PROFESSIONAL DEVELOPMENT
INGENIEUR
Liberalisation: Is it time for
change for the Professional
Engineering Service Industry
and the Laws that governed
It? – PART 2
By Ir. Dr Abdul Majid bin Dato’ Abu Kassim
6.0 Does Malaysia’s Professional Engineering
Services Need to Liberalise?
Besides Government commitments to international
free trade, the economic health of the country
comes into play. After 57 years of independence,
Malaysia’s global competitive ranking (2010-2011)
and overall economic standing (2008) compared
with developed and developing countries leaves
much to be desired. The Government views
liberalisation of services as a strategic reform to
improve Malaysia’s competitiveness and propel
the country out of the middle-income trap. In
the benchmarking of the services sector, the
Malaysian service sector is lagging and needs to
be bolstered to increase its contribution towards
the country’s GDP.
In Figure 6, Malaysia’s global competitiveness
has dropped alarmingly from 21 to 26 during the
period 2007 to 2011. Recently this has somewhat
improved as a result of Government intervention
to improve the business environment but it has
not yet achieved the desired level. Figure 7 is the
country’s economic performance in terms of GDP
over a period from 1970 to 2008. In comparison
to Taiwan and Korea which started on the same
economic level as Malaysia, both countries have
progressed by leaps and bounds in economic
performance. Other countries such as China and
Thailand which started at lower economic level in
1970 are progressing rapidly and may overtake
Malaysia’s GDP over the next decade.
6
64
VOL
– DECEMBER 2015
VOL64
55OCTOBER
JUNE 2013
Malaysia is stuck in the “middle-income trap”
and has lost its competitive edge in the export
of manufactured products due to rising wages.
Malaysia may for decades remain so with Gross
National Income (GNI) remaining stagnant and
hence it may not achieve the “high-income” status
it desires if nothing is done. For too long she has
been too dependent on cheap labour and capital.
Avoiding the middle income trap, entails the
Government to view the engineering service sector
as a driver for creativity that supports many pillars
of the Malaysian economy. This requires untapping
the potential of the engineering services to help
to drive growth based on high productivity and
innovation.
To be a developed and high-income nation,
the country’s economy must mimic those of other
developed nations that have similar characteristics
as shown in Figure 8.
From Figure 8, in developed nations such as
Singapore, Hong Kong, Australia, United Kingdom
and United States the proportion of the service
sector contribution towards the country’s GDP
is more than 65%. The notable exception is
Australia whereby the mining industry contributes
a fair proportion. The economic structure of high
income countries shows that the manufacturing
and agriculture industry contribute only a small
proportion to the GDP. For low income countries,
such as Thailand and Indonesia, the service sector
industry contributes less than 50% to the GDP. If