Heriot-Watt University Malaysia’s Budget 2023 Wish List

Following the Federal  Government’s plans to announce the Budget 2023 on 7 October 2022, Heriot-Watt University  Malaysia (HWUM) wishes to share its budget wish list. 

Last year, the education sector received the highest allocation of more than RM67 billion as announced in the 2022 budget speech. While we have been making progress, we feel that we can do much more if the higher education sector is accorded a larger allocation in Budget  2023. 

According to CGS-CIB Research, Malaysia’s GDP is likely to moderate to 4.1% in the year  2023, from 5.2% in 2022. When economic growth shows signs of slowing down, it is time to invest more in human capital development. That is why we believe a greater allocation for the higher education sector, will enable Malaysia to move toward its goal of becoming a high-income nation through both green and digital transformation, contributing to Malaysia’s overall  Gross Domestic Product (GDP). 

To make this a reality, Malaysia must focus on fully realizing its human potential. This begins by supporting local students in achieving enhanced educational outcomes through improving schooling quality and providing adequate social welfare protection for household investments in human capital. 

Here are some key considerations for achieving the overall GDP, which is primarily supported by the goal of transforming Malaysia into a high-income economy by 2025 through improved education and talent development programs. 

Positioning Malaysia as the Preferred Education Hub in the Asia Pacific for Tertiary  Education 

1. The Malaysian higher education sector is worth RM30 billion per year; with much potential to contribute to the overall GDP, we must devise innovative solutions to triple this figure. This can be mainly achieved by attracting more high-quality international students. 
2. Malaysia should aspire to be a pioneer in education through the delivery of quality, cost-effective and innovative digitally transformed educational programs and global transfer opportunities (leveraging the 10 international universities currently operating in Malaysia) to position Malaysia as an educational hub for tertiary education (including postgraduate and doctoral degrees) to nurture high-skilled global citizens.
3. To enable Higher Education Institutions (HEIs) to attract expatriate academic staff in areas where the country lacks talent, it will help to offer them tax holidays for two to three years. We should emulate China’s best practices on this.
4. Government sponsorship of students to study abroad can be redirected to universities in Malaysia. This will not only help reduce the budget expenditure but support local industries and the outflow of MYR at a time of depreciation of  MYR against USD or AUD.

Improving the Quality of Local Graduates and Talent to Meet the Demands of the  Digital Future 

1. While much emphasis is placed on Science, Technology, Engineering, and  Mathematics (STEM); enabling our students to be equipped with the knowledge and skills of digitization and the 4th Industrial Revolution (4IR), positive education must also be part of the curriculum and pedagogy to promote resilience. 
2. There must also be more awareness campaigns on overall well-being including mental health and the environment.
3. In addition, there must be equal access to education for underserved communities to ensure equal and wider access to sources of quality higher education materials.
4. The educational programs offered must be recognized, accredited, and certified by both local and international bodies. 
5. The government can consider providing double tax deductions for scholarships awarded to students by Private Higher Education Institutions to widen access to education. 
6. To alleviate the financial burden of parents taking loans for children’s education from banks, interest paid can be claimed via personal tax relief. This is to promote the continuity of learning for Malaysian children despite challenging times.
7. As for PTPTN loans, we would like to suggest that the loans cover the total fees to enable students to pursue high-quality education programs that are needed by the economy.

Technology 

1. While we applaud the government’s goal of making Malaysia a carbon-neutral nation by 2050. We would like to emphasize that in order to meet this goal, all key industries must understand and quantify their current emission levels and start developing plans to deliver the 2050 target. 
2. Efforts should be increased to accelerate the growth of a green economy,  including the introduction of green financial instruments and technologies that promote a more sustainable future. To accomplish this, we must first promote education to raise awareness of environmental, social, and governance (ESG)  principles.
3. This concerted effort, as well as a high level of green commitment and investment, would necessitate highly skilled talent tied to high-wage jobs. The growth target should ideally create jobs with comparable income brackets,  allowing local graduates to have purchasing power that contributes to a healthy overall GDP.
4. As a solution, the government would need to introduce green policies and tax reliefs to promote a concerted effort across all key economic sectors.  

Research and Development  

1. According to the Twelfth Malaysia Plan (12MP), research and development  (R&D) expenditure to account for 5.2% of GDP by the year 2025, versus 1% in  2020, with the private sector accounting for 70% of expenditure. There needs to be an investment that would encourage public-private partnerships and collaborations especially in research and development to provide innovative solutions to global challenges and at the same time, raise the value and quality of education in Malaysia. Tax incentives can facilitate these initiatives. 
2. Reintroduce the MYBrain grant to support students who want to pursue postgraduate studies.

Mitigating the brain drain 

1. Enhancing youth employability should remain a priority. This can be achieved through a combination of offering industry-relevant programs and increasing the quality of education, in general. 
2. More funding should be allocated to programs for talent retention, and indeed reversing the brain drain into “brain gain”. To maintain our best talent and re-attract Malaysians working overseas, we would require clear incentives and policies. Countries such as Singapore, Thailand, the United Kingdom, Australia, and others have introduced programs to attract global talents to their shores,  including post-graduate visas for international students. Malaysia could benefit from retaining international graduates in areas like data science, robotics,  computing, and other areas where talent is scarce.
3. Further, we must also prepare our youth to pivot and be part of a global workforce. With the endless possibilities brought about by our borderless world,  enabling our knowledge workers to work for global companies in Malaysia, will enable them to contribute to Malaysia’s economy.

In summary, Malaysia must begin to fully realize its human potential and fulfill the country’s aspiration of achieving a high-income and developed country status, the way forward is to assist local students in advancing further in education by enhancing the quality of schooling to improve learning outcomes and providing adequate and social welfare protection for household investments in human capital formation. 

HWUM remains committed to nurturing purpose-driven, future-ready leaders through its  ‘Positive Education’ approach. 

For more information on Heriot-Watt University Malaysia and its world-class programs,  kindly visit https://www.hw.ac.uk/malaysia/ or chat with our Education Consultants at  https://www.hw.ac.uk/malaysia/visit/chat-with-an-education-consultant.htm 

Professor Mushtak Al-Atabi 

Provost & Chief Executive Officer, Heriot-Watt University Malaysia