Malaysia should focus on education
Writer: Lee Hwok Aun
Published: Fri, 21 Oct 2011
2011 will have to go down as the year of the occupied square. The Occupy Wall Street month-long encampment at Zuccotti Park in Manhattan follows a motif painted from Tunis’ Kasbah Square to Cairo’s Tahrir Square, among the more epic places of revolutionary gathering.
Of course, we must press the comparison lightly. Protesting an economic injustice, corporate greed and unaccountable power is not as dangerous and momentous as fighting – and triumphing over – vicious tyrants.
But who can deny they got the world’s attention? The spread of Occupy Wall Street to American cities, and to tributary gatherings at symbolic places around the world (including Dataran Merdeka), shows that people around the world share the movement’s evoked sentiments.
A Time magazine survey found Americans’ impressions of the protests to be 54% favourable and 23% negative. According to an NBC/Wall Street Journal survey, 37% “tend to support” while 18% “tend to oppose” Occupy Wall Street.
The public square settlers chanted, “We are the 99%!” Not the top 1%, who in the United States take a fifth of national income and a third of national wealth, who live plushly while the unemployed worker and underfunded student grope for scraps, and who recently had the expiring Bush tax cuts renewed. Not the top 1%, who spend lavishly in political lobbying to secure tax breaks and lax regulations, discredit and defund public institutions, and who escaped penalty after causing the financial crisis.
This is really a battle of access to political power and control of the policy agenda. The choice to take to the streets befalls those barred, by lack of money, crony connection or party representation, from the corridors of power.
Lower- and middle-class people are feeling the financial squeeze and government budgets around the world are straining. In response, should countries raise revenue or slash expenses?
The response in the US, and more severely in the UK, is to cut spending and to let finance loose, again.
How about increasing tax rates? Notably, billionaire investor Warren Buffett implored the government to tax him higher and stop coddling rich folks. His message has not gained critical mass.
Away from much of the media spotlight, throughout June-August, students in Chile rallied around public education, boycotting classes, occupying schools and protesting in the streets. They demanded more, and better targeted, funding for public education.
Here in Malaysia, the financial sector’s power may not be as widespread, visible and entrenched as it is in the US, and we have sustained public funding for education.
But there are indications that financial interests dominate, and not in the most productive ways. We continue to ignore potentially large and socially productive public revenue sources. Education expenditure, while substantial in quantity, fails to meet the challenges of declining quality.
Manufacturing’s share of debt securities issued in Malaysia fell from an average of 21.0% over 1990-1997 to 2.2% over 2007-2010. Across the same interval, the share of the finance and business services rose from 15.3% to 52.2% – mostly in the form of asset-backed bonds. Parlaying money to make more money is alive and growing.
Between 1990-2001 and 2009-2011, the average annual amount of loans disbursed for manufacturing activities increased by a mere 30% in real terms, compared to 460% for credit cards and 280% for property purchases. Our system is veering towards buying inflatable assets rather than making things of real value and innovation.
Pre-budget chatter every September-October, it seems, ponders whether the upper bracket’s income tax will be reduced. In recent years, we’ve tangoed with the goods and services tax (GST).
Throughout all this, we retain zero capital gains tax on equity. In Malaysia, you can earn income buying and selling shares and pocket all the difference. The absence of a capital gains tax is not only a foregone legitimate source of government revenue, it also inclines investment to short term horizons. The rationale of a tax to penalise rampant profiteering underlies the real property gains tax – is there any reason it should not apply to equity? The top 1% will be happy with the status quo.
Our 2012 federal budget allocates funds to cover remaining bits of standard school fees. This is welcome, but how about delivering not just free schooling but also good schooling? How about recruiting and retaining a mass of good teachers?
Of course, the budget speech mentions “quality education”, but devotes little toward rejuvenating public schools. For teachers, there is an exit policy for deadwood and a retention policy for the perseverant, but no entry policy to attract the brightest and best into the profession. There are plenty of incentives for private schools. The 99% will not have much to do with private schools.
Occupy Dataran’s peaceful, community-building Oct 15 congregation – just half a day from afternoon to late at night – was prematurely broken up by police.
I wonder what will be sadder in 10 years: youth being unable to do write a decent sentence, or being too indifferent and intimidated to occupy a public square to protest the deficient public education they’re dealt?