How do we get ourselves out of the current economic quagmire?
The real issue is clear: Rights and privileges have been equated with monopolies and rent collecting - and this has led to an uncompetitive economy, exactly as propounded by the textbooks.
The change we require is simple: Reduce monopolies and distortions, and encourage multiple players in order to promote competition.
But the major counter argument is this: Why do we need a more competitive economy? With monopolies and economic distortions, we have managed to obtain for ourselves a fairly good standard of living. We are happy with things as they are and we should continue with the status quo.
The problem with this argument is that is that it is predicated on the proposition that there are some people who are willing to work very hard because they will get no government support as they are not indigenous and therefore they must fend for themselves. Thanks to their circumstance, they are forced to get out of the hole they find themselves in.
As these old slaves leave their hole, other unskilled immigrants will have to come in to take over their labours. Our economy therefore gets stuck in the agriculture that we have been fortunate to have inherited from the British colonials as a strategic position in the global economy.
The major hinderance to change in this country is the anachronistic poltical system that propagates sectarianism. There should be an overhaul of our political system. The alternative front based on justice and religion is also a tough alternative for the people to choose.
I hope that the political line could one day be drawn between the liberals and the conservatives - those that want globalisation and those that want a bit more of local control.
But no sectarianism, please. We are Malaysians!
Sometimes, I wonder whether our national problems are really a problem of the positions we take, or are they a reflection of our inability to communicate properly among ourselves, as a result of stereotyping and fear and suspicion. For everybody claims to be reasonable - which I would like to think they are and see things through their eyes.
Friday, April 2, 2010
Wednesday, March 31, 2010
NEM: NEAC Presentation at InvestMalaysia 2010
Went to the morning sesssion and came away with mixed feelings.
The NEAC presentation was about 10 slides based on the report NEM Part 1: Strategic Policy Directions.
The whole thing has been incredibly boring because it has got everybody talking about what's wrong with the Malaysian economy - and the whole agenda is making the whole nation with interested foreigners to bicker about our economic afflictions.
It would not be difficult to gather the data and details to support various arguments - especially by a well-paid team of young and enthusiastic graduates - and I would even imagine that NEM Part 1 would make a good read in this regard and probably be therapeutic for those reading it.
The tendency of everybody in the session - and even my tendency now - is to try to identify what are the real problems with this economy - but at one point or another, what needs to be said has already been said and probably a hundred times over.
This whole NEM has become a national nightmare.
The common phrase we now hear about the NEM is - the devil is in the details of the implementation. The other one is this - change we must but it may not be easy.
I choose to differ.
I think the most crucial aspect is to identify the core issues and to make core changes to policy and everything else will follow.
If we are going to get ourselves stuck in another rigid (and rigged) - though modified - system, then I think we are going to be no better than before.
The PM gave several guiding principles yesterday. I wish to give some of mine now on the NEM.
1. We should build a flexible and dynamic economic system with basic rules, and not a rigid system based on a new set of rules. There should be dynamism for investors and savers.
2. The key agencies should be answerable to the general public in some way on a regular business basis. We should call up BNM, MOF, MITI. MOE, MOT to explain what is happening on the ground. To my mind, the greatest misjudgement in policy is on the exchange rate which plays a key role in restraining Malaysia from getting out of the middle income. (But there are groups who are happy with us being in the middle trap because they are personally enjoying a good life while cracks and strains are appearing in the rest of the economy.)
3. There are some stale mindsets staying in senior officials. When asked what about the SMEs in the NEM, Amirsham - to the best of his ability - said, "I thought the role of the SMEs is clear - to support the big companies." This is a layman's view. What a shame, Amir! My view is that SMEs stay small and medium sized because they failed to grow to be big international firms, and this could be due to market constraints such as being hampered to serve just local MNCs or GLCs. We should be building a national route for local firms to compete in the global markets.
4. This brings me to the point about the state of the local economy. We have been so dependent on government spending to get the economy to grow since 1990, thanks to the greatness of our previous economic architect, that almost every corporation of any measure in Malaysia looks to the government for some form of business. And the argument now is that since we do not have the cash anymore, we should look to private investments. If the "private" sector is government-dependent, then tenders for government projects become a major issue. To focus therefore on the government tender system is therefore to miss the point.
5. A point is made that middle income economy depends on semi-skilled labour and graduates, and a high income economy depends on masters and PhDs. This takes time. The immediate solution is to grant PRs to foreign skilled professionals as well as double citizenship to Malaysians or ex-Malaysians already abroad.
6. The list can go on. But to create a great list to fix the national economic system is a telling indiction of the government system - that the ministers and the civil servants that we have now are a hopeless lot. They have to be told exactly what they have to do in order to do their jobs well. The so-called detailed Roadmap that is to be in NEM Part 2 a further proof of this paralysis in the public sector. I can be sure that the Roadmap will be extremely detailed and will take years to implement. To blindly implement a detailed Roadmap is to create yet another rigid system, albeit a better one. I think we are not getting out of the box.
7. Being stuck inside the box is a real problem. One of the slides this morning made the point that if our real GDP grows by 6.5% pa for the next 10 years, we must hit US$17,700 per head by 2020 which allows us to sneak in at the bottom of the high-income economy. I would interprete that income to be the top end of the middle-income economy, and if this is even trying, then we could as well slide down the pole to the bottom of the middle income, and below - if we fail to become flexible and dynamic as a society and economy.
8. If our administrative system is already efficient and functioning properly, the NEM is supposed to take a strategic role. We only have to provide one or two or even a handful of specific directions - such as market economy, transparent government, independent courts, poverty eradication - these should be sufficient to get the ball rolling for the system to change. No, instead, we are stuck arguing the details.
The NEAC presentation was about 10 slides based on the report NEM Part 1: Strategic Policy Directions.
The whole thing has been incredibly boring because it has got everybody talking about what's wrong with the Malaysian economy - and the whole agenda is making the whole nation with interested foreigners to bicker about our economic afflictions.
It would not be difficult to gather the data and details to support various arguments - especially by a well-paid team of young and enthusiastic graduates - and I would even imagine that NEM Part 1 would make a good read in this regard and probably be therapeutic for those reading it.
The tendency of everybody in the session - and even my tendency now - is to try to identify what are the real problems with this economy - but at one point or another, what needs to be said has already been said and probably a hundred times over.
This whole NEM has become a national nightmare.
The common phrase we now hear about the NEM is - the devil is in the details of the implementation. The other one is this - change we must but it may not be easy.
I choose to differ.
I think the most crucial aspect is to identify the core issues and to make core changes to policy and everything else will follow.
If we are going to get ourselves stuck in another rigid (and rigged) - though modified - system, then I think we are going to be no better than before.
The PM gave several guiding principles yesterday. I wish to give some of mine now on the NEM.
1. We should build a flexible and dynamic economic system with basic rules, and not a rigid system based on a new set of rules. There should be dynamism for investors and savers.
2. The key agencies should be answerable to the general public in some way on a regular business basis. We should call up BNM, MOF, MITI. MOE, MOT to explain what is happening on the ground. To my mind, the greatest misjudgement in policy is on the exchange rate which plays a key role in restraining Malaysia from getting out of the middle income. (But there are groups who are happy with us being in the middle trap because they are personally enjoying a good life while cracks and strains are appearing in the rest of the economy.)
3. There are some stale mindsets staying in senior officials. When asked what about the SMEs in the NEM, Amirsham - to the best of his ability - said, "I thought the role of the SMEs is clear - to support the big companies." This is a layman's view. What a shame, Amir! My view is that SMEs stay small and medium sized because they failed to grow to be big international firms, and this could be due to market constraints such as being hampered to serve just local MNCs or GLCs. We should be building a national route for local firms to compete in the global markets.
4. This brings me to the point about the state of the local economy. We have been so dependent on government spending to get the economy to grow since 1990, thanks to the greatness of our previous economic architect, that almost every corporation of any measure in Malaysia looks to the government for some form of business. And the argument now is that since we do not have the cash anymore, we should look to private investments. If the "private" sector is government-dependent, then tenders for government projects become a major issue. To focus therefore on the government tender system is therefore to miss the point.
5. A point is made that middle income economy depends on semi-skilled labour and graduates, and a high income economy depends on masters and PhDs. This takes time. The immediate solution is to grant PRs to foreign skilled professionals as well as double citizenship to Malaysians or ex-Malaysians already abroad.
6. The list can go on. But to create a great list to fix the national economic system is a telling indiction of the government system - that the ministers and the civil servants that we have now are a hopeless lot. They have to be told exactly what they have to do in order to do their jobs well. The so-called detailed Roadmap that is to be in NEM Part 2 a further proof of this paralysis in the public sector. I can be sure that the Roadmap will be extremely detailed and will take years to implement. To blindly implement a detailed Roadmap is to create yet another rigid system, albeit a better one. I think we are not getting out of the box.
7. Being stuck inside the box is a real problem. One of the slides this morning made the point that if our real GDP grows by 6.5% pa for the next 10 years, we must hit US$17,700 per head by 2020 which allows us to sneak in at the bottom of the high-income economy. I would interprete that income to be the top end of the middle-income economy, and if this is even trying, then we could as well slide down the pole to the bottom of the middle income, and below - if we fail to become flexible and dynamic as a society and economy.
8. If our administrative system is already efficient and functioning properly, the NEM is supposed to take a strategic role. We only have to provide one or two or even a handful of specific directions - such as market economy, transparent government, independent courts, poverty eradication - these should be sufficient to get the ball rolling for the system to change. No, instead, we are stuck arguing the details.
Tuesday, March 30, 2010
NEM: PM's Keynote Address at InvestMalaysia 2010
I was supposed to attend but didn't make it due to short notice, but managed to catch it live on TV just now.
First impressions:
1. The coverage ranges from poverty eradication, price distortions, middle-income trap, social safety net to high-income goal, political will, change, innovation, Bumiputra policy, investments, EPF, institutional change (MIDA) listed companies, GLCs, divestments, and property development. It is too comprehensive to be focused.
2. I feel at times that the first part of the speech was drafted by an analyst, which is a bit impersonal, while the latter part is a bit more gutsy and more categoric.
3. I feel that poverty cannot simply be eradicated by just raising the income level of the poorest section of society to solve the poverty problem. Poverty is inherent in the capitalistic system that we are in, and therefore needs a system to over-ride the system defect. A higher-income economy does not necessarily mean that will be no poverty. Widening the social safety net is one, but it must be seen as a systemic issue about helping those unable to participate in the mainstream.
3. The real juxtoposition is between change/high-income policy and the Bumiputra policy. There is so much psychological baggage from the latter that it is going to distort the thinking on economic policy. I suppose it is this politics that is hard to shake off. The Bumiputra policy has graduated out of the poverty discussion and is now concerned about rights in taking a cut in the pie. The PM talks about being more transparent in the tender process for Bumiputra where the definition of Bumiputra is now more inclusive of other Bumiputra. It is as lapis a cake as you can get, without the cream or core or investors of the economy.
4. EPF is to divest into foreign markets to make way for foreign investors to come to the Malaysia stock market. It is as silly an idea as you can get. I blame the advisers. I thought the original intention of having an EPF is to fund local development in order to accelerate the growth of the local economy. If you put an accountant in charge of the EPF, you are going to get a non-economic strategy.
5. The change/corporation of MIDA into the Malaysian Investment Development Authority is a step forward in removing the excessive power from the MOF who deals with all things strategically and financially important for the local economy. The trend should continue to remove more authority from the MOF, in lieu of the MOF authority not removed from the PM. (Would this mean that the MIDA CEO will now be half an MOF?)
6. When a PM talks about economic policy, he should just focus on policy. The moment he gets into specific cases, such as the divestments by GLCS and the nature of the divesments, I think we are zoomed back into the same old matrix.
I could have gotten some of the points off, so let's see what the reports say and see if I need to correct myself later.
First impressions:
1. The coverage ranges from poverty eradication, price distortions, middle-income trap, social safety net to high-income goal, political will, change, innovation, Bumiputra policy, investments, EPF, institutional change (MIDA) listed companies, GLCs, divestments, and property development. It is too comprehensive to be focused.
2. I feel at times that the first part of the speech was drafted by an analyst, which is a bit impersonal, while the latter part is a bit more gutsy and more categoric.
3. I feel that poverty cannot simply be eradicated by just raising the income level of the poorest section of society to solve the poverty problem. Poverty is inherent in the capitalistic system that we are in, and therefore needs a system to over-ride the system defect. A higher-income economy does not necessarily mean that will be no poverty. Widening the social safety net is one, but it must be seen as a systemic issue about helping those unable to participate in the mainstream.
3. The real juxtoposition is between change/high-income policy and the Bumiputra policy. There is so much psychological baggage from the latter that it is going to distort the thinking on economic policy. I suppose it is this politics that is hard to shake off. The Bumiputra policy has graduated out of the poverty discussion and is now concerned about rights in taking a cut in the pie. The PM talks about being more transparent in the tender process for Bumiputra where the definition of Bumiputra is now more inclusive of other Bumiputra. It is as lapis a cake as you can get, without the cream or core or investors of the economy.
4. EPF is to divest into foreign markets to make way for foreign investors to come to the Malaysia stock market. It is as silly an idea as you can get. I blame the advisers. I thought the original intention of having an EPF is to fund local development in order to accelerate the growth of the local economy. If you put an accountant in charge of the EPF, you are going to get a non-economic strategy.
5. The change/corporation of MIDA into the Malaysian Investment Development Authority is a step forward in removing the excessive power from the MOF who deals with all things strategically and financially important for the local economy. The trend should continue to remove more authority from the MOF, in lieu of the MOF authority not removed from the PM. (Would this mean that the MIDA CEO will now be half an MOF?)
6. When a PM talks about economic policy, he should just focus on policy. The moment he gets into specific cases, such as the divestments by GLCS and the nature of the divesments, I think we are zoomed back into the same old matrix.
I could have gotten some of the points off, so let's see what the reports say and see if I need to correct myself later.
Thursday, March 25, 2010
NEM: Pandering To Short-Term Investors
Stockbrokers and fund managers, no matter how they style themselves, are short-term investors based on long-term views. Investors with short-term views are called speculators.
I do not understand why the Prime Minister of Malaysia has to go to Hong Kong to talk to stockbrokers and fund managers about the New Economic Model for Malaysia. It is none of their business.
The rightful audience for the NEM are the local people, the citizens of Malaysia, who must be convinced that the NEM is the best thing that can happen to Malaysia and Malaysians such that the NEM will create the greatest confidence and pride that the people of Malaysia can have in their own country - so much so that they will sink in all that they have - the wealth their parents left them (if any), the wealth they have made in Malaysia, the wealth they have made abroad, their current savings, and their current efforts - and build on what we have new structures and systems that will improve social and economic life in Malaysia.
The last thing you want to do with the NEM is to convince short-term investors and speculators in Hong Kong that Malaysia is the place for you to take a quick punt - of at most nine months - by ordering that government agencies cut down on their holdings of listed companies so that these foreigners can do that punt.
I think the Prime Minister is being ill-advised in this case to pander to these opportunist investors. What we want in Malaysia are proper investors who will sink in their capital into machinery and work to produce output to serve the world.
In this world of excessive liquidity, liquidity is not the problem for the economy. It is the lack of good ideas for real investment in Malaysia that is hampering Malaysia from getting out of the middle-income trap into a high-income economy. It is the unwillingness to do the hard work of building a business that is the problem.
If you then mix in politics along racial ground, then you really are caught in a mental trap that is dragging down the economic strength and resolution.
I do not understand why the Prime Minister of Malaysia has to go to Hong Kong to talk to stockbrokers and fund managers about the New Economic Model for Malaysia. It is none of their business.
The rightful audience for the NEM are the local people, the citizens of Malaysia, who must be convinced that the NEM is the best thing that can happen to Malaysia and Malaysians such that the NEM will create the greatest confidence and pride that the people of Malaysia can have in their own country - so much so that they will sink in all that they have - the wealth their parents left them (if any), the wealth they have made in Malaysia, the wealth they have made abroad, their current savings, and their current efforts - and build on what we have new structures and systems that will improve social and economic life in Malaysia.
The last thing you want to do with the NEM is to convince short-term investors and speculators in Hong Kong that Malaysia is the place for you to take a quick punt - of at most nine months - by ordering that government agencies cut down on their holdings of listed companies so that these foreigners can do that punt.
I think the Prime Minister is being ill-advised in this case to pander to these opportunist investors. What we want in Malaysia are proper investors who will sink in their capital into machinery and work to produce output to serve the world.
In this world of excessive liquidity, liquidity is not the problem for the economy. It is the lack of good ideas for real investment in Malaysia that is hampering Malaysia from getting out of the middle-income trap into a high-income economy. It is the unwillingness to do the hard work of building a business that is the problem.
If you then mix in politics along racial ground, then you really are caught in a mental trap that is dragging down the economic strength and resolution.
Wednesday, March 24, 2010
Unemployability Or Social Change
I have been distracted by this idea of the "unemployability" of a whole new generation of children around the world, even in the developed world.
If the problem of "unemployability" is limited to a small society like Malaysia, then there is a need for the education system to change. But if the problem is spread across several societies, then it would seem that there is a need for change or that there will have to a change (by policy or otherwise) in the way society will function and look like in the years to come.
I am reminded that the IT revolution of today was and still is helmed by a few hippies of the sixties who seemed to have dropped out of the system and went on their own path. Steve Jobs, Bill Gates. The focus is not on their not having completed their education, but they saw different things.
"Unemployablity" can be elaborated in several ways. The first impression is that these young people who have passed through the educational system are "useless" - being "unfit for job vacancies that are currently available." Precisely. If only these young people would come up with ideas based on things they know how to do or wish to do.
Young IT savvy people who spent their formative years interacting with an illuminated piece of glass are typically shy and ungregarious. They are totally unfit for the incessant talking and cajoling required of the modern sales people who are now called business development executives or whatnots. There is stress in present industries because of overproduction and overconsumption of hackneyed products - which define the jobs that are typically available to young people who may feel they would rather be involved in other lines of "business."
The world is today caught in probably one of the most significant structural changes where the focus of the global economic power is slowly but surely shifting to the east - and not without must protest from the west. We should therefore expect societies around the world to change and transform and take on an entirely different shape. What that shape wil be will depend on the currently "unemployable" young people - who being unemployed will have to then employ themselves by doing whatever they can do.
I think the young people do not need new things. Their parents have already cluttered the whole house. Their parents have already bought more houses than any one family however extended will need. Their parents have enough big cars to drive around empty. I think the young people will do simple things which they really want to do and live a fulfilling life. At this, the GDP that measures quantities produced will have to fall sharply. The young people could save the world from being dug out wholesale to make things which the world do not want. The young people could eat simply and healthly - and they do not need to have a glib tongue to earn money and pile up on the material stuff.
Am I right or will I be right? I do not know. It doesn't matter. What matters is the way to get out of the box that we find ourselves in, without doing violence to the box.
If the problem of "unemployability" is limited to a small society like Malaysia, then there is a need for the education system to change. But if the problem is spread across several societies, then it would seem that there is a need for change or that there will have to a change (by policy or otherwise) in the way society will function and look like in the years to come.
I am reminded that the IT revolution of today was and still is helmed by a few hippies of the sixties who seemed to have dropped out of the system and went on their own path. Steve Jobs, Bill Gates. The focus is not on their not having completed their education, but they saw different things.
"Unemployablity" can be elaborated in several ways. The first impression is that these young people who have passed through the educational system are "useless" - being "unfit for job vacancies that are currently available." Precisely. If only these young people would come up with ideas based on things they know how to do or wish to do.
Young IT savvy people who spent their formative years interacting with an illuminated piece of glass are typically shy and ungregarious. They are totally unfit for the incessant talking and cajoling required of the modern sales people who are now called business development executives or whatnots. There is stress in present industries because of overproduction and overconsumption of hackneyed products - which define the jobs that are typically available to young people who may feel they would rather be involved in other lines of "business."
The world is today caught in probably one of the most significant structural changes where the focus of the global economic power is slowly but surely shifting to the east - and not without must protest from the west. We should therefore expect societies around the world to change and transform and take on an entirely different shape. What that shape wil be will depend on the currently "unemployable" young people - who being unemployed will have to then employ themselves by doing whatever they can do.
I think the young people do not need new things. Their parents have already cluttered the whole house. Their parents have already bought more houses than any one family however extended will need. Their parents have enough big cars to drive around empty. I think the young people will do simple things which they really want to do and live a fulfilling life. At this, the GDP that measures quantities produced will have to fall sharply. The young people could save the world from being dug out wholesale to make things which the world do not want. The young people could eat simply and healthly - and they do not need to have a glib tongue to earn money and pile up on the material stuff.
Am I right or will I be right? I do not know. It doesn't matter. What matters is the way to get out of the box that we find ourselves in, without doing violence to the box.
Thursday, February 25, 2010
Schools Are Churning Out The Unemployable
This is a familiar subject for many of us in Malaysia, and imagine how delighted I was when I came across this article in a foreign newspaper - of all places, the UK Times.
The thought that sprung to my mind was that - aha, now, this does not look like a typical Malaysian problem. Could it then be a problem of the times - and in particular, recession times?
When times are good, employers do not mind hiring anybody so long as that body will turn up for work - to answer phone calls, letters or emails.
When times are bad, employers argue about quality and price. As do everybody else.
I think that the only difference that we have among ourselves or between us is the scope for us to suffer errors and be allowed to live another day. At the end of the day, when times get tough, the only way out is to work hard and not die.
***
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article7034975.ece
Schools are churning out the unemployable
Harriet Sergeant
The latest unemployment figures are a shocker. Eight million adults are “economically inactive”. That means one in five people of working age does not have a job. A new and expanding group, poignantly described as “discouraged” workers, have even given up looking.
They are right to be discouraged but wrong that there is no work. A report out on Friday points out that a fifth of firms and a quarter of employers in the state sector are still hiring — despite the recession. Except they are taking on migrant workers — not our home-grown “discouraged” variety.
The managing director of a medium-sized IT company explained why. High-flyers — Oxford and Cambridge graduates — are still as good as any in the world. His problems come when he tries to recruit middle management. Last year he interviewed 52 graduates — all educated in state schools. On paper they looked “brilliant students”. Each had three As at A-level and a 2:1 degree. He shook his head. “There’s a big difference between people passing exams and being ready for work.”
This was obvious even before the interview began. Of the 52 applicants, half arrived late. Only three of the 52 walked up to the managing director, looked him in the eye, shook his hand and said, “Good morning.” The rest “just ambled in”. When he asked them to solve a problem, only 12 had come equipped with a notebook and pencil.
The three who had greeted him proved the strongest candidates and he hired them. Within a year they were out because of their “lackadaisical” attitude. They did not turn up on time; for the first six months a manager had to check all their emails for spelling and grammar; they did not know how to learn. It was the first time they had ever been asked to learn on their own. Their ability to “engage in business” was “incredibly” disappointing and “at 5.30 on the dot they left the office”.
This year the managing director has joined the 20% of companies recruiting overseas. “We are an English company but we have no English staff. It’s just too much trouble,” he said.
It is the same story with employers at every level in the UK. Sir Terry Leahy, the chief executive of Tesco, put it bluntly. Too many children have been leaving school after 11 or 13 years of compulsory education “without the basic skills to get on in life and hold down a job”. He said 5m adults were functionally illiterate and 17m could not add up properly. “On-the-job training” cannot act as a “bandage or sticking plaster” for “the failure of our education system”.
A CBI survey revealed that literacy and numeracy were not the only problems. More than 50% of employers complained that young people were inarticulate, unable to communicate concisely, interpret written instructions or perform simple mental calculations.
This goes a long way to explain why, of the 1.7m jobs created since 1997, 81% have gone to foreign workers. The Department for Work and Pensions (DWP) agrees with Leahy. UK citizens are on the dole because of “issues around basic employability skills, incentives and motivation”. It is a pity it has not passed that insight on to the Department for Children, Schools and Families.
The DWP has made it clear: work is where the inflated claims for our state education finally hit the buffers. At every stage we have a system in which the expediency of politicians and the ideology of the educational establishment take precedence over the interests of pupils.
We have children who can barely read and write scoring high marks in their Sats because it makes the school, and therefore politicians, look good. We have exam boards competing to offer the lowest pass mark because it allows heads to fulfil their GCSE targets. We have pupils pushed into easy subjects at A-level — which excludes them from applying to a top university — because it benefits the school. And we have universities that offer a 2:1 degree, as the IT company director put it, to “anyone who bothers to sit down and take the exam”.
On top of that is the attitude of the staff themselves. I was visiting schools to discover why so many black Caribbean and white working-class boys were failing. One reason soon became obvious. Their teachers, middle class themselves, failed to pass on those very values that had allowed them to progress in life.
They viewed inculcating attributes such as lucidity, spelling, grammar, punctuality and manners as “patronising”. They feared anything that smacked of the didactic. “I am not a teacher. I am a facilitator,” said one teacher primly. The head of another school insisted she was a “head learner” rather than a headmistress.
Joseph P Parkes is clear who he is and it is definitely not a head learner. Father Parkes is the president of Cristo Rey, a Catholic coeducational school in East Harlem, New York. His mainly black and Puerto Rican pupils come from single-parent homes; many have fathers in prison. But he is determined that no one is going to turn them down for a job.
His school operates an ingenious work-share scheme with some of New York’s most prestigious companies and charities. Once a week pupils put on their identity cards, go down to Wall Street and enter another world — of law firms and investment banks.
From the age of 14 they join a team of five pupils each performing clerical work one day a week. They know their salary pays “a big chunk” of their education. As one young man said: “They treat me like an adult.” Parkes explained: “It encourages them to take school seriously.”
How seriously I saw for myself when Parkes addressed morning assembly. We stood in rows, teachers patrolling on either side, straightening a shoulder here, checking a tie there. The talk was entitled First Impressions. “Now what kind of first impression have you made on our visitor from the UK here?” asked Parkes. “Have you shaken Miss Sergeant by the hand and looked her in the eye?” he demanded. Seventy pairs of eyes immediately engaged me. “Have you greeted her?” “Good morning,” they all chanted enthusiastically.
He held up a sheaf of papers, printouts of emails. The previous day, he had set them the task of applying for a job interview on the internet. First, had they researched the company? He summoned one boy to the front, who listed his company’s interests fluently. Parkes nodded approval, then turned back to us. Now then, how many had tracked down the right address for the email? Who was dispatching their precious job application to the man in the post room? Everyone laughed.
No detail seemed too small for Parkes. Had they spelt names correctly? He waved the papers accusingly. Some of the students had addressed their emails to him: “You were not following directions. You have got to learn to follow directions.” He selected three or four sheets. “And some of you have an email address that is inappropriate for a job application. Put yourself in the company’s shoes. Are you really going to give an interview to JosetheNiceGuy, FastandFurious@Hotmail” — the boy next to me blushed — “or Cristo Rey Hottie?” The pupils erupted. Finally, the head demanded: “What happens when you are not proactive?” “You are being a procrastinator,” they shouted back.
Parkes knows that his school is the only chance these young people have. Education has to make up for their background and the lack of those values that ensure success. He knows they are totally dependent on him for their future. If employers like the managing director are to recruit in England again, it is a lesson that our state schools will have to learn.
The thought that sprung to my mind was that - aha, now, this does not look like a typical Malaysian problem. Could it then be a problem of the times - and in particular, recession times?
When times are good, employers do not mind hiring anybody so long as that body will turn up for work - to answer phone calls, letters or emails.
When times are bad, employers argue about quality and price. As do everybody else.
I think that the only difference that we have among ourselves or between us is the scope for us to suffer errors and be allowed to live another day. At the end of the day, when times get tough, the only way out is to work hard and not die.
***
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article7034975.ece
Schools are churning out the unemployable
Harriet Sergeant
The latest unemployment figures are a shocker. Eight million adults are “economically inactive”. That means one in five people of working age does not have a job. A new and expanding group, poignantly described as “discouraged” workers, have even given up looking.
They are right to be discouraged but wrong that there is no work. A report out on Friday points out that a fifth of firms and a quarter of employers in the state sector are still hiring — despite the recession. Except they are taking on migrant workers — not our home-grown “discouraged” variety.
The managing director of a medium-sized IT company explained why. High-flyers — Oxford and Cambridge graduates — are still as good as any in the world. His problems come when he tries to recruit middle management. Last year he interviewed 52 graduates — all educated in state schools. On paper they looked “brilliant students”. Each had three As at A-level and a 2:1 degree. He shook his head. “There’s a big difference between people passing exams and being ready for work.”
This was obvious even before the interview began. Of the 52 applicants, half arrived late. Only three of the 52 walked up to the managing director, looked him in the eye, shook his hand and said, “Good morning.” The rest “just ambled in”. When he asked them to solve a problem, only 12 had come equipped with a notebook and pencil.
The three who had greeted him proved the strongest candidates and he hired them. Within a year they were out because of their “lackadaisical” attitude. They did not turn up on time; for the first six months a manager had to check all their emails for spelling and grammar; they did not know how to learn. It was the first time they had ever been asked to learn on their own. Their ability to “engage in business” was “incredibly” disappointing and “at 5.30 on the dot they left the office”.
This year the managing director has joined the 20% of companies recruiting overseas. “We are an English company but we have no English staff. It’s just too much trouble,” he said.
It is the same story with employers at every level in the UK. Sir Terry Leahy, the chief executive of Tesco, put it bluntly. Too many children have been leaving school after 11 or 13 years of compulsory education “without the basic skills to get on in life and hold down a job”. He said 5m adults were functionally illiterate and 17m could not add up properly. “On-the-job training” cannot act as a “bandage or sticking plaster” for “the failure of our education system”.
A CBI survey revealed that literacy and numeracy were not the only problems. More than 50% of employers complained that young people were inarticulate, unable to communicate concisely, interpret written instructions or perform simple mental calculations.
This goes a long way to explain why, of the 1.7m jobs created since 1997, 81% have gone to foreign workers. The Department for Work and Pensions (DWP) agrees with Leahy. UK citizens are on the dole because of “issues around basic employability skills, incentives and motivation”. It is a pity it has not passed that insight on to the Department for Children, Schools and Families.
The DWP has made it clear: work is where the inflated claims for our state education finally hit the buffers. At every stage we have a system in which the expediency of politicians and the ideology of the educational establishment take precedence over the interests of pupils.
We have children who can barely read and write scoring high marks in their Sats because it makes the school, and therefore politicians, look good. We have exam boards competing to offer the lowest pass mark because it allows heads to fulfil their GCSE targets. We have pupils pushed into easy subjects at A-level — which excludes them from applying to a top university — because it benefits the school. And we have universities that offer a 2:1 degree, as the IT company director put it, to “anyone who bothers to sit down and take the exam”.
On top of that is the attitude of the staff themselves. I was visiting schools to discover why so many black Caribbean and white working-class boys were failing. One reason soon became obvious. Their teachers, middle class themselves, failed to pass on those very values that had allowed them to progress in life.
They viewed inculcating attributes such as lucidity, spelling, grammar, punctuality and manners as “patronising”. They feared anything that smacked of the didactic. “I am not a teacher. I am a facilitator,” said one teacher primly. The head of another school insisted she was a “head learner” rather than a headmistress.
Joseph P Parkes is clear who he is and it is definitely not a head learner. Father Parkes is the president of Cristo Rey, a Catholic coeducational school in East Harlem, New York. His mainly black and Puerto Rican pupils come from single-parent homes; many have fathers in prison. But he is determined that no one is going to turn them down for a job.
His school operates an ingenious work-share scheme with some of New York’s most prestigious companies and charities. Once a week pupils put on their identity cards, go down to Wall Street and enter another world — of law firms and investment banks.
From the age of 14 they join a team of five pupils each performing clerical work one day a week. They know their salary pays “a big chunk” of their education. As one young man said: “They treat me like an adult.” Parkes explained: “It encourages them to take school seriously.”
How seriously I saw for myself when Parkes addressed morning assembly. We stood in rows, teachers patrolling on either side, straightening a shoulder here, checking a tie there. The talk was entitled First Impressions. “Now what kind of first impression have you made on our visitor from the UK here?” asked Parkes. “Have you shaken Miss Sergeant by the hand and looked her in the eye?” he demanded. Seventy pairs of eyes immediately engaged me. “Have you greeted her?” “Good morning,” they all chanted enthusiastically.
He held up a sheaf of papers, printouts of emails. The previous day, he had set them the task of applying for a job interview on the internet. First, had they researched the company? He summoned one boy to the front, who listed his company’s interests fluently. Parkes nodded approval, then turned back to us. Now then, how many had tracked down the right address for the email? Who was dispatching their precious job application to the man in the post room? Everyone laughed.
No detail seemed too small for Parkes. Had they spelt names correctly? He waved the papers accusingly. Some of the students had addressed their emails to him: “You were not following directions. You have got to learn to follow directions.” He selected three or four sheets. “And some of you have an email address that is inappropriate for a job application. Put yourself in the company’s shoes. Are you really going to give an interview to JosetheNiceGuy, FastandFurious@Hotmail” — the boy next to me blushed — “or Cristo Rey Hottie?” The pupils erupted. Finally, the head demanded: “What happens when you are not proactive?” “You are being a procrastinator,” they shouted back.
Parkes knows that his school is the only chance these young people have. Education has to make up for their background and the lack of those values that ensure success. He knows they are totally dependent on him for their future. If employers like the managing director are to recruit in England again, it is a lesson that our state schools will have to learn.
Tuesday, February 23, 2010
Noah's Ark In A World Of Excess Liquidity
The global fact today is excess liquidity. The excess liquidity was created by Greenspan over nearly two decades of unrestrained monetary exuberance, justified somewhat by the need to lubricate the IT revolution, and which has resulted in the following:
1. The rise of China as a global economic power fed first by the battle for cheap exports to the US and second by the flight of investment cash to the brave new Chinese market. This is probably the single biggest consequence of the Greenspan monetary mismanagement.
2. Underneath the China rise is the relentless search for better returns by investment bankers in markets around the world, which resulted in the flooding of every equity market of any substance with the flow and ebb of investment capital which accentuates the fluctuations in the forex and equity markets. There is now the IMF rethink that probably capital restraint is not a bad think - and I think it should better be directed at the money market rather than in the capital market.
3. With any excessive monetary creation is always the problem of inflation - and there are many analysts who would like to think that, given the quantity of money supply and the output level, inflation is not excessive. In the initial stages, when the excessive money is sloshing in the equity market and then, when that dies, and the cash goes into the property market, triggered by hapless bankers seeking to earn supernormal bonuses, the inflation in real estate is "bearable" and some would even say "desirable." Less so in Malaysia than the US where the property bubble burst after the bubble burst in Malaysia and our neighbours and that was after the Japan bubble burst not that long ago.
4. By the rescue of financial institutions, the US is doing what we less beings had done with ours. Whether that act is justified or not is a subject for debate - at least in the academic world of monetary and banking theory. The rescue of banks by central banks is a necessary evil in this articial monetary world of fiat money we have unfortunately created for ourselves - clever, yes, as well as illusionary. But don't let us think there is no appreciable consequence. The key effect is that asset prices are now artificially held up above equilibrium levels that time becomes the only solution as income struggles to rise to justify the high asset prices. Struggles because the asset-rich elite now do not have to work, and the poor workers on low pay in stagnant economies have to live in cramp conditions to give the asset-rich their rental income that they live on.
5. But the ultimate consequence of the excess liquidity in the world is the rise of China which unleashes a world new world of consequence, when a third of the world which used to be hungry is now not so destitute. With the frenzy of consumption (and investment), there is a significant and noticeable shift in the global aggregate demand curve to the right and hence a global rise in prices across all markets - except for the finished Chinese products. Nobody should think that the excess liquidity created by Greenspan had no impact on global inflation.
Noah's Ark
If there is excess liquidity, where is Noah's Ark to save us all?
The excess liquidity remains because the central banks have all plunged the holes with their bank rescues and so we are now all trapped in a world of ample worthless cash. Unplugging the holes does not appear to be a practical option.
The larger world now seems caught in a stalemate. The only way out for most countries seems to be a pray that somehow investors would be inspired with new innovative ideas to start a new round of investment projects - creating products that will entice the people of the world to consume and hence stimulating more economic activities.
In economies where confidence is at the lowest, the interest rate for savings would be the lowest because politicians, in their desperate bid to save their political careers, are very willing to punish the small savers in order to applease the big investors. This policy may work to opposite effects - as small savers, i.e., the many voters - will be unhappy over the erosion of true traditional values of hard work and saving, while the big investors will take the cheap funds and invest where the market exists.
In more confident economies, of which there is probably only one in the world at present, i.e., China, the policy action is exactly the opposite - instilling monetary discipline, raise interest and generally trying to slowdown the growth of the bubble. China is the only country in the world where the people are hungry and the environment is conducive for people to work hard to pull themselves up by their bootstraps. China is probably the Noah's Ark, if any one should be looking for one to climb onboard.
1. The rise of China as a global economic power fed first by the battle for cheap exports to the US and second by the flight of investment cash to the brave new Chinese market. This is probably the single biggest consequence of the Greenspan monetary mismanagement.
2. Underneath the China rise is the relentless search for better returns by investment bankers in markets around the world, which resulted in the flooding of every equity market of any substance with the flow and ebb of investment capital which accentuates the fluctuations in the forex and equity markets. There is now the IMF rethink that probably capital restraint is not a bad think - and I think it should better be directed at the money market rather than in the capital market.
3. With any excessive monetary creation is always the problem of inflation - and there are many analysts who would like to think that, given the quantity of money supply and the output level, inflation is not excessive. In the initial stages, when the excessive money is sloshing in the equity market and then, when that dies, and the cash goes into the property market, triggered by hapless bankers seeking to earn supernormal bonuses, the inflation in real estate is "bearable" and some would even say "desirable." Less so in Malaysia than the US where the property bubble burst after the bubble burst in Malaysia and our neighbours and that was after the Japan bubble burst not that long ago.
4. By the rescue of financial institutions, the US is doing what we less beings had done with ours. Whether that act is justified or not is a subject for debate - at least in the academic world of monetary and banking theory. The rescue of banks by central banks is a necessary evil in this articial monetary world of fiat money we have unfortunately created for ourselves - clever, yes, as well as illusionary. But don't let us think there is no appreciable consequence. The key effect is that asset prices are now artificially held up above equilibrium levels that time becomes the only solution as income struggles to rise to justify the high asset prices. Struggles because the asset-rich elite now do not have to work, and the poor workers on low pay in stagnant economies have to live in cramp conditions to give the asset-rich their rental income that they live on.
5. But the ultimate consequence of the excess liquidity in the world is the rise of China which unleashes a world new world of consequence, when a third of the world which used to be hungry is now not so destitute. With the frenzy of consumption (and investment), there is a significant and noticeable shift in the global aggregate demand curve to the right and hence a global rise in prices across all markets - except for the finished Chinese products. Nobody should think that the excess liquidity created by Greenspan had no impact on global inflation.
Noah's Ark
If there is excess liquidity, where is Noah's Ark to save us all?
The excess liquidity remains because the central banks have all plunged the holes with their bank rescues and so we are now all trapped in a world of ample worthless cash. Unplugging the holes does not appear to be a practical option.
The larger world now seems caught in a stalemate. The only way out for most countries seems to be a pray that somehow investors would be inspired with new innovative ideas to start a new round of investment projects - creating products that will entice the people of the world to consume and hence stimulating more economic activities.
In economies where confidence is at the lowest, the interest rate for savings would be the lowest because politicians, in their desperate bid to save their political careers, are very willing to punish the small savers in order to applease the big investors. This policy may work to opposite effects - as small savers, i.e., the many voters - will be unhappy over the erosion of true traditional values of hard work and saving, while the big investors will take the cheap funds and invest where the market exists.
In more confident economies, of which there is probably only one in the world at present, i.e., China, the policy action is exactly the opposite - instilling monetary discipline, raise interest and generally trying to slowdown the growth of the bubble. China is the only country in the world where the people are hungry and the environment is conducive for people to work hard to pull themselves up by their bootstraps. China is probably the Noah's Ark, if any one should be looking for one to climb onboard.
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