining Independence in 1957, and the formation of Malaysia in 1963, the country has undergone tremendous changes in terms of economic, social and political development. The success story of Malaysia has been documented by many scholars. Except for the 1969 riot, there has not been any major conflict in the country. Despite the generally peaceful state, there are also underlying tensions brought about by the needs to better distribute wealth, and further recognition of plurality in the country. Therefore, it is important to indicate the present realities after 51 years of self rule. The present realities are a composite of four dimensions: demography, environment, politics and globalisation:

I.

Demography

The present population of 27 million is projected to be 70 million by the year 2057. While there is an indication that the productive age group will increase, the percentage of the aged group will also increase. In the peninsular Malaysia, the major races will still be the Malays, Chinese and the Indians. However, the Malays are not the majority in Sarawak and Sabah. Plurality of races calls for a careful management of policies to sustain peace and development . The increase in the population will increase the demand for resources, especially land and water. The demand will put a strain on the capacity of the country to sustain development and the livelihood of the people.

• PRESENT POPULATION OF 27 MILLION WILL BE 70 MILLION IN 2057 • THE AGED GROUP WILL INCREASE • THE PRODUCTIVE AGE GROUP WILL BE LARGE DEMAND FOR RESOURCES (LAND, WATER) WILL STRAIN OUR CAPACITY

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II.

Environment

By 2050, the world’s global emissions of greenhouse gases have to be halved in order to arrest the increase of the overall temperature of the planet. Malaysia needs to address this issue by implementing national strategies in line with the Kyoto Protocol which requires that countries cut emissions by 5.2% from 1990 levels, by the year 2012, when the Kyoto Protocol ends. At the recently-concluded United Nations climate summit in Poland (December 2008), Malaysia was declared trailing behind in terms of its implementation of a climate change policy. The Climate Change Performance Index ranked Malaysia in the bottom 10 of the list alongside big greenhouse gas polluters like the United States, Australia, Canada and Saudi Arabia. Primary energy supply and demand have been increasing in tandem with economic growth from 1990 to 2005, showing the economic development and energy consumption have yet to be de-coupled. The generation of electricity has seen a significant shift from oil to gas and coal between 1990 and 2005. In 1990, 41.9% of the generated electricity was based on oil and 26.2% on gas, the figures in 2005 were 3.0% and 61.0% respectively. During the same period, the use of coal for electricity generation had increased from 13.8% to 30.3%, while hydro-based electricity generation decreased from 17.8% to 5.4%. The escalating consumption of energy over the years that heavily relied on fossil fuels had resultant significant increment in emission of greenhouse gas – mainly carbon dioxide – from the sector. Results of the RegHCM-PM study in 2006 revealed a substantial increase in mean monthly rainfall over the northeast coastal region and over Kelantan; and a decrease in mean monthly rainfall over Selangor and Johor. In the future, a higher maximum and lower minimum rainfall were also anticipated in many sub-regions, which may lead to more extreme hydrological conditions. The hydrological component indicated mean monthly flows should remain at about the same levels in most watersheds ,except in Kelantan and Pahang where it is expected to increase (12.3% and 7.2% respectively), and in Selangor and Johor where it is expected to decrease (7.9% and 3.8% respectively). The unsustainable usage of resources, fresh water scarcity, the practices leading towards climate change and the loss of biodiversity are the realities that must be addressed in the immediate future. • UNSUSTAINABLE USAGE OF RESOURCES • FRESHWATER SCARCITY • PRACTICES LEADING TOWARDS CLIMATE CHANGE LOSS OF BIODIVERSITY 109

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III.

Politics

There is a perception of Malay insecurity and lack of self-confidence: The threat is that many Malays are often projected by politicians as being in a siege mentality, namely that the non-Malays are going to take over and displace them in politics, profession and even land ownership. This is the political rhetoric that some politicians use to keep the ordinary Malays under their influence and control. At the same time, there is also a perception that non-Malays lack of a sense of belonging: The threat for non Malays is also the sense of insecurity that Malays are not treating them as equals. This is a political rhetoric by non-Malay politicians who want to be seen as the communal champion. non-Malay politicians likewise are pulling their communities further apart on issues pertaining to race, religion and language. In Malaysia, communal politics is also related to religion. In the next 50 years, Malaysia will continue to grapple with its inter-religious and inter-ethnic cooperation (and conflict). Social science studies undertaken from the 1980s until now, focussing on issues of nation-building and economic development in Malaysia show that, in an effort to approximate the ideals of democracy and liberalism, Malaysia has created a middle class that is expanding in size and whose members are very politically engaged. Democratisation has taken place since the 1999 General elections. The financial, and subsequently political crisis of 1998, led toward the erosion of confidence by voters towards Barisan Nasional (BN). With the step-down of Tun Mahathir in 2003, and economic recovery, the 2004 general election results showed the return of support to the ruling coalition. However, the seemingly-indecisive leadership and the opening of political spaces (within the civil society and in cyber space) led towards a loss of the 2/3 majority of BN in parliament during the March 2008 elections. Such swings of votes indicate several things. First, generally, the voters do evaluate their representatives in a rather educated manner. Second, voters (despite their differences) do not resort to violence in settling their differences; to some extent there is an inculcation of a culture of peace among the citizens. Third, the present yet-to-be voters and young voters have very different life experiences from the present generation of adults, thus their perception on government and governance will also be different (Loh 2005, Noraini Othman & Puthucheary 2006). Good governance is highly correlated to good leadership and listening to stakeholders: the public sector, the private sector and the grassroots/civil society. Malaysia has been improving on its governance within the public sector. However, there is still high indication of corruption, seemingly among the enforcement forces and the civil service. In terms of structural condition, the fusion of power between the legislature and Cabinet increases the possibility of the abuse of power. In this context, the less-

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than-dependable judiciary does not help in arresting the fear of lack of governance among the people. However, Malaysians do have a monarchy that they can turn to in times of crises. • COMMUNAL-BASED POLITICS IS STILL IN PLAY (Rhetoric of politicians creates the tension) • DEMOCRATISATION HAS TAKEN PLACE SINCE THE 1999 ELECTIONS • LACK OF GOOD GOVERNANCE • CHECKS AND BALANCE – Monarchy, Legislature, Judiciary and the Executive IV.

Globalisation

There are three schools of thought on globalisation represented by the juggernauts, the sceptics, and the transformationalists. Juggernauts believe that globalisation is a phenomenon that all countries will have to grapple with. There IS No Alternative (TINA) approach for the states but to engage with globalisation. At the other end of the spectrum, the sceptics view globalisation as another phase of modernisation. They view that the intensification of interaction is a natural progression of history. The advancement in technology (the Internet) is similar to the development of the printing press and the telegraphs during their initial discovery. The third school of thought, the transformationalists, takes a middle road that globalisation is a process unfolding into a yet-unknown phase. As such, state and non-state actors can become both agents and victims of globalisation. This transformationalist approach offers room for nation states, including Malaysia, to shape their own identity and goals for the future. In adopting the transformationalist approach, Malaysia recognises that it exists in an interdependent environment, not only with the neighbouring states in ASEAN, but also with the rest of the world. This approach enables us to address emerging problems related to increasing transborder movement of ideas, goods, services, humans, and communicable diseases. The transborder movement of humans is especially prevalent in Sarawak and Sabah. Due to the long land and sea border, the problem of porosity is acute. In this context, the use of ICT, especially the internet, is seen as the catalyst that has propelled interactions between diverse and far-flung communities. We need to be aware that such rapid, networked communications can have both positive and negative consequences.

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INCREASED INTERDEPENDENCE WITHIN THE REGIONAL AND WORLD SYSTEM

INCREASED TRANSBORDER MOVEMENT OF PEOPLE, SUBSTANCES AND DISEASES

CONSEQUENCES DUE TO ADVANCEMENT IN ICT/INTERNET

The present realities require us to think seriously about the state of our people’s future well-being. Despite the opportunities due to development in the country, there are risks, threats and challenges that must be realised and addressed in the immediate future. At the same time, there are opportunities to be seized in shaping the future toward 2057. More importantly, it is also appropriate to rethink about the security of the nation. Security is to be thought of in a more non-traditional manner. The perception, conditions, threats and experiences of Malaysians must be taken into account in the rethinking of our security. The following issues will be addressed from the perspective of Human Security, a non-traditional approach to security where the focus will be on human well-being in relations to the State. •

PRESENT REALITIES – INDICATE THREATS – HIGHLIGHT RISKS – IDENTIFY CHALLENGES – OFFER OPPORTUNITIES – QUESTION THE STATE OF OUR SECURITY IN A NON-TRADITIONAL MANNER(Perceptions, Conditions, Experience)

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ISSUES AND STRATEGIES This chapter focusses on THE SUB-THEME OF HUMAN SECURITY: the issues and strategies related to Community, Environment and Health Security. It concludes by identifying possible topics for Research and Development. I.

COMMUNITY SECURITY

A community is a group of people WITH SHARED VALUES, NORMS living in relativelyclose proximity, sharing common areas of interaction and is concerned with the wellbeing of all members of the community. Based on the present realities, two issues related to community security have been identified: The lack of a sense of belonging, and the persistence of poverty. The lack of a sense of belonging can be attributed to religious resurgence, ambiguous attitude towards language, persistence of communal politics and the influence of internet/media. The issue relating to the lack of respect lies in the feeling of superiority among members of different ethnic groups. For example, the Malays believe that due consideration should be given to their well-being since they are the “sons of the soil”, but they have been marginalised in the economic realm. The Chinese, on the other hand, tend to be associated with success in the economic sector. Thus, despite the need to live together as a nation, there is a lack of respect among the people toward one another. In the creation of ONE MALAYSIA, this issue must the addressed head on. We need to take the best from each culture, for example, one should emulate the spiritual strength of the Malays, follow the work ethic of the Chinese, engage in the technological prowess of the Indians, and marvel at the religious/cultural tolerance of the communities in Sabah and Sarawak. These are the strength/traits required as ingredients for a Respected Malaysia. The focus here is to maximise on one’s strengths. In doing so, it will minimise on the weaknesses. Moreover, one cannot impose one’s culture onto another ethnic group. Religious resurgence is not new in Malaysia. It has taken place since the late 1970s, especially after the 1979 Iran Revolution. It can be also argued that religious resurgence (Islamic revivalism) is a response towards the onslaught of globalisation. The problem with religious resurgence is the fact that it is ethnic emphasis which has the potential of increasing ethnic polarisation. More worrisome is the fact that, at present, it seems that the role played by religion, especially Islam, can be seen to be constraining rather than liberating for come community members.

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The ambiguous attitude toward language can also contribute toward ethnic polarisation in the community. The problem is confounded by the fact the unscrupulous politicians use rhetoric related to religion and ethnicity to attract voters. Finally, the influence of the internet and media can erode a sense of national identity as Malaysians, especially the youth assume a more globalised identity at the expense of building one’s own national identity. •

LACK OF A SENSE OF BELONGING – RELIGIOUS RESURGENCE – AMBIGUOUS ATTITUDE TOWARDS LANGUAGE (BM/ ENGLISH/ VERNACULAR LANGUAGES) – PERSISTENCE OF COMMUNAL POLITICS DESPITE EVOLVING DEMOCRATISATION – LACK OF COMMUNITY /GRASSROOTS ENGAGEMENT – INFLUENCE OF INTERNET /MEDIA

The second issue concentrates on the persistence of poverty, especially the existence of hard-core poor. Malaysia has an outstanding track record in poverty eradication. However, with urbanisation and modernisation, there continues to be a sizable section of low-income families and communities. This section of Malaysian society which encompasses all Malaysians, especially among the urban poor Malays, displaced Indian plantation workers in urban poor locations, sections of the natives of Sabah and Sarawak and a sizable section of the Orang Asli community. These families and communities are among the bottom 30% of Malaysian society who are in low-income jobs, have low educational achievements and most often feel a sense of alienation and marginalisation from mainstream communities. These communities need some specific focus and coordinated effort in addressing their socio-economic needs. While the Federal Government has and is undertaking many programmes for their socio-economic upliftment, this section increasingly feels excluded from mainstream development. The major area of concern is access to services provided. Many of these groups feel that there is weakness in the delivery system due to ineffective targeting or lack of coordination among the agencies or leakages to non-target groups. Most of the time there is a lack of consultation with the grassroots. The situation in Sarawak and Sabah needs special attention due to the large land mass where the creation and maintenance of infrastructure to increase accessibility can be rather prohibitive.

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Thus, poverty is still persistent in the country. Despite the fact that the poverty level has been reduced tremendously through excellent effort in development, the hardcore poor still exist. This can lead to further unequal distribution of wealth and access to resources. More importantly, the present reality of economic interdependence and volatility of market forces can have negative impacts on the livelihood of the large segment of middleclass in Malaysia. Furthermore, the existence of increased number of migrants does have an impact on competition of scarce resources.

• PERSISTENCE OF POVERTY – UNEQUAL DISTRIBUTION OF AND ACCESS TO RESOURSES – COMPETITION FOR SCARCE RESOURCES (MIGRANTS) – QUESTION OF INACCESSIBILITY IN SARAWAK AND SABAH – VOLATILITY OF MARKET FORCES (CLASS DIVIDE)

I.I STRATEGIES TOWARDS THE CREATION OF ONE MALAYSIA The Strategies can be classified into three CATEGORIES: A. Education, B. Good Governance C. Politics. A.

EDUCATION

1. Every child in a school must have a feeling of ONE MALAYSIA. This can be done by ensuring that all schools ( public, private and vernacular schools) adhere to the Rukun Negara and uphold the Constitution of the Country in terms of respect for the rights of all citizens. Children in school must begin to celebrate our diversity while maintaining their identity and ethnic heritage. 2. Trilingualism: All respected Malaysian must be trilingual by 2057. Many developed countries, such as Sweden, Norway and the Netherlands, encourage their youths to be multilingual. 3. Pluriliteracy: The education curriculum must be revamped to be based on pluriliteracy where the goal is to increase the understanding and respect of culture, religion and beliefs among all ethnic groups in Malaysian. It connotes multiliteracy in many languages, media and ways of different cultures.

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B.

GOOD GOVERNANCE

1. The practice of good governance by the ruling government gains the trust of the people and the international community. Based on the World Governance Indicators (WGI), Malaysia is seen as a country that has made an effort in promoting good governance. The implementation of the National Integrity Plan (PIN) in 2004 is an indication of the seriousness of the present administration in embracing good governance and rule of law. Since programmes to be implemented will affect people at the grassroots, local governments must solicit input from the community. In Indonesia, the government practices the Rapid Rural Appraisal Programme (RRAP) model to acquire input to creation of new programmes, and for the purpose of ongoing assessment and evaluation. If the grassroots feel the sense of belonging and ownership of a program, the chances of success is increased tremendously. 2. Planned development in Malaysia is continued with a focus on human security. The participatory approach taken in development planning in Malaysia through the technical working groups that include firms, ministries, consumers, academia as well as NGOs and civil society should be continued and enhanced to ensure social inclusion and representation in the development plans of the country. At the same time, at the implementation level, the use of the “bottom-up� approach should be enhanced to ensure that the development goals and objectives will meet the needs of the local community where it is implemented. This will require strengthening the consultative mechanisms between the local authorities and citizens to foster greater citizen participation in local development issues. For this purpose, public representatives and representatives of the community and voluntary sector should be given a greater role in the implementation process for more effective implementation at the local level. The creation of the Malaysia Safe City Initiative in 2004 is an example in this direction. C.

PREPARATION FOR POLITICAL CHANGE

1. Increase Interfaith Dialogues: The lack of the sense of belonging can be addressed by increasing interfaith dialogues. In these dialogues, the stress must be on the importance of all religions. Furthermore, one must also realize that religion is not necessarily related to ethnicity. Thus, the main objective of the dialogues is to slowly change the psyche of the people into a higher level of acceptance of diversity. For example, if a non-Malay was to covert to Islam, s(he) does not have to forget his/her culture. 2. Preparation for an evolving matured democracy: With democratisation and the development towards developed STATE, the leadership of ONE MALAYSIA must go above partisan politics in preparing the country for an evolving matured

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democracy. This means by the year 2057, the possibility of the existence of a twoparty system or a coalition system is high. The people, especially the youths, do not have “the politics of fear� in the minds. 3. Role of the Rulers: The rulers, through the Council of Rulers, can play a mediating role in resolving sensitive issues relating to religion and the status of the Malays. The non-partisan nature of the Council is accepted among the people as an alternative channel for conflict resolution. 4. Pursuance of Shared Goals rather than Communal Interest: The present ruling coalition must realize that, in order to maintain power, it must lead by example. The focus must be on the pursuance of shared goals for ONE MALAYSIA rather than communal interest. Serious efforts must be put to curb corruption and to foster good governance. II.

ENVIRONMENTAL SECURITY

The environment is the casing of the community. Without a sustainable environmental, a community will not survive. There are many threats and risks associated in the management of the environment. Three issues related to environment security are unchecked industrial development, low level of environmental consciousness, and limited cross-border environmental management. Malaysia has moved from an agriculture-based economy industry to a manufacturingbased economy industry. The success of the industrial development does not come without some negative consequences. The building of factories, the unchecked development in mountainous areas and the increased numbers of motor vehicles contribute towards global warming that will have negative consequences on the health of the people and the loss of land by the sea. In Sabah, it is argued that land management has become more profit-driven rather than empowerment-driven for the community. Furthermore, the low level of environmental consciousness among most Malaysians does not help in the promotion of sustainable development. The problem of cross-border environmental management is an issue that has implications of global governance and state sovereignty. Vague regulations in handling transborder issues compound the problems of haze and water management. Communities living near the borders of Malaysia can be seen as threats or challenges for local border governance. The lesser attention paid to border communities can lead towards unsustainable development at the border areas. The coastal zone in Malaysia houses the majority of the population and industrial activities and represents a unique environment which requires special attention in its planning, development and management. There is growing evidence that global

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warming is contributing to overall sea-level rise and is impacting the coastal areas. Malaysia undertook a vulnerability assessment of the impacts of sea-level rise on coastal resources and reported the results in the INC. The biophysical impacts expectable under different sea-level rise scenarios (20cm, 50cm and 100cm by 2100) were tidal inundation, shoreline erosion, increased wave action and saline intrusion. It is projected that there will be socio-economic impacts of the loss of agricultural production from eroded/inundated lands, displacements and relocation of flood victims with associated disruption of business/economic activities resulting from increased flooding, loss of fisheries production due to mangrove loss, and interruption of port operation. A number of adaptation measures for mitigating these impacts were considered, which included: defense, accommodation, retreat, counter-attacking, coastal land buy-back and integrated coastal-zone management. Malaysia is a maritime nation, surrounded by large oceans and regional seas like the South China Sea. Changes in the ocean modulate our climate. Occurrences of extreme events such as droughts, floods, haze episodes etc in turn affect our agricultural outputs, our economy, safety etc. Hence, to be able to better adapt to this, we must understand the ocean and how we can manipulate information from the ocean in such a way that we can make better decisions e.g. in terms of agricultural practices etc. However our capability in ocean research is very limited. We do have many scientists in biological, and chemical oceanography but a lacking in physical oceanography. •

LOW LEVEL OF ENVIRONMENTAL CONSCIOUSNESS

DEVELOPMENT WITHOUT REGARDS TO SUSTAINABILITY LEADING TOWARDS ENVIRONMENTAL DEGRADATION, CLIMATE CHANGE AND LOSS OF BIODIVERSITY

CHANGING OCEAN BEHAVIOUR/ SEA LEVEL RISE

CROSS BORDER ENVIRONMENTAL MANAGEMENT • LACK OF INTERSTATE/INTERNATIONAL GOVERNANCE • VAGUE REGULATIONS IN HANDLING TRANSBORDER ENVIRONMENTAL PROBLEMS: HAZE AND WATER

II.I STRATEGIES TOWARDS ENVIRONMENTAL SUSTAINABILITY A. The Creation of CLIMATE CHANGE PLAN B. Clean renewable Energy Policy C. Fresh Water Resource Management D. Increased Environmental Consciousness through holistic education

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A.

CLIMATE CHANGE PLAN:

The first step towards reversing this dismal state of affairs is to invite people from government agencies, the private sector and civil society to provide their views and recommendations on the country’s climate change plan. To date, there has not been an official, broad-based plan. There is a need to Mainstream Climate Change. The following are the most important issues: • • • • • • •

Energy and Climate Change: Climate Change and Food Security Climate Change and Public Health Climate Change and Water Resources Global Warming and Sea Level Rise Climate Change and Natural Disasters Future Climate Change Scenarios

Climate change is a cross-sectoral problem that has wide implications and localised impacts. It requires cooperation from all relevant ministries, state governments and local authorities, particularly in the planning and implementation of national development programmes and projects. Hence, a Cabinet Committee on Climate Change was established by the government in January 2008, chaired by the Prime Minister. Unfortunately, the Cabinet Committee has yet to meet. To be effective, such a Committee would require support from an appropriate institutional arrangement in addition to a comprehensive set of strategic responses to address the issue of climate change.The Prime Minister’s Department should establish a Climate Change Unit to support the Cabinet Committee on Climate Change. In addition, a Climate Change Policy and Action Plan should be formulated to ensure climate-resilient development that fulfils national aspirations for sustainability. The Policy should contain measures to address the potential impacts of climate change, which could undermine development, affect human well-being, and threaten the security of natural resources. B.

CLEAN RENEWABLE ENERGY PLAN

Renewable and Clean Energy Technology Information Services, Awareness and Capacity- building Programmes will enhance the level of understanding and awareness in an extensive education campaign and capacity-building programme. The level of awareness for the public in general, and especially policy makers, will be raised to the point that they understand the technology, are aware of its true benefits and ecological significances, understand the purpose and appreciate the functions of the technology. Policy makers shall further appreciate the possibilities for the market and the industry and are able to introduce suitable policy, regulatory initiatives and special electricity tariffs for grid interconnection. Activities such as establishing information

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services, seminars, workshops and capacity-building programmes will improve the level of competency and quality of work of the service providers, architects, engineers and developers. In addition, establishment of the information resource centre, database and website will provide the end users the required information for installing Renewable and Clean Energy technologies. Renewable and Clean Energy Technology Market Enhancement and Infrastructure Development will address the technical feasibility and economic viability of BIPV technology via implementation of a number of demonstration projects. These projects will further provide a wider level of acceptance and better understanding of the technology and its benefits. The demonstration projects will also pave the way for providing first-hand experiences for improvements in the training and skills of the stakeholders as well as increased efforts in R&D activities. The demonstration projects (500 kWp) and a national kick-off roof-top programme (>1 MWp), similar to many programmes implemented in Japan and Germany, will provide adequate knowledge and experience to architects, engineers, project developers, policy makers and other stakeholders for Malaysia’s future sustainable implementation of subsequent followup programme. Relevant standards must be updated and new guidelines must be drafted providing technical assistance to the industry. Renewable and Clean Energy Technology Policies and Financing Mechanisms Programme will involve activities intended to enhance the capacity of policy makers in coming up with appropriate, proactive and integrated plans and policies that will facilitate the development of a conducive business environment for Renewable and Clean Energy technology and thus enhance further cost reduction of the technology. Based on various targeted research activities, a compilation of policy, legal, institutional, financial and fiscal measures will be proposed to the government of Malaysia. These frameworks will enable the formulation of a national Renewable and Clean Energy technology target in the 10th Malaysian Plan (10MP) (2010-2015), supported with suitable and customised mechanisms for the local condition. 1. Implementing Structural and Non-structural Measures for Water Resources Management In order to adapt to or minimise the potential implications on water resources under varying climate conditions, several structural measures below can be considered for implementation:  Mitigate increased flooding by constructing flood-control dams, river improvements, levees, diversions, detention-storage and pumping installations.  Upgrade existing infrastructure for water storage where climate change reduces rainfall in parts of the country.

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 Review the water-resources plan of affected basins for improving effective use of water resources in order to sustain economic growth and human well-being.  Adopt improved water-management practices in water supply, irrigation and hydropower generation.  Undertake flood-zoning and flood-risk mapping, identify options for flood-proofing and prepare plan for resettlement of affected population.  Employ risk-management approach in dealing with water shortages due to droughts via the development of drought plans.  Develop rules and guidelines to account for climate-change impacts in the nation’s infrastructure.  Sensitise the public to the problems of water wastage and introduce policies or taxes that would cut waste, constrain demand and encourage recycling, i.e. through public awareness and education programmes.  Install Rainwater-harvesting System in buildings to collect rainwater for use in toilets and watering plants.  Climate change projections have to be studied further and translated into how it would impact Malaysia’s water resources and other socio-economic sectors (agriculture, forestry, bio-diversity, coastal resources, public health & energy).  Expected changes in water availability by year 2050 require a review of current waterresources plans in the various sub-sectors and states of Peninsular Malaysia.  Studies need to be carried out at selected river basins on performance of watersupply systems and irrigation systems based on future water demands and hydrologic regime.  Further research on the future hydrologic regime (rainfall/streamflow characteristics at finer temporal and spatial timescales) is required. 2.

Managing Water Resources Sustainably

The sustainable water-resources management in the country should be deliberated in future development plans to include a holistic and integrated approach on waterresources management (such as Integrated Water Resource Management, IWRM and Integrated River Basin Management, IRBM). It should clearly underline how better integration, management, monitoring and enforcement of infrastructure development can provide not only better returns but also properly-managed environment, including water supply, flood and pollution abatement. Essentially, what is needed is a framework for managing water resources in a sustainable manner with climate-change mitigation and adaptation measures embedded in it. C.

OCEAN BEHAVIOUR/ SEA LEVEL RISE

The Department of Irrigation and Drainage (DID) applies several short and long-term strategies in the management and protection of the shoreline area. The former solution

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includes a hard approach, comprising coastal bunds to protect agricultural area and coastal structures to protect beach areas. The long-term strategies encompass coastaldevelopment guidelines, coastal law, Integrated Shoreline Management Plan (ISMP), Integrated Coastal Zone Management (ICZM) and National Coastal Vulnerability Index Study. The following strategies should be adopted: 1.

Minimising Impacts using Guidelines and Regulations

The guideline on coastal management aims to minimise impacts of development on the coastal zone. Those factors include population expansion; conversion of coastal land into urban, housing, recreation and other areas; conflicts in use of available coastal resources; conflicts in the need for immediate consumption and to ensure the longterm supply for future generations; and various problems and issues due to impacts of coastal development. Suitable laws or by-laws will be drafted to ensure that all proposed developments in the coastal zone adhere to the requirements laid down in Department of Irrigation and Drainage Guideline No.1/97 as well as the Integrated Shoreline Management Plan developed. This will help to ensure an effective management of the shoreline that will alleviate the financial burden on the government to continue funding expensive coastal erosion problems and ensure preservation of coastal habitat. 2.

Implementing Integrated Shoreline Management Plan

The Integrated Shoreline Management Plan (ISMP) programme carried out by the Department of Irrigation and Drainage is tailored along the principles of Integrated Coastal Zone Management (ICZM) to address the major issues and problems facing the shoreline. It is an integrated approach that takes into account all the sectoral activities that affect the coastal area and gives due consideration to economic, social, environmental and ecological issues. The goal is to develop a management tool to harmonise all activities in the coastal area to support a broader set of management objectives for the coastal area. By implementing the recommendations made under the ISMP, it will be possible to maximise the benefits to be derived from the coastal area and its resources while at the same time minimising the harmful impacts on the coastal resources and the environment. In addition, it will also help in reducing the conflicts between different users in the coastal area and the harmful effects of human activities upon each other. Department of Irrigation and Drainage is currently progressing with its ISMP to cover the entire coastline of Malaysia in stages. These studies do include some element of the

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Coastal Vulnerability Index study but do not produce a classification index. Therefore, the index in the Coastal Vulnerability Index study will be used in the preparation of the ISMP in this country, and help as an assessment tool to the ISMP. 3.

Employing Integrated Coastal Zone Management (ICZM) System

The ICZM is a resource-management system which employs an integrative, holistic approach and an interactive planning process in addressing the complex management issues in the coastal areas. There are various activities and industries in the coastal zone all competing for the same shoreline and marine space.  These interests can be owned or operated by government agencies and private entities or the general public. Conflicts arise when the activities of one sector interferes or limits that of another. Hence, the management of the coastal resource must be guided and coordinated. The ICZM is aimed at resolving these conflicts and optimising the resources in the coastline. III.

HEALTH SECURITY

Health care is fast-becoming a priority public policy issue. However, because of our heavy focus on healthcare financing and delivery of treatment of diseases and rehabilitation, we become stuck in a financially non-sustainable cycle of better treatments for even more diseases that become treatable. While short-term solution is the improvement of efficiency in spending, the long-term solution lies in the need for personalised health care for all. Every Malaysian should be made entitled to universal access to public or private health facilities for primary, secondary and tertiary care. A US-type insurance-based health care financing system is inappropriate because of problems associated with the lack of coverage for a significant proportion of the population and high administration cost. The British-type system (publicly funded) suffers from long waiting list since health care seems to be effectively free to its consumers. This problem had been recognised long ago when one MP in the British Parliament remarked ““we shall never have all we need ....... expectations will always exceed capacity”. Outbreak of major diseases (e.g. SARS and JE) can severely strain the available health facilities and even threaten national security. A system for managing such crises must therefore but put in place. In order to have a productive Malaysia, the population must be healthy. Health is the precondition for the enjoyment of the wealth of a person. Without health one is not able to enjoy any accumulated wealth. Four issues related to health security are the escalating cost of health care due to technology and tertiary care, the lack of

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empowerment of people to be responsible for their own health, the increased number of the ageing population, the possible presence of epidemics of new and yet to be discovered diseases. • • • •

Escalating cost of health care due to technology and tertiary care Lack of empowerment of people to be responsible for their own health Ageing population Epidemics of new and yet to be discovered diseases

STRATEGIES TOWARDS PERSONALISED HEALTH CARE A. B. C. D.

Creative Healthcare Financing Plan. The complementary medicine and wellness for better quality of life Personalised Health Care Active Ageing Policy

A.

Creative Health Care Financing Plan

• The Japanese and later Korean national health insurance system can provide a hybrid alternative and has been shown to be quite effective in addressing the health-financing problem. Under this system, large corporations and government departments are mandated to provide health insurance to their employees. Less financially-able individuals obtain coverage from the Central Federation of Medical Insurance Societies (CFMIS) with contributions from profit of the health- insurance companies plus direct government funding. The system however is still unable to control excessive health treatment and therefore expenditures (e.g. caesarian delivery rates of about 40% of live births1). • To overcome the problem associated with the lack in coverage, it is proposed that a combination of public and private financing schemes similar to the Japanese/Korean model be adopted. Financially-able Malaysians (with employers contributions) are required to subscribe to a health-insurance scheme while some kind of a sharing of insurance contribution (means tested) between individuals and the government are instituted for the less financially-able individuals with contributions from part of the profits of health-insurance companies. • Incentives can be created where people are encouraged to maintain a healthy life style. To promote a healthy lifestyle amongst Malaysians reward them via tax incentives. This will indirectly reduce the need for hospital treatments and health services thus overcoming the “long waiting list” problems associated with effectively “free” health care. 1 Kim BY. Korean experiment for the unification of multiple medical insurers: a road to success or failure. In: International Symposium on National Health Insurance, Korea Health and Welfare Forum. 2000:3–39.

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• Resources must be devoted into research and development and projects that will continually improve preventive medicine since it has a significant impact on overall healthcare cost. • “Gateways” (much like those employed by the health maintenance organisations in the US) must be created to control treatments and therefore health expenditures.

• Community health-insurance concept can also act as a supplement for the above system. Concepts that have been shown to work include micro-insurance, community health funds, mutual health organisations, rural health insurance, revolving drug funds, community involvement in user fee management have all been loosely referred to as community-based health financing (World Band 20012). B. Management of Healthcare Crises (Outbreak of Diseases and National Calamities) • Create a National Health Command centre devoted to health-crisis management. The centre should be tasked with: o responding (early) and preventing major epidemics o co-ordinating with district, state and federal government officials. When the scale of a disaster warrants action, the centre will set up a crisis command centre with a designated chief commander. The job of the chief commander is to form task forces and decide on the level of government involvement o setting up an information exchange platform to collect and integrate up-to-date information. Exchange and integration of information is the key to winning the war on an epidemic o Setting up of command centre infrastructure with cutting-edge technology equipment and an advanced communications network to relay, update and analyse crisis information for decision-making to increase the effectiveness of epidemic response and prevention

2 “Community Involvement in Health Care Financing: A Survey of the Literature on the Impacts, Strengths, and Weaknesses”, HNP Discussion Paper, World Bank, 2001.

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C.

Personalised Health Care

• In order to reduce healthcare cost and increase the quality of life, individuals and families must be made more responsible to take care of their own health. This can be done by implementing the Lifetime Healthcare Plan3 (first mooted in early 2000’s). The plan is intended to: o facilitate continuum of care for the lifetime o capture health data in state of wellness & illness and make available to healthcare providers o ensure patient focussed, continuous, coordinated, integrated care throughout life o create and maintain Lifetime Health Record o provide information and educate individuals to take care of their health o provide early treatment of illness • To empower individuals to take care of their health, the school curriculum should include a subject on personal healthcare management emphasising personal responsibilities. • Tax incentives can be provided for people to maintain a healthy life style (e.g. exercising and eating well) and penalised people for choosing an unhealthy life style (e.g. smoking and sedentary living). • To provide an institutional framework to ensure that genetic tests are accurate and valid to ensure the integrity of test results in determining the relationship between genetic elements, effective treatment, susceptibilities to diseases and health outcome. Without integrity in test results and determined relationships, the growth in knowledge and hence its application will be severely impeded. • To develop policies regarding access to and security of research findings. This is needed so that open-information access for researchers to accelerate discoveries, while at the same time rewards invention and innovation. Without proper policies on access, there may be little incentives for research efforts since the returns on investment in research cannot be secured by the owners. This must be balanced against the need to share knowledge to accelerate further research and innovation. • To establish electronic health records for every Malaysian citizen that will be able to facilitate research in genetics and to take advantage of advancement in such fields. Genomics require efficient, accurate and effective data storage and retrieval system for information access, both for research and treatments. 3 Tan Sri Dato’ Dr Abu Bakar Suleiman, Paper presented at the National Congress on Information Technology in Medicine: What Every Healthcare Professional Should Know, 5-7Aug, 2004.

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• To create a framework for privacy protection for genetic information, to avoid the anticipated negative effects on the lack of confidentiality and security of individuallyidentifiable health information. Without an appropriate framework (including legal), information can be abused and people discourage from participating in the programme that is essential for its success. • To develop health-information technology so that researchers can continue to discover scientific knowledge and to make the new knowledge available for patient care. D.

Active Ageing Policy

• Prevent and reduce the burden of disabilities, health problems and premature mortality. o This can be first done by setting measurable targets for improvements in health status among older people. o Give attention to improving the health status of the low-income and marginalised population groups to mitigate the onset of disease and disabilities in later life because of poverty, low literacy levels and lack of education. o Make screening services available and affordable to all people as they age. Provide cost-efficient treatments that reduce disabilities (such as cataract removal and hip replacements) more accessible to older people with low incomes. • Reduce risk factors for major diseases and increase factors that protect health. o Control the marketing and use of tobacco. o Promote healthy eating by developing culturally-appropriate, guidelines for people as they age. Support improved diets and healthy weights in older age. o Increase affordable access to essential safe medications among older people who need them but cannot afford them. • Provide training and education to caregivers. • Provide education and learning opportunities to the aged. o Enable the full participation of older people by providing programmes in education and training that support lifelong learning. o Recognise and support the contribution that older people make in unpaid work in the informal sector and in caregiving in the home. This may also include voluntary activities. • Ensure the protection, safety and dignity of older people by addressing the social, financial and physical security rights and needs of people as they age.

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o Support the provision of a social safety net for older people who are poor and alone, as well as social security initiatives that provide a steady and adequate stream of income during old age for people outside the formal economic sectors (e.g. hawkers and barbers). o Recognise elder abuse (physical, sexual, psychological, financial and neglect) and encourage the prosecution of offenders. Train law enforcement officers, health-care providers, spiritual leaders to recognise and deal with elder abuse. IV.

RESEARCH AND DEVELOPMENT

Below is a list of immediate priority areas for Research and Development. Community Nation-building Ethnic relations and culture from a comparative perspective Issues related to border communities Security and development Impacts of globalisation. Environment Food security and safety Public health Natural disasters Health Genetic technology Genomics, Gene therapy, Pharmaceuticals and neutraceuticals Nano technology.

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PRIORITY STRATEGIES 1. THE CREATION OF AN ENVIRONMENT THAT WOULD INVOKE THE FEELING OF ONE MALAYSIA STARTING WITH THE EDUCATION SYSTEM - All sekolah kebangsaan must have the infrastructure to cultivate a sense of belonging. This includes TRILINGUAL ABILITY FOR ALL FUTURE MALAYSIANS. 2. STRUCTURAL AND MENTAL PREPARATION OF ALL MALAYSIANS FOR AN EVOLVING MATURED DEMOCRACY- The leadership must rise above partisan politics to ensure the wellbeing of the people. 3. THE ROLE OF THE RULERS AND MAJLIS RAJA-RAJA - The need to recognise the Role of the Rulers as the ultimate platform for conflict resolution. 4. ENGAGEMENT WITH THE COMMUNITY: A strong commitment to engage with the community in solicitations of ideas, fostering inter-faith dialogues, and development planning. 5. CLIMATE CHANGE- The creation of an Institutional mechanism to manage Climate Change inclusive of clean renewable energy plan, and the management of sea level rise 6. FRESH WATER CONCERNS - The emphasis on a HOLISTIC AND INTEGRATED APPROACH to water-resource management 7. CREATIVE HEALTHCARE FINANCING: Setting-up of a Taskforce preferably outside the Ministry of Health to implement Personalised Healthcare system that would include increasing health awareness among the people and the creation of accessible health-care financing 8. DISASTER MANAGEMENT: The need for an Integrated Disaster Management Plan to be pro-active and also to be responsive to the outbreak of diseases and national calamities 9. NEW APPROACH TO ACTIVE AGEING: Setting-up of a Taskforce in the Ministry of Women, and Community Development to coordinate the Active Ageing Policy for all stakeholders 10. RESEARCH AND DEVELOPMENT: Continue and increase support for research and development, especially in the priority areas of Human Security such as National Resilience, Climate Change and Holistic Health Care.

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A CALL FOR ACTION The timeframe for Malaysia 2057 is only 50 years down the road. The present realities indicate that there are threats, risks and challenges that will be faced by Malaysians. As such, this document focusses on issues related to three dimensions of human security i.e. the community, the environment, and the health dimension. The ultimate goal is clear: ONE MALAYSIA. A respected Malaysian in One Malaysia can only survive in an environment that is sustainable and healthy. Thus, the presence of opportunity must be seized in rethinking and formulating plans to achieve the goals.

There are three goals to be achieved: 1. 2. 3.

The creation of ONE MALAYSIA Environmental Sustainability as a Basic Tenet Personalised Health Care for a Productive Malaysia POSSIBLE TAG LINES •

ONE MALAYSIA FOR ALL MALAYSIANS

ALL MALAYSIANS FOR ONE MALAYSIA

PREDICT THE UNPREDICTABLE

SELAMAT INSAN SEJAHTERA MALAYSIA

SELAMAT INSAN SEJAHTERA NEGARA

INSAN SEJAHTERA NEGARA MAKMUR

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DIMENSION 4

NATIONAL DEFENCE submitted by

Universiti Pertahanan Malaysia

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THEME 4: NATIONAL DEFENCE Introduction Malaysia, as a peace-loving nation, believes in promoting global and regional peace and stability. Our defence policy has always been closely linked with our foreign policy and diplomacy. The organisation of our armed forces is aimed at establishing balanced, flexible and self-reliant armed forces. It should be seen as a credible force, capable in defending the nation and at the same time able to act as a credible deterrent to would-be aggressors. Regionally, we should actively continue our military cooperation with our neighbours and other relevant parties to address common security issues and as part of regional confidence-building measures. Globally, we should continue to participate in global peacekeeping and disaster-relief operations as a means of enhancing our international profile. The formulation of our defence policy and the organisation of our defence posture will be determined by our threat perception. The characteristic of our defence policy will continue to be flexible, to be based on our prediction of the likely outcome of the current global, regional and domestic political, economic and social development. Currently, in the context of conventional security, there is no specific, clear or imminent threat to the security of the country. However, the developments in the recent past appear to point to certain areas of security which may require closer attention and possibly more serious in-depth analysis. Defence Issues In discussing defence issues, one cannot but realise that the current notion of security has now gone beyond the scope of military or traditional security. Traditional security issues such as threat from external aggression or internal unrest which are characterised by violence and armed conflict; both from state actors and non-state actors are security issues that could be handled by the military, either on its own or working with other national security agencies. The issue of non-traditional security, however, is more complex given the diversity of its dimensions - such as economic security, environmental security, energy security, and a host of other concerns. Given their importance, they may need to be addressed in the same manner that traditional security is being handled by the military. The military, in certain cases, may be called upon to provide assistance to the relevant civilian agencies whenever their expertise is required. Traditional security and non-traditional security issues are inter-connected as deterioration in any non-traditional security area could easily transform into a traditional security threat if it is not properly handled. 134

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1.

Traditional Security.

In the area of traditional security, the world will generally continue to be beleaguered by regional conflicts which could potentially escalate into full-scale wars and domestic conflicts that could potentially have spill over effects wich could adversely affect the neighbouring countries. The security situation in the Middle East, particularly the Israeli – Palestinian conflict will continue to dominate the world’s attention. The situation in Afghanistan and Iraq will also be closely monitored as the world is keen to see how Bush’s “war on terror” is going to be brought to its conclusion by President Obama. The threat of terrorism will also likely to continue to exist. Whether there will be an escalation or a reduction in the number of terrorist attacks world-wide will partly be determined by Obama Administration’s approach in dealing with the threat. The traditional global security scenario is likely to see the world facing a security environment that is swept by the following trends; 1) the increased participation of non-state actors, such as terrorist organisations and private military companies in conflicts and violence; 2) the inter-twining of traditional security problems with nontraditional security problems, such as the Darfur crisis in Sudan creating more complex and formidable challenges for the world community to solve; and 3) the increase victimisation of civilian populations in warfare such as what is happening in Palestine, Iraq and Afghanistan. In conventional conflicts, improvements in technology will see continuing arms race (nuclear and non-nuclear), both in terms of sophistication and number among the belligerent states. In non-conventional conflicts, asymmetrical warfare will likely be the order of the day. Increasing use and dependent of cyber technology will also see the emergence of cyber warfare as the fourth dimension in warfare. 2.

Non-traditional Security.

As pointed out by Kofi Annan, the former United Nations Secretary General, three major non-traditional security concerns that the world will have to come to terms with are the current economic down-turn, the effects of global warming and environmental degradation, and the depleting global oil reserves that threatens the world’s energy security.

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One of the repercussions of global the economic down-turn is the increase the of unemployment rate world-wide. This in turn will create a host of social problems in individual countries such as rising crime rates and other social unrest. The problem might spill over in the form of rising cross-border migration into neighbouring countries, thus expanding the dimension of the problem from domestic into a regional one. The effect of global warming is believed to have created an erratic meteorological pattern causing environmental disasters such as the tsunami and flooding at the scale and frequency unheard of before. The cost of disaster relief and post-disaster reconstruction and rehabilitation efforts may cause severe strain on the economies of the affected countries as well as potential donors. Social and economic problems that surface in the aftermath of the disaster will also likely impact the affected countries and will have indirect repercussions on traditional security. The recent “energy conflict” between Russia and its immediate neighbours may provide us with a sneak preview of what the scenario would be in the world where energy resources are scarce and countries are desperate for energy. This is another form of non-traditional conflict that could potentially escalate into an armed conflict. The world will also likely be besieged by other existing social and related problems such as the spread of HIV/AIDS, increasing drug abuse and other crimes, human rights violations and the spread of infectious diseases and epidemics that could, as a result of globalisation be triggered, spread and cause catastrophe in the proportion that has never been seen before. Action Plan The prognosis may sound pessimistic but, instead of being paralysed into inactivity, it would be prudent to appreciate the extent of the challenges faced and take the necessary remedial action. The change in the nature of threat faced by the country warrants specific action be taken to contain and neutralise the threat. 1.

The Role of the MAF

It is envisaged that the MAF will continue well into the 21st Century in its existing role as the main pillar of national defense. In its primary role it will be the main agency in defending the nation’s land, air and sea territories from external aggression and to protect the nation’s strategic interests both at home and overseas. In its secondary role, it will continue to assist the police and other government agencies in internal security efforts and in disaster relief and other similar operations. In support of Malaysia’s 136

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foreign-policy objectives it will continue to participate in overseas peace-keeping and in disaster-relief operations under the banner of the United Nations or other regional organisations. 2.

Monitoring the Global, Regional and Domestic Security

Malaysia may not be directly affected by the conflicts that currently are taking place in the Middle East. However, constant bombardment of news depicting violations of humanitarian principles by the Israeli government and the apparent tolerance shown to them by the US government may encourage certain factions of its population to adopt a more hostile and radical attitude towards the US and the West. This may potentially play into the hands of terrorist organisations that thrive in exploiting anti-American sentiment and the idea of “clash of civilisations” between Islam and the West in their recruitment effort. As for the regional security situation, Malaysia will be guided by ASEAN’s policy of noninterference with the domestic affairs of its member countries and ASEAN’s aspiration of the region being a Zone of Peace, Freedom and Neutrality. It will, however, continue to monitor the developments of all identified security potential flash points within the region and pre-empt any negative developments through diplomatic and other channels. On the domestic front, some non-traditional security issues may need to be carefully monitored. The current state of ethnic relations, the effects of global economic downturn, and the influx of illegal immigrants are some of the priority issues that have to be addressed. All these issues are potentially explosive and could turn into serious traditional security problems if they cannot be satisfactorily resolved. To nip these potential problems in the bud, close and systematic coordination between the military and the relevant civilian agencies may be required. 3.

The Adoption of the Total Defence Concept

The diversity of security issues the country has to contend with points to the fact that Malaysia’s security concern is multi-dimensional and not restricted to traditional security issues alone. These issues may overlap, be inter-connected or even in conflict with one another. They also may have long and short-term implications. As a result, a properly-planned and coordinated approach may be needed for the nation to effectively and efficiently deal with these issues. As defence and security is too serious and multifaceted an issue to be left to the military alone, the adoption of the Total Defence concept may be a solution worth considering. 137

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As a concept, Total Defence adopts a total and comprehensive approach to security. It deals with traditional military as well as non-traditional security issues, approached with a holistic view and handled in an even and objective manner. For Malaysia, the suggested five main “pillars” of security that will support the concept of Total Defence will be the pillars of Military Defence, Civil Defence, Economic Defence, Social Defence and Cultural Defence. As Total Defence concept involves the strengthening of the five identified pillars of defence, it requires the involvement of other government ministries that will support the pillars relevant to their functions. All these efforts will be complementary to each other and coordinated at the highest level. This will ensure that every effort made in the strengthening of national defence and resilience is known to all agencies concerned, thus avoiding redundancies in efforts and resources, or conflicting efforts or agendas which may result in inefficiency and waste. Total Defence is not a new concept. It has been successfully adopted by Singapore since the mid 1980’s. As for Malaysia, the concept was successfully applied in our effort to defeat the Communist insurgents since the first emergency in 1948 - but it was not openly declared and designated as such. The adoption of Total Defence concept by Malaysia will only involve the rejuvenation of the existing mechanisms which are already in place and the education of the Malaysian public on the need to adopt a positive and coordinated approach towards security. In Total Defence, the armed forces will continue with its currently-identified traditional roles, anticipating potential threats and challenges and be prepared for them. It will be the nation’s main pillar of defence focussing on national defence and traditional security. Other government departments will be specifically identified as the main agencies supporting pillars of defence relevant to their respective roles. The Ministry of Finance, the Ministry of International Trade, and the Ministry of Domestic Trade and Consumer Affairs for example will be tasked to be the main agencies involved in supporting the Economic Security pillar. They will be given specific tasks and functions and will have their efforts coordinated at national level. To ensure that every strategy adopted is understood and accurately carried out, similar but smaller duplicate coordinating bodies should also be established at state and district levels. This will create an organisation with a clear “chain of command”, efficiently coordinated and mutually supportive of one another.

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To achieve this, it is believed that the National Security Council (NSC) needs to be rejuvenated and be given a fresh lease of life. NSC has proven itself to be a successful organisation in that it was instrumental in the coordination of the nation’s effort in the defeat of Communist insurgency. Headed by the Prime Minister himself, it was “a cabinet within a cabinet” but with a much more focussed approach. It did not see a problem as just a problem to be solved but as security issue that needs to be effectively resolved, as it may affect the nation’s well-being and survival. This “war-like” approach in dealing with key issues and the fact that it was personally headed by the Prime Minister may have contributed to its efficiency and success. Total Defence requires understanding, broad participation and support from the general public. Toward this end, the incorporation of some educational process may be necessary as part of the overall implementation of Total Defence. The military in this respect could be entrusted with this task. Exploiting the resources available to the military, it can be employed as an institution of nation-building. The role of the military in nation-building has been tested and proven in the past. The British, prior to granting Malaya its independence, had correctly identified the potential that the military has in this area. Believing that military education and training could help mould a united and resilient multi-ethnic Malaya with leadership skills that would enable its graduates to lead the nation, the Royal Military College was established in 1952. Other efforts undertaken by the British include the formation of the multi-racial Federation Regiment and the selection of twelve multi-racial candidates for military training at Sandhurst as part of the plan to lay the foundation of leadership development in the post-independent Malayan Army. The employment of the military as an institution of nation-building should not be seen as an effort to militarise the country but rather as an effort towards the fostering national unity, instilling discipline and patriotism and, on the broader term, in the strengthening of national resilience. The military could also play a major role in the country’s leadershiptraining and professional-development programme given the fact that a large number of military personnel are trained and equipped with skills and knowledge that could be applied in the civil sector. In facing new and diverse security challenges of the 21st Century, it is suggested that the Total Defence Concept be adopted as a broad and comprehensive defence and security policy with the military being incorporated as one of the key national institutions for nation-building. The adoption of this concept will not in any way require changes in the existing government structure, save for the need to revive and the re-strengthening of the already existing National Security Council. It is hoped that this approach will 139

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enable the nation to formulate a more comprehensive and coordinated defence and security policy, and create a more resilient nation that is focussed and dynamic in its approach in ensuring its survival and development well into the future.

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DIMENSION 5

SABAH AND SARAWAK AFFAIRS submitted by

Universiti Malaysia Sabah Universiti Malaysia Sarawak

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THE SABAH CHAPTER 5.1

INTRODUCTION

Sabah is a Malaysian state that is located on the northern part of the island of Borneo. With a total land mass of 76,115 square kilometers, Sabah became Malaysia’s second largest state after Sarawak. Sabah shares its border with Sarawak on its South West and East Kalimantan of Indonesia in the South. Popularly termed as ‘Land below the Wind’, Sabah is unique in every sense of the word. Perhaps the most distinctive feature of Sabah is its ethnic diversity. Due to factors such as migration and mixed marriages, the profusion of Sabah’s ethnic groups went beyond simple ethnic classification. Nonetheless, the Sabahans are officially categorised into 32 ethics groups. The largest indigenous ethic group is Kadazandusun, followed by Bajau and Murut. The largest non-indigenous ethnic group is the Chinese. Diversity in ethnicity has in turn led to cultural and language diversity. With over 30 distinct ethnic groups, there are close to 100 dialects in Sabah. The richness of culture and art in Sabah is manifested in the differences between the traditional dress, dance, music and handicraft of the various ethnic communities. Each of these differences clearly portrays the identity of each ethic group. Blessed with natural wealth and scenic views, Sabah has become Malaysia’s top tourism asset. On the abundant land of Sabah, one can find numerous tourist wonders such as the highest peak in Southeast Asia, Mount Kinabalu, the largest flower in the world, the Rafflesia, the oldest rainforest at Danum Valley and the world’s only mushroom-shaped island-diving destination, Sipadan island. In addition, Sabah is famous for being one of the richest biodiversity sites in the world. The geographical feature of Sabah is profoundly unique such that it has been called the “Nature” of the world. Sabah also has a perennial problem of illegal immigrants. Due to close proximity with Indonesia and the Philippines, Sabah has been receiving immigrants, both documented and undocumented from both countries. Complex issues such as the status of IMM13 holder and the street children are the daily concern of most Sabahans. The porous border of Sabah has brought up another dimension of challenges, such as the incident of kidnapping, piracy and smuggling activities. Sabah was, and still is, also facing various overlapping territorial claims. Disputes over Ligitan dan Sipadan had been settled amicably but the ‘unfinished business’ of the Philippine claims over Sabah is far from being resolved. After the issue of Pedra Branca had been decided by the ICJ, Sabah became the only state in Malaysia to face an overlapping claim with a neighbouring country.

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The historical background of Sabah is also a situation of sui generis. Although rarely discussed, the inclusion of Sabah in the Federation of Malaysia is indeed an extraordinary scenario in the history of colonialism. When Malaya achieved its independence in 1957, Sabah (known as North Borneo at that time) has never shown any significant interest to become an independent entity. Remarkably, six years later, Malaya gained a massive addition of a territory formerly colonised by the same imperial power. The people of Sabah were convinced that it was in their best interest to abandon their colonial status by agreeing to become one of the founding territorial components of Malaysia together with Malaya, Sarawak, Brunei and Singapore. 5.2

ASPIRATION

Most Sabahans of at least 30 years of age would be able to recall the four major eras in Sabah’s political landscape, in the last 46 years of its independence. These eras are: USNO (1967-1976), BERJAYA (1976-1985), PBS (1985-1994), UMNO (1994–current), with an average of ten years of ruling for each era. What does this scenario indicate? In general, Sabahans are relatively sensitive about political development, and will freely declare their political leaning. It shows also that Sabahans are (still) in search for the ideal political platform that truly represents their interest in administration and politics. And, contemporary issues normally do have major impacts on pattern of voting and sentiment, whereas religion and ethnicity have never been the factor in politics until recently (post PBS). One of the most prominent issues that never fails to make a significant presence in the political mindset of Sabahan is the strong feeling that Sabah is not fairly treated as one of the founder states of Malaysia. People are questioning why Sabah is the poorest state in Malaysia, despite being dubbed as the second richest state in the 1970s, and despite the fact that Sabah is one of the richest states in natural resources, as well as having low-population densities. In other words, this set-up is naturally a desirable formula for prosperity. In reality, it could not be more ironic. Until 2009, Sabah’s roads are the main reason for shortening the life span of national cars. Despite its abundant water supply, most rural Sabah areas remain pipeless. While a black-out in the Peninsular will become news headlines, in Sabah, a single light bulb in rural dwelling can potentially become a major headline. The casual observer will regard political turmoil in Sabah as an indication for a neverending political crisis. However, a closer look on the ground, shows that the turmoil is actually an out-cry for a better deal in terms of treatment as one of the founders in forming Malaysia, or at least equivalent to whatever Sabah’s contribution to Malaysian development has been.

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5.3

PRIORITY ISSUES

The unique features of Sabah and its rich historical and cultural facets have naturally generated many issues of interest. There are various symptoms observed on the ground. However, the major ones are concerning: (1) the growing security threat, (2) the persistent (chronic) poverty, (3) the never-ending federalism polemic and state governance. Each of these is a problem as well as an opportunity. The problemsolving process would open doors for opportunity. DIMENSIONS OF ISSUES

FEDERLISM & GOVERNANCE

POVERTY

SECURITY

ISSUES

SYMPTOMS ON THE GROUND

Economic & Finances

Social & Welfare

Maritime Security

Human Security

National Defence

X

X

Overlapping Claim

X

Migration

X

Incidence of Poverty

X

X

Sustainable Tourism

X

X

Accessibility

X

Basic Infrastructure

X

Rural Education

X

Political Autonomy

X

Unity and Integration

X

Downstream Industry

X

Natural Resources

X

X

X

Land Matters

X

X

Outdated Law

X

X

Heritage Management

X

X

Naming of Local Entities

X

Reinterpretation of History

X

Maritime Security in the East Coast of Sabah Maritime security is becoming the most vital part of national security. In the case of Sabah, security threats mainly came through its east coast, rather than from within the mainland. Between 2000 and 2005, a number of kidnappings and other trans-border crimes (i.e. piracy, smuggling and illegal immigrants) were recorded. Such incidents did 146

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not only pose security threats to our country and people, but also to foreign nationals. Hence, several countries have issued travel advisories to their citizens not to visit the east coast of Sabah. Although the number of cases have dropped due to tight security measures undertaken by various agencies such as the army, police, navy and Malaysian Maritime Enforcement Agency (MMEA), the perceived threats remain and such perception should not be taken for granted. Overlapping Claims The Spratlys Islands have become a disputed region where six governments (China, the Philippines, Vietnam, Taiwan, Malaysia and Brunei) strive to occupy the areas which are believed to be surrounded by rich fishing grounds and hydrocarbons. Malaysia’s claim is based on the fact that the islands are part of its continental shelf (which is stipulated in UNCLOS III 1982). Nevertheless, the strength of Malaysia’s claim, if it is based on the continental shelf principle alone, is viewed to be unconvincing. Hence, efforts need to be done to strengthen Malaysia’s argument before the overlapping claims be brought before the ICJ. Migration The number of foreign workers and illegal immigrants in Sabah is estimated to be more than one million, which exceeds one-third of its population. In some districts, (i.e. Kinabatangan), outsiders have even outnumbered the local people. Their imminent presence has been associated with various socio-cultural problems: stateless children, slum settlements, prostitution, money syndicates and crimes. They are also involved in non-conventional crime such as forgery of identification cards and birth certificates. By claiming that they are ‘local’, the immigrants had taken advantage over locals who do not possess proper identification documents. In addition, there are also some allegations of corruption and abuse of power of ‘Penghulus’ and ‘Ketua Kampung’ who supported their citizenship application. As the presence of illegal immigrants had led to various inter-related concerns, the issue at hand needs to be urgently addressed.

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Incidence of Poverty Poverty, which has long been a major issue in Sabah, needs to be addressed urgently. Poverty and hardcore poverty incidence in Sabah were 23% and 6.5% respectively in 2004. The incidence of poverty and hardcore poverty has been successfully reduced to 16% and 3.7% respectively in 2007. However, this level of poverty is still far above the national average. Overall Poverty (%) 2004 2007

Hardcore Poverty (%) 2004 2007

Malaysia

5.7

3.6

1.2

0.7

Peninsular Malaysia

3.6

2.3

0.7

0.3

23.0

16.0

6.5

3.7

7.5

4.2

1.1

0.7

Sabah Sarawak

Exclusion is one of the most revealing causes of poverty in Sabah. It is more obvious in the rural areas where accessibility and infrastructure utilities are still inadequate. Incidence of poverty in Sabah is also related to the culture and tradition of rural communities. Villagers tend to be fatalistic about their vulnerability, thus the need to rely on government subsidy is perceived as the only solution. Low educational achievement reduces the chances of employability. Thus, the poor rural community continues to participate in low productive economic activities. The lack of participation by the rural community in decision-making targeted at them also contributes to the failure of some policies. Sustainable Tourism Sabah’s tourism industry has undergone tremendous growth over the last decade. The industry is largely driven by the private sector. It is therefore necessary that key supporting services be upgraded, particularly the availability of sound infrastructure, skilled human resources and public security in order to attract private-sector investment. Infrastructure support, especially utility services such as water supply, electricity and waste disposal, is currently limited. Potential new tourist sites such as the coastal areas along Tuaran-Kota Belud-Kudat and Kuala Penyu have limited access to water and electricity. Another glaring problem faced by the industry is the government delivery system. The planning processes are often very lengthy and this leads to bureaucracy and unnecessary delays.

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Accessibility Sabah’s development depends on the ability to enhance its hard infrastructure (roads, ports, electricity, water and data connectivity), and soft infrastructure (human capital). Transport infrastructure needs to be upgraded in order to enable good transportation services for the tourism, agriculture and manufacturing industries. One key issue in Sabah is lack of connectivity. Poor road conditions e.g. gravel roads, inhibits the development of industry as transportation of goods, such as local agricultural and manufactured products, is constrained due to the duration of transportation and lack of accessibility to onward transport. To further develop the interior region, a road networks linking East to West and North to South must be developed and improved. Basic Infrastructure Sabah’s current electricity coverage is 67% of the population (SDC, 2007). As it is, Sabah’s electricity network is not as reliable as that in other parts of Malaysia since current-distribution network is not strong and requires reinforcement. Supply of electricity to rural areas is a challenge because of geographic factors and lack of infrastructure. This causes implementation difficulty and is very expensive. Other than that, land access is an additional hindrance to implementation of unitary power stations. Water supply to rural areas remains a major issue. Owing to lack of infrastructure and water sources, building water pipes and treatment plants in remote rural areas is prohibitively expensive. Rural Education There are approximately 1271 schools in the rural areas of Sabah. Out of the total number, there are 882 primary schools and 120 secondary schools. The number of students in those schools is approximately 484,466 students with 34,733 teachers. The main concerns of rural education in Sabah are as follows; teaching professionalism, the management of the schools, infrastructure and basic facilities, implementation of Teaching Maths and Science in English, limited knowledge, awareness in nutrition and poverty. Political Autonomy The relations between Sabah and Kuala Lumpur (especially in the governanceadministrative aspect) are often masked with political tussle. It is clouded by various issues, ranging from the dissatisfaction among Sabahans of the state of Sabah’s socioeconomy, to the disagreement in terms of political autonomy. More often than not, this situation develops tension and unhealthy relations between state-federal governments. The question is: how to unlock this so-called cul-de-sac political polemic

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between Sabah-Kuala Lumpur, without jeopordising the spirit of Malaysia Federation as a united political entity?

Unity and National Integration These national issues are too often understood from the perspective that mainly focusses on the problem of ethnic relations between the Malays and the non-Malays, rooted in the socio-political history of Peninsular Malaysia. This trend continues even after the formation of Malaysia, and therefore fails to clearly understand the complexity and the nature of ethnic relations in Sabah. This unique state needs a more encompassing, and not just a generic formula, for national integration. Ethnic relations in Sabah are mainly about the relations among the indigenous native groups, and as such are very different from the nature of ethnic relations between the Malays and the non-Malay immigrants in the Peninsular. During the pre-Malaysia era, the nature of ethnic relations in Sabah is more harmonious, as compared to the fragmented Malay and Non-Malay relations in Malaya, due to the ‘divide-and-rule’ colonial policies. Downstream Industry Oil palm currently takes up to 1,231,584 hectares or almost 90% of all agricultural land. This makes Sabah the single largest contributor to the Malaysian palm oil industry with 29.8% of all Malaysian oil palm plantations located here. About 30% of the national CPO (crude palm oil) production is produced in Sabah, nonetheless, there is minimal palm oil downstream activities in the state. Private sector involvement is crucial to ensure the development of manufacturing industries, particularly downstream activities such as oleo-chemicals. Natural Resources Forest resources in Sabah have been depleted through uncontrolled timber exploitation over the last 30 years, and more recently through large-scale conversion to other uses, particularly oil palm plantations. It is pertinent to address this problem in order to sustain domestic wood-based processing industries as well as to balance the outflow of foreign exchange from the state. Logs are still being exported rather than used for local manufacturing of value-added products. Scarcity of good raw material for processing has deterred, or discouraged, investors from investing in processing activities. As such, very few processing mills are currently found in Sabah. In fact, many foreign-owned mills have since closed down due to insufficient raw materials for processing.

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Land Matters Land matters in Sabah are largely governed by The Sabah Land Ordinance (Cap.68) 1930 and Land (Subsidiary Title) Enactment 1972. Under The Sabah Land Ordinance 1930 (SLO), land is registered under various categories, NT for Native Titles, FR for Field Register, CL for Country Lease and PL for Provisional Lease. Such categorisation is deemed to protect the interest of Sabah natives as NT and FR can only be solely owned by them whereas CL or PL can be owned by other than Sabah natives such as a non-Sabah native but Malaysian, foreigners, government agencies and others for a maximum period of 99 years. However, the rights of Sabah Natives over NT and FR are not absolute as those titles can be acquired by the government in lieu of cash based on the government’s valuation of the land and crops on the land. Outdated Laws Sijil Anak Negeri: It is high time to revamp the procedures in relation to the issuance of the Sijil Anak Negeri. Leaving the verification of native status on children from mixed marriages to officials under the Local Government and Housing Ministry, instead of a committee, will invite bribery, malpractice and abuse as happened previously (forgeries and fake Sijil Anak Negeri). The issuance of the Sijil Anak Negeri was frozen by the Government in 1982 (but later was withdrawn in December 2005) due to these problems. Sabah Labour Ordinance (Cap 67): The recent 2005 amendment has overlooked the needs to protect employees who are being terminated. Termination benefits are given out of employers’ discretionary powers, as SLO does nor have a similar regulation as provided in the Employment Act 1955, i.e. Employment (Termination and Lay Off Benefits) Regulations 1980. The 1980 Regulation provides for compensation to be awarded to the employees based on their length of service. National Heritage Management Sabah heritage management is facing numerous obstacles in preserving, protecting and conserving the state archaeological and historical features. This situation leads to a phenomenon what is known as heritage vandalism. Wreck site raider, looted artifacts, treasure hunting and illicit antique trade have caused Sabah to lose millions of Ringgit, and have affected its tourism industry. There are overlapping jurisdiction between the state and federal heritage management laws as stipulated in Antiquities and Treasure Trove Enactment 1977 and the National Heritage Act 2005. Lack of serious enforcement to counter illicit activities and shortage of research or rescue funding are the major causes that perpetuate unethical conduct of heritage vandalism.

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Naming of Local Entities The process of naming places, buildings, halls, roads, islands, historical places and others has to reflect local images and identity. The naming of such places, locations, roads, islands, historical places and others that are based on western influence should therefore be avoided. Meanwhile, the existing local names should be retained. This move is important to instill the spirit of nationalism amongst the society so as to familiarise them with the names that refer to the local and national iconic identities (e.g. Pak Musa Hall in Beaufort, Taman Tunku Abdul Rahman, Pantai Tanjung Aru, Kampung Tamparuli, Kampung Serusop). This could be one of the means to promote tourism based on sociocultural and historical values. Reinterpretation of Sabah History The writing of Sabah history should be based on local-centric rather than westernbiased and other influences such as sources for Sulu and Brunei. Sabah has to be seen as a unique entity that has long existed and stands on its own. This task is deemed as a priority because it would help to increase the number of local historical writings as an academic source by using local sources without relying entirely on foreign sources. This in turn would help to instill the spirit of nationalism among the society. 1.4

ACTION PLAN

SECURITY • The government must expedite its declaration of the country’s maritime basepoint (which is not indicated in the 1979 Peta Baru) and submit it to the United Nations. The government must also continue and intensify its exercise of authority in those claimed islands. Intensive historical research must be initiated to discover evidences about the area in order to strengthen and support the country’s claim, rather than relying much on the continental shelf principle. • The government needs to beef-up Sabah’s maritime security, especially the waters off Sabah’s east coast as the coastal security of the State is becoming more important. It is therefore necessary to increase the number of highspeed motorboats and sophisticated facilities in order to equip the security forces to contain such threats. • It is necessary to speed up the installation of radar system (announced by the government in 2008), which would enable the security forces in Sabah to act faster and efficiently in cases of untoward incidents. • It also demands political will by the government to tackle the issue of illegal migrants once and for all. An initiative must be taken to clarify their status, whether to maintain or send them back to their (parent) country of origin. Jabatan Pendaftaran Negara

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should also work (extra) in order to get all locals to have proper documentation. • The regional cooperation of BMP-EAGA could be used as an alternative to resolve the problems of human resources, as well as to smoothen and legalise labour mobility within the region (Borneo-Mindanao). UNITY AND NATIONAL INTEGRATION • Measures taken to safeguard the inherited unity and tolerance among the various ethnic groups in Sabah, by prohibiting any political process that may create prejudice, discrimination and unequal treatment among the natives (e.g. between native Muslims and native Christians). • Just treatment among all natives in Peninsular Malaysia, Sabah and Sarawak – i.e. appropriate recognition given to the local cultural traditions and their contribution in forming Malaysia. In specific, a formal endorsement of the Kaamatan/Gawai festivals as the official public holiday at federal level, and making Hari Malaysia (16 September) as important a celebration as 31 August is. POVERTY AND EDUCATION • Efforts to address the problem of poverty in Sabah should deal with the relevant variables related to poverty in specific areas. Strategies and policies to uplift the living standard of the poor should be oriented towards the root causes of poverty, not just its symptoms. Strategies should be specifically directed at expanding economic and commercial activities, and facilitating access to the opportunities (by improving basic amenities and infrastructures). • The allocation of RM9 billion for rural education need to be evenly distributed in a transparent manner. This is to ensure basic facilities and infrastructure is upgraded to the desired level. Currently, the basic facilities and infrastructure are seriously lacking. • Sabah Development Corridor and the implementation of Ninth Malaysia Plan should be carried out in the manner that would contribute to the improvement of education in the rural areas of Sabah. • The implementation of Teaching Mathematics and Science in English (PPSMI) at the schools in rural areas should be reassessed, particularly on competency of the teachers and the readiness of the pupils. The unqualified teachers should be upgraded to ensure teachers are assigned to teach in the areas of their expertise. The PPSMI teachers should be selected accordingly and PPSMI-related courses and ICT courses should be attended by the PPSMI teachers. • The content of the syllabus, the teaching aids and examination questions should be designed to incorporate ‘local content’ as the environment of the rural and urban areas are completely different. It also important to carry out awareness programmes on food nutrition.

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LAWS AND LOCAL RIGHTS • There is a crucial need to observe strict procedures in the issuance of Sijil Anak Negeri where the applicant has to undergo strict verification process to determine that he or she has Anak Negeri blood inherited from his or her forefathers. The verification should be made by a committee instead by only by officials under the Local Government and Housing Ministry, which consists of several Ketua Anak Negeri as well as the officers in charge under the Ministry. • The content of the law with regards to termination benefits in Peninsular Malaysia and Sabah need to be synchronised. • Cut down the delay in processing application of land title. The delay is due to lengthy procedure. • The practice of community-mapping should be considered as an alternative. In the absence of necessary documentation, District Office or the Land Survey Department should conduct an open Inquiry to verify claims made by the natives or whenever overlapping claims were to arise. NATURAL RESOURCES AND FORESTRY • Since forestry is a land matter under the jurisdiction of the state, it should be best left for the locals to manage it. Issues associated with land, financing, incentives and technical issues need to be addressed by relevant authorities. Special consideration for low rent and premium on land for forest plantation would encourage further participation of private sectors, and intensify forest resource development. • Besides managing the forest area, the companies appointed by Sabah Forestry Department should be also allowed to extract, and trade the logs. SFMLA holders must invest in building the capacity to manage existing forest resources sustainably, while incorporating the environmental and social needs of local communities. NATIONAL HERITAGE • State enactment should be the only legal instrument to be utilised in regulating matters relating to activities in preserving, protecting and conserving the state archaeological and historical features. • The Sabah State Museum should be given jurisdiction and prerogative to collaborate with other national securities agencies to confront illegal activities. • Federal funding should be increased for the research and rescue projects, particularly for valuable wreck sites, without concession policy on any recovered artifacts; • Ethical heritage commercialisation practices would lead to sustainable management of ‘archaeological and historical-based tourism’, which in turn would promote the significance of heritage through education and public campaign.

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• Legislate a set of laws that regulates the naming procedures of any entities deemed as national heritage, and to enhance awareness on the significance of national heritage through seminars and conferences and prolific history/cultural writing.

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Sarawak - COUNTRY PROFILE Geography Sarawak, situated on the island of Borneo, is one of two Malaysian states along with Sabah comprising what is referred to as East Malaysia. Sarawak is the country’s largest state, occupying a land area of 124,449.51 square km; some 37.5% of the country’s total land mass. Sarawak is separated from West – or Peninsula – Malaysia by a 600km stretch of the South China Sea. The state borders the independent sultanate of Brunei and the state of Sabah on the northeast, and the Indonesian state of Kalimantan on the south. Internally, the Batang Rajang, Malaysia’s longest river, flows through the entire state and provides the focal point for population dwellings. Sarawak is divided into three distinct terrain groups: the coastal plain dominated by wet swamp lands, the hilly interior that is most suited to habitation, and the northern highlands. Sarawak’s highest point is Mount Gunung Murut (2434 m). The state is famous worldwide for its tropical rain forests and diverse plant and animal species. Sarawak has a tropical climate with temperatures relatively consistent throughout the year ranging from 23C to 32C. The wettest months are November through to February, with rainfall varying by area. Recent History From the 18th through to the early 19th century, Sarawak was a governed territory under the sultanate of Brunei. Although the sultanate controlled maritime trade and much of the coast, its authority was weak inland. When James Brooke, an English trader and adventurer, arrived in the 1840s much of the state was in chaos and decline and rebellion was afoot. Brooke had use of a gunboat and accepted the sultan’s request for assistance in suppressing the revolt in exchange for a portion of the territory. Brooke was eventually appointed king, or “Rajah” of Sarawak in 1842, ruling the territory until his death in 1868. He passed on rule to his nephew, who then passed rule onto his son, and so continued the Brooke Dynasty for the next 100 years to come. The “White Rajahs” as they were called, greatly expanded the territory and although the Rajahs were British citizens, Sarawak was not formally a British colony and the Brookes followed their own policy of paternalism, aimed at protecting the indigenous population against exploitation and also encouraged the immigration of Chinese merchants. In 1941, the Japanese occupied the island of Borneo, and ruled the area for the duration of World War II. The area was captured by Australian armed forces in 1945, and the Rajah family forcibly ceded sovereignty to British rule on July 1, 1946. Many 156

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Malays opposed the termination of Brooke rule and Sarawak’s cession to Britain, and the resulting sociopolitical divisions persisted for years. Sarawak lasted as a British colony until 1963, when Britain granted independence to Malaysia. Sarawak along with Sabah were included as autonomous states within the new federation of Malaysia. In 1963, Datuk Stephen Kalong Ningkan was appointed the state’s first Chief Minister. The current Chief Minister is Pehin Sri Dr. Haji Abdul Taib bin Mahmud, who has held that position since 1981. Government and Politics Sarawak’s Chief Minister, who heads a cabinet of ministers, is appointed by the state’s Governor from among members of the state’s legislative council. Sarawak is divided into 11 administrative centres, with Kuching serving as the seat of government. On joining the federation of Malaysia in 1963, there were 18 points incorporated into the country’s constitution related to Sarawak’s special status as an autonomous state. The highlights of these include separate immigration control, Islam’s status as a national religion being not applicable and the state’s indigenous peoples enjoying the same “special” rights given to the Malay community in West Malaysia. Sarawak, along with Sabah, also has its own special section in the Federal Constitution. Particular highlights are special declarations towards native customary rights, such as The Land Code of Sarawak and the Forest Ordinance which govern the indigenous peoples and their land rights. Also unique to Sarawak is that the state government has created the posts of Federal Secretary and Federal Financial Officer. The main duties of the secretary are to coordinate and carry out administrative duties of government departments and public corporations in the state. The secretary is also responsible for strengthening relations between the federal and state governments. The financial officer is responsible to the ministry of finance in carrying out financial duties such as examining the budgets of federal agencies in Sarawak. The objective of establishing the office is to expedite the decision making process, without having to consult headquarters in Kuala Lumpur. Population With a population of approximately 2.4m, Sarawak is the least densely populated of Malaysia’s 13 states. Home to 28 culturally distinct ethnic groups, it is also considered the country’s most ethnically diverse state, and is unique in that there is no single ethnic majority. The Iban, who are mostly agrarian and practice a form of Christianity mixed with traditional beliefs and rituals, comprise the largest ethnic group with approximately 30% of the population. The Chinese are next with some 27% of the population, followed by the Malays (23%).

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The cities and towns are home to the largest proportion of Chinese, Malays, and Melanaus, while an increasing number of indigenous peoples have migrated to urban areas from their villages for employment reasons. The administrative capital is Kuching, which has a population of approximately 600,000. Other major cities and towns include Sibu (pop. 250,000), Miri (pop. 263,000) and Bintulu (pop. 176,800). The Chinese and Malays also disproportionately constitute the majority of representatives in business and government participation. Sarawakians speak a variety of languages, though Malay and English are the most commonly used in the business and political arena. There is also an equal variety of religions practiced, including Islam, Christianity, Chinese folk religion (a fusion of Buddhism, Taoism, Confucianism and ancestor worship), Bahá’i and animism. Many of the indigenous converts to Christianity continue to practice traditional ceremonies. Economy Sarawak is considered underdeveloped relative to Peninsular Malaysia, with an economy that has traditionally been resource based, in particular on oil and gas, timber and palm oil. The Malaysian government’s Vision 2020 calls for all Malaysian states to attain developed nation status by the year 2020 and Sarawak has set out its own blueprint to transform itself into a manufacturing and eventually knowledgebased economy. Under the leadership of Chief Minister Pehin Sri Dr. Haji Abdul Taib bin Mahmud, who also serves as the state’s minister of finance, the state has looked to diversify and industrialise its economy since the 1980s. At that time, Sarawak had a poverty rate of 40%, and with a concerted programme of government spending on infrastructure and rural development, has closed the gap to 7.5%. Manufacturing and high-tech industries now account for an increasing proportion of economic output and the state government has identified manufacturing, agriculture, construction and the service sectors as areas of future growth. With a large availability of competitively priced land and an abundance of cheap renewable energy potential, Sarawak is looking to position itself as an attractive option for manufacturing-based investment. In February 2008, the state launched the Sarawak Corridor of Renewable Energy (SCORE). The objective of SCORE is to lift the population’s standard of living through the optimal utilisation of natural energy resources to develop and attract energy-intensive industries to the region. SCORE is also set to intensify the development of infrastructure, utilities and social amenities and contribute towards greater growth and development of the state’s economy as a whole. The plan will run until 2030, with the aim of creating 1.5m jobs and reaching a per capita Gross Domestic product (GDP) growth of 5.5% per annum. It also intends to decrease the state’s poverty rate to 1%, down from the current 7.5%. The corridor, which covers 70,000 square km stretching across the centre of the state, has potential energy resources that could total as much as 20,000 MW of hydropower, 158

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1.46bn tonnes of coal, and 40 trn sq cubic ft of natural gas. The development of this power will be overseen by Sarawak Energy Berhad, the state’s utility company. The 2400 MW Bakun Dam, scheduled for completion in 2010, is expected to emerge as the second-largest hydroelectric complex in the world outside of China’s Yangtze Three Gorges Dam. And the state plans to develop another 2710 MW in hydroelectric capacity by 2013 through the Murum (990MW), Balleh (950MW), and Pelagas (770MW) dams, which are all located in the upper reaches of the Batang Rejang. Overall, the corridor blueprint calls for $104.5bn in capital investment over 23 years, of which $62.5bn is required for the establishment of energy-intensive and related industries and $21bn to develop energy resources, including the construction of hydropower dams and coal-fired power stations. Additionally, $19bn will be directed to the funding of infrastructure projects, while $1.9bn will be dedicated to human capital development. In terms of sourcing, 15% of the overall investment will be undertaken by the federal government, 4% by the state government, 23% by government-linked companies (GLC), and the rest by local and foreign private investors. Interest in the corridor has already been shown, with a number of local, national, and international companies coming on board. The project making the most global headlines involves Anglo-Australian mining company Rio Tinto, which has advanced its plans for a power-supply agreement with Sarawak Energy to source up to 1200MW of power from the Bakun Dam for a $2bn aluminum smelter with an eventual capacity of 1.5m tonnes. The smelter will be a joint venture with Cahya Mata Sarawak, the state’s leading conglomerate and architects of the entire Simalajau Development - an industrial city that along with the smelter will house other heavy industries such as oil & gas, aluminium, steel and silica, and eventually a deep water port. Another major venture involves Malaysian conglomerate Sime Darby, which is set to undertake the implementation of the 2400 MW Bakun hydroelectric power plant and the construction of a dual submarine cable linked to Peninsular Malaysia valued at RM22bn ($6.87bn). Also making headlines is a consortium that includes RHB Islamic Bank, Bahrainbased Unicorn Investment Bank, Asian Finance Bank and Kuwait Finance House, which are joining up with Sarawak Energy to set up an Islamic energy fund that could finance between RM3bn and RM20bn worth of investment projects. Islamic banks in Malaysia are seeking to channel Middle East investments into Asian projects that are sharia-compliant and the consortium believes that energy has strong potential since Gulf investors are now looking to diversify into opportunities other than real estate, the sector that has thus far attracted the bulk of investment in the region.

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ENHANCING INFRASTRUCTURE DEVELOPMENT IN SABAH AND SARAWAK: TRANSPORTATION, RURAL DEVELOPMENT AND INFORMATION COMMUNICATION TECHNOLOGY (ICT)

Faculty of Engineering University Malaysia Sarawak (UNIMAS)

By Professor Dr Wan Hashim Wan Ibrahim (Dean, Faculty of Engineering) Dr Mohd Ibrahim Safawi Mohd Zain (Head, Quality Assurance Division, UNIMAS) Dr Al-Khalid Haji Othman (Deputy Dean, Undergraduate & Student Development and Fellow - Center of Excellence for Rural Informatics (CoERI), UNIMAS)

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HEALTH, SAFETY & ENVIRONMENT Medical facility – Available at town centre. Emergency respond time is longer due to accessibility. Disease control – There is not much of preventative measure taken/briefed. Asset protection – Non-effective fire prevention system, no prevention from flood or land slide.

NATURAL RESOURCES Physical Development – Not suitable types of sand, gravel but very good quality of “kayu bakau” and woods. Water – Salty water source on coastal area. The potential ground water source can be gained prior to further geological resistivity survey. Minerals – Gained mostly from plants.

INFRASTRUCTURE Logistic – Land access, boats, and helicopter. Link Roads - land access to nearby developed area and within villages Water Supply – by rain harvesting for villages and supplied by government Electricity – Diesel generator in most rural area and grid power in small town. Telecommunication – intermittent private cellular networks available in some rural areas. ICT – Not all rural areas have the facilities of ICT for both Sabah and Sarawak.

FOCUS STRATEGY TOWARDS ENHANCING INFRASTRUCTURE DEVELOPMENT

EDUCATION Schools – Primary schools with boarding facility is available Pre-Schools – Most of rural area do not have pre-schools. However, there are few of preschool in rural developed by NGO. Teaching materials – Basic tools with non availability of ICT facilities.

GEOLOGY AND HYDROLOGY High water tablein the coastal rural areas - Drainage & irrigation problems Rivers connected to open sea – sediment movement & erosion is likely to happen Soil type – Swampy peat soils

CULTURE, BELIEF & RELIGION Ethnics –Sarawak - Iban, Melanau, Malays,Orang Ulu, Bidayuh etc. Sabah – Kadazan Dusun, Bajau Murut etc. ReligionFacility - Church, Mosque, Temple Nationality – Statistic of registration for both Sabah and Sarawak can be gained from JPN.

SOCIO ECONOMY Agriculture – Paddy, local fruits. Fisherman – Unreliable source of income due to threat of geological erosion and large scale of the industry Employment – Younger generation mostly working at nearby industry i.e.: sawmills, fishing. Tools – Traditional method is practiced.

Figure 1 161

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u

1.0

Introduction

Rural development is the improvement in overall rural community’s conditions, including economic and other quality of life considerations such as the environment, health, infrastructure, housing and transportation. It has been the core focus of the Malaysian economic policies since her independence in 1957. This report provides the needs and benefits of enhancing the infrastructure development for Sabah and Sarawak thus request this enhancement as a top priority where as: •• to eradicate poverty; •• to ensure a balanced development between urban and rural areas; •• to improve the equality of life of the rural population; and •• to establish and strengthen the rural urban linkages between the rural locality and the neighboring towns; Figure 1 shows the different aspects of focus strategies to enhance the infrastructure development in both Sarawak and Sabah. 2.0

Reasons Why the Government Should Give Top Priority to Enhance Infrastructure Development for Sabah and Sarawak

The enhancement of infrastructure development in rural areas such as in Sabah and Sarawak is very difficult to implement because of the large and hilly areas with widely scattered communities. Other factors that contribute to the above difficulties are poor transportation, power and communication facilities. Furthermore, there are non-availability of skilled labor and experts in order to execute the infrastructure development in such areas. Although the cost of developing infrastructure in rural areas is expensive, the Government should make it their top priority for the benefits of rural communities thus contribute to balance development between the rural and urban areas. 2.1 Needs and Benefits of Transportation System Economic activities in rural areas in Sabah and Sarawak demand better transportation infrastructures for accessibility and mobility. These include transportation network whereby airports, seaports, highways and roads that helps to form vital social and economic connections. This is especially true in rural areas where distance and scattered population make these connections even more important. For example, Sabah and Sarawak commodities including timber, fuel, and agricultural products must be transported from rural to urban areas where they are consumed, processed, or sent out of the state or country. New transportation network in the newly developed corridors such as SCORE are really required to attract more multinational companies to set up their business within the Corridors. The availability of extensive transportation

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network within the newly developed corridors will improve accessibility and mobility within the region and thus help those in rural areas to get direct benefits from such developments. Infrastructure development in transportations such as improving existing major junctions, building new roads, widening existing roads, putting in new interchanges, or constructing bridges can result in various benefits for rural areas. These benefits include improved access to services and jobs for rural communities, better access to customers for businesses, and reduced transportation costs. Rural transportation also essential for connecting people to jobs, health care, and family in a way that enhances their quality of life. Traffic growths for land base transportation in both Sarawak and Sabah states are very high annually as shown in Table 1 and Table 2, respectively. The availability of extensive transportation infrastructures will improve economic potentials of rural areas and improve environmental effect of urban areas. Other potential benefits include reductions in travel time for motorists, lower vehicle operating costs, safety and environmental gains, and cost savings for local consumers as goods and services become more competitively priced. If an improved transportation network leads to growth for an area’s economic base, it may also bring higher wages for workers and greater net income for owners of local businesses. Another important economic development can benefits from the transportation infrastructure development is supporting tourism development. In Sarawak, the number of visitors is very high i.e. 4.1 million visitors for the year 2006 and 5.2 million visitors for the year 2007. The improve transportation system in both states will facilitate further growth in tourism industry as visitors are attracted to visit the states with an improved transportation network. The rural transportation system also plays a central role in each state’s tourism industry, connecting visitors to urban areas and to key attractions, including state and national parks. Tourism and the service industry are becoming increasingly important to many rural areas in Sabah and Sarawak and this trend is forecasted to continue in the future. In summary, the improvement of transportation network in both states will certainly generate significant local economic benefits. Table 1: 16-Hour Traffic Volume along Major roads in Sarawak (Source: Highway Planning Unit, 2005) Route No.

Route Description

2001

2002

2003

2004

2005

Growth Rate (%)

SR102

Bau-Kuching

6711

5629

6148

8057

7698

6.84

SR107

Kuching-ByPass

67592

63933

61412

74886

75630

3.31

SR108

Kota Semarahan-Kch

9191

10037

11487

19831

20075

13.01

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Table 2: 16-Hour Traffic Volume along Major roads in Sabah (Sources: Highway Planning Unit, 2005) Route No. HR101 HR209 HR203

2.2

Route Description BeufortSindumin Kota KinabaluSindumin Kota-KinabaluSelipok-Tuaran

2001

2002

2003

2004

2005

Growth Rate (%)

2689

3856

4077

4902

5802

11.18

4246

4532

6368

6876

6609

8.16

20380

19129

18997

25030

26684

0.76

Needs and Benefits of Enhancing Physical Infrastructure Development for Sabah and Sarawak Rural Areas

Electricity In Sabah and Sarawak, the regional electricity grid allows distribution of electricity only some part of rural areas in the states. However, there are some rural areas (not in the Rural Electrification Schemes (RES) development) that do not have proper electricity supply [1]. The current electrification in these rural areas is based on diesel generator. With a problem of logistic, cost and other factors, diesel powered electrification becoming non-realistic approach. Therefore, the Government should either extend the grid electricity (which is very expensive in implementation), or looking for other alternative or renewable energy, such as solar PV system, hydro power and biomass. With this infrastructure development, the Government will be able to achieve the target of 80% of the rural areas to have the benefits of electricity by 2020. These infrastructure developments will bring a new era of better schools, ICT facilities and health services thus improved quality of life in the rural areas. Rural electrification expansion also will be able to speed up the other development activities in the areas. Many new infrastructure development NGOs and human development bodies (e.g. Sarawak Education Development Awareness - S.E.D.A.R) are willing to extend their activities in remote rural areas to help government’s efforts at poverty alleviation, human development and awareness. Clean and Treated Water Supply Most of rural areas in Sabah and Sarawak still do not have a cleaned and treated water supply. These rural communities obtain their water from water well system, rain harvesting or water supplied by the Government which is stored in a storage tank provided [1]. The cleaned and treated water supply by the Government is based on time scheduling and this can only last for few days or weeks. In the event of water ration shortage during dry season, rural communities used other resources for water that are available in their area. The lack of cleaned and treated water for domestic and personal hygiene leads to increase number of illness due to diseases such as diseases of the eyes, skin and intestine in Sabah and Sarawak. Therefore, the sanitation facilities 164

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or sanitation programs should be concentrated in these areas in order to reduce the incidence of water related diseases or intoxication associated with poor water quality and poor sanitation. Education The infrastructure developments such as ICT, transportation and schools (additional new buildings, old buildings being replaced, 24 hours electricity, clean water, teaching equipments, and number and capacity of classrooms) are the priority for the Ministry of Education to improve educational divide between the schools in rural and urban areas [2]. These high impact projects have been implemented in the first four years of the Ninth Malaysian Plan (9MP) which was announced on the 31st March 2006. However, the enrolment rates and achievements in education as reported in [3] are lower in rural areas especially in Sabah & Sarawak (particularly among indigenous communities of these two states) as compared to Orang Asli in West Malaysia. The literacy rates for rural areas in Sabah and Sarawak is also low, at 79% and 72% respectively. In order to solve the problems stated, the government should set-up more pre-school (5-6 age of group) classes with computer facilities and rehabilitation classes with 3M (read, write and count) capabilities. With these educational facilities in rural areas, the dropout rates in rural schools could be reduced from 1.2 percent to less than 1.0 percent at the primary level and from 16.7 percent to less than 1.0 percent at the secondary level. In order to provide knowledgeable, skilled and technical human capital among rural communities (with different level of education) requires training centers with qualified teachers or instructors. This is to prepare and equip the rural communities to compete and engage positively with modern technology. Therefore, the support for educational infrastructures in rural areas especially in Sabah and Sarawak should be given top priority for the balanced development and for the country’s achievement of developed nation status, as laid out in Vision 2020. It is hoped that the education awareness of the rural students in both states will further improve and the absentee rates can be reduced further and the number of good teachers serving the rural areas will increase. Health, Safety and Environment The rural communities depend greatly on government health services and klinik desa which either do not charge or charge with very nominal fees. However, most of the rural areas in Sabah and Sarawak still do not have these medical facilities and also disease control unit. Therefore, the communities have to take boat rides or use land access to the nearest health services to seek for medical treatments. The Government should also explore the “Medical Informatics Centers� approach to facilitate availability of logistics during emergency situations and a better management of rural healthcare. This has been a major factor contributing to our favorable health indices which are almost at par with those of richer industrialized nations. 165

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Telecommunication Due to the large areas and hilly terrain of both Sabah and Sarawak with widely scattered communities means two things in implementing telecommunication services in rural areas; i.e. higher cost and service deterioration. The higher costs of telecommunications infrastructure implementation in rural areas using cable network or lease line such as copper, fiber and cable will slow the development. To achieve high quality of services (QoS) in telecommunication in such areas requires special treatment in order to reduce the service deterioration. The problems with installation and maintenance of these cable networks have prompted the widespread use of wireless systems in rural areas. In particular, many rural private operators such as TM, MAXIS, and etc. are deploying Very Small Aperture Terminus (VSATs) and point to multipoint terrestrial radio systems integrated with wireless local loop systems. These facilities will benefits other developments such as ICT infrastructure and contribute to the realization of Wawasan 2020 where 90% of rural areas in Malaysia will be connected to the modern and sophisticated telecommunications network. The expansion and development of telecommunications services are important for the growth of the industrial and service sectors especially in the S.C.O.R.E. areas. 1.3

Needs and Benefits of Enhancing ICT Infrastructure Development for Sabah and Sarawak Rural Areas

The nature and scope of information required by the rural communities varies considerably to meet their needs. These include the students, school leavers, government employees and elderly peoples. The development of ICT infrastructures for rural areas in Malaysia such as Medan Info Desa (MID), Pusat Internet Desa (PID), Universal Services Provider (USP), E-Desa, e-Bario, DAGS Roll Out and Bridging Digital Divide (BDD) are the initiatives from Malaysian Government (Ministry, Department and Agencies) and private sectors to bridge the digital divide among rural and urban communities. The rural communities must be IT literate and understand the functions of the technology which will enable them to apply the technology to improve their livelihood. Even though, there are initiatives from the ministry, department and agencies on development of ICT in rural areas but the distribution of the development are not equally implemented as a result of low in number of ICT infrastructure in Sabah with 290 i.e. 14.9% and Sarawak with 376 i.e. 19.3% out of total 1, 945 ICT projects. Therefore, ICT infrastructures should be given as top priority in the future development for both states. Table 3 shows the number of ICT development in Sabah and Sarawak until 2007 [Economic Planning Unit (EPU), Putra Jaya]. There are several important ICT applications that can benefit rural communities such as educational, agricultural development, medical, government and business information system and multilingual.

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Table 3: ICT in Sarawak and Sabah SABAH ICT Project

Ministry/Department/Agency

No. of ICT 8

E-Desa SUK Sabah

SUK Sabah

Pusat Maklumat Rakyat

Jabatan Penerangan Sarawak

22

Medan Infodesa (MID)

KKLBW

9

Pusat Internet Desa (PID)

KTAK

3

USP2 (MAXIS)

MCMC

28

USP3 (TM)

MCMC

151

USP4 (TM)

MCMC

5

USP5 (MAXIS)

MCMC

33

Pusat Perkhidmatan dan Ilmu Komuniti (PPIK)

KTAK

27

Bridging Digital Divide (BDD)

KPKT

1

Program Komuniti Usahawan Digital (PKUD)

MARA

3

TOTAL

290 SARAWAK

ICT Project

Ministry/Department/Agency

No. of ICT

Pusat Sumber Elektronik (ERC) SUK Sarawak

SUK Sarawak

12

E-Bario DAGS

Projek DAGS

1

Pusat Maklumat Rakyat (PMR)

Jabatan Penerangan Sarawak

11

Medan Infodesa (MID)

KKLBW

10

Pusat Internet Desa (PID)

KTAK

4

USP2 (MAXIS)

MCMC

30

USP3 (TM)

MCMC

169

USP4 (TM)

MCMC

40

USP5 (MAXIS)

MCMC

51

Pusat Perkhidmatan dan Ilmu Komuniti (PPIK)

KTAK

35

Program Komuniti Usahawan Digital (PKUD)

MARA

2

SUK

SUK Sarawak

11

TOTAL

376

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Quality and Access to Education ICT infrastructure development in schools or telecenters can enhance the quality and effectiveness of education in rural areas by enabling accesses to online instructional materials and educational resources. Through the available technologies and programs such as digital television, video conferencing, educational websites and distance learning can be of efficient and cost-effective approaches to reach remote students. This development hopefully will increase the education level or knowledge among the communities in Sabah and Sarawak rural areas. Agricultural Development ICT is able to assist farmers in rural areas in implementing modern farming techniques and increase their exposure to competition outside their markets. E-Governance (Paradigm Shifter) The federal and state Government agencies can make use of ICT to deliver services to rural communities. Health and Wellness ICT is commonly used to disseminate public health messages and techniques for prevention of diseases, such as HIV. This is also to facilitate remote medical consultation, diagnosis and treatment. Disaster Mitigation and Response ICT can help the Governments, international agencies and NGOs to monitor and respond to natural disasters, thereby able of reducing casualties from these events. Environmental Monitoring and Resource Management ICT can be use to collect, process and disseminate information between distributed locations. This can enable a better understanding of complex cross-border issues such as climate change and biodiversity, and help to monitor ecological conditions so that prevention and mitigation measures can be activated. Preservation of Cultural and Indigenous Knowledge ICT can be a tool for recording and preserving indigenous populations’ culture and traditions, and for educating the rest of the world about the importance of protecting indigenous values and ways of life. 168

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3.0 CONCLUSION From the experiences and observations, rural communities in both states of Sabah and Sarawak were very anxious and motivated with the development programs implemented by the Government. This has been shown in the successful implementation of ICT programme by the ministry, department, agencies, and private sectors. REFERENCES [1] [2] [3] [4]

A.K Othman, A.M. Awang Mohamad, R. Bujang, K. Abdul Kadir, H. Kung, “Prelimenary Study on Kampung Muara Payang and Kampung Sebayang, Tanjung Manis, Sarawak: Socio Economic Aspect and Alternative Energy Options�, Public Report, 23 April 2008. Rosliwaty Ramly, Bringing impact to rural education in Malaysia, 24 October 2006 BERNAMA. Literacy and Education in Malaysia: Key Actions, Fact Sheet, Education is a Human Right, UNICEF Malaysia Communications, 15 Aug 2008 The National Telecommunication Policy of Malaysia (1994 - 2020) By Malaysia Government.

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The Need to provide Scholarships for Students from Sarawak and Sabah by Peter Songan & Spencer Empading Sangging One of the thrust of national mission is to raise the capacity for knowledge and innovation and nurture “first class mentality.” The other is to address persistent socio-economic inequalities constructively and to improve the standard and sustainability of quality of life. In response to the national mission, the state government of Sarawak and Sabah developed their own development strategies to support the national thrusts. Two of the development strategies are (1) to speed up growth and enhance the quality of life in the rural areas; and (2) to raise the standard of the states’ human capital and R & D capability. The vastness of the rural areas of Sarawak and Sabah represents great opportunities available to develop both states. The rural areas are naturally the development focus of both states to quickly spread the benefits of development to their people, as well as to bring about renewed growth in traditional sectors. Human capital is a vital and most important asset of a nation, and therefore, effort must be intensified in raising the individual capabilities of the people in both states so that they can become knowledge and skill workers who can work locally as well globally. One of the major programs to raise the standard of the states’ human capital and to enhance the quality of life of people in the rural areas in both states includes the provision of educational facilities to the rural communities. In Sarawak, for example, there are 1269 primary schools and 187 secondary schools. Many of these schools are located in the rural areas of Sarawak where facilities and infrastructures are lacking behind when compared to those found in the urban areas. Schools which are located in the more remote areas have their own problems as well. The performance of these schools, in terms of passing rate (SPM and STPM alike), when compared to most urban schools in Sarawak are significantly lower. Similarly, the number of school dropouts is also higher amongst rural schools. One of the main reasons for such phenomena is poverty. The causes of poverty are many, of which the major ones are remoteness, poor education, and low productivity due to limited access to productive resources. Sarawak and Sabah are among the few states which record a substantially high rate of incidence of poverty. Although the incidence of poverty on the average is 5.7% in Malaysia in 2004 (Ninth Malaysia Plan, 2006: Table 16.1), pockets of poverty continue to exist among the Bumiputra in general and the Bumiputra Minorities of Sarawak and Sabah. For example, in Sarawak, the incidence of poverty is still high among its Bumiputra communities, particularly the Bumiputra Minorities, which is a loosely-defined ethnic category that includes the Iban, Bidayuh, Melanau, and Orang Ulu (Kayan, Kenyah, Kelabit, Tagal, Ukit, Penan, Lun Bawang and Lahanan). In 2002, about 36.4% of Iban, 33% of Melanau, and 28% of Other Bumiputra as compared to 16.5% of Malays and 4.3% of Chinese are still living below the official poverty 170

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line (Madeline, Faridah Shahadan & Salfrina Abdul Gapor, 2006). The incidence of poverty in terms of average income of the rural communities in Sarawak and Sabah is higher than that of the urban population. As such, efforts to upgrade the human capital particularly among the needy (poor families) will be hampered unless relevant and specific strategies are developed to deal with the situation. The cost of living in Sarawak and Sabah is also higher than in West Malaysia. As such, the poverty line index (PLI) for both Sabah and Sarawak is significantly higher. This means that with the same amount of income, families in Sarawak and Sabah can afford less compared to their counterparts from West Malaysia. In terms of transportation and communication, many parts of rural Sarawak and Sabah are still inaccessible by roads. For example, in Sarawak, places like Bario Highland, Upper Kapit and Baram areas, and some other rural regions are not accessible by road. The cost of transportation is higher in these areas, because airplane and boats have to be used to get there. For example, in most parts of Kapit and Miri division, the main mode of transportation remains by river. Not only it is expensive but sometimes inconvenience. As such, students who intent to pursue their higher education may face a lot of financial difficulties as they have to pay more, and given the fact that many of the rural families are poor, some of these potential students may decide to forgo higher education. Such a situation will continue unless actions are taken to address it. To improve the quality of life in the rural areas of Sarawak and Sabah to bring it at par with that of other areas in Malaysia, efforts must be made to assist the students from the rural schools to pursue higher education, be it in public or private higher institutions. Improving the level of education among the rural poor will help to alleviate poverty. For example, a study shows that the generally observed positive relation between earnings and higher education in Malaysia extends around the threshold of poverty (Mok, Gan & Sanyal, 2007). It implies that with increasing level of education, families in the rural areas will be able to increase their family income. Therefore, it is imperative that the government comes up with a special scholarship scheme to assist poor families from poverty stricken rural areas of Sarawak and Sabah to have the opportunity for their children to further their studies. This scholarship scheme is considered one of the efforts by the government to bridge the socioeconomic gap between East and West Malaysia.

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References Madaline Berma, Faridah Shahadan, & Salfarina Abdul Gapor. (2006). Alleviating Bumiputra poverty in Sarawak: Reflections and proposal. Paper presented at the Malaysian Research Group 4th International Conference, 19-21 June 2006, Salford, England. Malaysia. (2006). Ninth Malaysia Plan, 2006-2010. Kuala Lumpur: Government Printers. Mok, T. Y.; Gan, C.; & Sanyal, A. (2007). The determinants of urban household poverty in Malaysia. (Report). Journal of Social Sciences, Oct 01, 2007. Science Publications.

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The Need for Sabah and Sarawak to Establish Pusat Asasi Sains

INTRODUCTION Pusat Asasi Sains offers specific design bridging pre-university programmes to prepare students with the right qualifications for admission to the university. Such foundation programmes play a very significant role as a feeder of student admission to the degree programmes of a university. Universiti Malaysia Sarawak (UNIMAS) and Universiti Malaysia Sabah (UMS) are the only two full-fledged Public Institutions of Higher Learning in East Malaysia. Both institutions used to conduct their own foundation programmes from 1994-1999 for the purpose as mentioned above as well as to provide more opportunity for students from impoverished families of the rural and remote communities in Sabah and Sarawak to continue their higher education. Currently, for foundation studies, students from Sabah and Sarawak are centred at the Ministry of Education’s Matriculation Centre, located on the island of Labuan. However, this is not readily accessible (logistically and financially) to most students, particularly from the remote communities from all over Sabah and Sarawak. In addition to that, at the apex of our national higher education system, UNIMAS and UMS, likewise other IPTAs in Semenanjung Malaysia, have equally important roles to play in providing sufficient human capital to meet the demand of our nation’s economic growth, development and challenges. The reestablishment of Pusat Asasi Sains will ensure that both universities will not lag behind other IPTAs, particularly in preparing quality pre-university students for their degree programmes, and eventually supplying sufficient quality human capital for the nation. In light of these, it is legitimate that UMS in Sabah and UNIMAS in Sarawak be given a chance to reestablish their own Pusat Asasi Sains. JUSTIFICATION The following are details of the justifications: 1. Students from Sabah and Sarawak have to go thus far to get access to foundation courses e.g. the Ministry of Education’s Matriculation Centre in Labuan, Science Foundation Centre in University Malaya, Matriculation Centre of the International Islamic University in Petaling Jaya and in Pahang. 2. UNIMAS and UMS being geographically isolated from Semenanjung Malaysia has not been able to compete with other Malaysian Public Institutions of Higher Learning for student enrolment, both quantitatively and qualitatively by virtue of

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their being considered remote relative to those in the peninsular where most of which are more attractively and strategically located. With the reestablishment of Pusat Asasi at both UMS and UNIMAS, it is anticipated that these two IPTAs will not lag behind other IPTAs , particularly in the core business of student admission. 3. Students for the science foundation programmes can be recruited from all over Malaysia with priority given to students from Sabah and Sarawak. Thus, this opportunity will further increase the availability of places for students from this part of the country to study locally especially for good students from the rural and remote areas of Sarawak. Simultaneously, more qualified bumiputera students specializing in science and technology from both Sabah and Sarawak will have the opportunity to study in UNIMAS and UMS. 4. The physical infrastructure (including science laboratories and equipments) in UMS and UNIMAS as well as academic staff are ready to cater for the establishment of Pusat Asasi Sains in both UMS and UNIMAS. 5. Pusat Asasi Sains in both UMS and UNIMAS can also cater for a pre-university programme for international students from overseas as well as neighboring countries, prior to admission to the degree programmes at both universities, thus enhancing the admission of international students to both universities. 6. Promotion of national integration and regional integration: Once established, Pusat Asasi Sains in UNIMAS and UMS would be an excellent ground to promote national integration between Sabah and Sarawak and Semenamjung Malaysia. Taking students from all over Malaysia serve well for a case of national integration. At the same time, regional integration can be enhanced by offering places for students from the other member ASEAN countries.

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Modernization of agriculture is important since both states strive to improve the lifestyle and to reduce the socio-economic gap. Introduction Agriculture is the sector with the most urgent need for modernization in Sabah & Sarawak. Majority of Sabah & Sarawak populations depend on agriculture production especially for rural population. Currently agriculture remains as the main way of making a living for most of them, either as pure subsistence farmers or with a little semi-commercial farming. Majority of this group of population are categorized as poor people and they are faced with many constraints that keep them poor. Most of them lack of knowledge and skills for modern farming; lack of financial support and information on financial support; lack of knowledge of agriculture commercialization processes and not using the right method. Therefore the yields are not up to optimum. One of the ways to speed up the income gap is to help this group of people to increase the income through agriculture modernization. The Government has initiated and given out a lot of incentives but mostly are not reached to the group mentioned above. It has mainly benefited the big companies only. Although some of the agencies have been helping the farmers, the result is still far away from the target. Why Modernization of Agriculture is important in Sabah & Sarawak? The only way to improve the current situation is through modernization of agriculture in this region and to encourage commercialization. This will result in many people being able to earn more incomes to meet other needs, improve their lifestyle, create more jobs in rural areas and use natural resources sustainably. In this region, we are provided with plenty of land, good weather and people. Government will need to focus more on professional agricultural advisory services, health services, good access infrastructure, and access to improve the farming process through the use of technology, good storage methods, processing and marketing avenues. At the end of the day, socio-economic gap can be reduced by: •

Increase in income because of the rise in productivity

Increase in the share of agriculture that can be marketed

Creation of many on-farm and off-farm jobs related to agriculture

How the Government Can Help? • Encourage more agricultural research and technology development especially focusing on the subsistence farmers. • Rural finance especially to simplified and loosen the procedure for rural population • Physical Infrastructure that will support the efforts to modernize agriculture. • Improving the marketing Network and Infrastructure 175

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INSPIRING AND INCULCATING SOCIAL UNDERSTANDING AND INTEGRATION THROUGH THE ESTABLISHMENT OF AN INDEPENDENT TELEVISION CHANNEL CALLED “YOUR PATRIOTIC CHANNEL”@ RTM 3? The Background Every year on 31st of August, Malaysians celebrate its National Day. Many of us look forward to this day for all the reasons we have. The older generations may have their eyes well up when they recall how someone they know had sacrificed his life for the sake of building a nation. Others celebrate in appreciation of peace and harmony we have in our country and many love this day as it is a public holiday! Yes, how many of today’s young Malaysians really know what they are celebrating for? They are living complacently in a world where violence, social problems and lack of respect for each other taking precedence over racial unity, patriotism and priority. As concerned citizens, we need to turn this alarming trend and that part of the solution lies in the hand of the government in power. We must not just educate our youths “to know” and “to do”, we must also educate them “to be” and “to live” together. We must emphasize on a program that recognizes values such as peace, love, respect, tolerance, cooperation and freedom and a program where these values are cherished as these are the sustaining force of human society and progress. What children and youths learn is later woven into the fabric of society. Therefore, this proposed program must have positive values at its heart and the resulting expression of them as its aim if we are to seek to create a united Malaysia for all. Electronic Media and the Society With vast development in technology today, no one can dispute the fact that dissemination of information as well as rumours or unreliable news can easily be distributed in no time. With the presence of blogs, bloggers could easily spread their information and propaganda almost instantly, be it for positive or negative intention. To the public, in particular youths with lack of understanding and lesser sense of patriotism, all these negative information could easily be absorbed, creating an unfavourable and inconducive situation in many instances. Recent street protest and violence clearly witnessed that majority of these protesters are mere followers who are ignorant of the evolution of this country – the pain, the struggle, the sacrifice made and the compromise set upon by our forefathers.

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An Independent Television Channel? Having said about how the electronic media in particular, the blogs which play significant role in today’s communication scenario, isn’t it timely for Radio Television Malaysia, (RTM) or any other broadcasting company to establish an independent channel? RTM in particular should move forward and take the lead in promoting greater understanding of what it takes to build this nation through broadcasting media. It is essential to provide guiding principles and tools for the development of Malaysia and Malaysian youths in particular through the establishment of one specific channel called “Your Patriotic Channel” @RTM 3? The Rationale We have so far witnessed the power of youths in determining political climate of a country. Therefore, our youths particularly, those who are eligible to vote, if not given educate understanding and continuous reminders of all efforts taken, will always end up making wrong decision in determining what is right and what is not, due to their inability in understanding the struggle and hardship set-forth by our forefathers. This is because to some of them, voting is just another game to play without really understanding the consequences to whatever decision they have made. Hence, the time has come for us to find ways and means to inculcate and instill the value and the importance of political stability of a country. There are many ways to educate our youths. However, learning history in school or attending talks and seminars might not be that attractive anymore as they might not get the chance to see and feel the struggle and effort in building this nation. Visual presentation on the other hand is always a preferred medium as seeing is believing! Therefore, the establishment of a specific channel devoted to inculcating patriotism and fostering better understanding amongst multiracial citizens is seen as worth all efforts. Proposed content of the program: (Your Patriotic Channel @RTM 3) Being patriotic politically is very important as this will stabilize our nation but it is equally important on the other hand to instill the understanding of multiple cultures in a complex setting of multiracial nation such as Malaysia as this will help to strengthen the mutual respect and high tolerance among the different races and beliefs. Sarawak alone has many tribes and ethnic groups that need to be bonded. Regret to mention that not many West Malaysians are aware of the existence of these ethnic groups. They probably know most of the more common groups such as Iban, and Bidayuh, but not groups such as Bisayah, Lun Bawang or Punan. Similarly, in terms of heroic contributions and sacrifice made to this nation, not many Malaysians are aware about the local warriors/patriots of Sarawak and their invaluable contributions towards the development of enhancing the stability of this nation.

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Based on these facts, many existing or new materials can easily be accommodated into this proposed channel. Among others are: 1. Existing film documentaries from the archives about Malaysia and its political struggle can be aired repeatedly. 2. Cultural performances/traditions/ethics and values from various ethnic groups. 3. Talk shows on various topics relating to human development and nation building. 4. Excerpts of speeches from former and current leaders which help to inspire youths. 5. Popular patriotic songs and patriotic songs retrieved from various competitions. 6. Patriotic based films and dramas. 7. Sit coms and comedies with patriotic content. 8. Documentaries on the process of traditional crafts and its relationship to various ethnic groups such as the symbolic meaning of Keris to the Malays. 9. Biography of Malaysian great leaders/patriots. 10. Documentaries on the evolution of Malaya and Malaysia. 11. Pronouncement on the meaning of Rukun Negara and the understanding of Federal Constitutions and their implication towards the building of Malaysia. 12. Documentaries on the roles of Parliament and Dewan Negara. 13. Documentaries on the transformation of Malaysia and the transmigration of its citizens. 14. Live interviews with Malaysian prominent figures. 15. National Service Activities – documentaries and live interviews/talk shows. 16. PERMATA activities – documentaries and live interviews/talk shows. With vast choices of subject matters, this channel will serve as a value-based atmosphere in providing a philosophy of living in a multiracial society, facilitating on the youths’ overall growth development and choices so they may integrate themselves into the community with respect, confidence and purpose.

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Closing Remark It is indeed a pleasure to witness year after year the national broadcasting agency which always devotes its effort to air documentaries/talks and seminars during the merdeka month. However, issue such as patriotism is something that needs to be reminded and developed continuously. We can model after community channels in The U.S., The Discovery Channel, History Channel or even Animal Planet and National Geography to name a few. They have created great impact on their viewers and proven to be very viable across ages and gender. Despite being aired repeatedly, their success in educating and nurturing people to appreciate history, nature and the world we live in is indisputable. Parallel to that, this proposed channel is also able to give a better dimension of Malaysia and this will help to deepen the understanding about what Malaysia is to foreigners who might not have sufficient knowledge on the complex society of Malaysia. Perhaps this channel can also be assimilated as part of our effort in promoting Malaysia as a tourist destination besides being a catalyst to attract researches and tourists in obtaining reliable sources of information on Malaysia, at least at the fundamental level.

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COMMITTEE MEMBERS MAIN COMMITTEE Chairman:

Members:

Y.Bhg. Prof. Dato’ Ir. Dr. Radin Umar bin Radin Sohadi Director General, Department of Higher Education Y.Bhg. Prof. Dato’ Dr. Sharifah Hapsah Syed Hassan Shahabudin (Vice Chancellor - UKM) Y.Bhg. Prof. Dato’ Dr. Sulaiman bin Md. Yassin (Vice Chancellor -UMT) Y.Bhg. Prof. Datuk Dr. Nik Mustapha Raja Abdullah (Vice Chancellor - UPM) Y.Bhg. Prof. Dato’ Seri Dr. Syed Arabi Idid (Rector - UIAM) Y.Bhg. Prof. Dr. Khairuddin Ab Hamid (Vice Chancellor - Unimas) Y.Bhg. Prof. Datuk Dr. Kamaruzzaman Ampon (Vice Chancellor - UMS) Y.Bhg. Lt. Jen. Dato’ Pahlawan Hj Zulkifli bin Zainal Abidin (Vice Chancellor - UPNM) Y.Bhg. Prof. Dr. Che Wan Ahmad Zawawi Ibrahim (Representative - UM) Y.Bhg. Prof. Dr. Omar bin Osman (Representative - USM) Y.Bhg. Dato’ Seri Prof. Dr. Ibrahim Abu Shah (Vice Chancellor - UiTM) Y.Bhg. Prof. Ir. Dr. Mohd Azraai Kasim (Representative - UTM) Tan Sri Dato’ Dr. Nordin Kardi (Vice Chancellor - UUM) Y.Bhg. Prof. Dr. Aminah binti Ayob (Vice Chancellor - UPSI) Y.Bhg. Prof. Datuk Dr. Mohd Noh bin Dalimin (Vice Chancellor - UTHM) Y.Bhg. Brig. Jen. Prof. Dato’ Dr. Kamarudin bin Husin (Vice Chancellor - Unimap) Y.Bhg. Prof. Dato’ Dr. Daing Mohd Nasir bin Daing Ibrahim (Vice Chancellor - UMP)

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Y.Bhg. Dato’ Prof. Dr. Abdul Shukor b. Hj. Husin (Vice Chancellor - USIM) Y.Bhg. Prof. Dr. Ahmad Yusoff bin Hassan (Vice Chancellor - UTeM) Y.Bhg. Prof. Dato’ Dr. Alias bin Daud (Vice Chancellor - UDM) Y.Bhg. Prof. Dr. Zainai bin Mohamed (Vice Chancellor - UMK) MINISTRY OF HIGHER EDUCATION Members:

Dr. Siti Aishah bt Baharum Puan Noor Khalidah bt Md. Khalid En. Baharuddin bin Tahir En. Jamalulail bin Abu Bakar Puan Rosma Wati bt Tahir

Secretariat:

Cik Noorahayu bt Yahya Puan Norfarah bt Ghazali

DRAFTING COMMITTEE: UNIVERSITI MALAYSIA TERENGGANU Chairman:

Y.Bhg. Prof. Dato’ Dr. Sulaiman bin Md Yassin

Members:

Prof. Dr. Shukery bin Mohamed Prof. Dr. Nik Hashim bin Nik Mustapha Prof. Dr. Ibrahim bin Mamat Assoc. Prof. Dr. Nik Fuad bin Nik Mohd Kamil Dr. Noraien bt Mansor

Secretariat:

To’ Puan Wan Hafsah bt Wan Mohamad Puan Wan Sarimah bt Wan Razak Puan Noor Suhaila bt Mat Hassan Puan Mazlina bt Abd Aziz En. Mohd Fadli bin Abdullah HUMAN SECURITY: UNIVERSITI KEBANGSAAN MALAYSIA

Chairman:

Y.Bhg. Prof. Dato’ Dr. Sharifah Hapsah Syed Hassan Shahabudin

Members:

Prof. Dr. Nor Ghani Md Nor Prof. Madya Dr. Rashila Ramli Dr. Sharifah Munirah Syed Hussein Alatas

Researchers:

Prof. Ir. Dr. Hassan Basri

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Prof. Dr. Saran Kaur Gill Prof. Dr. Mohd. Fauzi Mohd. Jani Prof. Dr. Sharifah Mastura Syed Abdullah Prof. Dr. Zakaria Stapa Prof. Dr. Abdul Latif Samian Prof. Dr. Mazlin Mokhtar Prof. Dr. Burhanuddin Yeop Majlis Prof. Dr. A. Rahman A. Jamal Prof. Dr. Normah Mohd. Noor Prof. Ir. Dr. Riza Atiq Abdullah O.K Rahmat Prof. Dr. Rahmah Mohamed Prof. Dato’ Dr. Mohd. Yusof Hj. Othman Prof. Tham Siew Yean Prof. Dato’ Dr. Abdul Rahman Embong Datin Paduka Halimahton Saadiah Hashim Prof. Dato’ Dr. Md. Ikram Mohd. Said Prof. Dato’ Dr. Sharifah Zaleha Syed Hassan Prof. Dato’ Dr. Denison Jayasooria Prof. Dr. Mansor Mohd. Noor Prof. Dr. Joy Jacqueline Pereira Prof. Dr. Rozhan Othman Prof. Dr. Muhammad Fauzi Hj. Mohd. Zain Prof. Dr. Salmaan Hussain Inayat-Hussain Assoc. Prof. Dr. Kalaivani Nadarajah Assoc. Prof. Dr. Hazita Azman Dr. Ismail Mohd. Saibon Prof. Dr. Tajudin Fredolin Tanggang Prof. Dr. Kamaruzzaman Sopian Secretariat:

Pn. Padlon Hj. Yahya ECONOMICS AND FINANCE: UNIVERSITI PUTRA MALAYSIA

Chairman:

Y.Bhg. Prof. Datuk Dr. Nik Mustapha Raja Abdullah

Members:

Prof. Dr. Ahmad Zubaidi Baharumshah Prof. Dato’ Dr. Mansor Md. Isa Prof. Dr. Fatimah Mohamed Arshad Prof. Dr. Abdul Ghafar Ismail Prof. Dr. Chandra Muzaffar Prof. Dr. Annuar Md Nassir

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Prof. Dr. Shamsher Mohamad Prof. Dr. Nik Hashim Nik Mustapha SOCIAL AND WELFARE: UNIVERSITI ISLAM ANTARABANGSA MALAYSIA Chairman:

Prof. Dato’ Seri Dr. Syed Arabi Idid

Coordinator:

Assoc. Prof. Dr. Hazizan bin Md. Noon

Group Heads:

Prof. Dr. Rosnani Hashim (Education) Prof. Dr. Abdel Aziz Berghout (Race, Religion, Culture & Values) Assoc. Prof. Dr. Khaliq Ahmad (Socio-economics) Dr. Tunku Mohar Tunku Mokhtar (Public Safety)

Members:

Prof. Dr. Siti Normala Sheikh Obid (Economics) Prof. Mohamad Sahari Nordin (Education) Prof. Dr. Noraini Mohd. Noor (Psychology) Prof. Dr. Ahmad Ibrahim Abu Shouk (History & Civilization) Prof. Dr. Ahamed Kameel Mydin Meera (Economics)

External Consultants:

Assoc. Prof. Dr. M. Ariff Zakaullah (Economics) Prof. Dr. Shukery bin Mohamed (UMT) Prof. Dr. Che Wan Ahmad Zawawi Ibrahim (UM) Assoc. Prof. Dr. Sity Daud (UKM) Prof. Dr. Ahmad Farhan Sadullah (MIROS)

NATIONAL DEFENSE: UNIVERSITI PERTAHANAN NASIONAL MALAYSIA Chairman:

Y.Bhg. Lt. Jen. Dato’ Pahlawan Hj Zulkifli bin Zainal Abidin

Members:

Assoc. Prof. Lt.Kol (B) Ahmad Ghazali bin Abu Hassan

SABAH AND SARAWAK AFFAIRS: UNIVERSITI MALAYSIA SABAH & UNIVERSITI MALAYSIA SARAWAK

UNIVERSITI MALAYSIA SARAWAK Chairman:

Y.Bhg. Prof. Dr. Khairuddin Ab Hamid

Members:

Prof. Dr. Peter Songan Prof. Dr. Fatimah Abang Assoc. Prof. Mohamad Fadzil Abdul Rahman Prof. Dr. Wan Hashim Wan Ibrahim Assoc. Prof. Dr. Spencer Empading Sanggin Dr. Sharen Ahmad Zaidi Adruce Dr. Mohd Ibrahim Safawi Mohd Zain Prof. Dr. Wang Yin Chai 183

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SABAH: UNIVERSITI MALAYSIA SABAH Chairman:

Y.Bhg. Prof. Datuk Dr. Kamaruzzaman Ampon

Members:

Prof. Dr. Amran Ahmed Prof. Dr. Rosnah Ismail Prof. Dr. Sabihah Osman Assoc. Prof. Dr. Asmady Idris

Researchers:

Assoc. Prof. Dr. Kasim Mansur Assoc. Prof. Dr. Na’imah Yusoff Assoc. Prof. Dr. Roszehan Mohd Idrus Assoc. Prof. Dr. Remali Yusof Dr. Ramzah Dambul Dr. Mohammad Tahir Mapa Dr. Kntayya Mariappan Dr. Pg. Hassanal Pg. Bagul Marja Azlima Omar Paul Porodong Zaini Othman Baszley Bee Basrah Bee Wan Shawaluddin Wan Hassan Mohd Shaukhi Md. Radzi Rizal Zamani Idris Syahruddin Awg Ahmad Mori Kogid Sharija Che Shaari Ida Shafinaz Mohd Kamil Aliakbar Gulasan Christina Ligadu

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Profile for Penerbit UMT

Towards 2057  

Setting the National Agenda Dimensions for Change

Towards 2057  

Setting the National Agenda Dimensions for Change