Quality of education sustain economy

教育素质牵制经济

It is always every country’s dream to become developed country. However, the context of “developed” often been measured narrowly with “high income” as main and maybe, the only focus. Economic progress merely through rise in income is just considered as “economic growth”, not “development”. The context of “development” goes beyond income targets such as education, environment, human rights and so on.

Luckily, achieving high income or specifically, GNI per capita of USD15,000 by 2020 is only one of Malaysia’s Economic Transformation Program (ETP) many targets. Besides focusing on income growth, serious attention also needs to be given, particularly to education aspect. Quality education can improve productivity and ensure adequate supply of skill labors.

Recent Development: University Ranking

Recently, Malaysia has again ranked out of Asia Top 100 in Times Higher Education’s world universities ranking for 2014. University of Tokyo (Japan) gets top rank. National University of Singapore (NUS) ranked second. Nanyang Technological University, another Singapore university, ranked highly at 11^th place. Universities from India, Saudi Arabia, Labanon, Iran and Thailand also have representatives in Asian Top 100.

National University of Singapore was formed out of University Malaya (UM) when Singapore got independent from Malaysia. Therefore, it is unacceptable to see Singapore counterpart consistently being among top university in Asia and the world while none of Malaysian university comes close to that standard.

Does high education standard in Singapore relative to Malaysia explains the economic disparity between both countries?

Education, Total Factor Productivity (TFP) and Income

To achieve high income nation, Malaysia needs talents. Quality education can produces talents, skill labors and therefore, helps improve total factor productivity (TFP). A brief analysis on relationship between TFP and income per worker reveals a positive relationship for both Malaysia (see Figure 1) and Singapore (Figure 2). Data for both Figure 1 and Figure 2 are sourced from Anders Isaksson (2007) study for United Nations Industrial Development Organization (UNIDO). Both figures imply that increasing productivity can increase income and thus, boost economic growth. However, to increase productivity, quantity and quality of education (not just quantity alone) are important.

   

Figure 1: Malaysia’s TFP and Income Relationship

Figure 2: Singapore’s TFP and Income Relationship

Malaysia and Singapore both provide lots of education opportunity for its citizen. Table 1 shows Malaysia’s latest adults’ literacy rate is very high at 93.1%. This is higher than the world (average) literacy rate of 84.1%. Malaysia’s literacy rate improves 23.6 percentage point since about 20 years ago implies a remarkable expansion of education opportunity to its citizen. Among the selected Asian countries (selection depending on data availability), Singapore top the group at 95.9%.  Despite relatively low literacy rate, India has 10 universities in Asia Top 100 ranking, implying their quality of education. Will Malaysia economic progress faster if we have better quality of education? If we take Singapore as an example, the answer could be a “yes”.

Table 1: Adult (15+) Total Literacy Rate (%)

Country	1979 - 1985	2010 - 2011	Changes
Singapore	82.9	95.9	13.0
Philippines	83.3	95.4	12.1
Thailand	88.0	93.5	5.5
Vietnam	83.8	93.4	9.5
MALAYSIA	69.5	93.1	23.6
Myanmar	78.6	92.7	14.1
Indonesia	67.3	92.8	25.5
India	40.8	62.8	22.0
World	75.6	84.1	8.4

Source: World Bank database

Figure 3 and Figure 4 show a relative higher TFP (measure in relative to the United States’ TFP) and income per worker for Singapore as compare to Malaysia. Both figures show a worrying trend where gaps between Malaysia and Singapore are widening over time in term of TFP and also income per worker. Furthermore, Malaysia’s TFP was only half of United States’ TFP most of the years from 1961 to 1990. The graphs as in Figure 3 did not show much encouraging trend for improvement for near future too. In contrast, Singapore’s TFP did reach as high as 90% of the United States before declining back to about 80% level. Widening gaps of Malaysia-Singapore education quality could be the cause for economic disparity between the two countries. Thus, improving quality (not quantity) of Malaysia’s education may help improve our economy.

Figure 3: TFP Comparison - Malaysia vs. Singapore

 

Figure 4: Income per Worker Comparison - Malaysia vs. Singapore

Education and Malaysian Economic

“Higher education attainment yield higher salary” – that is what parent usually tell their children to encourage them to study hard. On Malaysia’s macroeconomic perspective, that statement may have its truth.

States analysis

Table 2 shows top six states with highest gross domestic products (GDP) per capita in 2012 also have higher workforce with tertiary education. Exception is Sarawak. Sarawak comes second in term of GDP per capita but only 18.5% of its labor forces have tertiary education. This is due to high revenue from Petroleum and logging sectors that boots Sarawak’s wealth. Kuala Lumpur has highest GDP per capita and also highest percentage of labor forces with tertiary education. Other top income states with high tertiary educated labor forces are Labuan, Pulau Pinang, Selangor and Melaka.

On the lower income states, Terengganu and Kelantan have relative high percentage of tertiary educated labor. Perhaps, many of those state-born residents are working at other states like Kuala Lumpur and Selangor yet still registered under their home-state. A graphical representation on percentage of tertiary education labor versus GDP per capita is presented in Figure 5.

Table 2: GDP per Capita and Education Profile of Labor Forces by States, 2012

States	GDP per capita	No formal education	Primary	Secondary	Tertiary
WP Kuala Lumpur	73,931	0.9	9.5	54.2	35.4
Sarawak	40,414	7.3	22.8	51.4	18.5
WP Labuan	39,682	3.8	13.7	52.8	29.7
Pulau Pinang	37,006	1.1	13.1	58.9	27.0
Selangor	36,135	1.0	11.2	52.3	35.5
Melaka	33,550	1.2	13.3	60.4	25.1
Negeri Sembilan	32,511	2.0	17.3	59.2	21.6
Pahang	26,197	2.3	19.2	58.3	20.2
Johor	24,574	1.3	14.3	65.6	18.8
Terengganu	22,733	2.9	15.1	57.5	24.6
Perak	20,569	1.5	17.7	62.5	18.4
Sabah	19,010	8.8	29.3	46.4	15.5
Perlis	18,119	2.4	13.5	62.3	21.9
Kedah	15,814	2.7	18.6	60.1	18.6
Kelantan	10,617	5.3	17.2	54.8	22.7

  Source: Malaysia’s Statistical Department

Figure 5: GDP vs. Labor Forces with Tertiary Education by States, 2012

Education Industry

Education has been a big industry in Malaysia despite the drop of quality in international comparison standard. Revenue from education services amounted to only about RM 25 million in year 1972 but rose a magnificent 39,553% to about RM10 billion in 2010 (see Table 3). Salaries and wages paid also increase dramatically from about RM15 million in 1972 to RM53 million in 1981, RM 148 million and then RM3 billion in 2010. In year 2010, numbers of people engaged in education sector are estimated as 107,939 persons. Value of fixed assets owned associated to education services are about RM8.9 billion.

Table 3: Education Industry in Malaysia

Year	Revenue (RM mil)	Salaries & wages paid (RM mil)	Number of person engaged	Value of Fixed Assets Owned (RM mil)
1972	25.237	15.273	6145	28.937
1981	104.429	53.299	12462	91.593
1990	304.048	147.831	22812	274.343
2010	10,007.309	3165.553	107,939	8,933.593
Changes	(%)	(%)	(%)	(%)
1972 – 2010	39,553.3	20,626.5	1,656.5	30,772.6
1981 – 2010	9,482.9	5,839.2	766.1	9,653.6
1990 - 2010	3,191.4	2,041.3	373.2	3,156.4

Source: Malaysia’s Statistical Department

Suggested Improvement

In one of my co-authored journal article, we have highlighted few area of concerned about Malaysian education services. First is death of dialectic. Despite loud calls for lifelong learning in Malaysia, capitalist wave have transformed the fundamental of education from empowering the minds (thinking) to manufacturing employees for contemporary labour usage. Therefore, Malaysian present education system has changed from the argumentative culture to indoctrination culture which does not improve productivity. Excessive exams that act as a ‘quality control’ check on the potential employees are the culprit. Thus, a system of education that reduces examination, gives freedom for dialectic and encourages argumentation is needed.

Second is the slavery of market-driven education. Education has evolved into what Theodor Adorno called as Kulturindustrie (Cultural Industry). Kulturindustrie is a term used to describe a culture (including education) that has been turned into an industry commodity, producing and selling worldwide according to the rules of the capitalist market, which are profit maximization. Thus, the following five directions of education are heavily influenced by those capitalist market rules: (a) undermining of the importance of non-pragmatic and non-market-driven subjects, which are important to improve thinking; (b) rapid increases of sub-standard educations; (c) immortalizes the students as “King Consumer”; (d) preferring ‘Teacher’ academician than ‘Thinker’ academician (e) from free public education system towards paid private education. Therefore, commercialization of education services should be done with care for its quality, not merely expanding its quantity.

Third is administrators’ hegemony-cum-syndrome of pseudo-professors. In our current education, academic achievement has been so much bureaucratized. Empowering bureaucrats over academician may have causes office politic that retards our academic excellence. Thus, let us go back to the very basic. Just let our academicians do their research, write and publish freely i.e. focus on their core-business. Give them less non-academic stuffs, less non-productive meetings and less politicking. Anyway, at the end of the day, it is the number of good quality works that count internationally and not the number of committees that they represented, not how many non-publishable reports that they have produced and not how many meetings that they have already attended.

 Conclusion

Good quality of education is as important (if not more) than quantity of education. Quantity of education (mushrooming of new education institutions from pre-school to higher learning level) may contribute to national output. However, together with quality of education industry only sustainable growth can be achieved.

[Chinese version published at Nanyang Press, 7th July 2014. Available online at http://www.nanyang.com/node/633343. This English version may be slightly different from the Chinese online/printed newspaper version]