Question 3: As Malaysia shift from a middle-income country towards a high

income country by

2020, the right human capitals with the right skills are

imperative for sustained growth. Based on this statement, critically bring

your reflection in Malaysias current effort in strengthening its human capital
base.

Every five years, Malaysia has set a target of socio-economic development

through the Five Year Plan as the main working document of the
government's development program. Eleventh Malaysia Plan (11MP) is the
final catalyst in bringing Malaysia to achieve the status of a high income
developed nation by the year 2020. With guided by the Malaysian National
Development Strategy (MyNDS), 11MP soaring theme "Growth Anchored
People" which is the inclusive principle of putting people as a priority in all
national development agenda. 11MPs Six Thrust Strategic of inclusivity;
welfare of the people; strengthen the infrastructure; human capital
development; green growth; and re-engineering economic growth towards
achieving Vision 2020. As a development plan in the final sprint towards
2020, the 11MP need the thrust from the employees to boost up the
economic growth.
At this critical stage, the future success of the country is highly
dependent on human capital. Moreover, with the challenges of globalization,
they can slow the pace of national development agenda. The fall in the price
of Brent crude oil in the international market to some extent also affected, as
well as the depreciation of the ringgit. In fact, Malaysia could be expected
loss of up to RM 300 million in revenue for every $1 as the effect of falling oil
prices on the global stage (ASTRO Awani/Luqman Hariz, 2016). The
transformation of the employee is able to provide Malaysia to face the
tribulations

of

globalization

that

is

inevitable

and

thus

ensure

the

development of the next five years. Accordingly, 11MP focuses on human

capital development as a key driver to drive the economic growth.
According to M.Hisyam (2005), the development of human capital
might capable in shaping the direction of the country towards the targeted
insights. It is clearly seen that human capital plays a big role in determining
the performance and productivity of an organization or government entirely.
In addition, human capital development had actually been planned since the
8MP. Therefore, this is not something that is new to Malaysia in developing
the human capital especially for the young generation who would run the
country in future. Moreover, looking into the 9MP, the government has set
out in its plan at the second thrust which is to improve the capacity for
knowledge and innovation and nurture 'first class mentality'. As one of the
step, the government also emphasizes the development of human capital
with a progressive attitude and thinking. Next, the 10MP focuses on the
world-class human capital, which making Malaysia as a high performance
country by restructuring the labor market and transform government
towards transforming Malaysia.
The 11MP which is current Malaysia Plan also aims to develop the
institutional capacity and implementation machinery through a variety of
human capital development program. There are various improvements made
to increase the capacity for knowledge and innovation and also the 'first
class mentality' which was applied since the 9MP. A few steps have been
taken care for the government places great priorities in the development of
human capital through various policies and programs. 11MP also continue
the sustainability agenda prior to the various measures for improvement and
enhancement of human capital which is knowledgeable, skilled and to ensure
they have a positive attitude. Therefore, the 11MPs working document can
be understood to be the last inclusive plan to catalyze the development of
human capital in the next five years until 2020. Innovation, creativity and
added value are the high skill base of human capital. At a critical point
2

moving towards 2020 in less than four years onwards, the country is in need
of workers who have these said skills.
Rapid

technological

progress,

increased

competition

due

to

globalization, economic dynamism, changes in the labor market and higher

education demands for the transformation of human capital development
workers. The need for highly skilled human capital that is based on
innovation, creativity and constantly improve the value added to drive the
organization. In addition to achieving a high-income country with a per capita
income of USD15,690 in 2020. 10MP previously witnessed 1.77% of workers
receiving benefits in 2014 through the expansion of coverage of Human
Resources Development, 2001 (HRDF) compared with 1.68 million in 2010
and by 36.5% on average PhD qualified academic staff at public universities
in 2013, up from 30% in 2010. The provision is made for offering loans to
employees to enhance their skills. Among them is through the Skills
Development

Fund

Corporation

(PTPK),

skills

upgrading

program

for

employees of small and medium enterprises (SMEs), as well as the Industrial

PhD program.
As a main supply heading towards a developed nation, 11MP outlines
policies and strategies to prepare and strengthen the human capital of
workers. This is because the quality of human capital, highly skilled, relevant
and innovative cross-sector is a key determinant for achieving the goals and
objectives of the 11MP. This issue mostly discussed mainly in Chapter 5
Strategic Thrust 3 and 4 as well as the Focus Area under Chapter 9. In
Chapter 5 of 11MP focuses on enhancing human capital development agenda
of the developed countries, particularly the human capital of workers in the
private sector. The focus on this sector for the human capital development
under this chapter is to increase the skills of the workforce through lifelong
learning. 11MP pursue lifelong learning initiatives of the 10MP through two
Focus Area of the Focus Area A: improving the efficiency of the labor market

to boost economic growth; and the Focus Area C: strengthen lifelong learning
for skills upgrading.
To improve the efficiency of labor, workers' interests are always given
the full attention through the implementation of performance-based salary
scheme or Productivity Linked Wages System (PLWS), which will be
forwarded widely in the industrial sector. Moreover, the wage gap will be
reduced and the government will introduce a wage index as a guide to
compensation that is fair and transparent and improve legislation to protect
the rights and interests of the workers. This is due to its distribution and
salary increases proportionate with high productivity and your rights and
interests are guaranteed to be next enhancing the competitiveness and
efficiency of employees.
The concept of lifelong learning is still continued to the labor market to
enable workers in a professional career or pensioners or those who have
second career which get the retraining and skills upgrading continuously to
meet the changing demands of the labor market. Apart from the various
industry-based

training

programs,

community-based

programs,

pre-

employment training in new technologies and entrepreneurship training,

employees also have the opportunity to study with the help of funding or
scholarship up to the level MyPhDIndustri. Despite that, civil servants are the
pillar of the nation. This is because the public sector is the effective
facilitator for the growth driven by the private sector. In the chapter 9 of
11MP, government set prerequisite for the transformation of productivity
supported by civil servants as agents of transformation that determines the
efficiency of public service delivery to the productivity and well-being.
Thus, the Focus Area B within 11 MP is effective has given the priority
to rationalize the public sector institutions for the productivity as a public
service transformation. The main source of such labor and financial
allocations will be adjusted according to preference. This rationalization
4

process is needed so that the public sector is always in line with changes in
the current economic and demographic structure. Among the strategies
identified is skilling and reskilling for the employees in support groups to
diversify their skills. These efforts will enhance the career development
opportunities to qualify for the support group to consider the professional
and managerial positions or performing various tasks within the public
service.
11MP focuses on talent management for the future of public services
through Focus Area C under Chapter 9. General knows that to get the best
quality human capital, the government should polish their public servants.
Among the strategies identified is providing a flexible work environment to
maximize productivity and retain the talent. Other than that, government
could provide a balance between work and life and improving the training of
the public sector to improve the relevance and impact with a focus on
leadership skills and specialized expertise. Due to the constantly changing in
the demand for public services, customer expectations and people would
also always increase. The officials should be equipped with a wide range of
knowledge, skills and abilities. Through 11MP, civil servants had the
opportunity to participate in more programs, capacity building and training
to be provided in a variety of skills, new fields and specializations such as
data science, economics and forensic accounting, green auditing and
assessment of intellectual property. A variety of courses in areas related to
the administration of the public sector will also be offered by the Institute of
Public Administration (INTAN) and Razak School of Government (RSOG) to
build leadership skills and the ability of civil servants according to the task.
Tenth Strategy Paper under Third Core of Chapter 5 focuses on the
human capital of workers in higher education institutions in an effort to
transform the education system. Academic staff will be given the opportunity
to choose a career path based on expertise and specialization. They can also
strengthen entrepreneurial skills for attachment, sabbatical, loan services or
5

cross placement program between the public and private sectors in the field
of industry relevant to the subject being taught. Implementation of human
capital development strategies for workers in 11MP will bring the significant
transformation to the development of the national economy. Each employee
has the potential of human capital as a driver of productivity and
transformation agent. When the government emphasizes on the talent
management, increasing the capacity and efficiency as well as various forms
of benefits and incentives, it will produce a committed and productive
employees as targeted.
In fact, through programs and training that are organized by the
government or related agencies, the knowledge, skills, attitudes and
personal values of employees could be improved in their workplace
(Hellriegel, D, Jackson, S.E & Slocum, J.W., 1999). This is because it can
improve the workings and temperament that will lead to further disciplinary
problems at work which could ultimately affect the productivity. Chapter 9 in
11MP also touched the strategy focused on good values among public
servants. Values and behavior will complement the efforts made towards
improving the image and public trust in the public service and ensure that
civil servants carry out their duties in the best way, quality and integrity.
Therefore, the focus is always given to the human capital of the country as a
defender of the country to fight for the challenges to improve the welfare of
the people and the country. Thus, 11MP provide opportunities and space to
be used by every human capital. The benefits obtained by employees are the
return on investment (ROI) that is giving back to the country with
productivity growth target of 3.7% average annual growth rate of labor
productivity compared with 2.3% in the 10MP.
Next, on 2016 budget government also increases the minimum wage
of the workers in Malaysia from RM900 to RM1000 per month and from
RM800 to RM920 per month for those in Sabah, Sarawak and Labuan. The
increment of minimum wage however being objected by the large
organizations due to the implementation across all sectors except the
6

domestic services and it will increase the productions for the plantation
companies. In addition, the decision to heighten the minimum wage is it will
strengthen the Malaysian workforce and reduce the reliance on foreigners to
provide

the

government

human

capital

efforts

in

(www.cipd.asia,

strengthening

the

2015).

Other

human

capital

than
base

that,
by

implementation of training programs to meet the needs of local industries in

Sabah and Sarawak where government had announced 30 per cent for
Human Resources Development Fund (HRDF) to run the programs. This
shows that the government really made an effort to improve the human
capital base towards 2020 and it shows the concerns about the welfare of
the working class.
One of the way for the government to strengthening the human capital
base is by having program like 1 Malaysia Training Scheme (SL1M) which
could be one of the best example to show the effort of the government. It is
a program that targets to enhance the employability among graduates
through collaboration with Government-Linked Companies (GLCs) and private
sectors. According to Norashikin Ismail, Head of Secreteriat for 1 Malaysia
Training Scheme, this implementation of SL1M also benefiting the companies
as it is a part of their Corporate Service Responsibility (CSR) and those
companies who joined would entitle to double-tax deduction on allowances
and on-the-job training cost where this scheme will continue until 31 st
December 2016. This program seems to be good effort for strengthening the
human capital base is because those who join SL1M will have gained selfconfidence and thus trainees are able to transform and acquire the skills
needed to become more employable after they finished the programs for six
months or longer depends on the selected companies. The example of joined
companies is Maybank, Celcom, UMW and many more.
Despite from that, the government also has determined that the
Technical and Vocational Education Training (TVET) sector as the main
component in providing highly-skilled human capital and also one of the key
7

drivers of the economy for Malaysia to become high-income nation. This is

because, Malaysias quality and skills of human capital is very crucial and
limited to the success of economic transformation. The demand for labor
especially for the TVET sector is expected to increase after the introduction
of National Key Economic Area (NKEA) that require a workforce of up to 3.3
million by 2020 of which 1.3 million are to be TVET graduates (Economic
Planning Unit,2013). The focused sectors for TVET are Retail, Greater Kuala
Lumpur Development, Tourism, Education as well as Healthcare.
Furthermore, a new system of vocational education has been built as a
form of transformation of TVET. This is a determination of re-engineering the
existing vocational education system which can contribute to the highincome country. TVET was designed especially to produce a holistic human
capital capable of facing any challenges whether at the national level or
globally. Moreover, this can be seen as the effort to strengthening the human
capital because TVET provide a highly trained workforce to meet the
countrys needs in the job market. When individual self-actualization arises in
self, a holistic human capital can be achieved naturally only by developing
technical and cognitive element in TVET. During the implementation of TVET
programs, different ministries manage their own TVET institutions where
there are various standards of performance with limited authority and
responsibility.
Last but not least, TalentCorp also one of the effort by the government
to strengthening the human capital base. It was established in 2011 under
the Prime Ministers Office. The aim of its establishment is to formulate and
facilitate initiatives to address the availability of talent in-line with the needs
of the countrys economic transformation. According to CEO of TalentCorp,
Johan Mahmood Merican, he said that they are putting an effort in bringing
more women into the labor market and how the large presences of UK
universities help reinforce Malaysias positioning as a regional hub for
education. The government has consistently invested in human capital since
8

9MP which on human capital is one of the largest components of government

annual allocation. A lot of money is invested in human capital is because
Malaysia nowadays currently rank as an upper-middle income nation. In
order to reach high-income nation, Malaysia have to putting an effort on
human capital as it is the key part of achieving the current state instead of
Malaysias physical infrastructure.
In Economic Transformation Program (ETP), education also one of the
core sectors that plays an important role. When Malaysia succeed to be
recognized in international level, it helps reinforce our countrys positioning
as a regional hub for the education and other services that is needed within
the region. Other than that, Returning Expert Program had already more than
thousand applicants approved which Malaysia really needs that professional
and expert to help in developing the human capital.
11MP period is expected to be full of challenges. The declining in oil
prices, the economic imbalances and political world, the depreciation of the
ringgit, the terrorist threat and others is the potential challenges that require
our country to always stay strong and resilient. Economic growth in 2016 for
example, has seen volatility in financial markets, declining commodity prices,
the strengthening of the US dollar and China's economic slowdown. Malaysia
plans in the previous years were achieved despite various challenge been
faced. 11MP is capable in playing a role in developing countries, enhancing
human capital development and able to satisfy every citizen. The important
thing is the government must have the right strategy, accompanied by
commitment, superior value and commitment of every employee to work
together with the government in facing any challenges that come. Thus, to
achieve that all strategies of 11MP should be welcomed and taken its
chances by human capital of workers in all sectors. Achievement of the
outlined strategies will drive the transformation that can lead Malaysia
towards a high-income nation. The role and cooperation of all parties, as well

as the synergy of all sectors, finally did a developed nation state and can
successfully transformed beyond 2020.

REFERENCES
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Hellriegel.D., Jackson, S.E., dan Slocum, J.W. (1999). Management Ohio :

South Western College Publishing
JPM (2000). Eighth Malaysia Plan 2001-2005. Putrajaya.
JPM (2005). Ninth Malaysia Plan 2006-2010. Putrajaya.
JPM (2010). Tenth Malaysia Plan 2011-2015. Putrajaya.
JPM (2015). Eleventh Malaysia Plan 2016-2020. Putrajaya
Johan, MM (2014). Malaysia investing in human capital. Retreived on 30
October

2016

from

http://www.theworldfolio.com/interviews/johan-

mahmood-merican-ceo-of-talentcorp-malaysia-n2952/2952/
Luqman, H. (2016). Harga minyak jatuh ke bawah USD30 setong. Anda tahu
apa kesan kepada Malaysia? ASTRO Awani.
Norashikin, I (2013). Gaining Self-Confidence through SL1M Increases
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October
2016
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file=/2013/4/13/mystarjob_careerguide/12918067&sec=mystarjob_car
eerguide
Rasul, M.S., Ashari, Z.M., Azman, N., & Abdul Rauf, R.A. (2015). Transforming
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