If I asked most people to name an up-and-coming higher education system – one not from a wealthy country but perhaps from the middle-income zone – people would probably naturally speak about China. And they’d probably be right: China’s higher education system has achieved remarkable things in the half-century since it was re-constructed after the Cultural Revolution. But could you name a second?

Let me give you my answer: it’s Malaysia. It’s not well-known outside the region, but in fact it has five reasonably good research universities, four of which teach in English. It has a highly diversified institutional landscape, covering both publics and privates (and also some fairly interesting “quasi-publics”) and degree and sub-degree level institutions. It has been a leader in internationalization in higher education, having been one of the first countries in the region both to encourage large in-fluxes of students from the Indian Ocean region and beyond, but also to allow the set up of foreign campuses on its soil. It is also one of the rare developing countries to make major use of student loans as a means of financing, something that is even more impressive when you consider the loan system has to work under the principles of Islamic banking.

Today my guest is Dr. Morshidi Sirat. He’s one of Malaysia’s most experienced higher education observers and policy-makers. Over the last two decades he;s been a Dean, a Vice-Chancellor, Advisor to the Minister of Higher Education, Director General of Higher Education for Malaysia and the Founding Director of Malaysia’s Commonwealth Tertiary Education Facility. In our discussion, he guides us through the ins-and-outs of Malaysia’s success over many decades of higher education investment. He credits in part good old fashioned strategic planning – something Malaysians are really good at. But he also points to a widely-shared national belief in the power of education to drive development, something which has underpinned both the government political commitment to the sector and the relatively high levels of public spending that universities have enjoyed. But enough from me: let’s listen to Dr. Morshisi.

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The World of Higher Education Podcast
Episode 2.17 | Malaysian Higher Education

Transcript

Alex Usher (AU): Dr. Morshidi, I want to talk about the system as a whole as it’s a fairly complex system. At the top of the system, Malaysia has five serious research universities: Universiti Kebangsaan Malaysia (that is, the National University) Universiti Sains Malaysia (that is, the science university), Universiti Putra Malaysia (focused on agriculture and life sciences), Universiti Teknologi Malaysia, and of course the flagship Universiti Malaya in Kuala Lumpur that pretty much makes Malaysia the dominant higher education system in Southeast Asia. I don’t think there’s any other countries in the region that have that density of research intensity. How did these universities emerge as beacons of research excellence?

Morshidi Sirat (MS): It is by design. It’s not by accident. When we launched the national education strategic plan, the idea was to improve various aspects of the Malaysian high education system in terms of research, innovation, commercialization, and talent including our ability to attract talent from abroad as international students. In 2005, we came up with the concept plan for the establishment of research university system. That’s where things got developed into the establishment of research-intensive universities at that time among the five oldest universities. So, it is a carefully planned strategy.

AU: There was a general plan to advance these five universities, but there were also two specific plans for two specific universities. University Sains Malaysia (USM) received something called APEX status which allowed it more flexibility in rules and governance. Universiti Malaya was the site of the High Impact Research Program, which provided it with hundreds of millions of ringgits for advanced research. What was the spur for those two specific excellence programs to create very specific poles of excellence? To what extent did they succeed in their aims?

MS: This APEX’s initiative, the solution of excellence in higher education in Malaysia has it’s a conceptual origin from the German higher education system. So, when we open up the bid for the APEX program, various universities applied for the program. We look finally at two universities, Universiti Sains Malaysia in Penang and University of Malaya. So, when we look at their proposals, it seemed that USM is very bold in terms of trying to do things differently. Whereas University of Malaysia is more on the conventional type of pathway where they are into ranking, into publication, into research. But USM is not into ranking. It is about excellent in terms of sustainability, in terms of bringing community to the normal mainstream of development, it is about the poor, the bottom billions and all of that. So, we just we realized that while they are bidding for the same program, they have different DNA. So that’s why APEX USM was selected because we are looking for something beyond ranking, beyond publication, beyond research for research, but research for the good of the community. APEX gives administrative flexibility in governance. It’s not really the governance that we are hoping for because we are still under the Ministry of Education or Higher Education now. We are still civil servants. We still have to subscribe to the Ministry of Finance and Treasury regulations. So, while we have autonomy in terms of selection of students, how we use the money and the resources in terms of the program, we still that we still need to follow the central government. I used to call it pseudo-autonomy. It’s not full autonomy that we’re hoping for.

AU: Let me ask you about another very unique institution in in Malaysia, and that is Universiti Teknologi MARA. So that’s 150,000 students spread across 35 campuses. That’s a very big institution. It has a specific mandate to serve the Malay and Indigenous populations, or what’s known as Bumiputera in Malaysia. From a policy perspective, I’m curious, why one big university rather than a lot of little ones? And why the exclusive focus on Bumiputera?

MS: Okay. Firstly, they are thinking about a system that you have in California, the University of California system. Basically, it is one big university. But you have all the campuses which each of these campuses have their own rectors. They have a little bit of autonomy to run their own campus. So, it’s a system with a constituent entities within that system. It’s huge but that’s how they want to develop systems. They have a central system which governs everything, but there will be autonomy at each of the individual campuses. It’s huge, it’s big, it needs a lot of money, but that is the way they think that they can roll out the agenda for the Bumiputera effectively. Why Bumiputera? Why not opening to other races, other ethnic groups? There are openings but at the postgraduate level, they are opening to international students. But at the undergraduate level or diploma level, the aim is to affectt the social condition of the Bumiputera in terms of employment opportunities and skill, because if you look at the remote areas in peninsula Malaysia it is the Bumiputera that is well behind without skill and are low income. That is and was the original idea of the establishment of ITM at the time, the Institute Teknologi MARA to give skills an opportunity for the who are who are rather backward in economic terms at that time.

AU: In a similar vein there’s the issue about the division between public and private universities in Malaysia because public institutions, not exclusively, but they tend to serve and be run by Malays. Like I say, not exclusively but to a large extent. While the private sector tends to be run by and serve the Chinese population, to a lesser extent Indians as well. My understanding is this policy is rooted in policies from the 1960s and 1970s, which were about financial and political empowerment for the Malay people. My question is this likely to change anytime soon, or do you think this is a permanent feature of the Malaysian system?

MS: Some years back, when I was in the ministry, we tried to appoint non-Bumi in the next level. That’s the deputy vice chancellor. There were Indian deputy vice general with Chinese and so on and so forth. The previous government have tried too. They appointed a Muslim Chinese vice chancellor in one of the universities in Borneo. We have tried, but the acceptance, not within the university, but at the ministerial and at the central agency level is hard. They are more at ease dealing with a vice chancellor that is a Malay or Muslim. But now with this with this unity government, who is the government which is about reform, maybe five-six years or earlier than that, we will see that coming. It depends on the government, whether they are serious about reforming the whole system. If they are serious, then probably three or four years down the road, we’ll see a non-Bumi Vice Chancellor in University of Malaya, for example, in USM or in UPM. But the regional universities may be difficult because they have the regional kind of aspiration that needs to be met. Whereas University of Malaya is about international aspiration. That could fit into a non-Bumiputera kind of agenda.

AU: You’re saying that there might be changes in terms of the management of universities. What about the students they serve?

MS: For students, if you look at why we introduced the loan, I’ll talk about later, is to enable students to enter private university because they’re charging very high tuition fees at the time. So, the loan was introduced to help them to enter private universities. But the agenda was a private university, while it was originally for the non-Bumiputera, but we have moved away from that. Private university is about international students. They have a lot of capacity to allow international students to come in whereas the public universities, the undergraduate program, is about the Malaysian students. It’s not exactly right now public university is for Bumiputera and private university is for the Chinese or for the Indian. You have a significant number of Malays now who are sending their children to private universities because employability, because of the relevance of the program. In the private university, they can change the program very fast, according to the changes in the employment scenario, not in the public university. If you look at some of the major private universities now, you will see a large proportion of Bumiputera who are from the well to do family. The second thing is, you’ll see now in many of the big private universities, the CEO or the President aren’t Chinese anymore, they are Malays. So, there is that change now coming in, but we still need to need to see the change in the public university in that sense.

AU: Dr. Morshidi, one area where I think Malaysia was well ahead of international trends was in internationalization. It was among the first countries to welcome big international branch campuses, most notably from the United Kingdom and Australia, and more recently China as well. But it was also one of the first newly industrialized countries to put a heavy emphasis on recruiting international students, most notably from Iran and East Africa. What was it that made Malaysia such a pioneer in these areas?

MS: First, we had the policy in place in 2011. But before that, the private sector was already recruiting international students to fill up the capacity that they have because they had excess capacity in the private sector. We saw that there were opportunities to increase our national income through international student. So based on that development, we introduced in 2011, the internationalization policy. That guided in a more designed and planned way how we recruit students, how we manage international students, and how we regulate fees and other aspect of international students in Malaysia. So, it’s a more structured, more designed structure of engagement, recruitment, and things like that. When I was at the ministry, we established the education Malaysia global services, which processed international students coming to Malaysia. That’s a very thought-out system to bring in and to recruit international student in Malaysia. We broadened the market beyond Iran, beyond Africa, we are now into China, India, and Indonesia. We are targeting about 150,000 international students by the end of 2027. It’s a very well-planned thing to improve our system.

AU: Yet another area where I think Malaysia has been a leader, certainly within Asia, is in developing a functioning, large scale student aid system, which goes by the acronym of PTPTN. It’s also an anomalous case in the sense that it serves an Islamic country, but its loans still carry an effective interest rate, although they go under the euphemistic term of administration charges. What made Malaysia go down this road and how well is PTPTN functioning these days in terms of loan recovery?

MS: Everything about Malaysia is about duality. You have the conventional, you have the Islamic banking, insurance. Everything else in Malaysia is about duality. So Bumiputera and non-Bumiputera, in that sense. When we started PTPTN, we were not using the interest rate because it’s very sensitive but we use administrative rates. In fact, in many of the government loans, even in the among civil servants use administrative rate not interest rate because administrative rate is below interest rate. But now we have introduced a system called oujara, which is 1%, which is further below the administrative rate, so that is the Islamic component. So, you can choose whether you want to stay with the administrative rate, which is 4%, or you move to the 1% lower system, which is purely sharing a compliant system. Now you are asking me whether it is performing or not. The last time I heard reported in the system, we were able to collect only about 50 percent of those loans. So, they introduced a lot of discounts, a lot of sticks and carrot kind of things, in order to make people pay. But now it is around 50-51% payment rate. I can say there’s a problem there in terms of sustainability, but we have introduced ways and mean to make borrowers pay the loan through employers, through income tax, what we call the income contingent loan payment and things like that. So, there are moves in order to recover to improve those recovery payment rates.

AU: I want to go back a few years now to around 2016, where if I’m not mistaken, there were some pretty significant cuts to government transfers to universities, but without any compensating change to tuition fee policies. If I’m not mistaken, tuition fee policies have been more or less frozen for two or three decades. It’s been a long time. How did institutions respond to these changes? Was it widespread cutbacks? What happened at the institutional level?

MS: They have to cut back on unnecessary expenditure, but they were given the leeway to increase income through other means. Many of the public university have what you call the private arm or the holdings. Holding is a private arm where they can get income in order to cover the gaps between what the government gives and what they need to spend. So many of the universities have their own holdings in order to generate accounts. Now in universities that have medical faculties, they are allowed to start a private medical facility. We charge the full rate. So, we’ve got cross-subsidy in that sense, you charge high for private arm and then it covers it back into subsidy into the other sector. So, that’s how they deal with the gaps. But the problem is enrolment in the public universities are still very high so the payment the salary of the professors and all is very high. Trying to cover that with whatever income they can generate is very difficult. So, recruitment of lecturers and promotion of lecturers tends to be slow and tends to be muted over time because of the resources constraint. I’m not saying that they’re able to overcome this problem now. Over time, they keep on saying that if we’re not doing anything, we’re going to be bankrupt or something like that. So the problem is there. I’m not saying that when the government cut, they are not able to do many things, but they are not able to cope with that kind of cuts. It’s a big cut for big universities like UITM, we spend billions a year, 10 percent cuts means a lot of money there. They are trying to do their best through other means, increases of international student is one agenda there.

AU: One big sort of earthquake that happened politically in, in Malaysia was the election of 2018. For the first time since independence, the Barisan Nasional lost power. Since then, power swung back and forth between the BN coalition and the currently governing Pakatan Harapan coalition, or PH coalition, led by Anwar Ibrahim. You had four different prime ministers in the past six years. How has this affected higher education policy? Do the two coalitions have significant differences with respect to higher education policy? And if so, what are the areas of greatest contrast?

MS: No, not much. We are shifting between prime ministers and government but there’s not much changes in high education policy. We see changes in education policy, but not higher education because education is left to the universities. Universities are public statutory bodies. They are allowed to determine how they move forward. But there are two major changes that the universities are being pressured toward. One is the introduction of artificial intelligence which universities are very slow to take up because it requires some investment. The second part is graduate employability. They’re saying that graduate from employed because you have not responded well to the changes in the employment system. Different government will look at the role of universities differently but basically, they agree that universities have a role to play in talent development, in human resource development, and in research, in commercialization. They have not changed much in context of those areas. There are pronouncements in terms of changes. But when you want to implement it, they realize that they are constrained not from the universities itself, but from the central agencies, because there are still rules and regulations that makes it difficult to implement those changes.

AU: I know Malaysians take strategic planning very seriously. I go into bookstores all over the world and I’ve never seen strategic planning sections as big as the ones that I’ve seen in Malaysian bookstores. The current 10-year education blueprint, which is a kind of a strategic plan, ends next year if I’m not mistaken, and I assume some kind of new multi-year plan is in the works. What do you think will be the key elements of this next plan?

MS: We are reviewing the plan this year and after reviewing the plan, there’ll be a new plan. I will anticipate there will be different things because we have different minister now. If we had the previous mister now, and we’re reviewing the plan, we would see something that’s moving forward the previous agenda, what we have not done or whatever. But since we have a new minister, obviously he may want to have his own legacy we may find new things. But one thing that we have indication from the Prime Minister himself is the adoption of AI, artificial intelligence. So, I think the blueprint will have a good section on how AI should be adopted in the Malaysian higher education system. I think that’s the major one.

AU: Again, that would probably make Malaysia a leader. It would make it unique in the world because I don’t know anybody else thinking about that stuff. One last question, if I may. What makes you most optimistic about higher education in Malaysia? What do you think are the aspects of it that make you think this is going to bring our country to the next level over the next decade or two?

MS: I’ve seen other higher education system in ASEAN, for example. I’ve worked with and assisted Laos, Cambodia, Vietnam in terms of their higher education plan. I have not seen a system that’s planned and designed with all the ingredients compared to the one in Malaysia. But I’m not talking about how well they implemented. Don’t get me wrong there. We have all the document. We have the plan. Implementation is another thing. But with the kind of exposure that we have among international students, I’m still hopeful that we are still the hub for higher education among the international group here. Secondly, while many academics say that our universities are being pressured, our universities are being controlled by the government, actually there are a lot of autonomy being given to universities compared to other universities in the ASEAN region. Thirdly, we believe in education. We believe in higher education. That’s basically it is. We are the first to attract international branch campus in Malaysia because we believe in good quality education. We have in place agencies that they have been assigned to be to be in control or to monitor each aspect of this quality of learning and education in Malaysia, so that we are sure that if things are implemented accordingly the quality of education can be maintained in a sense. Obviously the government is a pro-education government, the government which is pro-higher education will move forward the higher education agenda in the next few years. That’s why I’m very confident about how things will be moving in the next few years.

AU: Thank you so much for joining us today. It just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan. And of course, you, our listeners for tuning in. If you have any comments on the podcast or suggestions for new episodes, please don’t hesitate to contact us at podcast@ higheredstrategy.com. Join us next week when our guest will be Andrée Sursock, who among her many titles is a senior advisor at the European University Association, and she’ll be joining us to discuss the complicated world of French higher education and how the sector has fared over the past six years under the government of Emmanuel Macron. Bye for now.

*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service.