An empirical evaluation of government scholarship policy in Malaysia

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  • Higher Education 14 (1985) 197 210 Elsevier Science Publishers B.V., Amsterdam Printed in The Netherlands



    OZAY MEHMET Faculty of Administration, University of Ottawa, Ottawa, Ontario, Canada

    YIP YAT HOONG Faculty of Economics Administration and Institute of Advanced Studies, University of Malaya,

    Kuala Lumpur, Malaysia


    In Malaysia, government scholarships have been utilized on a large scale in order to achieve the employment restructuring objectives of the New Economic Policy (NEP). This article provides an empirical evaluation of the effectiveness of this policy instrument, based on a comprehensive survey of the 1982/83 graduates. The results show that scholarship policy is now: (1) generating a mismatch in the High-Level Manpower (HLM) market and (2) that these scholarships are distributed in a heavily regressive manner, benefiting students from the wealthier and higher- income families.

    Part h Introduction

    This article provides an empirical evaluation of the government scholarship policy in Malaysia, based on the results of a large-scale survey of 1982/83 graduates of each of the five universities in the country at the time. While many developing countries have various types of scholarships for university students, these are typically available on a limited scale (Woodhall, 1983). Malaysia, on the other hand, has a large-scale programme of government scholarships for university education. In 1982/83, a total of 20,526 students, or 66.7 percent of the aggregate enrolment of 30,844 students in the five universities were on a govern- ment scholarship granted by a department of the public service or by a statutory body (Mehmet, 1984, Table 3.2). In addition, there were 12,800 Malaysian students overseas, sponsored by the government, pursuing higher education (Malaysia, 1984, para. 858, p. 354).

    0018 1560/85/$03.30 9 1985 Elsevier Science Publishers B.V.

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    A unique characteristic of the Malaysian scholarship programme is that it is restricted on ethnic criteria: thus, government scholarships are intended to give substance to the special rights of the Malays, written into the Malaysian consti- tution. The special rights have long historical roots, reflecting the feudal, ruler- ruled relations between the Malay rakyat (i.e., subjects) and the ruler, whereby the latter is expected to act as theprotector of the former in return for unreserved loyalty (Muzaffar, 1979; Syed H. Ali, 1982). This view has been institutionalized and operationalized under the New Economic Policy (NEP) which was adopted in the aftermath of the race riots in May, 1969, which were occasioned after a hotly-contested general election in which the economically-dominant Chinese appeared to have scored significant political gains at the expense of the Malays, thereby threatening the traditional ruler-ruled relations among the Malays (Slimming, 1969). There are two main objectives of NEP: (l) eradication of poverty, and (2) restructuring economic and employment patterns in Malaysia by 1990 (Malaysia, 1976). Both objectives are heavily pro-Malay: the vast majority of the poor households were the rural Malays; and economic wealth and power was almost exclusively in the hands of non-Malays.

    One of the first tasks undertaken under the NEP was a major Manpower Survey (Malaysia, 1973), conducted by the Economic Planning Unit of the Prime Minister's Office. The results of this survey were utilized in the Third Malaysia Plan to set the quantitative targets to ethnic restructuring policy through to 1990. The 1973 Manpower Survey predicted higher than average growth of demand for professional and technical manpower and called for substantial expansion in the post-secondary level of education and training to produce the required Malay manpower.


    With almost three-quarters of the planned term of the NEP expired, it is pertinent to undertake an empirical evaluation of the university system of Malaysia to determine the extent to which it has actually been fulfilling the HLM needs and policy objectives. The purpose of this article, which is part of a larger study (Mehmet et al., 1984), is to provide such an evaluation, based on a large-scale survey of the 1982/83 graduates of all the five Malaysian universities.

    The evidence to be presented below suggests that there is a serious lack of coordination between high-level manpower planning on the one hand and economic planning on the other. There are clear signs from the labour market for university graduates that the private-sector needs for certain types of technical and professional manpower are not being met, while graduates in certain other fields are unemployed or under-employed. The following recent developments in the Malaysian development policy have tended to add to the urgency of the problem of HLM mismatch:

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    (1) the on-going financial constraint faced by universities as a result of the current recession has led to shrinking budget allocations for universi- ties in relation to other forms of public expenditure, necessitating greater cost-effectiveness;

    (2) the same necessity has been further aggravated by the increasing cost of higher education, especially in capital and overhead costs with the creation of five new universities since 1967 (Yip, 1983) and two newer ones recently;

    (3) the saturation of the civil service as the traditional employer of universi- ty graduates, especially in the light of the present "freeze" of positions in the public sector; and

    (4) increasing emphasis on privatization and greater reliance on the private sector in the development strategy of the Mahathir administration (Malaysia, 1984, pp. 22-3).

    There is another fundamental problem with the Malaysian university system. It stems from a large and persistent excess demand for university places in the country owing partly to the phenomenon of credentialism (Mazumdar, 1981), but also because education has always been highly valued by all the races of Malaysia, both as an investment and consumption good. Admissions to univer- sity are decided centrally in the Ministry of Education on racial and bureaucratic criteria. This system of allocating university places discriminates in favour of the rich and powerful families, and there is evidence showing that unequal access to education in Malaysia increases with the level of education, being severest at the tertiary (Meerman, 1979).

    In theory, the scholarship policy provides a potentially highly effective policy instrument for remedying both the manpower mismatch and the unequal access problems. For example, public scholarships can be utilized as incentives to encourage students to specialize in certain fields of studies rather than in others; and scholarships can be distributed progressively, rather than regres- sively, promoting greater access for academically bright and promising students from economically deprived households, who, for this reason, may be denied opportunity for higher education. Therefore, our study looks at both of these inter-related dimensions.

    Part II: The IPT/UM Survey of 1982/83 Graduates

    Our analysis is based on data generated through a large-scale survey of 1982/83 university graduates, financed under a research grant from the Cana- dian International Development Research Center. A total of 2,046 question- naires were completed through direct enumeration of first-degree graduates of

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    all five universities in Malaysia during the Convocation ceremonies over June- September 1983. The actual survey coverage represented 45 percent of the total graduating class with bachelor degrees (Table I), as compared with a pre-survey objective of 50 percent sample size. This large sampling ratio was chosen as a substitute strategy for multiple stratification (i.e. by race, discipline, region, etc.) which could not be performed owing to time constraints. In the case of Universiti Teknologi Malaysia, delays were encountered in securing the necessary official permission for the enumeration, resulting in only a 13.4 percent coverage. For this reason, a blowing-up procedure was adopted, as explained below, to main- tain data consistency.


    It will be seen from Table I that 1,244 of the surveyed graduates, or 60.8 percent of the total, were on government scholarships which covers those granted by departments of the public service as well as by statutory bodies. Scholarships include bursaries and other forms of non-repayable grants (except as provided under bonding agreements, as discussed below); as such student loans, from all sources, are excluded.

    Racially, government scholarships are distributed in a heavily pro-Malay manner. Thus, almost four out of every five government scholarships were awarded to Malay graduates. The Chinese share was only 14.4 percent, Indians accounted for 4.3 percent, and East Malaysians 2.9 percent. Moreover, the value of Malay scholarships, as a general rule, was found to be higher than those for non-Malays, with the exception of East Malaysian scholarships.


    Survey Sample Size, by University and Scholarship Status

    Scholarship status and University No. % Sample size

    No. %

    1. Scholarship holders 1,244 60.8 2. Non-scholars 802 39.2

    I + 2 Total survey 2,046 100.0 3. Total bachelor degree graduates 1982/83 4,551 100.0 2,046 45.0

    University Malaya 1,840 100.0 933 50.7 University Sains 790 100.0 363 45.9 University Kebangsaan 1,258 100.0 511 40.6 University Teknologi 238 100.0 32 13,4" University Pertanian 425 100.0 207 48.7

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