In my first article (Manager@Work, Jan 25, 2010), I warned that I would ask hard questions. This is the first.

I ask this because we seem to do things that fly in the face of rational thought. Consider this: if you had the opportunity to invest a considerable sum of your hard-earned cash in any fund run by any of Malaysia’s star fund managers, or one run by Warren Buffett, would you not consider the latter? Just because Buffett is not Malaysian?

I hope not. You’d go with the manager who can deliver the best returns for you, and you then take the returns and spend them wisely on a combination of items, and if you’re forward-thinking, the combination will include things that will a) Sate your senses, and b) Lay a better foundation to generate yet more wealth.

It’s a simple recipe.

Yet, Malaysia seems to have not thought about this. Or worse, thought about it but didn’t do anything about it.

We all know from our textbooks that economic growth (in the industrial age) depends on how well one marshalls key factors of production of land, labour and capital. Many commentators have coined new factors of production: technology, markets, and so on — relevant for today’s information age. I’d postulate that all of this — yes, even our Econs 101 course —  misses the point. The fundamental factor that generates superior production and creates growth is human capital, whether in the industrial age or the information age. However abundant the land, however plentiful the labour, however sufficient the capital, in the hands of a wrong leader, the said company, the said country will fail. Observe many parts of sub-Saharan Africa. It is even more true today. The ultimate factor of production is talented human capital. This is the goose that lays the golden eggs.

Yet, Malaysia is happily exporting its geese, and they are laying eggs for others.

The man who turned Singapore Airlines into the world’s most successful airline (measured both in terms of profit track record and customer service) was a Malaysian — J Y Pillay from Seremban. And for most of the 1990s, Dr Cheong Choong Kong (formerly a lecturer at the University of Malaya, and formerly a Malaysian) shared Mr Pillay’s strategies and philosophies and kept the airline flying high. It is noteworthy to add that SIA was born out of adversity. It was forced into existence as the unified flag carrier MSA (Malaysia Singapore Airlines) was no longer tenable following the separation of Singapore from Malaysia. SIA had no home market (and still doesn’t).

Singapore had few resources (capital) to pour into the airline. Yet, the right man (or men) made the difference.

There are other examples of Malaysians who chose to ply their trade elsewhere and seek their fortunes beyond our shores.

And hence, create fortunes for others beyond our shores as well. In any brain drain/brain gain literature, Malaysia is without fail grouped into the first category. In fact, the much-accessed Wikipedia states: “There has been a serious brain drain from Malaysia. Official papers reported that there are a million talented Malaysians working overseas. Recently the brain drain has increased in pace — 300,000 Malaysians migrated overseas within 18 months since January 2008, for different reasons. And among them 200,000 migrated in the first eight months of 2009.”

So, if Malaysians can think, we must ask, what made these people leave?

The answers to this question will enlighten us as to what to fix to get us on a new pathway to economic growth and national development.

I should add that I am talking about making sure Malaysia keeps its best “geese”, stops exporting any more “geese”, and it’d be even better if we attracted our own back and other people’s best “geese” just as the US, UK, Australia and closer to home, Singapore did to us and to many other nations. I am not talking about the golden eggs they lay. For that, with the right social and distribution policies, we can set to right any inequalities.

But like in the famous fable, let’s not confuse the geese with the eggs. Without the former, we are purposefully limiting the amount of the latter. Anyone who has thought through this must surely understand what is the right path.

The author of 42 was a brain-drained Malaysian who left the country at the age of 16. He has returned and looks forward to a better-led country, economically and socially.
Send your thoughts, questions and responses to 42@bizedge.com

Conversation with the reader
Dear 42,

Following the line of discussion in your article (“Can we regain our competitive edge?”, Manager@Work, Jan 25, 2010) I would have thought that it should have been entitled “How can we regain our competitive edge?” as opposed to “can”.
Of course, the original query was more eye-catching. However, I believe that we need to have a constant spirit of optimism: A “jaded” spirit will not be the one to climb the mountain (and Malaysia needs to climb many mountains) to regain its competitive edge.

I have also just returned to Malaysia after a three-year stint in Vietnam. You are right, Vietnam’s foreign direct investment is substantially larger than Malaysia’s. Despite the financial meltdown in 2009, Vietnam still recorded positive growth of under 6%, but given the lower base, the future looks bright. However, Vietnam also has its intrinsic problems (that is, education and infrastructure) which serve to highlight Malaysia’s strengths (more so in infrastructure, and to varying degrees, education) if it can gather the different strands together to pull ahead.

I wish you well because I hope for the best for Malaysia. It’s home. We also owe a duty to the next generation to make it a better place.

With best regards,
Billy

Dear Billy,

This is an insightful question.

The gulf between “can” and “how” is a big one. The latter suggests that Malaysia has already come to terms that it has been losing its relative competitive edge, and has determined that it needs to get on a new, right course to address this. This course of action is fundamentally different from the present.

I detect a tone of optimism in your comments, and like you I look forward with hope. I do see that leadership in various public and private sector organisations has embraced the need to do things differently. But alas, I also see that some have not. Until there is more pervasive acceptance of the problem, it will be hard to mobilise the country.

With this, Vincent Chin will conclude his 42 column. He will return occasionally next year to comment on the latest developments in management and leadership.His previous columns in Management@Work can be found under the Management section at www.theedgemalaysia.com

This article appeared in Manager@work, the monthly management pullout of The Edge Malaysia, Issue 794, Feb 22-28, 2010