Kuala Lumpur, May 24, 2023 – The Federation of Malaysian Manufacturers (FMM) supports the recent comments made by the World Bank senior economist on the fragmentation of many Government programmes and initiatives which “hurts the public purse” as the programmes and initiatives are being financed by taxpayers’ money. Fragmentation in Government programmes and initiatives lead to unnecessary wastages and inefficiencies due to uncoordinated efforts, multiplicity of programmes and initiatives most often aimed at the same target groups as well as misalignment of resource allocation. It is even more compelling now for the Government to address the fragmentation and duplication of programmes and initiatives to support its fiscal consolidation initiatives towards reducing the nation’s fiscal deficit.
FMM would like to cite several areas where there currently exists fragmentation and duplication in efforts which must be addressed to ensure more coordinated and streamlined approaches to improve the governance, efficiency and outcomes of the programmes and initiatives:
i. Technical and Vocational Education and Training (TVET): The TVET landscape in the country ecosystem is currently highly fragmented with over 11 Ministries and close to 1300 TVET providers nationwide resulting in the overlap of jurisdiction and standards and duplication of programmes and misalignment of funding of TVET institutions. The fragmentation and duplication of programmes lead to a lot of confusion amongst students and parents and adds to the already negative perception towards TVET being a second choice career pathway for students. We strongly believe that a single lead agency to govern and coordinate the national TVET agenda in the form of a TVET Commission and a TVET Act would address the challenges faced in this highly fragmented ecosystem and be able to regulate TVET in Malaysia towards elevating TVET as a reliable and alternative career pathway and towards supporting TVET as a game changer in the Government’s efforts to produce highly talented local talent.
ii. Investment promotion: FMM has always held the position that there is a need to re-engineer all Investment Promotion Agencies (IPA) throughout the country under ONE single body with centralised, coordinated and well facilitated investment promotion framework which should ideally be the Malaysian Investment Promotion Agency (MIDA). In this regard, we welcome the decision of the National Investment Council chaired by YAB Prime Minister which had on May 22, 2023 announced that MIDA has been empowered as the country’s main investment promotion agency as part of the Government’s efforts to reorganise the ecosystem of the IPA and to coordinate the functions and roles of the IPA and related regional economic corridors investment in phases.
iii. Upskilling, reskilling and job placement initiatives: FMM concurs with the World Bank senior economist that there currently exists duplication and fragmentation in Malaysia’s Active Labour Market Policies (ALMPs). In particular we see duplication in programmes and efforts towards reskilling and upskilling of workers including job placement of workers which is currently undertaken by the Human Resources Development Corporation (HRD Corp) as well as by the Social Security Organisation (SOCSO) via their Employment Insurance System both organisation of which come under the same Ministry i.e. the Ministry of Human Resources. We are strongly of the view that all reskilling and upskilling programmes and initiatives should come under a single body such as HRD Corp which already has an established framework for approving training courses, training providers as well as allowable cost matrix for training courses. Having a single established framework managed by a single body will reduce confusion in the market when it comes to offering training courses and reduce/eliminate risks of profiteering by training providers which can offer similar training programmes under both schemes but based on different cost matrix. Both organisations manage funds which are contributed by employers and employees (in the case of SOCSO). Job placement initiatives should ideally be centralised under the EIS without HRD Corp duplicating the efforts as managing such initiatives comes with a cost of running the placement centres. It would also create confusion amongst job seekers.
iv. Digital and technology blueprints: Over the years, FMM has actively been involved in Working Committees with Ministries and Government agencies such as Ministry of Investment, Trade and Industry (MITI), SIRIM, Malaysia Productivity Corporation (MPC), Malaysia Digital Economy Corporation (MDEC), MIMOS Berhad, Malaysian Investment Development Agency (MIDA), etc to share practical insights from industry players to ensure that the technology policies and strategies in the country will be aligned with manufacturers’ needs. Since 2010 there have been over 10 technology blueprints, policies and strategies rolled out many of which without the accompanying implementation and execution action plans and with overlaps. FMM is strongly of the view that there must be a comprehensive strategy in implementing the many policies and blueprints including possible review of the policies and their implementation process to address the following:
- Unclear lines of responsibility, lack of coordination in policy implementation and fragmented ownership of policies;
- Comprehensive rolling out and implementation of policies; and
- Close monitoring of implementation.
Implementation and execution plans must be drawn up expeditiously after policy announcements are made to minimise confusion and disruption as well as boost uptake by industry.
v. SME assistance programmes: SMEs often have to deal with many different government agencies to submit the same company profile, financial reports, various certificates, etc. If SMEs only have to deal with a one-stop agency or “centre co-ordinating agency (CCA)” such as SMECorp, it will save a lot of time and resources. SMECorp should act as the sole agency of contact for SMEs to deal with for all SME related development programmes. There should be a centralised data repository for SMEs to lodge all their company information (once, except when there are updates) which would eliminate the need for filing up repetitive forms for various programmes/grant applications, etc. SMECorp’s role as CCA to coordinate the implementation of development programmes across the various Ministries and agencies is very vital and hence all relevant agencies need to work closely with SMECorp in implementing the respective programmes.
SMECorp should also play the role to review all SME related development and assistance programmes to ensure there is no duplication in programmes and ensure that funding can be directed towards issues/areas which have not been given due attention.
We can already see some positive steps taken by the Government towards addressing the fragmentation of Government programmes and initiatives and look forward to more stocktaking measures to identify other areas for greater consolidation of efforts and resources for the greater prosperity of the nation.
Tan Sri Dato’ Soh Thian Lai
President, Federation of Malaysian Manufacturers
FMM Advocates Transparency, Integrity and No Corruption
About FMM
The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 12,100 member companies (3,700 direct and 8,400 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.
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