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Heriot-Watt University Malaysia’s Budget 2023 Wish List

 By Professor Mushtak Al-Atabi 

Following the announcement of the Federal  Government’s plans to announce the Budget 2023 on 7 October 2022, Heriot-Watt University  Malaysia (HWUM) wishes to share its budget wish list. 

Last year, the education sector received the highest allocation of more than RM67 billion as  announced in the 2022 budget speech. While we have been making progress, we feel that we  can do much more if the higher education sector is accorded a larger allocation in Budget  2023. 

According to CGS-CIB Research, Malaysia’s GDP is likely to moderate to 4.1% in the year  2023, from 5.2% in 2022.

When economic growth shows signs of slowing down, it is time to  invest more in human capital development.

That is why we believe a greater allocation for the  higher education sector, will enable Malaysia to move toward its goal of becoming a high income nation through both green and digital transformation, contributing to Malaysia’s overall  Gross Domestic Product (GDP). 

To make this a reality, Malaysia must focus on fully realising its human potential. This begins  by supporting local students achieving enhanced educational outcomes through improving  schooling quality and providing adequate social welfare protection for household investments  in human capital. 

Here are some key considerations for achieving the overall GDP, which is primarily supported  by the goal of transforming Malaysia into a high-income economy by 2025 through improved  education and talent development programmes. 

Positioning Malaysia as the Preferred Education Hub in Asia Pacific for Tertiary  Education

The Malaysian higher education sector is worth RM30 billion per year; with  much potential to contribute to the overall GDP, we must devise innovative  solutions to triple this figure. This can be mainly achieved through attracting  more high-quality international students.

Malaysia should aspire to be a pioneer in education through the delivery of  quality, cost-effective and innovative digitally transformed educational  programmes and global transfer opportunities (leveraging the 10 international  universities currently operating in Malaysia) to position Malaysia as an  educational hub for tertiary education (including postgraduate and doctoral  degrees) to nurture high-skilled global citizens.

To enable Higher Education Institutions (HEIs) to attract expatriate academic  staff in areas where the country lacks talent, it will help to offer them tax holiday  for two to three years. We should emulate China’s best practices on this. 

Government sponsorship of students to study abroad can be redirected to universities in Malaysia. This will not only help reduce the budget expenditure but support local industries and outflow of MYR at a time of depreciation of  MYR against USD or AUD.

Improving the Quality of Local Graduates and Talent to Meet the Demands of the  Digital Future

While much emphasis is placed on Science, Technology, Engineering, and  Mathematics (STEM); enabling our students to be equipped with the knowledge  and skills on digitisation and the 4th Industrial Revolution (4IR), positive  education must also be part of the curriculum and pedagogy to promote  resilience.

There must also be more awareness campaigns on overall well-being including  mental health and the environment.

In addition, there must be equal access to education for underserved  communities to ensure equal and wider access to sources of quality higher  education materials.  

  1. The educational programmes offered must be recognised, accredited, and  certified by both local and international bodies. 
  2. The government can consider providing double tax deductions for scholarships  awarded to students by Private Higher Education Institutions to widen access  to education. 
  3. To alleviate the financial burden of parents taking loans for children education  from bank, interest paid can be claimed via personal tax relief. This is to  promote the continuity of learning for Malaysian children despite challenging  times.  

As for PTPTN loans, we would like to suggest that the loans cover the full fees  to enable students to pursue high quality education programmes that are  needed by the economy. 


While we applaud the government’s goal of making Malaysia a carbon-neutral  nation by 2050. We would like to emphasise that in order to meet this goal, all  key industries must understand and quantify their current emission levels and  start developing plans to deliver the 2050 target.

Efforts should be increased to accelerate the growth of a green economy,  including the introduction of green financial instruments and technologies that  promote a more sustainable future. To accomplish this, we must first promote  education to raise awareness of environmental, social, and governance (ESG)  principles.

This concerted effort, as well as a high level of green commitment and  investment, would necessitate highly skilled talent tied to high-wage jobs. The  growth target should ideally create jobs with comparable income brackets,  allowing local graduates to have purchasing power that contributes to a healthy  overall GDP.

As a solution, the government would need to introduce green policies and tax  reliefs to promote the concerted effort across all key economic sectors. 

Research and Development 

According to the Twelfth Malaysia Plan (12MP), research and development  (R&D) expenditure to account for 5.2% of GDP by the year 2025, versus 1% in  2020, with private sector to account for 70% of expenditure.

There needs to be  an investment that would encourage public-private partnerships and  collaborations especially in research and development to provide innovative  solutions to global challenges and at the same time, raise the value and quality  of education in Malaysia. Tax incentives can facilitate these initiatives.

Reintroduce the MYBrain grant to support students who want to pursue  postgraduate studies.

Mitigating the brain drain

Enhancing the youth employability should remain a priority. This can be  achieved through a combination of offering industry relevant programmes and  increasing the quality of education, in general.

More funding should be allocated to programmes for talent retention, an indeed  reversing the brain drain into “brain gain”.

To maintain our best talent and re attract Malaysians working overseas, we would require clear incentives and  policies.

Countries such as Singapore, Thailand, United Kingdom, Australia, and others have introduced programmes to attract global talents to their shores,  including post graduate visas for international students. Malaysia could benefit  from retaining international graduates in areas like data science, robotics,  computing, and other areas where talent is scarce.

Further, we must also prepare our youth to pivot and be part of a global  workforce. With the endless possibilities brought about by our borderless world,  enabling our knowledge workers to work for global companies in Malaysia, will  enable them to contribute to Malaysia’s economy. 

In summary, Malaysia must begin to fully realise its human potential and fulfil the country’s  aspiration of achieving the high-income and developed country status, the way forward is  to assist local students to advance further in education by enhancing the quality of schooling  to improve learning outcomes and providing adequate and social welfare protection for  household investments in human capital formation. 

HWUM remains committed to nurturing purpose-driven, future-ready leaders through its  ‘Positive Education’ approach. – BACALAHMALAYSIA.MY


  • Writer is Provost & Chief Executive Officer, Heriot-Watt University Malaysia


BacalahMalaysia Team

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