Blaming the Wrong Target: It’s Not Malay Supremacy or the NEP Causing Brain Drain, But Government Policy Missteps

The Malaysian brain drain is a persistent issue, often attributed to racial policies such as the New Economic Policy (NEP) and the broader narrative of Malay Supremacy (Ketuanan Melayu). This simplistic view misses a deeper systemic issue: the failure of government policies to capitalise on local talents and innovations in national development projects. Rather than prioritising homegrown solutions, the government consistently awards significant projects to foreign companies. The rollout of Malaysia’s 5G network is a prime example, where instead of opting for the cost-effective and flexible OpenRAN approach, the contract was handed to Ericsson, a proprietary system managed by a foreign entity.

The Overlooked Core of Brain Drain

While the rhetoric around Malay Supremacy and the NEP garners much attention as contributors to the exodus of talent, the reality is far more complex. Yes, racial and discriminatory policies might create frustration among certain groups, but the real deterrent for talented Malaysians is the lack of opportunities to apply their skills and innovations locally.

Our universities, both public and private, produce numerous patents and innovative research yearly. Local startups, tech firms, and research institutions have proposed solutions that could be implemented in national projects. Yet, when it comes to major initiatives—be it in telecommunications, infrastructure, or technology—foreign corporations are often favored. This discourages local talents who see their skills undervalued and their potential unrecognised, prompting them to seek opportunities elsewhere.

Case Study: The 5G Rollout Decision

The Malaysian government’s decision to award the 5G contract to Ericsson instead of utilising OpenRAN technology is a striking example of this mismanagement. OpenRAN, an open-source technology supported by many global telecommunications experts, offers a flexible and cost-effective alternative to proprietary systems. Adopting OpenRAN could have provided a platform for local companies and universities to collaborate, innovate, and gain practical experience. Instead, the government chose a closed system managed by a foreign entity, sidelining local expertise and innovation.

This choice reflects a broader pattern where local solutions are dismissed in favor of foreign options. The ramifications are clear: talented engineers, researchers, and tech entrepreneurs who could have contributed to national projects are left with no platform to showcase their skills. As a result, many of these skilled professionals opt to work abroad, where their expertise is valued and their contributions are recognised.

The Problem Is Policy, Not Ethnicity

When politicians like Khairy Jamaluddin address the issue of brain drain, they often mention systemic racial biases or outdated policies as primary causes. However, these explanations only scratch the surface. While racial policies such as the NEP may contribute to discontent among non-Bumiputeras, the core issue is the government’s reluctance to engage with local talents and products. It is not solely about ethnic favoritism but about the lack of trust in homegrown solutions.

For example, Malaysia has a wealth of talent in technology, agriculture, and the sciences. Universities and local firms have developed numerous patents, yet when it comes to implementing these innovations, the government looks outside. This trend sends a message to local talents: no matter how innovative your solution is, it will likely be sidelined for a foreign product. This disincentivises innovation and drives our brightest minds overseas, where they find more welcoming environments.

Learning from the Success of Local Startups Abroad

The story of Grab, originally conceived as “My Teksi,” highlights this issue. Founded by Malaysians Anthony Tan and Tan Hooi Ling, the startup faced numerous bureaucratic challenges and a lack of financial support at home. When local investors like Khazanah Nasional hesitated, Singapore’s Temasek stepped in. The rest is history—Grab became Southeast Asia’s first decacorn (a company valued over $10 billion), headquartered in Singapore. The success of Grab abroad exemplifies the missed opportunities when local innovations are not nurtured domestically.

This brain drain is not merely about individuals seeking higher salaries abroad but about the inability to scale their ideas and innovations within Malaysia. The problem is not an intrinsic flaw in the concept of Malay Supremacy or the NEP but rather a governmental failure to create an ecosystem where local talent can thrive and compete globally.

The Way Forward: Trust Local, Build National

The solution lies not in dismantling policies like the NEP but in creating a more inclusive and merit-based approach to national projects that prioritise local talent and innovations. The government must start viewing local universities, startups, and tech firms as valuable partners in national development rather than sidelining them for foreign expertise.

1. Prioritise Local Talent: Implement policies that require a significant portion of any national project to be carried out using local expertise. For example, for future telecommunications projects, mandate a consortium of local tech companies and universities to collaborate on implementing OpenRAN technologies.

2. Encourage Public-Private Partnerships: Facilitate partnerships between government agencies and local startups, providing them the platform and funding to scale their innovations. This could involve grants, tax incentives, or guaranteed contracts for projects showcasing local technology.

3. Promote Homegrown Innovation: Establish a national body to oversee and promote the use of locally developed patents in significant projects. By creating a pipeline for research to be commercialized and utilized in real-world applications, the government can help stem the flow of talent leaving the country.

4. Create an Ecosystem for Growth: Develop an ecosystem where startups and innovative projects can thrive without excessive bureaucracy. Simplifying processes for grants, funding, and project approvals will allow local talent to focus on innovation rather than navigating red tape.

In Brief

The narrative blaming Malay Supremacy or the NEP for the brain drain in Malaysia is an oversimplification that overlooks a more pressing issue: the lack of supportive government policies that prioritise local talent and innovation. By continuously awarding significant projects to foreign companies, Malaysia loses not only financial capital but also human capital, as talented individuals leave for countries where their skills are appreciated and utilised.

To reverse this trend, the government must shift its focus to creating a conducive environment for local talent to flourish. Trusting and investing in local capabilities is not just a solution to brain drain but a strategic move for national development. The future of Malaysia’s progress lies in the hands of its own people, if only they are given the opportunity to contribute.