Unemployed graduates: Who prospers? — Dr Lim Teck Ghee

Unemployed graduates: Who prospers? — Dr Lim Teck Ghee

Malaysian Insider, OCT 29 — Datuk Seri Najib Razak’s 2010 Budget is called “1 Malaysia, Together we prosper”. Before the advent of the Prime Minister’s multi-million ringgit public relations sloganeering, his predecessor Tun Abdullah Ahmad Badawi had already introduced the “Prosper” theme.

Abdullah in his Oct 30, 2005 budget speech announced “Prosper” or Projek Pembangunan Usahawan dalam Bidang Peruncitan to assist graduates venturing into business. Under Prosper, Perbadanan Usahawan Nasional Berhad (PUNB) would finance 200 graduates up to RM50,000 each; that easily amounts to RM10 million.

Prosper is an ongoing programme and this year, its attachment training will allow participants to intern in PUNB investee companies. The cost of ensuring this prosperity is, however, not open to public knowledge.

Nonetheless, the RM10 million allocated in Abdullah’s 2006 Budget is clearly a drop in the ocean compared to the RM700 million set aside in Najib’s March 10, 2009 mini budget. The latter’s stimulus package planned to create 163,000 training and job placement opportunities for retrenched workers and unemployed graduates.

Of this number, 50,000 will be absorbed into the civil service, adding to its already obese size and bloated payroll. It is important to note that under the RM191.5 billion 1 Malaysia Budget, 72.2 per cent is for operating expenditure, out of which RM42.2 billion is for emoluments. Furthermore next month, a “special financial contribution” (announced earlier) in the form of a year-end bonus totalling RM400 million will be paid to public sector employees from Grade 41 to Grade 54.

Khazanah — “treasuring” human capital
It is true that other parts of the world are similarly facing the problem of workers getting laid off and school leavers unable to find jobs due to the depressed global economy.
However the numbers in Malaysia are simply staggering. Based on estimates, about 60,000 graduates might find it difficult to seek employment at all times, said Najib when launching the Graduate Employability Management Scheme (GEMS) on March 13, 2009.

Unemployed graduates
Year                Numbers affected
2001-2002     10,000 (incl. diploma holders)
2008-2009     163,000 (incl. retrenched workers)

GEMS is run by Khazanah Nasional Berhad under the aegis of the Finance Ministry. The precursor to GEMS is the Graduate Employability Enhancement (GREEN) programme, also tasked to Khazanah in co-operation with GLCs.

We can safely assume that a proportion of these targeted graduates have not been able to find work in the fields in which they hold the requisite paper qualification. Meanwhile the government continues to fail to address the longstanding lack of relevance of the courses taught in the public universities and the low standards of graduates produced.

Instead of getting it right from the get-go through structural reform of the higher education system (and better still the entire schooling system), our authorities are attempting to fix the shortcomings of graduates who flounder in the competitive marketplace by pouring money to correct their mis-education.

It is all the more worrying when Khazanah’s director of strategic human capital management Azman Mohd Hussein reveals that the unemployed graduates have to be given remedial and practical training for a whole year to improve their communication skills and increase their level of confidence.
And similar to the “Prosper” scenario, the public is not cognizant of Khazanah’s expenditure breakdown either.

Hitting rock bottom soon?
Something’s very wrong when the situation goes keeps getting from bad to worse with no light at the end of the tunnel.

Retraining for graduates and youth
Year                 Programme                             Estimated cost (RM)
2001                Graduate Training Scheme        150 million
2004-2005      Graduate Training Scheme         265.2 million
2006               Khazanah – GREEN                   unknown
2008               Najib stimulus package #1          600 million
2009               Najib stimulus package #2          700 million
2009               Khazanah – GEMS                      unknown
* The outline table above is incomplete as information is unavailable in  the public domain.

As early as Sept 25, 2001, Tun Dr Mahathir Mohamad, speaking from the Prime Minister’s Office, had unveiled an economic stimulus package which earmarked RM150 million for 10,000 degree and diploma holders. This allowed them to learn IT, brush up on Mathematics and English, in addition to providing RM500 monthly allowances on a temporary basis until end-2002.

“Temporary” appears to have been a misplaced optimism because the chronic problem has persisted for nearly a decade now. Between January 2004 and June 2005 alone, the government’s human resources development fund paid out RM265.2 million in training grants to individuals.

From November 2001 until mid-2006, the Graduate Training Scheme had retrained almost 22,000 unemployed graduates, then Human Resources Minister Fong Chan Onn disclosed in his paper “Developing human capital” delivered on Aug 21, 2006.

Nonetheless, on Dec 27, 2007 in a paper presented by the government-sponsored Institut Kefahaman Islam Malaysia, Ikim quoted a comment from the Human Resources Minister on the inadequate success rate of the retraining.

Ikim research officer Nor Hartini Saari said “roughly RM500 million” had been expended in retraining. “However, according to the minister, only 1,400 graduates have been employed after participating in the aforementioned training scheme.”

Two years down the road on Oct 20, 2009, Higher Education Minister Mohd Khaled Nordin still talked about RM48 million spent in university partnerships with corporations “in strategic sectors that could improve innovation-based industries and guarantee graduates of job opportunities”.

Unless our public coffers are replenished by King Midas, the government may soon go broke from the “guarantees”.

It is just not sustainable to have the next generation depend on the nanny state even after they have been provided with ample tertiary education opportunities, with generous financial assistance and babysitting after graduation, and eventually bailouts every step of the way.

Raiding the public treasury
Various ministries and entrepreneurial agencies have set up their own graduate retraining programme and this makes the tracking of fiscal allocations difficult.

For example, the RM7 billion stimulus package revealed by Najib on Nov 4, 2008 allocated RM300 million for a skills training programme fund (with focus on tourism and “business process outsourcing sectors” among others); RM200 million for programmes by private training institutions and RM100 million for youth programmes at various levels — we see here three intersecting areas.

Then there is “another RM70 million to facilitate employment of retrenched employees and graduates seeking jobs,” a special allocation approved by Cabinet as announced by Human Resources Minister S. Subramaniam on Jan 21, 2009 in Putrajaya.

The aforementioned RM70 million could well be a tranche from the RM600 million infusion for skills training under Najib’s RM7 billion package a year ago. Or then again, maybe not ... who knows. In any case, the RM600 million was augmented by another whopping RM700 million barely four months later under Najib’s second stimulus package.

When so many quarters are involved in the overlapping effort between government agencies, GLCs, and the private sector, only the “special committees” established to manage the funds know the full details.

Even the Auditor-General’s office probably does not have the complete picture of how much money is being poured into remedying incompetence in the public universities. And what the results have been. If it does, it would be very important for the public accounts committee to put this information out in the public domain.

It may be argued that the fact that these public funds seem to be going towards so many “facilitators” and “consultancy” companies shows a primarily liberal and laissez-faire approach used by the government to tackle the problem.

Also of some relief is that no monopoly seems to have appeared in cornering the market.
The crush of agencies, ministries and private agents seeking participation in this fast-growing industry of “enhancing graduate employability” should reassure us that there are droves of Malaysians who are driven by patriotism to help our hapless graduates. The unkind amongst us may suspect that making a quick buck — or rather making buckets of bucks — is more the real motivation.

No solution in sight
Considering that many of our young adults are no surer of securing jobs after graduation today than they were in 2001 and three prime ministers ago, the public and the current undergraduate population have a right to demand a full accounting of the huge sums of taxpayers’ money spent.

We also need to know the outcome of independent impact studies that can provide empirical data on how effective or ineffective this massive injection of public funds has been.

In the current parliamentary debate taking place on the “1 Malaysia, Together we prosper” Budget, there needs to be an explanation on where the total RM1.3 billion appropriated over the mere span of the recent year for training and retraining purposes went to. And who has prospered from the money. — Centre for Policy Initiatives