Abstract
The global economy is reeling from the effects of financial crisis which led to an economic crisis triggered by the United States sub-prime mortgage crisis which started in late 2007. The sharp inflation in petroleum and food prices in the first half of 2008 also compounded the problem. The National Bureau of Economic Research (NBER) had declared that the US economy had been in recession since December 2007. Contraction in the growth rates of major developed economies thereby causing global trade in goods and services to plummet has affected open economies including Malaysia. Last year Malaysian GDP grew by about 4.6% over 2007. An ominous sign that economic growth in 2009 would be low or even negative was the 0.1% growth in GDP in the fourth quarter of 2008 compared to the same quarter in 2007. This was due mainly to a 40% drop in net exports. The slow down in growth has affected all sectors of the economy. Education in general and higher education in particular are not spared. Higher education has to compete for scarce public funds. The main objective of this paper is to understand the impact of the global economic crisis on higher education in Malaysia. A better understanding is imperative in order to prepare for the challenges ahead. The challenges ahead are within the framework of the new economic model being formulated by the government in order to lift Malaysia into a high income country within a decade. A major critical success factor is the implementation of an effective human capital development strategy. Keywords: Economic crisis; higher education; recession.
Highlights
Countries in Asia are increasingly worried about what is happening in the West, especially with regard to the weaknesses in the US financial industry precipitated by the sub-prime mortgage crisis
Many Asian nations have witnessed rapid growth and wealth creation in recent years. This crisis has shown that in an increasingly inter-connected world there are always systemic effects rippling throughout the global front and as a result, Asia including Malaysia has had more exposure to problems stemming from the West, so because of its open economy
The main objective of this article has been to understand the effect of the global economic crisis on the higher education sector in Malaysia
Summary
Countries in Asia are increasingly worried about what is happening in the West, especially with regard to the weaknesses in the US financial industry precipitated by the sub-prime mortgage crisis. Malaysia’s ability to carve out significant competitive advantage in certain industries lies in the people factor, requiring them to attain a high level of competence and skills It is through higher education and training that Malaysia can be prepared to face the challenges that global economic recession has brought about in the last couple of years. The formulation of NHESP is an important step forward for the MoHE to strategise the national economic growth and development via the output of skilled and competent human capital at the institutions of higher education, despite the global economic recession. Ȱȱ InflationaryȱRateȱ DeficitȱBudgetȱ UnemploymentȱRateȱ BankruptcyȱRateȱ DelayedȱorȱAbandonedȱProjectsȱȱ Retrenchmentȱ GovernmentȱSubsidiesȱ NationalȱDebtsȱ.
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