IF there is anything to be explained it is simply this; why was the quantum so big?

I find those who say that the Government should have explained the matter better a trifle insulting, because it infers that the Malaysian people do not understand that higher global oil prices will, one day or another make its impact felt here.

We are now beyond explaining the rationale, it has been a few weeks and now most people do not care about the rationale anyway because they have made up their mind that the Government's rationale may well be flawed in the first place.

If it’s flawed why bother listening.

What we need now is action from the Government to help Malaysians cope better with the new global reality that it says it wants to introduce to the country, a world where subsidy is a dirty word.

First of all subsidy takes place everywhere, especially in two areas of economic activities, food production and cutting edge industries that typically serve the military. Some countries, especially in Europe and Japan the Governments also bear a sizeable portion of the public transportation burden

If we want to become a developed nation then we will have to reconsider our subsidy strategies in these three areas of economic activities.

Beyond that the Government will need to convince thinking Malaysians that they actually have a long term plan for the country in terms of its global role and competitiveness in commerce.

That Malaysia seems to be stuck between the rock of a manufacturing economy and the hard place of a service or knowledge economy is old news and it is also tiring to read that we seem to be no closer to an exit plan from this potentially lethal vortex.

I say that we are groping in the dark because there has been no strong injection of effort and improvements in the areas which will determine our competitiveness in the future, namely higher education and professional education.

If we are serious about taking on the world in the field of high technology and service, the Government must pour a large chunk of its money into higher education which comprises research development and it must also make Malaysia's professionals among the most desired in the world.

In my mind the first priority must go towards higher education and research. Here the Government should simply make education freely available to everyone who wishes to continue their studies.

This will substantially increase the burden of public expenditure but it is an unavoidable position as the future of the country hangs on it.

At this point we should not make the mistake of simply building more universities and colleges but also give the students more room to stretch their intellect and not be too focused on getting a degree for the sake of a job.

We must inculcate a love for knowledge among the young because this is sorely lacking in the country. If a child wants to get a degree then more often than not it is because they want a comfortable job. The pursuit of higher education in this country is rarely about satisfying the hunger for knowledge or the desire to become a pioneer in a particular field.

This change of mindset is crucial to the future of the country. As a small nation we have relatively little natural resource that we can keep digging up and sell to the world so, more than America, Australia, China, Russia and many African nations Malaysia is heavily reliant on its people to guarantee future prosperity.

More than anything else Malaysia must reverse the brain drain and start on a new economic masterplan that revolves around the development of our intellectual infrastructure and capacity.

A master plan that involves the building of more universities and packing them with world class teachers will have far fewer pitfalls than one that centres around the building of physical infrastructure in the hope of attracting foreign capital.

While there is no doubt that we need foreign investment to keep the economy humming along we also have to keep in mind the importance of knowledge as opposed to manufacturing capacity in this modern world.
Manufacturing capacity or even the actual products themselves are fast becoming generic. Even cars, which are considered the most complex mass produced item is becoming nearly identical except in design and branding.

As modern manufacturing technology becomes cheaper, the actual production of many items will be farmed out to countries which have a large pool labour that can be harnessed cheaply and we will see semi finished products being shipped back to the country owning the intellectual rights for finishing, branding and marketing.

With many contract manufacturers springing up we will see margins narrowing very quickly and this is why we must have an exit plan from low end manufacturing and enter the world of services.

The new trend now is to farm our research and development work. At the moment most of the work farmed out involves product development as developed countries try to tap the relative low cost of engineering services and keep the more critical concept development and specifying work in their home country.

India, for example is firmly entrenched as the supplier of accounting services and customer relation management solutions. Their position as software developing nation is hardly challenged.

Singapore is fast becoming a research hub in many high technology fields and they are taking a lead in some areas of financial services as well.

Thailand on the other hand has decided to become a major regional manufacturer and food production hub.

Malaysia on the other hand is left dangling in no man's land, seeing our manufacturing advantages eroding fast and being left behind in the K-economy.

We need to get on this bandwagon quickly; I believe that we have the next five years to establish ourself as a service industry investment destination.

Apart from our current lack of capacity to take on the service industry, the country may also be suffering from an image problem.

While Singapore may practice a political system that is repressive by Western standards, it is known for efficiency and excellence in many fields, its professionals are well respected the world over while Malaysia's institutions of higher education are slipping in the global ranking.

We need to find a field to excel in and quickly attract the best minds into the country to lay the foundation for the future.

The field we chose has to be a sunrise industry and one that is growing fast and has few competitors and in my mind, there area few:

1. Energy - Sustainable energy because the world cannot afford oil in the future
2. Biotech - Stem cell research, specifically organ replacement
3. Money - Finance/venture capitalism (we can do a lot more in this field than what we are doing now)
4. IT - Information warehousing and processing incorporating artificial intelligence which is what Google is doing and making a lot of money out of it and the reason why everyone should be afraid of Google
5. Food - production and processing and marketing- food will never be a sunset industry.