The Malaysian Insider

Malaysia

Brain-drain debate after Penang loses RM10b deal

KUALA LUMPUR, Nov 10 — Penang lost out on a multibillion-dollar foreign investment because it does not have enough experienced electrical and electronic engineers, state officials said.

The assertion could point to a worrying drop in Malaysia’s international competitiveness. After all, Penang is dubbed the country’s Silicon Valley.

Penang Chief Minister Lim Guan Eng told Parliament recently that the state lost US$3 billion (RM10.2 billion) worth of foreign investment because it could not “commit to having 1,000 engineers”.

“I didn’t turn down their investment but they did not want to come because I could not give them a guarantee,” he was quoted as saying by The Star daily.

Parti Gerakan delegates at its annual assembly on Oct 31 staged a protest to demand that Lim explain why he had lost a big investment. The party has an axe to grind because it lost Penang to Lim’s Pakatan Rakyat alliance in last year’s general election.

According to Lim’s chief of staff Jeff Ooi, the specifications laid down by the potential investor were such that Penang could not fulfil them. He and other state officials declined to identify the Western European company involved.

“We have a shortage of engineers in Penang, and the investor specified that it needed senior electrical and electronic engineers, which we do not have in big supply,” Ooi told The Straits Times.

It spelt bad news for Malaysia, coming amid a sharp drop in foreign direct investments (FDI) into the country.

Prime Minister Datuk Seri Najib Razak recently revealed that the country’s net FDI plunged to RM3.6 billion in the first six months of the year, compared with RM19.7 billion in the same period last year.

Gerakan economic bureau head Wan Sun Keong said Lim gave a “flimsy excuse” for losing the investment.

“Each year, our public and private universities produce no fewer than 6,000 engineering graduates, based on my own unofficial estimates,” he said.

Penang is home to major manufacturing plants, including top chipmakers Intel and Advanced Micro Devices, lighting manufacturer Osram Opto Semiconductors and automotive equipment maker Bosch. Intel alone employs about 5,000 engineers in Penang, said Wan.

The state reeled in RM10.2 billion worth of FDI last year, compared with the national total of RM46 billion.

The Penang Skills Development Centre, which trains students for employment with Penang-based companies, said it produces about 100 electrical and electronic engineers a year.

But Ooi attributed the brain drain to Malaysia’s lack of competitiveness. He said the state government had obtained supporting data from the state Human Resource Department and the Federation of Malaysian Manufacturers.

The opposition has long complained about the brain drain, as Malaysian professionals get lured away by higher pay elsewhere and are turned off by the shrill debates on race and religion. There are also concerns that the country’s education system does not produce quality graduates.

“It all boils down to salaries,” said Shamsuddin Bardan, executive director of the Malaysian Employers Federation. A senior engineer working in the US could make about RM30,000 a month, compared to about RM20,000 in Malaysia.

Fui K. Soong, executive director of the American Malaysian Chamber of Commerce, suggested that a review of the country’s tax structure could help attract talent. “Professionals make much more overseas where the tax structure is much lower than in Malaysia...We have to move up the value chain and create a high-income economy,” she said.

Critics say the tax system burdens the middle class — professionals, entrepreneurs and civil servants — the most. — The Straits Times

Comments (4)

written by BJS, November 12, 2009

The Brain-Drain issue - starts with the kind of education system and quality of education we hv in govt schools, to the quality of college degrees recd, then it is the comprehension and application of English in global business, the lack of trained special skills (as in industrialised bldg system), employer's ability to make a profit in terms of economic downturn, the effects of politics on people, and looming concerns abt Malaysia's secularism and moderation on young people & women included.

Just an observation, without prejudice.

written by 1000 Engineers, November 11, 2009

In western countries, the term 'engineer' is usually used to describe what we in Malaysia normaly refer to as 'mechanics'. So, I suspect what this company means when they said they need to employ 1000 engineers is that they need to employ a total of 1000 staff ( engineers and mechanics) combined. The usual ratio being about three mechanics to every one engineer, depending on the products/services they are working on. So it could well be that they are actually looking to employ only 250 real engineers and 750 mechanics/assistant engineers. I think this would be a more realistic figure.

written by Senior Engineer, November 10, 2009

Senior Engineer earning RM20000 a month in Malaysia?????
i was a senior engineer before in malaysia.. and my salary not even a quarter of that..
i dunno from where the got this fact..

i am currently working in singapore earning more than double i used to earn in malaysia..
malaysian engineer are definitely under-paid when compared to other countries..
we need to project ourselves much better and not project ourselves as cheap labour country..

written by jctan, November 10, 2009

"A senior engineer working in the US could make about RM30,000 a month, compared to about RM20,000 in Malaysia."
Even without converting, cost of living in US is also lower. USD1 for RM1, lok sta the price for McD, cars, Shampoo, etc,,,its way chaper there..hack..u dont even need a car bcoz the public transport is darn good there