Need to maximise human capital

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BRUNEI needs to maximise its human capital as it lacks the full spectrum of educational institutions that is needed and may end up under-utilising its human capital resources, an economic analysis expert said.

Maximising human capital is among reforms recommended by Manu Bhaskaran, director and chief executive officer of Singapore-based international strategic advisory firm Centennial Asia Advisors, to create "the right enabling environment" for Brunei's goal of expanding its economy beyond oil and gas.

In a report published under the Centre for Strategic and Policy Studies (CSPS) Strategy and Policy Journal, he said the government has to be a pro-active builder of competitive advantage, and one way is through maximising human capital.

He said there is a need for more vocational schools for those who are not academically inclined or who start late.

"Institutional development is needed; a wider range of educational institutions such as more vocational and polytechnic level education," he said, adding that an incentive structure could also be introduced to encourage students not to shy away from difficult but marketable courses.

In April, during the Universiti Brunei Darussalam's 2010 convocation ceremony, the Minister of Industry and Primary Resources recognised that a labour force strong on technical and vocational skills will be one of many ways for Brunei to diversify its economy.

Pehin Orang Kaya Seri Utama Dato Seri Setia Hj Yahya Begawan Mudim Dato Paduka Hj Bakar, in his remarks at the 13th Convocation for Vocational and Technical Education Institutions (VTET), said the nation's youth must be active in spurring on other sectors for the country's economy, by diversifying away from oil and gas as it will soon be depleted.

"Technical and vocational education gives a platform for students who are more keen on learning subjects that are hands-on. It also ensures the turning out of labour force which will meet employers' expectations and fulfil the economic growth of the country," he said.

The minister said padi farming, tourism and the petrochemical business will provide job opportunities for graduates of VTET.

During the 12th convocation in October last year, only 215 students graduated with respective certificates, indicating about a 76 per cent increase in the number of graduates this year.

The Ministry of Education (MoE) in March has also been making efforts to increase VTET graduates by turning the Sultan Hassan Secondary School in Temburong into a vocational-technical school.

Plans for a vocational school in the Tutong district are also in the pipeline as mentioned by the ministry in July 2009.

The MoE has also been actively sending out engineering scholars to Germany, Australia and the United Kingdom, to ensure they maintain the number of specialised graduates in the country.

Brunei Economic Development Board Acting Chairman Dato Paduka Timothy Ong has repeatedly noted the need to invest in more qualified local engineers and to attract young people in the field to support and sustain Brunei's economic development. He said that the economic development of Brunei requires a special contribution from engineers and the future generation of engineers. "Brunei cannot rely on natural resources for sustainable development alone, and that we need to make that journey from being just a natural resource-rich country to being a natural resource-rich country plus a knowledge-based economy," Dato Ong said earlier this year.

"In order to succeed in our economic development, we need to overcome a number of challenges. Besides the need of improving the ease of doing business in Brunei and our need to adapt to change, we must also make sure that our young people are educated in a way that prepares them for their jobs of the future," he said, a point which Bhaskaran also mentioned in the CSPS journal.

Dato Ong further stressed that there is a declining interest in the study of engineering in Brunei. "In Brunei, there are only 10 per cent of our students in tertiary education studying engineering, in comparison to countries such as Bahrain with 17 per cent, Qatar with 19 per cent and Malaysia 40 per cent, and possibly much higher in Singapore."

"In order to continue to attract the best of our young people into engineering, we have to ensure that there are sufficiently attractive opportunities in engineering," Dato Ong said.

In the CSPS report, Bhaskaran said some policy options in maximising human capital include having a selective but pro-active approach to wooing foreign talent, whether they are entrepreneurs or highly qualified graduates.

He suggested labour mobility as well, in Brunei's case, that citizens of one country could work in the other without an employment pass for a number of years without need for special immigration permission in the form of an employment pass or work permit.

Another suggestion is for the government to make greater strategic use of its large pool of savings, the only resource other than oil and gas that Brunei has of global scale.

"Singapore which now yields a very substantial income from its own built up pool of savings is using such income to fund the government budget, after a long period in which it was reluctant to do so. Brunei may want to consider this," he said.

Bhaskaran also believes that there could be more support for the locally owned business sector, which efforts can already be seen, through MIPR and the BEDB.

"More privatisation is needed. The aim would be to create a more dynamic private sector including a class of globally competitive, Bruneian-owned companies," Bhaskaran said, adding that small-to-medium enterprise (SME) development is also needed.

"Establish an agency or agencies that are dedicated to the SME sector. Thailand and Malaysia have set up SME banks. Singapore has taken the view that it is not funding of SMEs that is the problem but the underlying capabilities of the SME sector, a problem that is best remedied through upgrading the capacity of the SMEs," he said.

Through the BEDB's Local Enterprise Applications and Products Programme, a grant scheme aimed at supporting local SMEs and MIPR's SME export financing scheme, local businesses can now tap funding which could contribute to the development in that sector. The Brunei Times