Easy Loan For Grads Doing Business

KUALA LUMPUR, MALAYSIA: Malaysian university graduates this year may be offered loans without the need for guarantors or collateral.

Easy credit? No, just the government’s way of preparing for an expected shrinkage of jobs as the full impact of the global economic crisis makes itself felt in Malaysia.

Entrepreneur and Cooperatives Development Minister Noh Omar said on Dec 17 last year that the government was considering giving unsecured loans to graduates who want to start small businesses.

On top of that, the government has also set up a RM70 million (S$29 million) fund to retrain unemployed graduates. Human Resources Minister S. Subramaniam said recently that they will be taught skills such as communication, English language and creative thinking.

The government is gearing up for hard times this year, and hurrying to get safety nets in place as the economy shrinks. The political fallout from joblessness can be huge, as Malaysians are unused to high unemployment rates.

The government took a big hit last year when voters punished it for its apparent ineptitude in handling spiralling inflation at that time.

This year, unemployment will be its big test.

Malaysia’s 52 public and private universities and colleges produce 145,000 graduates and diploma holders annually, while several thousands more come back with overseas qualifications.

Even in good years, thousands of graduates struggle to get the white-collar jobs that they want.

For some like Ms Hajahfarhana Tarnudi, 23, starting a business could be the very thing she needs, having given up looking for a suitable job.

The journalism graduate from Universiti Teknologi Mara gave up her dream of working as a reporter after her parents objected, but could not find any alternative career. She now plans to plant chillies on a big scale.

‘My parents don’t like me being a journalist, so I thought why not start a business?’ she said. ‘Chillies are expensive these days and not many young people are willing to go into agriculture, which can be big business.’

Ms Hajahfarhana, however, does not plan to take up a government loan, as she can get help from her parents.

But while some graduates may grab the easy business loans that the government is planning to offer, others are still determined to find more traditional employment.

‘The programme is good for those who want to be young entrepreneurs but personally, I think it is better to work first before starting a business,’ said Universiti Tunku Abdul Rahman graduate Renu Gnana Pragasam, 24, who knew about the unsecured government loans but was not interested in starting a business.

Likewise, Ms Sri Shalini Devi Veeraya, 24, said she would still look for the ‘right’ job.

Her job-hunting experience was similar to that of many fresh graduates around Malaysia.

The industrial chemistry graduate from local Universiti Malaysia Sabah spent no less than four months hunting for the right job, sending her resume to at least 100 companies.

Only about 10 per cent responded, she lamented.

‘I went through a very difficult time and it is not easy to look for the ideal job that suits my degree,’ she said.

Fortunately, she managed to find a job recently in an oil and gas company in Kuala Lumpur.

But graduates are only one part of the picture. Millions more Malaysians are employed in lower-level jobs, and these are the jobs that are now at the highest risk.

The manufacturing sector, which employs 10 per cent of Malaysia’s 11 million workers, is expected to be hard-hit this year, as its biggest markets are the United States and Europe.

So far, job losses have been minimal, but the figures could spike in the first quarter. There are already reports of lower manufacturing output, fewer orders and factories cutting back on production.

Workers in Penang factories - the hub of Malaysia’s electronics industry - have already been asked to take long vacations or work fewer days as production lines shut down.

‘So far, retrenchments are low, but we should not be complacent,’ Malaysian Trade Union Congress (MTUC) president Syed Shahir Syed Mohamud told The Straits Times.

Mr Subramaniam, the Human Resources Minister, said last month that more than 4,700 workers will be retrenched in the next three months. These include 1,500 workers from Western Digital, an American hard disk manufacturer that closed down its plant in Kuching.

In the 1998 downturn, about 80,000 Malaysians were retrenched.

The Malaysian Institute of Economic Research recently warned that the unemployment rate may rise to 4.5 per cent, compared to 3.5 per cent last year.

‘The electrical and electronics sector in particular is very vulnerable,’ its executive director Mohamed Ariff Abdul Kareem said recently.

Malaysia is hoping to save jobs for its citizens by sending home foreign workers who comprise a third of its workforce. It has also allocated RM300 million to upgrade workers’ skills.

Mr Syed Shahir is, however, pushing the government to do more to meet retrenched workers’ pressing needs. He said the retrenchment benefits stipulated by law are inadequate.

‘We are asking the government to expedite a retrenchment fund. It’s not dole, but support for them until they can find a job,’ he said.

The MTUC has been pushing for this for years, though without much success as the government is strenuously opposed to what may appear to be dole.

But this year, the job imbalance is likely to become more stark: While Malaysia employs three million foreign workers, thousands of its graduates struggle to find a job.

The only survey available was done about three years ago, and it found that about 25,000 graduates were jobless as they lacked both technical and soft skills, and had a poor command of the English language. As they were mostly Malay, the situation was exacerbated by job seekers’ claims of discrimination by the largely non-Malay private sector.

This could put greater pressure on the government as an employer. Every year, thousands flock to the civil service for jobs. At one time - when the government still provided this data - figures showed that sometimes, there were more than 10,000 applicants for a single white-collar civil service position.

Over the years, the government has absorbed so many workers that its staff strength grew from 800,000 to 1.2 million. It may not be able to hire more people in a downturn.

For some graduates, the dearth of jobs has meant giving up their dream jobs.

Universiti Teknologi Mara graduate Nuraingnee Ya, 24, from Kelantan, for instance, found herself taking up odd jobs, working in fast-food outlets and customer service centres.

Instead of putting her journalism degree to use, she had to resort to using her Form Five qualification - equivalent to a Secondary 4 education in Singapore - to land a job.

‘Several employers told me they would rather hire me on Form Five qualification so they don’t have to pay me a graduate’s salary,’ she recalled. ‘So I had no choice because if I were to be picky, I would be jobless.’