• Madani Sahari

BUDGET 2016: Developing Human Capital

It is a common perception that government will cut training budget during an economic downturn. Indeed it is true that some governments would reduce their fiscal expenditure on training to balance against revenue.

On the contrary, advance nation do not usually reduce their training budget but proportionately allocate training expenditure in line with the drop in the levels of employment during recession.

In 2008 economic downturn, the USA average training expenditure per employee fell by 11% from the previous year. Corporate expenditure reduced from USD58.5 billion in 2007 to USD56.2 billion in 2008. However the proportion of overall employees training remained unchanged with the drop in training volume remained largely in line with the drop in the level of employment.

The recent fiscal budget 2016 by the Malaysian government saw the focus given to technical and vocational education and training (TVET). In line with the budget theme of which is “Prospering the Rakyat”, a sum of RM4.8 billion is allocated to 545 TVET institutions.

Priority is given to the TVET programme as the government foresees the need to achieve the targeted 60% of the 1.5 million new jobs to be created by 2020 to achieve the status of a developed nation. The workforce must be TVET skilled to face the businesses and technological challenges ahead.

TVET programme is a long term measure to prepare the nation workforce towards economic recovery and henceforth industrial development when their new skills will be useful for competitiveness and innovativeness of the local industries.

Towards this, the Ministry of International Trade and Industry (MITI) will establish an industrial skills committee to coordinate TVET programmes in collaboration with industries and some RM350 million is allocated to finance various TVET training programmes for 2016.

Malaysia Automotive Institute (MAI) has implemented various programmes thus far towards enhancing the skills and knowledge of the automotive industry workforce, both the current employees and new entrances into the workplaces.

The programmes were guided by four main economic pillars, namely; creating new employment opportunities, enhancing career development, generating new entrepreneurs, and growing the current businesses. All geared towards enhancing the competitiveness of the local automotive industry.

Creating new employment opportunities are programmes introduced for new engineering graduates and school leavers, especially those from the vocational and technical institutions.

On-the-job trainings are coordinated for graduate students for their exposures and preparation towards real working life in a popularly attended programme named “Automotive Industry Certification Engineering (AICE)”.

“Industry Led Professional Certificate (IPC)” is a similar programme tailored for school leavers from vocational and technical institutions. The programmes cooperate with relevant industries to prepare the generically trained students into specific areas of the students’ interest to open up opportunity for employment in the automotive sector.

Customized AICE and IPC were also conducted for the currently employed automotive workforce to enhance career development in their respective workplaces. Apart from opening employment opportunities and career enhancement the programmes also indirectly expose the participants to business opportunities in the automotive sector.

The proposed 2016 budget aimed at creating 25,000 new jobs and trainings for some 10,000 employees. Enhancing competitiveness of more than 100 local vendors and strengthening some 500 existing workshops and service centers are also part of the budgetary agendas, inclusive of developing new entrepreneurs in sales, distribution, service, repair, remanufacturing and recycling activities in the local automotive industry.

It is a good reason for the automotive community to applause the proposed budget and to prepare for a challenging year ahead in 2016.

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