Science Matters by Academy of Sciences Malaysia

SCIENCE MATTERS A Collection of Published & Unpublished Opinions about

SCIENCE IN MALAYSIA

by Datoâ&#x20AC;&#x2122; Dr Ahmad Ibrahim FASc Fellow, Academy of Sciences Malaysia

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SCIENCE MATTERS A Collection of Published & Unpublished Opinions about

SCIENCE IN MALAYSIA

by Dato’ Dr Ahmad Ibrahim FASc Fellow, Academy of Sciences Malaysia

“

I would like to acknowledge the support of the following in producing this bookthe New Straits Times for publishing the articles, the President of the ASM for publishing the manuscript, the Fellows of ASM for their constructive comments on the articles, and last but not least to my family for enduring my moods and demands writing the pieces, especially my wife Datin Sabariah Othman.

“

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ÂŠ Academy of Sciences Malaysia 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior permission of the copyright owner. The views and opinions expressed or implied in this publication are those of the author and do not necessarily reflect the views of the Academy of Sciences Malaysia.

Published by: Academy of Sciences Malaysia Level 20, West Wing, MATRADE Tower, Jalan Sultan Haji Ahmad Shah, off Jalan Tuanku Abdul Halim, 50480 Kuala Lumpur, Malaysia Phone : +6 (03) 6203 0633 Fax : +6 (03) 6203 0634 admin@akademisains.gov.my

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SCIENCE MATTER

CONTENTS Foreword

1.0 Unleashing the Benefits of Science

• Invest in Science for Balanced Sustainable Growth

• Profiting from Innovation

• Science on Transformation Radar

• Science, Youth and the Nature’s Future

• Transforming Malaysia’s Future Through Innovation • Science Taking a Positive Turn

• Scientists – A Disappearing Breed

1 5 6 7 9

• Tap on the Nation’s Professors

• Science Career No Longer Favoured

• Secret Recipe of a Nobel Laureatte

• Harnessing Science for Socio-Economic Gains • Building Human Capital for the Innovation Economy

2.0 Creating Conducive R&D Ecosystem

• Resolve Lingering R&D Challenges

• High Time Industry Invest More in R&D • Need to Rethink R&D Strategy • R&D Transformation Next

• Inciting New Vigour in R&D Commercialisation • Dilemma of Public R&D

• Taking R&D to Market: A Global Issue

• MH370 Offers R&D Ideas in Aviation Science • Rethink Cutback for Research Varsities

21 23 25 26 27

3.0 The Future Holds The Key

• Looking to the Future to Drive the Present

• Global Peace Through Science

• Power of Foresight

• Momentum Needed to Achieve the Future We Desire

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4.0 Recognition for Science

• Merdeka and Mahathir Award Salutes Science

• Science is Synonymous with Civilised Society

• Make the Mahathir Science Award Our Nation’s Drive for Innovation • Tunship for Science Due

45 46

• Unmatched Passion for Raising Talent

5.0 Strategising Science

• S2A to Unleash New Vigour in the Nation’s Science Agenda

• University Rankings - Do We Really Need Them?

• We Need a Masterplan for Science

• TPPA is Good for Innovation

• Strengthen SME Masterplan with S&T Support Plan

• Technology Lessons from Germany

• Bioethics, a Major Challenge for Science • Planning Beyond GDP

54 56 58

• Innovation Puts Nation’s Future in Good Hands

6.0 Emerging Science Business

• Global Certification Reflects Growing Distrust

• Invest in Science for New Growth Area

• Make Better Use of Our Sand

• Tap on the Growing Business of Geospatial Technology

• Lighting Sees New Light

• Designing Sustainable Cities of Tomorrow Starts Now • Highspeed Broadband Vital for Digital Economy • Battery Making to Become Big Global Business • New Malaria Vaccine Shows Promise

• Bioeconomy, the Next Growth Opportunity

66 69

70 71 72

• Tap On New Opportunities in Rail Business

• Patent Has Limits

• Misunderstood Plastics

• Nanotechnology - The Next Big Thing After the Internet • The Untapped Business of Enzymes

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75 77

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7.0 Energy Changes Through Science

• Deploy Subsidy Savings for Energy Research

• Energy Efficiency Lessons from Nature

• Better to Subsidise Solar Energy

• Champion Energy Efficiency for a Sustainable Future

• Fossil Subsidy No Help For Renewables

• Comprehensive Study Needed to Prepare for Climate Change

• Can We Really Ignore Nuclear Power?

8.0 Resolving Earth’s Rare Mystery

• La Rochelle-French Tourist Town-Home to Rare Earths

• Rare Earths, Not All About Lynas

• Global Rise in Research Hints Rare Earths Importance

• Rare Earths in the Green Economy Mitigating Risks and Harnessing Opportunities

• Rare Earths Indispensable in Wind Power 9.0 Building synergy in Asean Science

• Unleashing Asean Innovation Potential

92 94 95

99 99

• Asean Should Collaborate More in Science

100

10.0 Science and The Environment

104

• Thorium to Rid China of Health Threatening Smog

105

• Science to Help Bridge Economic Divide

• Dealing with Rise in Environmental Conflicts • Recycling Destined for Big Time

• Incinerating Garbage Best Option

• Sustainable Development: Lessons from Cameron Highlands • Energy From Wastes - The High Tech Way • Rethink Business Model for Sewage

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102

104 107 108 109 110 111

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11.0 Managing the Science of Water

113

• Invest in Desalination to Cushion Water Woes

114

• Water Scarcity, a Growing Concern of Power Sector

117

• Improve Water Use Efficiency to Avert Crisis

119

12.0 Palm Oil Thrives on Science

121

• Malaysia and Indonesia Battle for Lucrative Palm Oil Business

122

• El Nino- A Game Changer for Water?

• Build a National Centre to Coordinate Water Research • Make Water a National Key Priority Area in the ETP

• More Join the Palm Oil Bandwagon

• Palm Oil Needs Price Recovery to Regain Confidence • Will Palm Oil Survive Climate Change?

113 116

118

121 123 125

• Trans Fat Make Palm Oil More Popular

127

• Sound Science to Remove Doubts on Palm Oil Sustainability

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• Palm Oil: Asset or Liability

133

• New Questions Raised on Sustainable Development

• Sustainable Development: The Good, The Bad and The Ugly • Palm Oil Industry Taken for a Ride

128

131

135

• New Challenges for Palm Oil

136

• Experts Deliberate on Sustainability of the Palm Oil Business

138

• Hidden Agenda Behind Palm Oil Sustainability?

• Malaysian Scientists Break Yield Code of Oil Palm

137 140

13.0 Natural Rubber and Science

142

• Natural Rubber Under Pressure to Chart New Destiny

144

• Future of National Rubber - Invest in New Ideas • Bring Back The Glory of Natural Rubber

142 145

14.0 Innovation Success

147

• Tabung Haji, A Success Story in Social Innovation

148

• Bring Back the Glory Days of IMR

• FELDA, A Success Story in Poverty Alleviation

147 149

• FELCRA, A Success Story in Rural Transformation

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• Rebrand MAS as Halal Syariah Compliant

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• Malaysia Airlines Will Emerge Stronger

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FOREWORD Communication is the key to the expansion of knowledge. The knowledge of

science is no exception. Scientists actively publish journals to communicate their findings for peer review and acceptance. This has always been the way to build scientific credibility and reliability. In a world where interdisciplinary is now a

prerequisite to resolve global issues, communicating science across disciplines is a must. More than that, communicating science to inform and educate the

common man as well as the policy making community has become extremely necessary. This I believe, is the only way to mainstream and expand science

literacy. Only then can society truly benefit from the investments in science. The ultimate destiny is for the entire nation to “Profit from Science”.

I started venturing into science literary during my early days at the Rubber

Research Institute of Malaysia. I realised then that much of the science discourse was confined within the realms of scientists only. This was not healthy for a

nation pursuing innovation as an instrument for nation building. I decided to

write for the newspapers to encourage more public discussion on science. But how? I did not have a clue as to what media writing was all about. But I knew I had to have a strategy. Then, in 1990 when the nation was moving towards

another general election, I realised I had a better chance of getting my articles

accepted if I were to link the science article to a political campaign. So, I wrote on “Mahathir’s Vision for Science & Technology”. As expected, the article was accepted and published on the Election Day itself under the Opinion editorial page. That initial encounter with true blood journalists also exposed me to

journalism writing. I was given a book “Journalism for Non-Journalists” to better understand the many techniques on writing for the media.

Since then, I have written on many aspects of science, especially its impact on

the society and the economy. This book is a compilation of such articles which have appeared in the media, in particular the New Straits Times. I hope the group of articles will provide some appreciation for the issues on science in Malaysia.

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CHAPTER 1 UNLEASHING THE BENEFITS OF SCIENCE In the first part of the book, I have assembled all the articles I wrote on the potential benefits, challenges and difficulties of investments in science. Innovation is of course a major goal in science. As a country, Malaysia has long recognised the importance of innovation in increasing the nationâ&#x20AC;&#x2122;s competitive nature. But innovation is not without challenges. Many of the articles here deliberate on the many challenges faced by the nation while pursuing this end result. Among the challenges, include having the right talent; a key success factor for innovation. There is a concern in Malaysia that despite the sound policies on science, it would be difficult to realise the benefits if the country cannot attract and retain the best scientific brains. It is very disconcerting that the interest in science among students has witnessed a drastic decline. However, an even greater concern is the fact that resident scientists have left in large numbers to work overseas. Some say it is not so much the money that has lured them abroad, it is more the research ecosystem. The research environment in the country has yet to match those in the more developed economies. Many are aware of the changes that need to be made, but the resistance to change is also equally strong. What the nation desperately needs is the push to change that has to come from the top leadership.

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PROFITING FROM INNOVATION 2010 promised to be the turning point for the global economy. The crisis, rooted in the American housing blunder of 2008, was showing signs of closure. Trade figures were up, manufacturing outputs were up. Consumer confidence was returning. Then in April, the Icelandic volcano spewed ashes in the air over Europe that disrupted flights in the continent. It eventually affected the rest of the world because all flights in and out of Europe were put on hold. The one week flight suspension made a significant dent on the revenue of European airlines, costing them millions in lost revenue. The incident was the first negative news that tested the confidence of the economic recovery. Soon after that, there was news of Greece with its burgeoning debt crisis. Economists warned of a possible contagion effect on the European Union (EU) and eventually the world if no help was forthcoming. This was not unlike the ASEAN domino effect of 1997 which had its roots in Thailand. Fortunately the EU responded with a massive rescue package which ran into billions of Euros. It is still unclear whether the amount would be sufficient. It was even more worrying given the fact that countries like Portugal and Spain have also been under similar pressures. Some experts warned that the UK economy would also be hit hard if its high deficit is not addressed. The hung result of the UK elections was no consolation for the market. If one were to include the massive oil spill in the Gulf of Mexico and the scandal of a leading investment bank in the USA, many are beginning to question whether 2010 will indeed be the turning point that we are all hoping for.

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The World Cup in June should bring back some cheer! Despite such negative news, Malaysia however reported an encouraging first quarter growth of more than 10%! That should silence critics of the government’s stimulus package. One thing is for sure though, the global economy is still not out of the woods. The recovery is still extremely fragile. Some are even predicting a double dip recession for the world. This would not augur well for a country like Malaysia. As a trading nation, it has never been in Malaysia’s interest to have a global economy mired in recession and low growth. Both the EU and the USA, for example, are major markets for our exports. Any downturn there will impact negatively on our export business. That is why strategic market diversification is crucial in Malaysia’s export business. The export business has undoubtedly made significant contributions to Malaysia’s economy. But that may not be enough for the country to attain a developed country status come 2020, especially since we export low value products. This may not be sustainable in the long term, especially with our costs moving upwards. Unless we continue to add value to the country’s resources, we may be trapped in the so-called middle income bracket. The emergence of other lower cost producers such as Vietnam, Cambodia and Indonesia, just to name a few, has put our competitiveness in the low cost market under serious threat. Many believe if nothing is done to address the issue, it is not impossible that we may one day end up like Greece. A recent analysis by the government’s thinktank has suggested that if we continue to heavily subsidise the economy, we can go bankrupt by as early as 2019! However, some experts say subsidy is only one

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factor. There are other leakages that need to be addressed. It would be suicidal to ignore such warnings. Once there is no more oil to sell, or once the country becomes a net importer of fuel, it is not unrealistic for the economy to sink further in the lower income trap. Will the recently launched New Economic Model (NEM) be the saviour? How can we make a success of NEM? What is the critical success factor of NEM? These are some questions begging for answers. The model calls for a robust and reliable implementation mechanism if it is to have any chance of success. Over the years, we have launched many plans with a lot of fanfare and ceremony, but when it comes to implementation, many of the plans have failed miserably. Lack of coordination among key stakeholders is one major reason why many plans could not be implemented effectively. Take science for example. There have been many initiatives launched to take the country’s science to a higher level. Yet, to this day there is still talk about science not truly delivering. Many are critical of the R&D expenses in the country. They maintain that most of the R&D investments all these years have failed to address the real needs of society and industry. Much of the R&D outputs remain unexploited. There are exceptions of course. Some success has been achieved in industries such as oil palm and rubber. Why can’t the other sectors emulate them? How can the situation be improved? The answers are rather obvious really. Unlike rubber and oil palm where there is constant surveillance on the technologies and products driving the business and market, most other sectors do not have as much technology intelligence work done. Unless we know where technologies

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are heading and what new products are emerging, it is difficult to develop research ideas which will eventually deliver value. Not just commercial value but also societal benefits. Secondly, funding for science and R&D in the other sectors are not only insufficient, but whatever little there is available is not allocated for the right research ideas. While others are already talking about R&D budget exceeding 3% Gross Domestic Product (GDP), we are still lingering at below 1%. The critical role of basic research has also not been fully recognised. Not enough is being done to strengthen the country’s fundamental research. This is despite overwhelming evidence that innovation thrives in a system which has a strong ground in basic science. There are also no guiding foresight studies which can be used as the criteria for the approval of research undertakings. In the case of rubber and oil palm, especially oil palm, there is more funding and the criteria for project selection are also clearer. Of course, one very important factor which drives research success in oil palm and rubber is the fact that researchers constantly obtain market feedback from the industry which in actual fact provides the bulk of the R&D funding. Finally, there are clear institutional drivers, Malaysian Palm Oil Board for oil palm and Malaysian Rubber Board in the case of rubber. A recent announcement by the government to finally formalise an institution dedicated to drive the country’s science, technology and innovation agenda should be welcome news. It is about time that the Malaysian Innovation Centre be established and given the mandate to implement the country’s National Innovation Policy. It must be made clear that the deliverables should not be short term. There is no short cut to building innovation. Most of all, the Centre should not be another “empire”, instead

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it should be lean and should work closely with existing institutions that have all been set up years ago. These include the R&D institutes, the universities, venture capital agencies and the technology incubation institutions. Only then can we expect the NEM to have a chance of delivering its many promises of getting innovation to create wealth for the country.

INVEST IN SCIENCE FOR BALANCED SUSTAINABLE GROWTH The 13th general election has just ended. The Government has been given another 5-year mandate to rule. Though the battle for control was tough, the people have decided. The win is more or less a strong endorsement of the transformation program initiated by the Prime Minister. Academy of Sciences Malaysia (ASM), established 17 years ago, has the country’s top thinkers and strategists in Science, Technology and Innovation (STI) under its wings. It recently unveiled a list of “wishes” which scientists believe are crucial if we are to sustain the country’s development agenda. The Academy is convinced that through the effective implementation of the “Wish List” the Nation’s desire to achieve a Balanced and Sustainable Growth would be more than fulfiled. The “List” is guided by a strong desire to prepare the Nation to compete in the global innovation-led economy. All Malaysians must embrace it. Only then can we realise the aspirations of the NEM to achieve high income with equity and sustainability.

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First, we need to strengthen the mechanism to mobilise STI knowledge for socio-economic advantage. This entails proper thinking of the research that we need to fund. The research must include new knowledge, further refinement of current knowledge or the development of well-creating outputs. We cannot afford to fund research for the sake of it. Second, we all know that talent is the key success factor in science. We need to therefore invest in STI talent development in our education system right from a very young age. We need to find ways to arrest the current decline in interest among students to take up science. We need to make science related career more attractive to the young. In fact, Fellows of the Academy feel we need to build a national STI culture of scientific thinking among all Malaysians. It does not matter what profession one takes up eventually, but all must adopt logical scientific thinking in decision making. Third, we need to energise the industry to embrace a commitment for STI practices as a key element of the business process. Innovation is not likely to be sustained if there is no involvement from the business community. The mechanism to bring together the governmentindustry-academia nexus needs to be strengthened. One way to get industries to pay more attention to technology is to create more competition in the marketplace. It is difficult to breed a research-intensive private sector without the necessary pressure to compete. Fourth, we need to ensure the country’s STI governance structure is conducive in driving a motivating innovation ecosystem. For example, there must be a proper mechanism for the evaluation, approval and monitoring of research

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projects. The decision-making process must be transparent and above board. Fifth, we need to maintain a vibrant international link and networks with leading STI institutions of the world. Science changes so fast; new technologies are created almost on a daily basis. Unless we maintain in close contact with such developments, we risk being outdated. International connectivity should be seen as an important investment. Sixth, we need to expand the scope of STI funding to include a dedicated funding scheme for idea generation through studies focusing on future scenarios. This way we will be better guided in our focus areas of research. In fact, we need to create dedicated funding for key research areas including but not limited to Water, Energy, Health, Agriculture and Biodiversity. Although we are blessed with plentiful rain, we have experienced bouts of drought and water shortage and not to mention pollution of our water sources. Finally, in this era of serious threats to the climate and the environment, we need to gradually phase out unsustainable blanket subsidies on energy and water. We should instead divert a portion of such funds toward R&D in energy and water. The “Wish List” has been developed through an evidence-based analysis undertaken by the Academy. It is time the STI agenda is given higher priority in the country’s development agenda. Only then can the Nation strive to realise the vision of becoming a truly developed and competitive Nation that all Malaysians dream of. Wise investments in STI is the only way for the country to develop a sustainable path.

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SCIENCE ON TRANSFORMATION RADAR Transformation is now a key agenda of the government. Despite earlier scepticism, positive signs are emerging. This confirms we are on the right track. In fact, transformation has proven to be a powerful communication tool. It helps wake us all up to the harsh realities of the threatening challenges ahead. We need to arrest any potential decline in our competitiveness. We need to continuously seek new opportunities for growth and we need to be fully prepared for possible threats to the nation. Climate change, for example, can be a major obstacle to growth so are other security issues including food, energy, water and the cyber world. Admittedly, transformation would have been difficult without the strong push from the Prime Minister himself. In fact, any initiative for change needs the commitment of the highest leadership for any chance of success. At a recent forum on science governance organised by the Academy of Sciences Malaysia (ASM), Senior Fellows of the Academy reviewed the governance framework for science in the country. The Senior Fellows of the Academy which number 22 at the moment are literally the top scientific leaders of the country. Most were at one time leading the nation’s public research institutes and universities. Many of them are now retired but remain passionate about pushing the nation’s science agenda. Led by Academician Emeritus Professor Tan Sri Datuk Dr Omar Abdul Rahman FASc, a former Science Advisor and Founding President of the Academy, they were unanimous on the urgent need for change in the science governance structure. A transformation is inevitable if the country is to effectively tap on the power of science and technology to drive nation building. A position paper on the matter is in the pipeline.

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The picture however is not all gloomy. We as a nation used to excel in many areas of science. The former Rubber Research Institute of Malaysia (RRIM) was not too long ago the world’s reference point on the science of natural rubber. Its journal was world class. Later, the Palm Oil Research Institute of Malaysia (PORIM) followed in its footsteps. This explains why PORIM’s signature event, PIPOC, never fails to attract top scientific minds not only in the palm oil industry but also in edible oils research. The Institute for Medical Research (IMR) was the other centre which was among the world’s authority in medical science especially on tropical diseases. It is now a pale shadow of its former glory. How can we revive such excellence? How can we reclaim the leadership of yesteryears? Many believe the solutions lie in strategic transformation of the management structure and delivery mechanisms for research including effective planning. It is not impossible. After much debate and intellectual disagreements, the meeting of Senior Fellows eventually came out with one principal verdict, and that is to revamp the country’s entire science governance system. We need a transformation programme like the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP) which are now bearing fruits. The Science Transformation Programme (STP) will need to put in place the National Key Innovation Areas (NKIAs) and the consequent Entry Point Initiatives (EPIs). In order to develop the programme and identify the NKIAs and EPIs, the appropriate stakeholder’s engagement laboratories can be the mechanism to tap ideas. This can be along the lines of ETP and EPP laboratories hosted by PEMANDU. A key success factor for such Science Transformation Programme, many agree, must involve the private businesses and industry.

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The NKIAs can include Green Technology, Energy Security, Water Security, Biodiversity Potential, Food Security and Climate Change Opportunities, just to name a few. Under each of the NKIAs, we can think of the Entry Point Initiatives (EPI). For example, under Climate Change Opportunities, a possible EPI is Drought Tolerant Rice while Smart Materials for better energy management could be an EPI under Green Technology. The motivations for change in science governance are clear. Signals which include the declining interest in science among students, the continuing inertia in research investment by industry and the low rate of research going to market should no longer be taken lightly. It is time for an aggressive transformation!

SCIENCE, YOUTH AND THE NATION’S FUTURE It is no coincidence that the nation is now a leader among the developing economies of the world. This was achieved through shrewd planning by the country’s leaders. The country is what it is today because of decisions made decades ago. But what was the most critical decision then? Few would dispute the fact that it was our investment in education that has made the nation what it is today. The prosperity that the country now enjoys would not have materialised if not for that stroke of wisdom to commit to education. If education was the key ingredient then, many believe education will continue to be the instrument to shape the country’s future in the coming decades. This was the consensus reached at a recent forum titled “Future of Science in Nation Building; The Role of Youths”, organised by ASM. Each year, the Academy hosts two General Assemblies to deliberate on issues of science and nation building. This time around, the focus was on the role of youth.

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The four panellists who hailed from across the country’s political divide gave very powerful insights and thoughts about the topic at hand. They agreed on the importance of investment in education to drive future progress of the nation. But they were also in agreement on the fact that education today will have to be different from the past in terms of content and approach. Today’s education must take into account current realities. What are the realities today? Firstly, these days, society is generally more educated. They want to have a bigger say in the way the education system is designed. Secondly, the world is now more interconnected than ever before. The internet has completely revolutionised knowledge. Everyone is allowed access to sources of information globally, something unthinkable in the past. Some are now saying that even universities may soon become a thing of the past. One can eventually achieve lifelong learning online. While ICT has changed many facets of life and business, the forum was also concerned about other forces at work which can derail global progress and sustenance in the long run. Climate change, for example, is now a reality we can no longer ignore. Despite earlier apprehension about the UN climate predictions, the world is now convinced about the science of global warming. What is worrying is the fact that it is people who are the main contributors. As such, only man can provide solutions to reduce the build-up in greenhouse gases in the atmosphere. Many agree much of the solution lies in the smart deployment of science. This is where investment in science education is crucial. The unfortunate part of it all is that many of the country’s young do not have much interest in science. They view science as complicated and are not encouraged by the less lucrative job prospects. This explains why only 30% of students are

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taking up science. This is half of the country’s 60% target. How can we reverse this trend? The panellists agreed that despite the urgency of the issue, there is not much debate in parliament. Science is seldom a topic of vigorous interest among policy makers. The panellists admitted that this would not augur well for the future of the nation since policy decisions are needed to effectively drive the country’s science agenda. They agreed that one way to address this would be to formalise a parliamentary standing committee for this purpose, whereby the President of the Academy as an independent body will annually brief the committee on the state of science in the nation. What was clear from the deliberations was that science will not only help mitigate future risks to the nation but also help create new socio-economic opportunities. While climate change, for example, presents risks, it can also provide opportunities for new businesses and industries. For instance, new businesses involving green technologies are slowly but surely emerging. Therefore, preparing our youths early in science will put the country in a better position to build a future that we desire!

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TRANSFORMING MALAYSIA’S FUTURE THROUGH INNOVATION After the turmoil in 2009, 2010 promises a new hope for the global economy. Experts predict that the world’s economic growth may recover from the dismal -1.1% in 2009 to 3.1%. Malaysia was not spared from the global slowdown in 2009. The country’s export was badly affected. Investments hit historic low. In fact, Malaysia’s economy may have shrunk by about 2.3% in 2009. Although the World Bank predicts Malaysia’s economy may grow by 4.1% in 2010, there are concerns that it may not be sufficient to meet the target set to achieve Vision 2020. There is an all round agreement that Malaysia needs a new economic model. What is that model? In today’s era of globalisation and the growing dominance of knowledge economy, Malaysia has to look to marketdriven innovation to compete in a global landscape which has witnessed drastic change. Competition is rising and the emergence of the BRIC countries (Brazil, Russia, India and China) has somehow shifted the epicentre of global economic growth. Evidence of Malaysia’s recent struggle to match Gross Domestic Product (GDP) growths achieved by China, India and Vietnam provided a strong case for change. In fact, after the economic slowdown in 1997, Malaysia’s GDP growth has dropped to half the precrisis levels. The growth after the crisis averaged 5.5% whereas pre-crisis growth averaged about 9.1% from 1988 to 1997. It is already a foregone conclusion among government and businesses that, if we are to have a chance of coming close to the targets set under Vision 2020, Malaysia needs transformation. Will innovation be the solution?

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Many countries such as Japan, Korea and Germany, just to name a few, are all enjoying the fruits of their investment in innovation. They have very little indigenous natural resources. Most of their energy and fuel needs are imported. Yet, they are among the high achievers in the global economy. Why? A lot of it has to do with their impressive growth in their total productivity. How? Technological innovation is the key. But what exactly is innovation? How can innovation support Malaysia’s agenda to become a high income nation? Though innovation calls for the right policy directions and commitments, many agree that the most critical success factor is a strong political will. It is, therefore, most encouraging that the government under the leadership of Dato’ Seri Najib Tun Razak has now given innovation the much needed stamp of approval and support. When launching “Innovative Malaysia” recently, the PM emphasised that innovation is not necessarily limited to science alone. It can be misleading to link innovation only to new technology. This is because many innovations are neither new nor involve new technology. A popular definition describes innovation as a fresh idea which delivers value. The value need not be just commercial. It can also be humanistic value. The self-service concept of McDonald’s fast-food business chain, for example, involves running a restaurant in a different way rather than making a technological breakthrough. The low cost air travel business like AirAsia is another example. It is important not to confuse innovation with invention. They are not the same thing. New products may be an important part of the process but they are not the essence of it. There may be some novelty but the idea can come from another industry or even country. Whatever it is, innovation is increasingly seen as a key success factor for today’s business. It is what differentiates

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progressive companies from the laggards. Take technological innovation for example. Innovative companies invest heavily in scientific R&D with a clear idea about market needs. Governments and businesses now allocate some percentage of their revenue for R&D. Japan, for instance, spends almost 3% of its GDP on R&D. So do USA, Germany and the UK. Malaysia has set 1-1.5% of GDP as the next target. For now, we only spend less than 1%. Investing in R&D is often necessary to develop new technologies but there is no guarantee that all R&D will lead to success in the commercial world. R&D is a risky investment. All the more reason that ideas for R&D must be well thought of. Is it something that the market needs? Will it result in a new process which will revolutionise business? Market and business justification is now a must for any R&D funding. This trend is global. Most expect reasonable returns on their R&D investment. Malaysia is no different. What is the best way to achieve this? Ideas for technology and the consequent R&D must be guided by market needs; both current and future needs. At the same time, we should continue to invest in building human capital with a strong knowledge base if we are to sustain the country’s innovation strength. This is where funding for basic and fundamental R&D is crucial. There must be a conducive environment for the new technology business to be incubated and nurtured. This is where Technology Park Malaysia Corporation can serve as the host for all new technology innovation initiatives. Research universities like Saudi Arabia’s KAUST should be established within the Park. Technology related institutions such as Malaysian Technology Development Centre (MTDC), Academy of Sciences Malaysia (ASM) and Malaysian Biotechnology Corporation (MBC) should all be moved to the Park. Ultimately, the Park should be home to a community of

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technology innovation players, not only from within the country but also from overseas. The success of Malaysia’s innovation agenda also rests upon the presence of well-trained scientific human capital. Currently, it is still below the level needed to support a healthy growth of innovative products and technologies. The country’s target to have in place 50 research scientists per 10,000 workers is still far off. So far, we have less than 20. This is where universities, both public and private, should be given the resources to further enhance their human capital development capacity. More radical and less bureaucratic approaches will have to be brought in to beef up the productivity of universities and research institutes. Some lessons in reengineering the country’s many R&D centres can be learnt from countries like South Korea and Germany. In Germany, for example, the Fraunhofer Institutes have emerged as world leaders in technological innovation. The recipe is quite simple really; develop technologies which have market relevance, build alliance to cooperate in the development of frontier technologies, work closely with the industry especially SMEs, build strong foundation in basic research and link the fruits of basic R&D from universities with the applied R&D of the Fraunhofer Institutes. It is high time for Malaysia to emulate the success proven by institutional infrastructure in such countries. R&D centres in Malaysia will need better coordination and collaboration. Some may have to come under the Fraunhofer-like set up. In Germany, more than 58 institutes come under the Fraunhofer organisation. Though they are independent from each other, through the Fraunhofer Headquarters, many institutes come together to work on major technological initiatives of the country. They form research alliances, which over the years, have proven to be effective in breaking

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technology frontiers. The latest alliance is on “Electric Mobility“. Institutes that want to participate will bid to be part of the alliance. There is no reason why in Malaysia, SIRIM, MPOB, MRB, Nuclear Malaysia, FRIM and many of the R&D centres in the universities cannot come together and operate along the Fraunhofer model. If Malaysia is truly to become an innovation powerhouse, we cannot operate using the ‘business as usual’ model. Malaysia needs new directions. It calls for a transformation.

SCIENCE TAKING A POSITIVE TURN Science in recent years has been under a lot of scrutiny. There were many concerns such as declining interest in science at schools, investments in scientific research not translating into commerce, R&D not focused, businesses not taking science seriously, limited funds for R&D, scarce talent in science and the list went on and on. At one time, scientists almost gave up on science. Many took up other professions. Many scientific talents left for greener opportunities outside the country. Even the programme to lure back scientists under the “Brain Gain” initiative had limited success. It could not sustain. Things are however changing now. The Government is serious about using science to drive the country’s socio-economic transformation. Things are looking up for science and it is no coincidence it is happening this year, the “Year of Science & Innovation Movement”. Apart from the many carnivals that have been held to promote science, more serious things are happening at the policy and execution levels. The Ministry of Science, Technology and Innovation (MOSTI) is taking the bull by the horn. There is now hope among scientists in the country that promises better days ahead for science.

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It all started when the Government decided to reincarnate the position of Science Advisor to the Prime Minister. This position, for reasons unknown to many, was literally frozen for many years. During that time, it would not be wrong to suggest that science was left in a limbo. No one was sure where it was heading. That partly explained the disillusionment with science. The appointment together with a new refreshing leadership in MOSTI marked the beginning of positive change for science. At a recent international conference on science hosted by the Academy of Sciences Malaysia (ASMIC 2012), the YB Minister of MOSTI made the announcement about the new initiatives that will soon transform science in the country. The initiative to create a Science Act for the country is a major turning point for science. This will be promulgated based on the new Science, Technology and Innovation Policy (NSTIP3) that is being finalised at MOSTI. Unlike countries which have achieved success in science such as South Korea, Taiwan and others, we still do not have a legal entity that is tasked to drive science in a more coordinated and strategic way. Decisions on science are often left to the whims and fancies of those in authority without legal framework and they keep changing. This does not bode well for science because investment in science is not short term. Science cannot afford to change too often. South Korea took more than 30 years to become a leading supplier of nuclear technology. The new Science Act is looking at the experience of others for guidance. The common theme in many countries is the empowerment of a legal authority to drive the science agenda. The newly established National Science Research Council (NSRC) is the right entity to be given the mandate. NSRC has to be given the necessary autonomy and power to work between ministries. This is important because science cuts across many ministries and disciplines. NSRC should be

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structured to not only manage the science funding but also talent development. There is no reason why science in the country cannot match the best in the world with NSRC allocating the resources. MOSTI is also finalising the Act for the Academy of Social Sciences. This is an important development because nowadays, all projects call for a multidisciplinary approach. Inputs from the social science realm are critical as society becomes more involved in the approval of projects. This is also in line with the Government’s New Economic Model which articulates the country’s aspiration for high income with sustainability and inclusiveness. ASM is looking forward to partner with the new Social Sciences Academy to further the interests of science in the nation’s socio-economic transformation. It is clear that 2012 as the year of “Science & Innovation Movement” is witnessing new initiatives by MOSTI that will turn science for the better.

SCIENTISTS A DISAPPEARING BREED Lately, there have been disturbing reports about the decline in the number of students taking up science. It has reached a critical level. Though in the early years, the government had set the target ratio of science to arts students at 60:40, the actual ratio now is much lower. Some say it may be more like 20:80. At the rate things are going, it will be tough for the government to increase the number of research scientists and engineers (RSEs) in the country. The government’s target of 50 RSEs per 10,000 workforce by 2020 does not look achievable. This can have serious repercussions on the country’s innovation plan.

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How do we address this? How can we attract more students to do science? Ask any student on what is their preferred profession would be or for that matter, ask any parent what they want their children to become. Chances are the student will not choose a career in science and the parent will also not want their children to pursue a career in science. Anything but science. Why is this so? Why is science unattractive? Experts have offered many reasons for the declining interest in science. Top on the list is the fact that a career in science does not pay well. It is less lucrative compared to the other professions but many believe there is more to it than that. One factor contributing to the growing disinterest in science has to do with the fact that science is widely viewed as complicated, uninteresting and difficult to master. Is this true? Is it really that complicated? In the past, there was no difficulty getting students to join the science stream. In fact, in the early years, the country was able to attract many to do science. Some were disappointed when told they did not qualify to join the science class. Is it the teaching methods that are putting students off these days? Or is it because the facilities reserved for science? Many countries have introduced new approaches to teaching science. In France for example, their Inquiry Based Science Education (IBSE) is proving to be a hit among students. China is also implementing its own IBSE model. They call it the “hands brain” programme. In the USA, their K12 model has also shown positive results. All such programmes are based on the use of practical approaches to explain and describe scientific theories and phenomena. Malaysia has yet to put in place our own IBSE programme. The fact that some schools reportedly do not have proper science laboratories would

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make it difficult to implement IBSE. This is not good for teaching of science and will negate the target to increase the number of scientists to support the nation’s transformation agenda. Under the government’s Economic Transformation Programme (ETP), many admit science and technology can make a lot of difference in the outcome. Science can be deployed not only to sustain the 12 national key economic areas (NKEAs) but also to discover new potential areas for growth. This cannot be achieved without a critical mass of scientific talents. Without sufficient numbers, the country may face difficulties competing in a global economy increasingly led by science and innovation. The plantation sector is in despair over the lack of human capital in agriculture, especially agronomists, microbiologists and fertiliser technologists. Acute shortage of taxonomists needed to support our biodiversity programme has also been widely reported. There are also very few students taking mathematics. Yet, a strong command of mathematics is essential in almost all fields of science. In the developed countries, professionals in biotechnology, bioinformatics, ICT and computational biology have good background in mathematics. It is high time we resolve this talent issue in science. The government’s recent announcement to undertake a national review of the country’s education policy is welcomed. In science education, the review should seriously look at the policy to train science teachers in the country. Often, the teaching of science is not the preferred vocation of many would-be teachers. It is more like their last choice. Some take up the option while waiting for a better job opportunity. As a result, there have been rampant cases of teachers not taking classroom teaching seriously. Often classroom teachings are considered inadequate to cover the full syllabus. Students have to attend expensive tuition

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classes to make up for whatever left out in the classroom. Tuition centres are mushrooming due to increasing demand. In the early days, extra tuition was not widely needed. Yet, we were able to produce well-schooled students. We may want to take a cue from some countries which have been more successful in attracting the best brains to take up the teaching of science. One country has successfully attracted its top students to take up the teaching of science by offering them lucrative incentives and rewards. Apart from better pay, those who join the programme are also given the opportunity to pursue further studies up to postgraduate level PhD. If we are to make headways in the global innovationled economy, the investment in science education is of paramount importance. Otherwise, it will be a matter of time before we are overtaken by countries like Vietnam where their investment in science education is on the rise.

TAP ON THE NATION’S PROFESSORS Many challenges confront the nation and we need solutions. Otherwise, they can derail the country’s move towards becoming a high income nation. One major challenge is our depleting oil reserves. Petroleum is our major revenue source. Any decline in production can upset the nation’s budget. Soon, we will become a net importer. One study suggests it may even happen as early as 2019. The country’s other consistent performer is palm oil. It is running short of land to expand. The only place where the price of land is still acceptable is Sarawak. Even there, the process to acquire land is complicated. Industry players now look at Africa, particularly Liberia and Ghana, for expansion. Unlike petroleum, the industry can still fall back on R&D to increase production at least for palm oil.

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While the country’s key revenue earners are showing signs of potential decline or at best stagnating, the country’s expenditure on fuel and food subsidies takes a big chunk of the annual budget. Admittedly, it is not easy to reduce or phase out such subsidies. It may even become a political suicide. It has to be done in stages. Nowadays, the society is more educated and better informed. They are becoming more vocal in protesting projects which compromise their safety and health, even projects which negate environmental well-being are not looked at too kindly. Take nuclear energy for example. Soon after the debacle in Fukushima, the public has grown more nervous about anything radioactive. The slightest mention of radioactivity would set off a string of protests. A good example is the rare earth project in Kuantan. Though international experts have come out with assurance that the risks are manageable, this has not silenced critics. Some say the views of experts are no longer respected here. Is this a healthy development? Unless it is recognised that virtually all technologies carry some kind of risks, it will be very difficult for the nation to truly benefit from the opportunities that new technology-based businesses present. The question should be whether the risks are manageable or not. Even today’s nuclear reactor designs are relatively safer compared to the earlier designs. They are now talking about third and fourth generation nuclear power plants. In fact, scientists are now experimenting with new fuels such as thorium to replace uranium which experts claim will further improve the safety aspects of nuclear power. Despite all the publicity over the incident in Japan, the radioactivity there is still well contained locally. The number of fatalities is also considered low. This should be quite encouraging considering the fact that the Fukushima plants are of the older design. But an important question to ask is, why

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is it Japan still choose to invest in nuclear despite going through all the pains of Nagasaki and Hiroshima? Surely we cannot buy the argument that the Japanese are less concerned about losing lives. Like all humans, the Japanese also want to live long which why anti-ageing formula sells well in Japan. Maybe they look at climate change as the bigger enemy. For that matter, why are the oilrich countries of the Middle East also committing to invest in nuclear power? This is despite the fact that their oil reserves can last almost forever. For two days, on July 7 and 8, the National Professorial Council had their first National Congress. Almost 1,400 professors of the country descended in Kuala Lumpur to discuss, among others, implications of climate change on the country; the energy options for the country including whether we should invest in nuclear power; the new emerging science-based businesses that Malaysia can benefit from; the ecosystem for scientific research in the country; and the issues surrounding science education in the country. They came from various disciplines ranging from pure and applied science to social science. All 20 public universities of the country were represented. Nowadays, most of the global issues require a multi-disciplinary approach to develop solutions. When implementing new technologies, an understanding of the socio-political impact is crucial. This is why social science research has become more important. The organisers are quietly hoping that their deliberations will be taken up by the media for eventual publicity. Public awareness is critical. The Congress did eventually generate a lot of new ideas. All in all, a total of 14 resolutions were passed. Everyone talked about pushing the country’s envelope to better compete in the knowledge-based, innovation-led economy. The professors are among the nation’s best brains. They

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can offer clues to some of the country’s challenges. How does Malaysia move on the question of nuclear energy? How can Malaysia strategise to benefit from the green economy? How can Malaysia profit from the hidden and untapped wealth in the country’s vast biodiversity? How can we better manage our water? How can we attract more bright students to the science profession? These are some questions looking for answers. If we are to effectively deal with the many challenges confronting the country and profit from the many opportunities, the assembly of the country’s professors is definitely a forum where we can look to for possible answers. It is high time we listen closely to their ideas. It is time to tap on the country’s professors!

HARNESSING SCIENCE FOR SOCIO-ECONOMIC GAINS Academy of Sciences Malaysia (ASM) is the country’s first science think-tank. Over the years, the Academy has advised the government on strategic directions for science, technology and innovation. Modelled after many renowned Science Academies of the world, the Academy now boasts a membership of about 250 Fellows. Many are retired former director-general’s of research institutes, experienced engineers and vicechancellors of universities. Some are still working professors actively conducting research. As a science think-tank, the Academy has anchored regular discourse on science, technology and innovation. The Academy is also an active member of the Global Academies of Sciences, headquartered in Germany. Through such alliance, joint statements have been made on global issues such as climate change,

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sustainable development, energy challenges, resource depletion and health concerns of the world. The Academy also regularly undertakes studies on how science can help mitigate global threats to the nation. As a think-tank, to be credible, such studies were always done with objectivity and independence. Since 2012, the Academy has hosted the General Assembly, GA, twice a year. Last year, the topics discussed were the impact of climate change and the future of green technology. This year in April, the Academy recently hosted a talk by our former Minister of International Trade and Industry (MITI), Tan Sri Rafidah Aziz who spoke on “Science and the Economy; Challenges for Malaysia”. This was the first time the Academy has hosted a talk on a topic other than science. It proved to be exhilarating and thought-provoking! More importantly, who else is better to address the topic than Tan Sri Rafidah who we all know has been the prominent flag bearer of the country’s foray into international trade for many years. Many agree she is among very few leaders of the country who has made a name in the international arena of politics, government and the economy. Many Fellows of the Academy turned up and posed all kinds of questions, in a way testing her understanding of the role of science in the economy. Despite being away from ministerial duties for a few years now, Tan Sri Rafidah showed she has not lost her touch. She was still in her element while answering questions from very senior Fellows of the Academy. She did not mince her words suggesting that much improvement is needed in science governance if science is to truly make any significant impact on the economy. According to her, Malaysia has now moved into phase three of economic development. The first phase was the low-cost era. The second phase was efficiency-driven. We are now in the

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innovation phase where the role of science and technology becomes even more critical. She, however, warned that science cannot make an impact if scientists continue to do research without thinking of the practicality of the outcome. She called for more logical thinking when proposing research. She cited a case of research in the early years to make superior quality bricks from rice husks. In the end, because no thought was given to the economics of the eventual technology, the findings remained locked in the drawers of researchers. She also touched on her encounter with a policy strategist who had the misguided notion that we should phase out manufacturing if we are to embrace the knowledge economy! Imagine if we as a country had abandoned manufacturing in the quest for the knowledge economy. It would have been disastrous. As usual, her talk was filled with examples and innovative ideas. All her suggestions made sense. When pressed on the secret of her logical thinking, it could have been attributed to the fact that she was actually a science student in her pre-sixth form years. One question posed by her was, how come every time we renew our passports we are given a new number? Would it be better if everyone is assigned just one number like our IC number? That would make forgery difficult. To her, innovation is not just for scientists. What is important is that every Malaysian, irrespective of whatever profession they eventually enter, should be trained from small in scientific and logical thinking. Only then can science truly make an impact on the nation’s socio-economic aspirations!

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SCIENCE CAREER NO LONGER FAVOURED Lately, there have been disturbing reports about the decline in the number of students doing science. Though in the early years the government had set the target ratio of science to arts students at 60:40, the actual ratio now is much lower. Some say it may be more like 20:80. At the rate things are going, it will be a tough challenge for the government to increase the number of research scientists and engineers (RSEs) in the country. The government target of 60 RSEs per 10,000 workforce by 2020 does not look achievable. This can have serious repercussions on the country’s innovation plan. How can we address this? Ask any student what would be their preferred profession. Or for that matter, ask any parent what they want their children to be. The student will not choose a carrier in science. The parent will also not want their children to pursue science. Anything but science. Why is this so? Why is science unattractive? Experts have offered many reasons for the declining interest in science. Top on the list is the fact that a carrier in science does not pay as well. It is much less lucrative compared to other professions. But many believe there is more to that. One factor contributing to the growing disinterest in science has to do with the fact that science is widely viewed as a complicated course. It is uninteresting and difficult to master. But the question is why it only complicated now is? In the past, there was no difficulty getting students to join the science stream. In fact in the early years, the country was able to attract many to do science. Some were disappointed when told they did not qualify to join the science class. Is it the teaching methods that are putting students off science nowadays? Or is it to do with the

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facilities for science? Many countries have introduced new approaches to teaching science. In France for example, their Inquiry Based Science Education (IBSE) is proving to be a hit among students. China is also implementing its own IBSE model. They call it the “hands brain” programme. In the USA, their K12 model has also shown positive signs. All such programmes are based on the use of practical approaches to explain and describe scientific theories and phenomena. Malaysia has yet to put in place our own IBSE programme. Recent reports of some schools in the country not having suitable science laboratories are very disturbing. This does not augur well for science teaching. It can further negate the national target to increase the number of scientists to support the nation’s transformation agenda. Under the government’s economic transformation programme, science and technology (S&T) can make a lot of difference to not only sustain the 12 national key economic areas (NKEAs), but also discover new potential areas of economic growth for the country. This cannot be achieved without the necessary critical mass of scientific talents. With the decline in interests to pursue science as a career, the country may face difficulties competing in a global economy which is increasingly led by science and innovation. Already the plantation sector has expressed concern over the lack of human capital in agriculture, especially agronomists, microbiologists and fertiliser technologists. Acute shortages in taxonomists has also been widely reported. Taxonomists have important roles to play in developing and harnessing the country’s biodiversity wealth. Even in the area of mathematics, there are very few takers. Yet the command of mathematics is essential in almost all fields of science. In the developed countries, professionals in biotechnology, bioinformatics, ICT and computational biology all have good grounding in mathematics.

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It is high time we urgently resolve this talent issue in science. It is encouraging to know that the government has recently announced a review of the country’s education policy. In relation to science, the review should seriously look at the policy to train science teachers in the country. Often, the teaching of science is not the preferred vocation of many would be teachers. It is more like their last choice. Some take up the option while waiting for a better job opportunity. As a result, there have been rampant cases of teachers not taking classroom teaching seriously. It has been widely reported that some teachers even do not cover the full syllabus in class. Instead, students have been persuaded to attend expensive tuition classes to make up whatever has been left out in the classroom. Such practice gives a bad name to those teachers who are more committed and passionate about teaching. We may want to take a cue from some countries which have been more successful in attracting the best brains to take up the teaching of science. One country has successfully attracted its top students to take up the teaching of science by offering them truly lucrative rewards. Apart from the better pay, those who join the programme are also given the opportunities to pursue further studies up to the PhD level.

BUILDING HUMAN CAPITAL FOR THE INNOVATION ECONOMY The results of the SPM and STPM have just been announced. As usual, the media gave prominence to the high achievers. This year, one student scored 21 A’s in the SPM, setting a new record. In Malaysia, examination results get a lot of media attention. The race for maximum A’s has driven parents to invest in extra tuition for their children. This explains why the demand for tuition education has literally

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exploded. It has become a big business. The irony of it all is that gaining many A’s in exams does not necessarily guarantee future success in life. In fact, most of the top 10 richest men in the world are college dropouts! Following the results, next comes the decision to pursue college or university education. Ask any of the students about their preferred course. Chances are not many would want to do courses in pure science. Pure science is not among the first choice among the high achievers. Many would rather take up medicine, accountancy, engineering or even law. Yet, as Malaysia prepares itself to become an innovation economy, the country needs more scientists and technologists. Moving forward, Malaysia cannot continue to be overly dependent on the low value commodity type economy. We need to move up the value chain of products and processes. This is where productivity issues assume greater prominence and innovation is key to improving the country’s total factor productivity. This will be somewhat stunted without a vibrant human capital in science and technology. In fact, under the Ninth Malaysia Plan, the target is for the country to eventually have at least 50-60 scientists per 10,000 population by the end of the Plan. How can we realise this target? Money or rather the lack of it is not the only reason why many shy away from pursuing science as a career. In the past, there have been many who had opted for the science profession but over the time, they all became disillusioned. The working environment in the country, they claim, is not conducive enough for those bent on pursuing R&D in science. Facilities are mostly inferior compared to those in other countries. They are also not well maintained while access to R&D funding is also limited. Malaysia only allocates less than 1% of its Gross Domestic Product (GDP) for R&D. This is far behind many countries committed to the innovation

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agenda. They mostly spend at least 2-3% of GDP on R&D. Furthermore, the red tapes and bureaucracy associated with research funding application have been frustrating. A large number have as a result left to join other professions. There have been cases of those who return home after successful research stints overseas only to experience disappointment here. Many eventually cut short their stay. How do we change this? How can we attract more to take up science? Under the country’s Ninth Five-Year Plan, science and technology have been singled out as the instruments for wealth creation and societal well-being. If we are serious about this, the strategies have to be studied again. For a start, there is an urgent need to relook at the country’s entire science and technology management system. The fact that most of the R&D have not translated into much value for the nation speaks a lot about their poor management. We are not just talking about commercial benefits here. We are still behind on the knowledge generation agenda as well. Very little of Malaysia’s scientific literature are cited by international scientists. For one, many agree there has to be more accountability and transparency in the disbursement of funding for R&D. Good governance is paramount. It is time the Ministry of Science, Technology and Innovation (MOSTI) reassess its operational structure. For one, since science and technology cuts across all ministries, MOSTI has to constantly engage others when developing policies for the country. Take the National Biotechnology Policy for example. There is talk that most of the policy’s thrust areas which also involve other ministries have yet to get their full support when it comes to implementing the thrust areas identified. The reason for this is because they were not adequately consulted when the plan was initially discussed.

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The truth of the matter is that even prior to the Ninth Malaysia Plan, the country already had in place the institutional mechanism to provide the necessary coordination among the ministries and agencies. However, things changed in the last few years. Much of the institutions have been dismantled. The news going around is that some are in the process of being abolished. Take the National Council for Science and Research (MPKSN) for example. It was one of the instruments created to promote better coordination among ministries and agencies. Chaired by the Chief Secretary to the Government, MPKSN has proven to be a useful forum for inter-ministerial matters to be ironed out. It would be retrogressive for the country’s science and technology agenda if this is removed. Now what is left to be seen is how the secretariat can be improved to be even more effective. If the country is to truly realise the wealth creation benefits of science and technology, there must also be clear directions on the priority areas of R&D that the country wants to invest in. Experts should be galvanised to develop recommendations on such priority areas. At one time, there were active national level consultative committees in the priority areas of advanced materials, advanced manufacturing and others. Sadly, many have remained dormant for many years now. It is time to revitalise them. In fact, Academy of Sciences Malaysia (ASM), which brings together scientists from almost all the technology disciplines, should be a good candidate for the assignment. No doubt there should be active consultation with industry, businesses as well as the society at large. At the end of the day, all research should ultimately benefit the society and the nation.

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The fact is there are ways science and technology can become an attractive profession. Many agree that fat salary packages are not the only motivating factor. Scientists would thrive much better if the ecosystem for science and technology development is more conducive. Good laboratory infrastructure, better access to the latest literature, more opportunities to network with other scientists both locally and abroad, reasonable access to funding, less bureaucratic intervention, realistic performance targets, as well as objective reward system are among the features of the ecosystem which would be attractive to scientists. If we are truly serious about galvanising quality human capital in science and technology, it is time we pay more attention to such needs of scientists. Only then can the profession attract the best brains to support the country’s dire need to compete in the global innovation and knowledge economy!

SECRET RECIPE OF A NOBEL LAUREATE All scientists look up to Nobel laureates. Most scientists aspire to win the coveted Nobel Prize. Every country, for that matter, would wish to have a Nobel winner. Malaysia has long made known this wish. Earlier in the 90s, the target was to have one Malaysian Nobel Laureate by 2020. Is this achievable? What does it take to be a winner? Do we have the right ecosystem for a Nobel candidate? Scanning the research landscape in the country, it is quite unlikely that we will produce one by 2020. This, however, is achievable if we are well-prepared. Furthermore, if we read the biographies of Nobel Laureates, we will find that most did not plan to win the Nobel Prize. The recognition comes from many years of ground-breaking basic research on the fundamental understanding of science. It is sort of unravelling the unknown. Academy of Sciences Malaysia (ASM) recently hosted a Nobel laureate in chemistry from Taiwan. This was in conjunction with the Nobel Foundation’s “Sketches of Science” exhibition by the Academy that was held at the Petronas Gallery. Nobel Laureate Professor Lee Yuan Tseh won the Nobel Prize in Chemistry in 1986 for his breakthrough research on molecular beam. The bulk of his research, however, was not done in Taiwan. Instead, most were conducted using laboratories in the USA. He spent many years working in the University of California at Berkeley, Harvard University and the University of Chicago. During that time, the science field in Taiwan was still under developed. It is different now. Professor Lee, who was heading Taiwan’s Academy of Sciences for a number of years, had a hand in turning Taiwan into one of the world leaders in scientific research, not only applied research but also basic research.

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This is of course not the first time Professor Lee conducted talks in Malaysia. He has been here on a few occasions as a guest of the Academy. In recognition of his active involvement with the Academy, he was made an Honorary Fellow of the Academy. This time he came also as President of the International Council for the Sciences (ICSU). On this occasion, he gave lectures on two subjects. One was on ICSU’s current initiative called “Future Earth”, and the other was on his “Experiences being a Scientist”. “Future Earth” proposes a research framework for the world scientific community in response to our common pursuit of the global sustainability agenda. His talk about his journey of becoming a Nobel winner, however, was the one that created much excitement among the audience.

But the most critical formula of a Nobel Laureate is his passionate pursuit of science in search of the truth. His persistent journey to prove his theory on science to the world did face a lot of scepticism and cynicism initially. This is where the entrepreneur in him really showed. He talked about how he had to design equipment from scratch to help prove his point. He had to be multiskilled and often times, the skills had to be acquired through self-learning. The one thing he shared with the audience was that his passion for science was never driven by the goal of becoming a Nobel Laureate. That was his secret!

What was the secret behind success. It was obvious from his narration that the Nobel Prize is reserved only for research work which offers new knowledge in science. It is the kind of research that looks at the basic understanding of science. There may be some unexplained phenomena in science which the research helps unravel. The Prize is definitely not conferred on applied research. Unfortunately in Malaysia, we have given too much emphasis on applied research. Basic research is not well-funded here. Applied research is where scientists use the current knowledge of science to develop new products or improve current processes. Such research is, no doubt, also useful in support of the country’s agenda to deploy science for wealth creation and societal well-being. But it will not qualify for the Nobel Prize.

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CHAPTER 2 CREATING CONDUCIVE R&D ECOSYSTEM There is no denying the fact that research and development (R&D) is the key mover of science and scientific knowledge. This can be in basic or fundamental R&D or the applied R&D. There are number of issues on R&D in Malaysia. Some say there is too much focus on applied R&D and less emphasis given to basic research. It is common knowledge that a strong foundation in basic scientific knowledge is fundamental to the success of applied R&D and consequently innovation. In many countries which have achieved much progress in innovation, they maintain the right balance between basic and applied. In fact, in most governments, allocation on research is mainly limited to basic research. Almost all of the applied R&D is paid for by the industry being researched. This is still not the case in Malaysia. Questions have also been raised on the ecosystem for research and governance in general. Scientists believe there is still room for improvement. The ongoing discussion on the Gross Domestic on Expenditures on Research and Development (GERD) in Malaysia is still on. But many even among the scientific fraternity are already asking whether we are able to do justice to a GERD at 2% Gross Domestic Product (GDP). This is because at the current 1%, there is not enough research to go around. We need more ideas and talent!

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HIGH TIME INDUSTRY INVESTS MORE IN R&D A few years ago, around 2006 or there about, the US National Academy of Sciences came out with a report titled “Rising above the Gathering Storm”. It was meant to be a sort of a wake up call for the world’s most powerful nation on their declining leadership in technology and business competitiveness. The study behind the report was undertaken as a result of strong urgings from no less than the US Congress. There was this concern that the country was slowly losing competitiveness in areas that they once excelled in; science and technology. They attributed the decline to the growing, almost national neglect of science and innovation. At the same time, they also felt threatened by many new emerging nations around them which have overtaken their leadership position in technology. All such countries have come up in global competitiveness ranking through many years of investment in science and R&D. Some of the glaring statistics confirming the US decline was shown in the percentage of graduates in science from US universities. While countries like China and South Korea reported a percentage of science graduates approaching 50%, the US could only manage about 15%. The study looked at countries like China and South Korea as part of the gathering storm. They needed to re-evaluate their science and technology strategy so that the US will once again rise to prominence in the highly competitive global technology leadership. That report came out with suggestions on many fronts including improving education in science, making a career in science an attractive option and also revitalising industry participation in scientific R&D.

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Very few would dispute the fact that Malaysia is also faced with a similar predicament, though not so much to regain leadership in science but more to attain some strong command of science to help the country’s economic development. Despite many years of increasing government investment in R&D, the outcome, except for sectors such as palm oil and rubber, has been rather disappointing. To put it simply, the R&D results coming out of universities and government research institutes had difficulty reaching the market. In other words, not much of the investments in R&D translate into wealth. How do we address this? How do we maximise the conversion of such R&D spending into economic dividends for the nation? Many theories have been proposed to explain the poor performance. One talks about scientists being poor entrepreneurs. Another blames poor choice of R&D topics which they say do not reflect market needs. One strong theory, however, points at the private industry itself. The industry does not invest much in R&D. In terms of market needs, the private industry is deemed to be in the best position to understand such needs. This means if it is more involved in R&D, then the chances of hitting the right research topics are much better. The big question is, how do we motivate the industry to invest more in R&D? Unless this happens soon, we may have problems competing in the knowledge-driven economy of the world. There is no doubt that the knowledge economy is already upon us. The signs are everywhere. A simple example is the mobile phone. Only less than 10% of its value can be attributed to the physical materials used. The rest comes from the knowledge and content technology. The developed economies of the world have long moved in the direction of a knowledge and technology intensive economy. That had come about because of the simple reason that they could not

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compete anymore with the emerging low cost economies of Asia, Latin America and Africa. In the 70s and 80s, Malaysia was among the low-cost economies of the world. Not anymore. In the 90s, Malaysia graduated to join the group of middle-income nations. By then, we could no longer compete on cost to attract investment, be it local or foreign. That drop in investment was largely responsible for the anaemic growth in the past decade. Now, the government says the country has been trapped for too long in the middle-income category. This is not tenable since the population has grown and the slow growth in the past decade or so means the economic cake is no longer big enough for all to share. The government recognises that unless the country moves to a higher income economy, there will be serious repercussions on the country’s socioeconomic equity. The only way for the country to achieve a sustained high income economy is through investments in technology. In today’s innovation-led world economy, technology delivers the highest value but the investments have to be industry driven. This is where private industry contribution is crucial. It is high time that the spending on the applied research close to the market R&D be borne by the private industry rather than the government. The government has long subsidised such R&D which proved unproductive and unsustainable. Furthermore, the subsidy aid is becoming a major financial burden on the country’s budget. It has even been suggested by some think-tank groups that the allocation for subsidies may eventually bankrupt the country. Government spending on R&D should rightfully be confined to the basic and fundamental areas where commercialisation is not a certainty. But the applied R&D which promises a more assured potential for market acceptance should involve the industry more. The investment should come from private

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industry. Only then can we get the returns expected from the country’s investments in technology and innovation.

RESOLVE LINGERING R&D CHALLENGES Every five years, the government would unveil its Malaysia Plan. Few would dispute the Plan’s usefulness in guiding the nation’s development. We are now at the end of the 10th Malaysia Plan. By 2016, the 11th Malaysia Plan will take over. This is the last of the five-year plans before 2020, the year when we are supposed to achieve the developed nation status. It will be the Plan which will pave the way for the country’s development beyond 2020. A development based on sustainability and inclusiveness. This is happening while the world economy is gripped with new challenges. Climate change is one threat which has not gone away. It is getting worse because mankind has yet to rein in the rise of greenhouse gas emissions and all the signs of getting nations to commit indicate a continued struggle. There is so much at stake especially for big businesses. Attempts to manage emissions through the carbon market mechanisms have met with little success. Unless drastic changes happen soon, scientists are convinced global temperature rise will exceed the two degrees centigrade limit. When that occurs, the threat to the world can be devastating. The continued use of fossil fuel is to be blamed for global warming. Developed countries are, however, shifting the blame to deforestation by developing nations. But the dilemma is that the alternatives have yet to match fossil fuel in terms of cost economics. Many believe solar is the

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best replacement for fossils but more R&D is needed to bring down the costs further. Others including wind and biomass have their limits in terms of availability. The ideal option is of course hydrogen. Here we need a cost effective technology to split water which is abundantly available into hydrogen and water. Again, more investment is needed in R&D especially to develop a viable fuel cell technology to convert hydrogen into electricity. The demand for low carbon green technology is set to rise in the coming years. Malaysia has taken the right initiative by establishing a dedicated ministry. We will not, however, be able to tap the full benefits of green economy if the strategy is only to bring in foreign investments. We need to also participate in the development of the appropriate green technology. This is where R&D is key. Applied R&D alone is not sufficient. We need a good balance between applied and basic research. Although we aspire for a high rate of R&D commercialisation, we must not forget the strategic importance of basic research. Without a strong grasp of the fundamentals, it is difficult to sustain the flow of ideas for applied research. Recent years have seen an over-emphasis on applied R&D. The 11th Plan must bring back the right balance between applied and basic research. The availability and deployment of talent is another challenge for the nation’s R&D. We need to attract and retain good R&D talents. Now, the movement of research talent among the country’s many public R&D entities is limited. A recent study by the National Science and Research Council (NSRC) has recommended the setting up of a research management agency to better coordinate the nation’s research assets. This will not only minimise unnecessary duplication but also provide a platform for the better mobility of research talent. By centralising overall management, it will

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also lead to sharing of expensive facilities. We need to transform the management of the public R&D assets to get better value for money. Such transformations should motivate more to join the research profession. Getting the private industry, especially the SMEs, to invest more in R&D remains a challenge. The 11th Plan should introduce new strategies to encourage the business sector to partner universities and embrace R&D and innovation. New funding to invigorate more collaboration between public research institutes and the SMEs may be needed. This should also help build more confidence in the partnership. The 11th Plan is our last chance to bring the R&D culture into business as we approach 2020 and beyond. We should not miss this opportunity!

NEED TO RETHINK R&D STRATEGY Since birth, men have always been curious. Babies are known to be adventurous while trying new skills. As we grow up, seeking knowledge is a vocation men often indulge in. Not many would deny the fact that knowledge is one of the most precious commodities available to men. Knowledge is a powerful tool which can mean the difference between success and failure. It is especially crucial in today’s business which has become increasingly knowledge driven. We are always reminded that there is no end to the pursuit of knowledge. It does not end after formal education. Continuous learning is now accepted as the informal way of acquiring new knowledge. Knowledge is never static. It constantly grows. New knowledge arises from research. This explains why countries that invest heavily in R&D stay ahead of others in terms of economic competitiveness.

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Investing in R&D is not cheap. It involves much expense in making available the facilities and the deployment of the necessary research talent. Like all other investments, it is therefore important to plan the right strategy for R&D. Though, admittedly, the end game of R&D is to generate wealth and bring benefits to society, we must be reminded that there are risks and uncertainties associated with R&D. There is no guarantee that all R&D will deliver the promised targets. Failures are common in R&D but past experience has shown that failed results should never be discarded because they may hold the key to some new innovation. Many spin off technologies that now enjoy popular application come from the unexpected findings of R&D. A good example is the MP3 which came from unanticipated R&D results. Now the Fraunhofer research network of Germany earns around Euro100 million annually through MP3 licencing. In general, there are two major branches of R&D. The applied R&D is the branch devoted to developing products or processes intended for commercial use. Examples include a new drug which has therapeutic application or a new process for more efficient energy generation and use. In the developed economies, most applied R&D are undertaken by the private industry and businesses. This is because they are often driven by market needs and who else would know the market better than the business enterprise. It is quite inappropriate for academics to be given the task of doing applied R&D without them being linked to some business entity. Unfortunately, this is happening in the country now. University researchers are being pressed to deliver short-term innovation through applied R&D.

This is the type of R&D which is more appropriate for the academic community. Basic research produces publications which are more readily accepted by the so-called peer reviewed high impact journals. The results of applied R&D do not attract as much interest as such journals. However, most countries which have achieved prominence in applied R&D are also big spenders on basic R&D. Inadvertently, because of the higher level of uncertainty associated with basic R&D, they are almost 100% funded by the government. The opposite is true for applied R&D. They are all mostly funded by businesses. Those applied R&D which are not market-driven tend to suffer from the difficulties in commercialisation. This explains why the rate of R&D commercialisation of the countryâ&#x20AC;&#x2122;s government funded R&D is still rather low. It is time we rethink the strategy for R&D in the country. First, we need to have the right balance between basic and applied R&D. Maybe a 40:60 ratio to start with. Second, all applied R&D must involve the private industry and businesses from the word go, even at the evaluation stage. Studies have shown that a country has to be strong in basic R&D if it is to achieve a better performance in applied R&D. The end game is that all applied R&D should be left to the businesses and industries, while the government should fund most if not all basic and fundamental R&D. Only then can the country enjoy sustained innovation.

The other branch of R&D is the basic or fundamental research. This is more driven by the need to generate new knowledge rather than aim for commercialisation.

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R&D TRANSFORMATION NEXT Is R&D, short for research and development, on your information radar? Lately, some have questioned why the nationâ&#x20AC;&#x2122;s R&D have not yielded the desired outcome. For example, not many of the R&D results have been commercialised. Do we need to invest so much of public money in R&D? Why donâ&#x20AC;&#x2122;t we just buy technology? Admittedly, there is some truth in the claim but this does not mean we should totally ignore R&D. If there are shortcomings, then deal with them. There is ample evidence to show that countries which invest wisely in R&D have realised enormous gains in terms of economic and social dividends. We may have difficulty even to decide what to buy without the strength in R&D. However, though such sceptics remain, the scientific community is consoled by the fact that the number of believers in R&D has also grown. Fortunately for us scientists, the Prime Minister himself is a strong believer in the power of R&D. Looking at his many endorsements of R&D, we can safely conclude that the leadership is convinced that R&D investments have merits. The PM has championed many strategic initiatives which indirectly support R&D. Only recently, the PM launched the funding scheme, PLATKOM, to invigorate more R&D among small and medium enterprises (SMEs). The active participation of SMEs in R&D is a key element of success. Such schemes will in the long run help remove the bottlenecks that we experienced all these years. More recently, the PM also launched another initiative for young entrepreneurs. Appropriately called MaGIC, many believe it will help weave the magic we need to unleash the R&D potential among our young entrepreneurs.

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However, how can the many concerns about R&D be allayed? How do we make R&D deliver the promise of wealth creation? How do we show that R&D benefits the society? How do we minimise the uncertainty in the outcome of R&D? Many believe it is time we transform the nationâ&#x20AC;&#x2122;s R&D. Top on the list is the need to rethink how we efficiently fund R&D. Many agree we need to revisit the mechanisms to evaluate and approve R&D proposals. At the moment, the system is more like money looking for projects rather than R&D projects looking for funding. Because of the pressure to show a high percentage of spending, quality is often compromised. As a result, even doubtful projects are approved. If this goes on, it will continue to feed the vicious cycle of an increasing number of failed projects and a lower rate of R&D commercialisation. Another area which calls for transformation is the balance of allocation between applied and basic research. Though we see applied research as the R&D investment that matters most when it comes to commercialisation, we must not forget the strategic importance of basic research. Without a strong grasp of the fundamentals, it is difficult to sustain the flow of ideas for applied research. When Steve Jobs went about developing the smartphone, he had to fall back on the fundamental knowledge that was available to him. In Malaysia, we need basic research to know what we have within our biodiversity. At the same time we need to bring the SMEs on board in applied research. In countries where there is a high level of success in the commercialisation of R&D, we often see the active participation of business in R&D as well as a sustained investment in basic research.

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The deployment of talent is another aspect of R&D which calls for transformation. There is no provision for the movement of research talent among the country’s many public R&D entities. It is time the mobility of research talent be designed as part of their career progression. This will also promote better collaborative partnership between institutes. Instead of the often criticised silo working arrangements, such collaboration will lead to more sharing of facilities. It may be worth using the scheme of service used by the administrative and diplomatic service of the government as a guide. Such transformation should motivate more to join the research profession. With all the various transformation initiatives going on, there are reasons to believe that R&D transformation is next!

INCITING NEW VIGOUR IN R&D COMMERCIALISATION Not so long ago, there was very little discussion about R&D in public. Only scientists talked about it but try asking a man on the street about R&D now. Chances are many are now more familiar with what it stands for. Some are even aware of the issues in R&D. This has come about because of the growing public discourse on R&D. The Academy can take some credit for this. Even the Parliament has been seen raising the issue of R&D spending, and whether it truly benefits the nation. The scientific community has come under pressure of late to deliver the promises of R&D. Though the nation’s investment in R&D has yet to match those in the developed economies, the amount allocated is still substantial. Now the country invests around one percent of our Gross Domestic Product (GDP) on R&D. Developed countries, meanwhile, consistently invest to the tune of two to

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3% of its GDP. Some of the Norwegian countries allocate even more. However, in the developed countries, the contribution by the private industry can reach up to 70%. Here, more than 80% of the R&D spending comes from the government coffers. Will this change in the coming years? R&D commercialisation has been the topic of interest among policy makers of late. There is concern that the nation’s investment in R&D is still not showing attractive returns. Admittedly, the percentage of R&D that get translated into businesses are still comparatively low by developed country standards. It is still below 10%. Why is this so? The aim is to at least achieve an average of 30%. It is common knowledge that multinational companies that invest heavily in R&D attain even higher levels of commercialisation. This is attributed to the fact that most of such private businesses R&D are driven by market demand. Through their constant vigilance of market changes, they are able to decide on the right R&D topics to invest in. This explains why R&D investment in palm oil which is more market driven has shown a higher degree of commercialisation than the national average. Even there, they can do with some improvements. How do we improve the return on investment for the nation’s R&D? In view of the urgency at hand, the Ministry of Science, Technology and Innovation (MOSTI) had just declared 2014 as the Commercialisation Year. Various programmes are underway to promote and publicise the need to raise the nation’s R&D commercialisation rate. At the same time, MOSTI is looking at taking steps to further enhance the nation’s ecosystem for R&D commercialisation. There is talk about building a dedicated gallery to exhibit the latest R&D products waiting to be marketed. Such a gallery will allow investors and the business community to

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meet and discuss possible monetising ventures with the owners of the R&D outputs. The Technology Park Malaysia Corporation (TPM) at Bukit Jalil would be the ideal place to showcase such potential R&D offerings. Established almost twenty years ago, TPM was given the mandate to be the half-way house for R&D entering the market. Now that Malaysia has in place a critical mass of R&D considered ready for commercialisation, the time is right for the shared facilities at TPM to be appropriately upgraded. Many agree R&D commercialisation requires a thriving technology community actively engaged in the exchange of ideas on R&D topics and new technology opportunities. Such technology fraternity should ideally include research scientists, venture capitalists, intellectual property experts and business entrepreneurs. TPM at Bukit Jalil has the space to house such a community. In fact, TPM’s Innovation and Incubation Centre together with the Park’s Centre for Technology Commercialisation should now merge to host such a meeting place. The ecosystem can be further enhanced if the other innovation players including Biotechnology Corporation, Malaysian Technology Development Corporation (MTDC) and Malaysian Innovation Agency (AIM) are persuaded to set up office at the Park. Even universities, especially those outside the Klang Valley, should seriously consider opening up branch outlets at TPM. If that can be materialised, then we would truly have a thriving technology rich community at the Park. Only then can we incite greater vigour in the country’s R&D commercialisation.

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DILEMMA OF PUBLIC R&D We are all familiar with the often quoted Malay proverb “Telan Mati Mak, Luah Mati Bapak”. Short and simple but carries a deep meaning and delivers a powerful message. We must salute past craftsmen of such soul searching proverbs. They remind us of life’s many realities, very clear articulation of the difficult choices we have to make in life. In the English language, there is one word that can well describe this particular proverb. The word is “dilemma”. According to the Oxford English Dictionary, the word “dilemma” refers to “A situation in which a difficult choice has to be made between two or more alternatives, especially ones that are equally undesirable”. This reminds us of the book “A Malay Dilemma” authored by our former Prime Minister and an Honorary Fellow of the Academy Tun Dr Mahathir Mohamad. Although controversial at first, it was eventually accepted as an intellectual literary offering by a great statesman. The book discussed the difficult options of the Malays as they negotiated the many twists and turns of the nation’s early phase of development. We all know that much of the propositions from the book were eventually harnessed and incorporated as part of the country’s development policies. Over time, the resulting action plans from the policies have to some extent resolved much of the dilemma highlighted in the book. This also goes to show that it sometimes pays to listen and embrace the recommendations of any such critical socio-political analysis. This is, of course, provided that such exposition is done with objectivity and independence.

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This brings me to a not so different dilemma now faced by some of the countryâ&#x20AC;&#x2122;s public R&D assets. A recent study on such assets exposes some of their shortcomings, especially on governance. Not so much because of their own doing but more because of the lack of proper national R&D policies to guide the operation of such public research assets. Many of them are just departments in a ministry. Some are statutory bodies while a few are government linked companies. The findings from the study suggest that most exist in a state of dilemma. Most do not have clear directions as to where they are heading. These include unclear governance framework and inappropriate performance measurement indicators as a R&D entity. One thing they all have in common is that they were all established with one powerful mandate, and that is to facilitate the nationâ&#x20AC;&#x2122;s drive towards an innovation economy through applied scientific research. All is not lost however. The study has come out with conclusive recommendations to realign all such public research assets through some coordinating mechanism. This is not unlike the practice in many developed economies where such assets are linked in a coordinated manner with the small and medium enterprises. Some government research assets such as the palm oil and rubber research institutes have clear links with the industries they serve. They are also statutory bodies with some degree of autonomy. They have their own research councils which also include industry representation to provide the necessary policy directions. They are doing alright. Unfortunately, those research assets which operate as government departments do not have such luxury. Some degree of autonomy is needed if a research entity is to operate effectively.

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A more serious dilemma concerns those R&D assets which operate as GLCs. They are not-for-profit government companies. When it comes to performance measurement however, they are assessed on profits they generate. If they do not show profits, then they are denied the necessary incentives such as bonus and rewards. Since R&D in general would not show profit, such GLCs would tend to shift their focus from research to doing training and consultancy. This affects their core business which is R&D to a great extent. When they do not show good performance in R&D, they are again taken to task. This dilemma calls for urgent redress. Otherwise, their outputs on R&D will continue to worsen. It is time their performance measurement is placed solely on their R&D outputs and how this benefits the SMEs. The returns to the government should be ultimately reflected in the profits enjoyed by the SMEs.

TAKING R&D TO MARKET; A GLOBAL ISSUE Nowadays, having access to the right technology is seen as the key ingredient for success for both businesses and government alike. In todayâ&#x20AC;&#x2122;s era of knowledge and innovation economy, countries like Malaysia, which can no longer offer low-cost advantage look for technology to add value to its economy. Look at where Japan, Korea, Germany, Finland and Switzerland are today thanks to their investments in technology. They have many things in common; lack of natural resources and import dependent on much of their needs. Yet, all their economies are among the top performers in the global competitiveness ranking. Why? It has a lot to do with their strength in technology.

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If technology is seen as the key success factor for economies, then R&D is acknowledged as a key driver of technology development. It is now more than 10 years since SIRIM became a corporate entity; the first public sector R&D to be corporatised. To be exact, it is now approaching 11 years. It was officially operational as a corporate body in September 1996 after many years of operating as a government agency. A few years of planning and strategising were needed to produce SIRIM’s corporatisation blueprint. This was led by the then Director-General, Dr Ahmad Tajuddin Ali (now a Tan Sri). He was convinced that the only way to make R&D more accountable was through corporatisation. Ahmad Tajuddin pushed very hard for SIRIM to be a corporate entity to get away from the massive bureaucracy as a government body. However, Ahmad Tajuddin could not assume the post of CEO/President when SIRIM was officially corporatised. He was then appointed as Executive Chairman of Tenaga Nasional on September 1, 1996. SIRIM was, however, fortunate to have another no less capable candidate as CEO. Dato’ Dr Mohd Ariffin Aton was appointed as CEO/President on September 1, 1996 to steer SIRIM’s corporatisation dreams beyond the blueprint. Having accumulated many years of extensive experience in R&D management, first as the pioneer Professor of UKM’s chemical engineering department and later heading Petronas’ R&D outfit, Ariffin had all the credentials to lead SIRIM as a full-fledged corporate body. The fact that SIRIM has made significant headways in realising much of its corporatisation dreams speaks volumes about Ariffin’s ability to change a government entity from one which conducted R&D to support standard writing to one which now talks of R&D as an instrument of business. Come September 2007, Dato’ Dr Ariffin will be

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completing his tenure at SIRIM. His experience managing and nurturing a corporatised R&D entity however would have gone to waste if it is not somehow documented and shared with other R&D institutions which harbour similar plans towards corporatisation. A recent interview with Dato’ Dr Ariffin has managed to cull some interesting insights on what R&D corporatisation is all about. Has it all been worth it? What would he have done differently? What is his advice to others contemplating a similar path? What is next for SIRIM? These were some of the questions posed to him in the hour long chat. It was clear from his response that he had to face all kinds of challenges leading SIRIM on that corporatisation journey. There were periods of pain and there were also joyous celebrations. At the end, there was no hiding the satisfaction he felt, contributing to the entire exercise of transforming SIRIM from a lesser known R&D entity to one that is now internationally respected and recognised in many technology based areas especially those related to industrial R&D. The first thing he did was to ensure that there was a proper system and process in place. There was need for a clear delineation of responsibility. This is where he introduced a clear guide on the level of authority (LOA). A lot was taken from what he learned while at Petronas. With a clear LOA, there would be better accountability. Since R&D is mainly about people management, his next task was to put in place a good human resource system. The reward system had to be objective and transparent. The performance development appraisal (PDA) system was adopted as the instrument to promote objectivity and transparency in staff assessment. Over the years, the PDA underwent changes and modifications after much experience following its implementation. He then went on to create a proper financial

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system. As a corporate entity, the constant tracking of its finances is a must. It is all about promoting efficient use of resources and assets. There should also be a transparent system for procurement which can sometimes take up a lot of time. Embracing the system was not much of a problem in SIRIM. This is because as the long-time custodian of standard and quality for the country, the ISO culture was already there in SIRIM. What was needed was a better grasp of the business culture. This proved more challenging because of legacy issues associated with most government entities. A sense of urgency, for example, had yet to be embraced as a culture in a government type operation. In business, neglecting timeliness of service may even be suicidal. This is where a lot of courses on mind-set change had to be infused. Admittedly, it was not easy. When he first took up the job, he found that R&D in SIRIM was not so much for technology development. It was more to support the needs of standard development. He needed to create a critical mass of researchers to do more serious R&D. He did this by putting together groups with common interests and created R&D programs which reflected a balance between basic and applied R&D. From then on, the R&D in the Advanced Material Research Centre (AMREC) and the Environment and Bioprocess Technology Centre (EBTC) began to produce the kind of R&D which were amenable to patenting and eventual commercialisation. What would his advice be for other R&D institutes planning a similar journey? His view is that the corporatisation agreement must be clearly spelt out, especially on the fact that profit should not be the motive. It is more to create a business like environment to promote better accountability in R&D, including cost

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consciousness and efficiency. The bottomline should still be aligned to the usual outputs of R&D; patents, new improved knowledge, process and products. Those should be the principal Key Performance Index. What then is the way forward for SIRIM? Unlike other R&D institutes, SIRIM has to manage both R&D and Standard/Quality (S&Q) development. Admittedly, both are critical elements of a knowledge-driven economy. It would be impossible to bring technology to the marketplace without proper standards in place. So, as far as SIRIM is concerned, the S&Q part of its operation is fairly well taken of except for the new rule on separating certification and consultancy. When the rule comes into effect, which will be soon, a decision will have to be made on whether SIRIM would keep or let its business certification go. As for the R&D component, more work is needed to further enhance the generation of new intellectual property for licensing and commercialisation. One idea is to infuse from flagship projects. Whatever it is, Datoâ&#x20AC;&#x2122; Ariffin has already put in place a strong foundation for the future of R&D based on the principles of a corporatised entity.

MH 370 OFFERS R&D IDEAS IN AVIATION SCIENCE March 8 will surely go down in history as the date when the best of aviation science is still shown with its shortcomings. That was the day when flight MH 370, on its usual journey from Kuala Lumpur to Beijing, disappeared from radar detection. Many theories were offered to explain the sudden loss. One was that the plane may have suffered structural failure and plunged into the South China Sea. But later evidence proved the theory was flawed. This came only after days

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scouring the South China Sea. Many countries offered help. Even though the search did not lead to much in terms of proof of mishap, the fact that many countries collaborated in the exercise was a good enough demonstration that men do care for each other. If only such spirit can be perpetuated at all times, peace for the world is more or less assured. What became evident during the frantic search for the missing plane was the level of sophistication in aviation technologies that man now has in command. Imagine a situation where the communication and sensor technologies are much less developed. The search would definitely have been more challenging. The turn back, for example, would not have been noticed. The observation was not made by commercial radar. Instead, it was made possible by the more sensitive military radar which spotted the sudden change in the flight path of MH 370. It was also then that the theory surrounding the mysterious disappearance of MH 370 also changed. The shift in theory was later corroborated by the expert analysis of satellite images produced by many orbiting the earth. Again, the willingness of countries to share their satellite data was applauded not only by those who have spent sleepless nights trying to put together credible information to give to the press, but the gesture was also very much appreciated by relatives and friends of those who were on the flight. In fact, looking at the images flashed on television, there was that encouraging sign of relief after many tense days among relatives when the Prime Minister made that press briefing confirming that the plane did not explode as earlier thought.

When the plane was still nowhere to be found, the concern for the safety of those on board came back to haunt them. Whatever it is, the earlier confidence that MH 370 will soon be found in tact is still there. It is encouraging to know that virtually the whole world prays for a safe end to the whole crisis. It is amazing to see how many countries have rallied together to help in the search. What is also encouraging during the crisis is to know that the nation does have many experts on aviation science. Many of the experts have come forward to offer their take on the science and technology of aviation communication and sensor technologies. Some have offered new fodder for aerospace R&D which should attract support in terms of funding. One idea concerns the need to develop the technology to better interpret the different satellite images which apparently have been designed based on differing standards. This tends to slow down the deciphering of the image data. Another idea concerns the blackbox which is meant to provide the insights on what has taken place in the flight. At the moment, the blackbox can only be analysed after the plane is found. Why canâ&#x20AC;&#x2122;t a blackbox be designed to continually relay information to the ground? There was also the idea mooted on the need to design a communication device which cannot be deliberately switched off. For example, can we have a communication sensor embedded in the aircraft body? Often times, ideas for new technologies emerge in a crisis. MH 370 is a good example.

The other announcement which in fact put to rest the theory of mechanical failure was the revelation that the communication was deliberately switched off, causing the planeâ&#x20AC;&#x2122;s disappearance from the radar screen. However, the feeling of relief among relatives was only temporary.

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RETHINK CUTBACK FOR RESEARCH VARSITIES Spending on R&D has always been under close scrutiny. This is understandable since the expenditure on research does involve a significant sum. Research is after all a long term investment for the country. Unless carefully planned, research can end up with virtually no significant gains. In the 10th Malaysia Plan, more than RM2 billion was allocated for R&D in the country. Much of that money ended up in the country’s higher learning institutions, mainly the universities. Those researches, especially the applied research, which do not translate into commercial gains or beneficial use by our society may well be considered a waste. Unfortunately, our years of track record has not been encouraging. A very high percentage of the R&D undertaken has not reached the market place. Concerns have, therefore, been raised on the wisdom of allocating funding for research in the country. However, with the formalisation of the research university concept a few years ago, things have started to look up. Backed with reasonably adequate funding support and coupled with improved management autonomy, a recent assessment shows that the five research universities in the country have performed extremely well. Publications in many highly cited internationally referred journals were significantly up. Patent acceptance has also seen much improvement so much so that all the research universities have confidently declared that they are destined for world class performance in a matter of years. In other words, they will soon be among the top world universities in the global ranks. Each year, every one of the five universities received RM100 million funding for R&D.

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In 2014, though earlier promised the usual RM100 million, all the five universities were jolted by the news that their allocation would be reduced by half. Later, there were rumours that the cutback would be limited to only a quarter. This, however, could not be confirmed. Whatever it is, the reduction would significantly derail the long term plan that all the five have worked out for their universities. Some postgraduate researches would have to be aborted. Not to mention the many post doctorates and the research assistantships that the universities have engaged. Once such talents leave for greener pastures, the country’s pool of human capital related to reseaches will be lost. A more concerning impact will be the growing ridicule over a career in research. As it is, the interest among students in science has yet to pick up momentum. Yet, the country wants to increase the number of research scientists and engineers (RSEs) to help support the nation’s innovation aspirations. By 2020, the plan is to have at least 100 RSEs per 10,000 workforce. Developed countries have many more. Our ASEAN neighbours are aggressively pursuing programmes to increase their research talent. If we are not careful, we will soon be behind Indonesia, Vietnam and Thailand. This does not augur well for the nation’s competitiveness, even within the region. It is already a widely accepted fact that in the coming years, nations which fail to measure up in terms of innovation have much to lose in the global competition. A country may well allocate a lot of money for research but nothing much will happen without the availability of good research talent.

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Academy of Science Malaysia (ASM) has been lobbying for continued support for science and innovation. This is because from the Academyâ&#x20AC;&#x2122;s Mega Science Studies that is assessing the countryâ&#x20AC;&#x2122;s future, we will have difficulties mitigating the business risks that will emerge without adequate talent in science. In addition, we will not be in a position to capture many technology driven opportunities that are sure to dominate future businesses. These will include new businesses in the bioeconomy such as new therapeutic drugs and vaccines, as well as the emerging opportunities in the green economy. Even our dreams to venture into new businesses based on nanotechnology will simply fade away. We would like to appeal that the announced cutback for research universities be reassessed. By sustaining the funding support, we may not reap the benefits now but we will definitely harvest the rewards many times in the coming years. This has been demonstrated time and again by nations that invest heavily in science and research!

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CHAPTER 3 THE FUTURE HOLDS THE KEY Science involves long-term investment. It is not just about taking care of current needs; it is more about planning for the future. We must be aware of emerging risks and opportunities that will shape the future. By looking at the long run, we can make wise decisions on the necessary investments in science. Future studies such as foresighting are useful tools to better understand tomorrowâ&#x20AC;&#x2122;s needs. Taking into account the megatrends and the technologies that will loom, we can build more realistic scenarios of the future. Academy of Sciences Malaysia (ASM) has introduced its own design of future studies to generate ideas for a sustainable Malaysia. The Mega Science studies should be useful as we evaluate sustainable development of the country. We need to support such future studies with the necessary funding and resources. In South Korea, they have adopted a law which stipulates that they undertake a national foresight study every five years the least. They are now amending the law to increase the frequency to every three years.

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POWER OF FORESIGHT The 21st century is all about rapid change and globalisation. The pace of change is accelerating. It is imperative that leaders and management understand its implications and promise. In a world of pandemic change, it is all too easy to be caught unprepared. Being prepared is always the key to success in a fast changing world. Those who can create and predict the future, as well as operate in it with confidence and knowledge, will emerge as winners. Understanding the future of technology and its impact now has become a must for any critical planning. It is even more urgent given the fact that the product cycle from basic discovery to mass marketing and replacement with an even better model, has shrunk from 40 years in the past to six months or less. Leaders in the realms of business, government and universities need foresight as a strategic instrument of planning. This is because they often take big bets on the future. They have to manage risks. Armed with reliable foresight predictions, leaders will be able to plan ahead better. There are many ways to anticipate the future. We can collect a lot of data, weigh them carefully and make a wild guess, or we can try to identify trend in global affairs and project where they will lead. Other than that, we can use the oldest technique of all; ask someone who we believe to be an expert, just like what the Greeks did more than 2,000 years ago when they consulted the oracle at Delphi. There is confirmed evidence that we are moving to a more populous world that is largely industrialised and intelligent, but also poses unprecedented risks of environmental damage, energy shortages, climate change, weapons of mass destruction and other threats. The global population will reach eight billion by

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2030. What kind of scenarios will emerge in the future? How will such scenarios impact a country like Malaysia? Will there be threats? Will there be economic opportunities? Malaysia has for years engaged science and technology to create wealth and provide socio-economic well-being for the country. Ever since the introduction of the IRPA R&D funding beginning during the 5th Malaysia Plan till now, the exploitation of R&D outputs for wealth creation has been dismal. Much remain locked up within the confines of universities and research institutes. Innovation has been a big disappointment. Despite the establishment of the relevant institutional support infrastructure and funding to motivate innovation, the performance of our innovation is disenchanting. Many experts have offered views explaining the failures. New strategies have also been gathered in revised plans and policies, but effective implementation has been another challenge. Some of the opinions on the poor performance point to the lack of forward planning and foresight. Others blame it on the fact that there is no proper institutional body which is given the authority and resources to drive the innovation agenda. Take the issue of climate change for example. We all know international climate conferences can be tough affairs. Participants at such meetings like the one recently held in Copenhagen would testify to this. Politicians negotiated over reduction targets there but the proposed numbers came from a great deal of complex behind-the-scenes scientific research. Often, experts do the preliminary work for the negotiators so that any potential targets are based on realistic facts. Whatever the outcome of such meetings, many countries have begun preparing for any eventualities caused by climate change. In the European Union, the Fraunhofer Institute for Systems and Innovation Research (ISI) recently and

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Innovation Research (ISI) recently took the lead in producing a report on global change on behalf of the European Commission. In the report entitled “ADAM 2-degree scenario for Europepolicies and impacts”, ISI researchers worked together with experts from a number of other institutes and countries to gaze far into the future to the year 2050, and find answers to such questions like “What will Europe have to do in the interim to limit global warming to 2 degrees?” and “what effects will the efforts have on individual countries’ economies and labour markets?” Scientists and politicians now agree that the Earth’s temperature must not be allowed to rise more than 2 degrees above pre-industrial levels. Anything higher may exceed the tolerable limits in terms of effects on mankind. Since industrial nations produce the bulk of the global greenhouse gases, they must cut their emissions by a far greater amount than the developing and emerging countries. There is talk of a reduction target of 80% by 2050 compared to the base year of 1990. The study produced by the ISI has shown that Europe is capable of achieving this without any detrimental effect on its economy. It was not an easy exercise. Trying to forecast so far into the future is like trying to solve a complex equation with numerous unknowns. It was particularly difficult to amalgamate all the different models on which the study is based, because, as project manager Wolfgang Schade of the ISI explains: “We had to find an integrated modelling system for all the 27 countries.” Preexisting models dealt with individual sectors such as transport, energy supply or private households, but now, because they were seeking a more comprehensive outlook, all the various interdependencies had to be worked in. Converting from coal-based power to wind and solar power for example has the knock-on effect that less coal is transported, which in turn means less energy is required for transport.

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The overall conclusion of the study is that the 80% reduction target for the EU is achievable but massive efforts will be required, not only to expand the use of renewable energies, but also to save the energy overall. A great deal is still being wasted. Savings can be made in all sorts of ways, for example by ensuring buildings are better insulated, by improving material efficiencies, or by using electrical equipment that draws less power. These are the potential opportunities that climate change presents. The study also makes it clear that polluters must pay for the harm they inflict on the environment. A suitable price must be attached to carbon dioxide in order to increase pressure to make changes. Incentives such as labels and standards must be created for products with low CO2 emissions. These should help accelerate their launch into the market and last but not least, significant sums of money must be invested in research, so that new, climate-friendly technologies can be developed and commercialised. At present, the biggest CO2 emitter is the energy sector. It is to be blamed for roughly half of all greenhouse gases but this is also where the greatest potential for savings can be found. An estimate puts the savings at a colossal 90%. In the studies of the 2-degree scenario, coal would have to forfeit its central role among energy sources, while the renewable energies sector could expand to provide as much as 75% of Europeâ&#x20AC;&#x2122;s electricity within the next 40 years. Experts predict that wind power, in particular, will continue to experience substantial growth. If energy-saving measures also begin to take effect, Europe can not only stop expanding its highly controversial nuclear power industry but it can also do away with the current carbon capture and storage policy- and still achieve its climate targets.

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The Fraunhofer study demonstrates the power of foresight to better understand the future opportunities that climate change presents. It is based on a number of assumptions but the future is always full of surprises. The financial crisis of recent years certainly showed us that. Even in the technological sphere, we may see breakthroughs over the next 40 years that no one can imagine right now but one thing is certain; foresight is a powerful tool to help plan the future. This EU study on climate change provides excellent clues on the future choices and opportunities in the energy sector.

LOOKING TO THE FUTURE TO DRIVE THE PRESENT It is common knowledge that the future is uncertain and complex. Those who can accurately predict the future are now being sought after. By knowing the future, we will be able to plan better to take advantage of opportunities and mitigate potential risks. Take Vision 2020 for example. It is only 10 years away. The ability to achieve the developed country status that we long for is now being questioned due to our growth rate. Can we double our per-capita income come 2020? Based on the growth achieved in recent years, economists are saying that it will be challenging to meet the target. The government has already started on initiatives to stimulate change. There is now a new approach in stakeholder engagement. The economic laboratories have confirmed it cannot be business as usual. Innovation should not be taken lightly. Many have been rattled by the suggestion that the country may even go bankrupt if subsidies are not phased out soon!

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Both the New Economic Model (NEM) and the 10th Malaysia Plan (RMK 10) highlight about the strategic role of innovation. Innovation will be a potent instrument to turn the economy and deliver the high income target. Innovation will help the nationâ&#x20AC;&#x2122;s sustainability agenda. Admittedly, the strategy is not new. Experts agree that innovation has brought success to economies around the world. Finland, the home of the global brand Nokia, is one example. Lately, South Korea has also been cited as another success story in innovation. In Malaysia, innovation is not entirely a new strategy. Many institutions covering the entire value chain have been created to champion innovation. The government has allocated sizeable funding for R&D as well as the commercialisation of R&D. Though based on Gross Domestic Product (GDP), the R&D spending is small by world standard, the amount is still substantial. In the Ninth Malaysia Plan (RMK 9) alone, close to RM2 billion was channelled for R&D. The concern is that much of the findings have yet to reach the market. We still have a poor record of R&D commercialisation. Why is this so? What are the gaps? How can we make innovation work? To some, the gaps have been known all along. The shortcomings of past efforts have been staring at us like a big sore thumb. The reason why innovation has not been truly effective is rather obvious. One major complaint is that the players have not acted in synchrony. The silo mentality remains the biggest obstacle to innovation. The innovation loop of ideas to R&D to market and back to ideas is just not looping. There is serious communication gap between the market and the R&D community. As a result, R&D ideas do not often reflect market needs. Market players have yet to be convinced that investing some of their earnings in R&D will help grow their business. The technology community that we hope

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would populate science and technology parks in the country has not happened. Even the institutions created to drive innovation have not truly come together except may be at post-Cabinet meetings. The end result is that institutions do not link, scientists do not partner with industry, and industry does not engage academics. How can then we have a truly vibrant innovation ecosystem? It is truly challenging. Add to that the fact that the financial and banking sector still operate under the old collateral mode, we cannot harbour much hope for innovation. Banks still struggle to assign value to the knowledge capital. Even the so called venture capitalists are mostly risk averse. There must be change and we must take a critical look at the past 15 years of the countryâ&#x20AC;&#x2122;s innovation experiment. The Prime Minister has finally announced the establishment of Innovation Malaysia. This is the entity that promises to address the missing gaps in the innovation value chain. This signals the start of the change of process in the innovation ecosystem but as the saying goes; the proof of the pudding is in the eating. The success of Innovation Malaysia rests upon the synergy link among the stakeholders of innovation. This is the most difficult gap to close. This calls for close cooperation between ministries and agencies in the government including universities, research institutes, funding institutions and the business community. This requires an effective dismantling of the silo mentality that permeates our work culture. It is the most challenging aspect. However, it is not impossible. Looking at the signals coming from the countryâ&#x20AC;&#x2122;s top leadership, the commitment to the innovation agenda is strong. The political will is there. Now it is left to the stakeholders to make this happen and Innovation Malaysia is ultimately the entity to drive the wealth creation objective of innovation. However, Innovation Malaysia

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on its own will face difficulties to realise this. The link to the Ministry of Science, Technology and Innovation (MOSTI) is critical to its success. The link of Innovation Malaysia to the research community is imperative. This is because research is the bedrock of innovation and commercialisation ideas. All such linkages can only come from trust among the many stakeholders. Otherwise, Innovation Malaysia will be another candidate for the so called “Valley of Death” that we are all familiar with. Since most of the science, technology and innovation institutions are under the purview of MOSTI, the ministry is in the best position to take the first step to consolidate such institutions. Technology Park Malaysia Corporation (TPM) in Bukit Jalil is the ideal site to anchor the key players of the country’s innovation ecosystem. Unlike Innovation Malaysia which looks at the entire innovation value chain, MOSTI can focus on the technology commercialisation aspect, especially on those intellectual properties and patents that already exist within MOSTI. In addition to that, MOSTI may want to establish a graduate studies centre within the TPM campus. This will not only provide the opportunity for human capital enhancement up to the doctorate level in science and technology but also feed the incubation and commercialisation agenda of TPM derived from the research outputs carried out at the centre. In the end, TPM will be populated by a vibrant technologydriven community which would eventually give rise to a productive innovation ecosystem that we desire. It is obvious that Malaysia’s innovation agenda is at a crossroad. It requires bold and imaginative decision to put it on a constructive path to a vibrant future. MOSTI is well placed to make this major plunge and take the country’s technology commercialisation to greater heights. It is not impossible.

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MOMENTUM NEEDED TO ACHIEVE THE FUTURE WE DESIRE It is not uncommon nowadays to hear of meetings convened to discuss the future. As world population continues to rise and global resources continue to show signs of depleting, concerned groups everywhere come together to forecast possible future scenarios and decide on appropriate strategies to create a future we desire. A host of things are discussed at such meetings. For example, what would happen if the world’s food production falls behind world demand? By 2050, or there about, global population is set to touch nine billion. This will translate into a huge demand for food. Already there is talk that climate change will make it more difficult to maintain the current level of crop productivity not to mention, declining land available to plant such crops. Unless some new breakthroughs are made in food production technology, a global food deficit will spell trouble for humanity. Supply is one side of the issue. Affordability is a more serious challenge in food access. What will the repercussions be for the world if more people are forced into the poverty trap? Studies have shown convincing evidence that poverty is a possible root cause of terrorism in the world today. Also how will the world cope with a situation where all fossil fuel sources dry up? Again, studies have provided chilling evidence that renewable energy alone cannot satisfy the surging global demand for energy. This is the reason why the world has not totally discounted nuclear power despite its evident safety concerns. How do we avert such disastrous scenarios and create the future that we truly desire? What kind of energy combination is sustainable?

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I recently attended a UN Expert Group Meeting on Improving Access to Water, Sanitation and Energy Services in Asia and the Pacific by addressing the WaterFood-Energy Nexus. This was held at the office of the Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok. A large number of countries participated in it including ASEAN member nations and experts from South Korea, China, Turkmenistan, India, Nepal, Kazakhstan, Sri Lanka and Japan. Agencies such as the Asian Development Bank (ADB) and the Food and Agriculture Organisation (FAO) were also represented. The deliberations were focused mainly on the link between the supply and demand forces of water, energy and food as nations strive to pursue a development path that would be sustainable. Case papers on the trans-boundary issues surrounding the Mekong River Basin, the Brahmaputra-Ganges Complex and the disappearing Aral Sea provide some guidance on the lessons that can be learnt and mistakes that can be avoided. While the Mekong already has in place a Commission partnered by countries which share the basin, the same cannot be said for the Brahmaputra-Ganges area. The meeting was convened with three prime objectives in mind. One was to identify issues within existing practices of managing the water, energy and food sectors. Two is to identify geographical hot spots where managing the three sectors as a nexus would be advantageous or otherwise, and three is to suggest strategies and policies to promote balanced development by integrating the three resources. At the end of the day, there was consensus that the issues have to be tackled with more political will.

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In Malaysia, the government had started well with the New Economic Model (NEM) where both elements of sustainability and social equity were given strong emphasis as the nation pursued economic prosperity. So far, the government has introduced many initiatives which support the aspirations of NEM. The Government Transformation Programmes (GTP) and the Economic Transformation Programmes (ETP) are useful instruments of development that the government has pushed with much vigour. These, however, should have both short-term and long-term targets. For example, investment in science, technology and innovation is key if the nation is to achieve sustainable prosperity. In pushing technology-driven innovation as an instrument of transformation, R&D funding, talent development, conducive ecosystem and governance are key determinants. On funding, we need to be in line with world average. On talent, we need to retain and attract the top performers. We need to arrest the declining interest in science among school children. Unless these issues are addressed, it would be difficult for us to achieve the future we truly desire, which is essentially sustainable prosperity for all! We should not disrupt the momentum that is already initiated by the current leadership.

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GLOBAL PEACE THROUGH SCIENCE It is an accepted fact that men always fight. From a young age there was always a reason to pick a fight. During school, we would fight even over the slightest disagreement. This can be over name calling or even a petty quarrel. Of course there will always be those who enjoy watching and egging the others on. During my primary school days, I remember the popular brawling spot was near a roadside brick kiln (oven) after school. When in secondary school, the usual venue was behind the basketball court often after Friday prayers. However, fights back in the day seldom ended up in lasting vengeance. It would heal up rather quickly. As adults, fighting usually gets more serious. Sometimes, even minor skirmishes would end up as serious conflicts. As far as I can remember, there has never been a time without war somewhere in the world. Those who read history must know that past wars were fought more on territorial expansion. Building and expanding empires were common drivers of conflicts in the past. Then, there were also wars fought over ethnic and ideological differences not to mention conflicts which arose from discrimination and suppression. Later, wars started over the control of key resources. Oil has been one resource which has attracted a lot of fighting often times escalating into full-fledged wars. Now, many believe water will be the next excuse to engage in warfare. The signs are already there. In cases where the water source is shared among nations, tensions have already started building up. Many expect this to worsen as the impact of climate change begins to bite even more.

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Though wars bring misery to many, there are some who benefit from such conflicts. Understandably, those in the business of selling weapons, for example, stand to gain. However, many agree, wars in the end are damaging for all. The humanitarian consequences of wars are many. They create refugees and many displaced people. All have to endure years of stressful living under deplorable conditions. Over the years, weapons have become more sophisticated. They pose even bigger threats to the survival of the human race itself. Science has somehow helped develop the new socalled weapons of mass destruction. These include those based on nuclear, chemical and biological systems. All have become major global security concerns. There is fear that if such weapons end up in the hands of misguided groups, the consequences can be catastrophic. Though knowledge in science has contributed to the proliferation of such dangerous weaponry, science has also proven to be a potent instrument of peace. Cases of successful initiatives where science has helped cushion the animosities between nation states are aplenty. One such example was the establishment of the International Institute for Applied Systems Analysis (IIASA). Over the years, IIASA has made important contributions towards the understanding of the various forces at work to influence the global energy development, world water scenarios, demographic dynamics and the intricacies surrounding the search for solutions to global poverty. IIASA was established during the cold war. It was a place where US scientists and Soviet scientists come together to research and develop scientific solutions to some of the pressing global problems such as poverty alleviation, food production and access to the basic amenities. It has been reported that there are similar initiatives sprouting in the Middle East.

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Like sports, science can be a powerful instrument to bring conflicting parties together and work towards a common good. However, unlike sports, science does not promote violence. We are all familiar with the kind of violence that can start from sports. No such thing happens under scientific collaboration. On the contrary, scientific cooperation seeking solutions for many of mankindâ&#x20AC;&#x2122;s common enemies, breeds more peaceful coexistence. One common enemy is climate change. Through science, men have come together for years exploring the strategies that the world needs to combat climate change. Scientists collaborate to develop new low carbon energy sources. They cooperate to demonstrate potent adaptation measures for sustainable agriculture and food production. It is time the world looks at science not just for wealth creation; instead, science should also be invested as a potent weapon for peace.

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CHAPTER 4 RECOGNITION FOR SCIENCE SCIENCE IS SYNONYMOUS WITH CIVILISED SOCIETY We all know about Vision 2020. We are all familiar with the call to become a developed nation enjoying high income with inclusiveness and sustainability. We do not have to embrace the exact mould of the developed nations, even if they are exploring anew. This is basically because their current mould has serious imperfections. It is not inclusive. The income disparity among their people is still widening. Chronic social problems have not shown signs of abating. It is not sustainable. So, Vision 2020 suggests we need to create our own. We need one which invigorates a civilised society, creating wealth in harmony with nature and man.

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Academy of Sciences Malaysia (ASM) in partnership with the Mahathir Science Award Foundation recently hosted a dinner in conjunction with the presentation of the Mahathir Science Award for 2013. The winner, Dr Alan Cowman, is an Australian scientist who has dedicated much of his research to Malaria- a disease of the tropics which continues to inflict suffering among the tropical countries. His findings bring us closer to developing the vaccine for malaria. As the only award in the world which celebrates the scientific achievements of the tropics, the Mahathir Science Award continues to attract good nominations from around the world. At nine years old, the award is considered young. But with the right support, the Academy aspires to eventually make the award equivalent in prestige to the coveted Nobel Prize. Tun Dr Mahathir himself came to present the award to Dr Cowman. Addressing the audience in his usual relaxed style, Tun was still very much in his elements. His impromptu speech on the subject of science provided enough justification why the award is appropriately named after Tun. His belief in science is unwavering. The award in a way recognises Dr Mahathirâ&#x20AC;&#x2122;s truly passionate fascination with the power of science and technology. During his tenure as Prime Minister, Tun literally started the scientific transformation for the country. Many scientific initiatives including the multimedia super corridor, the technology park, the Malaysian Technology Development Corporation, Malaysian Industry Government Group on High Technology, and the Academy of Sciences, just to name a few, were all established through his efforts. Tun was fortunate to have Tan Sri Omar as his science advisor then. He orchestrated the entire ground work for the initiatives.

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In his remarks, Tun emphasised the need for the nation to invest in science. This is because there is much evidence to show that science is the path to discover new knowledge and civilisation is about constantly acquiring new knowledge. A society will not taste the true flavour of progress without embracing science and developing new knowledge. History has shown us how past civilisations thrived on the power of science and the growth of knowledge. During the glory days of the Islamic scientific achievements, the Islamic countries of the Middle East were among the major centres of civilisation in the world. Scholars from all over the world converged in those countries seeking new insights. Through such civilised environments, the countries also enjoyed economic and social progress. However, as soon as the investment and commitment to science started to wane, the decline in socio-economic progress was inevitable.

MERDEKA AND MAHATHIR AWARDS SALUTES SCIENCE

The Mahathir Science Award is one of many attempts by the Academy to motivate interest in science among Malaysians. Recent years have seen science taking a downturn. This is not healthy if we are to truly achieve the targets to be a developed nation come 2020. Fortunately, the government is beginning to listen. New science based initiatives are being supported. The recent launch of the Science to Action (S2A) by the Prime Minister has boosted the morale of the scientific community in the country. It is another attempt to transform the country’s scientific endeavours but we must be reminded that science is not only for scientists. If we are to truly harness the fruits of science, then science should be embraced by all. Support should not come from the government only. It is time the business community to also help the government move the country’s science agenda! Then science will truly build a civilised nation.

It is in recognition of such individuals that on 27th August 2007 the Merdeka Award was established. According to the Founders of the Award, namely Petronas, ExxonMobil and Shell, “It is named the Merdeka Award to commemorate the true spirit of independence which transcends the conventional definition of national sovereignty. It explores the liberation of the mind and spirit–factors which foster the realisation of human potential and the pursuit of excellence. The Merdeka Award aims to encourage going beyond the ordinary and comfort zones, aspiring to create a new mind-set among Malaysians”.

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Every year for the past 56 years on 31st August, Malaysians celebrate ‘Merdeka’. The occasion would showcase the achievements of the nation since independence in 1957. The nation is now on track to be a developed nation by 2020. This is a significant achievement mindful of the fact that many among our contemporaries are still struggling. We have to thank our leaders who have demonstrated the wisdom and resilience to steer the country forward amidst all kinds of challenges. At the same time, we should not forget the contributions made by other equally committed Malaysians who have served the nation well in various capacities.

The Award recognises and rewards excellent individuals and organisations whose works and achievements have not only contributed to the nation’s growth but have also inspired greatness in the people of Malaysia. After all, ‘Merdeka’ is about honour, passion, determination and sacrifice. The Merdeka Award thus

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â&#x20AC;&#x153;celebrates and rewards the independence of the mind and spirit, the strength of character and integrity that underpins meaningful achievement and the creativity and vision that enables greatnessâ&#x20AC;?. Since its establishment in 2007, 23 Malaysians have won the Award. Interestingly enough, eleven of the recipients are Fellows of Academy of Sciences Malaysia (ASM). This is seen as a big endorsement for science in the country. Coming at a time when student interest in science is waning, the Award which carries fairly substantial reward money will hopefully provide the impetus that we need to mobilise interest in the science profession. The Academyâ&#x20AC;&#x2122;s own Mahathir Science Award is also making its presence felt as another instrument to motivate research in science for the tropics. Established slightly earlier than the Merdeka Award, the Mahathir Science Award however does not limit winners only to Malaysians.

those outside the tropics pay for keeping the forests intact? The Mahathir Science Award is ready to reward scientists who can develop scientific solutions for such a dilemma Disease is another big challenge for the tropics. Dengue, for example, is still rampant in many parts of the tropics. Even malaria, which many thought is no longer prevalent, still haunts the tropics. Scientists who can offer new ways of overcoming such diseases are also eligible for the Mahathir Science Award. Over the years, the Award, which was modelled after the Nobel Prize, was given to scientists whose researches have led to more efficient rice production, as well as research efforts which add value to resources of the tropics like the rubber wood. In 2012, the Award went to an engineer who developed the natural rubber base bearing to isolate buildings from earthquakes. We should create more similar awards that salute science!

We know for a fact that countries of the tropics have always been attractive destinations for tourists. Many from the temperate countries would flock to the tropics for the all year round sun and the heat. Notwithstanding that, the tropics have also attracted a lot of global attention on their rainforests of late. The world views the tropical rainforests as the last line of defence against the onslaught of global warming and climate change. Any decline in the forest covers through logging and other deforestation activities would set alarm bells among the world environmental NGOs. This is because they look to the forests as the biggest natural sponge to absorb greenhouse gases. This is even more critical since the rest of the world outside the tropics does not have much forest cover to speak of! But countries in the tropics do need to clear some of the forests for development. Will

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MAKE THE MAHATHIR SCIENCE AWARD OUR NATION’S DRIVE FOR INNOVATION Few would dispute the power of the Nobel Prize driving force of global science achievements. Anchored by the Royal Swedish Academy of Science, the Nobel Prize has for years motivated world scientists to strive for research excellence. Every year, scientists wait anxiously for the announcement. For those who win they celebrate. Those whose names do not appear continue their research regardless. The winning researches have benefited the world at large. These range from scientific breakthroughs in medicine, physics and chemistry. All continue to advance the fundamental understanding of scientific knowledge. It has been through such breakthroughs that inspire much of the applied scientific research which produces new products for the world. Academy of Sciences Malaysia (ASM) has for a number of years anchored the Mahathir Science Award. Launched to motivate research excellence on tropical science, the Award has been surviving on the Academy’s limited financial support. There have been some funding contributions from one or two corporate individuals. A recent attempt to obtain a launching grant from the government is still under consideration. Modelled after the prestigious Nobel Prize for Science, the Mahathir Award has so far recognised a number of world class scientists who have made commendable breakthroughs in science for the Tropics. These have been in the area of tropical medicine, food research as well as engineering technologies. A recent winner is Dr Coleman from Australia. His research on malaria brings the world a little closer

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to a viable vaccine. Last year, the Award was bestowed on Dr Kelly who spent many years perfecting the use of natural rubber for earthquake isolation bearing. An earlier winner of the Award was the Forest Research Institute of Malaysia (FRIM) for the R&D which led to the commercialisation of rubber wood for furniture. Nowadays, Malaysia earns substantial export revenue from rubber wood furniture. Because of funding constraints, the Mahathir Award can only afford one winner a year. This is of no help to effectively publicise the Award. This is unfortunate because the Award can be an important instrument to motivate scientific research in the country. Malaysia is trying hard to move the country’s innovation agenda but the progress has been slow. It is time we re-examine the nation’s innovation driving force, especially the use of iconic awards to invigorate local scientific excellence. The Mahathir Award fits the bill very well. First of all, the Award is named after the country’s foremost statesman who has given his best in advancing the nation’s science. In fact, the Mahathir name itself is a powerful brand on its own right. Secondly, it is the only international award which recognises excellent scientific work for problems of the Tropics. There is no doubt the Award can be a powerful platform to galvanise the country’s top scientists to focus on the many problems confronting the tropics. There are many common issues in the Tropics. For example, we have yet to find lasting solutions to some of the tropical diseases. Dengue is a good example of one which still poses a problem for many countries in the tropics. Apparently, a vaccine for dengue is still difficult because the virus keeps changing. Food security is another emerging challenge. Many believe that the growing population will make the matter worse, including changing climate. Many predict the

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extreme weather conditions brought about by global warming will create problems for food productivity in the tropics. This is further aggravated by the call from environmental pundits to stop clearing new land for agriculture. Genetic engineering offers some hope for productivity improvement but environmentalists are also against the so called genetically modified crops which they say will upset the natural balance. It is a dilemma! It is clear that the Tropics desperately need new scientific breakthroughs. One proven approach to motivate scientific passion is through awards like the Nobel Prize. The Mahathir Science Award can be transformed into a similar instrument to motivate local scientists. The only way to overcome the current inertia is through the injection of a launching grant from the government to enable more than one winner each year. Support from the nation’s corporate sector can help sustain the Award.

TUNSHIP FOR SCIENCE DUE Very few would question science’s important contributions to the country. As the nation embraces innovation to compete in the knowledge intense global economy, the country would continue to depend on science even more. Yet, there is concern that the interest in science among students has declined. This can pose problems as we struggle to build sufficient talent pools to anchor our innovation initiatives. The decline is not merely because students see science subjects as difficult and complicated. A more compelling reason is that students do not see much glamour working as a scientist- a misguided perception about science. On the contrary, science can actually be very rewarding. Ask any scientist who has tasted scientific research. They would not want to

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exchange their vocation for anything else. Many have developed a true passion for what science offers! However, perception is still perceptionmisguided or otherwise. Something has to be done to correct the misperception. The more important question is, how do we raise the profile of scientific research to be on par with other professions? We are aware of the fact that many do not see science as a profession per se. In today’s world, any graduate in science can become a research scientist. Very few undergo skills training needed to be an effective research scientist. This explains why most do not perform well. This has to change. Academy of Science Malaysia (ASM) has initiated a number of programs to increase the level of professionalism in scientific research. We provide training in the relevant research skills including technical writing, crafting winning research proposal, communicating science and research management. We have created a database on the top researchers in the country and planning to develop other instruments of recognition for science excellence. The challenge to deliver glamour to the profession however still remains. This is where the award of Tunship for science can be a potential game changer. The Tunship is a national recognition which has not been bestowed on the nation’s scientists. Many among them have made significant contributions to the nation. It is time to award a Tunship for science especially since we are not short on deserving candidates. There are scientists who have made strategic contributions to the establishment of the key institutions in the country’s innovation ecosystem. Even to this day, many former stalwarts of the nation’s science have yet to fully retire from active involvement in pushing the science agenda. Many are involved in the Academy’s programmes to bring betterment to the country’s science.

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A former President of the Academy has also left an indelible mark on the nation’s pursuit of science. His commitment to fight the cause for palm oil is well known. As we are all aware, palm oil is an important revenue earner for the country. Over the years, the industry had to come to terms with a lot of threats. Initially, it was nutrition then came the issue of sustainability. The country’s top palm oil scientists never tire from using science to defend the interests of palm oil. It would not be wrong to suggest that the palm oil industry would not be where it is today without the contributions from science. Another President of the Academy is no less passionate about championing science. He has served in many capacities. In the early years, his leadership in scientific institutions in the country has revolutionised the conduct of R&D for the nation. Later, as he assumed leadership of a number of private companies, he was instrumental in mainstreaming science among the industry echelon. These are other science personalities who have left a mark in the nation’s scientific endeavour. In fact, the Academy’s senior fellows comprise many individuals who have given their lives for the country’s science. It would be unfortunate if none among them is accorded the highest recognition in the nation. It is time a Tunship is bestowed for science. This would automatically put science on a pedestal that would motivate the young to take up science as a profession. There is no denying that a little glamour accorded to science would go a long way to ignite the nation’s interest in science.

UNMATCHED PASSION FOR RAISING TALENT Remember Tan Sri Ani Arope? I am sure many Malaysians know the name. During his heyday, his name was often in the news. Sometimes controversial; sometimes salutary. He headed the Rubber Research Institute Malaysia (RRIM) for many years then he went on to anchor Guthrie, and later Tenaga Nasional, TNB. He is now in his early 80s and as he puts it, “waiting in the departure lounge of life”. The truth is once we live beyond seventy-two which is the average life expectancy for humans, we are literally preparing to depart but Pak Ani, as he likes to be called, is always full of humour even in times of pain. He is never short of amusing anecdotes to share. Can that be his secret of enduring the difficult times in his life? I was recently privileged to attend the launching of his memoirs. Hosted by TNB, his easy-to-read autobiography was launched by Tan Sri Leo Moggie, the TNB Chairman. It was a full house as expected. Tan Sri Ani has many friends and admirers. For me, it was a time to reminisce with past acquaintances from my rubber days at the RRIM. I still remember my early days in rubber research. As a chemical engineer, my initial plan was to work for the oil and gas industry and I did get an offer from a refinery in Port Dickson. When I went to see Pak Ani who was then the CEO of rubber research however, his advice was to reconsider. He came out with all the arguments to convince me that I should aspire to go for higher degrees. I was bought over and decided to stay put to participate in the institute’s talent development program which Pak Ani was totally passionate about. Human capital has always been his top agenda. In fact, during the launching of his memoirs, we were told that he was also pursuing that agenda when he was

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at TNB. It was during his time at TNB that much effort went into the development of the training centre in Bangi and of course eventually to the establishment of the University Tenaga Nasional, UNITEN. His passion for uplifting the academic level of staff members was rooted during his time in MARDI and the RRIM. When he was helming the RRIM, he managed to secure scholarships and other funding to send the officers of the RRIM for higher degrees. I had the British Council scholarship to study wastewater engineering at the University of Newcastle-upon-Tyne in the United Kingdom. Many of my other colleagues went to Belgium for Masters and PhD. One even went to Poland to secure a higher degree. There were those who tried to ridicule the whole program. Known among colleagues for his impeccable fighter instincts, Pak Ani never backed down. He just ignored all the insinuations and scepticisms. Nowadays, many of the people he sent for higher degrees are key players in the nationâ&#x20AC;&#x2122;s science and technology fraternity. Some are captains of various industries. He often joked that he would like to see all his staff having degrees enough to fill up a thermometer! In this era of the innovation led economy of the world, having the right talent pool is a key recipe for success. You can have all the money and sophisticated infrastructure for innovation, but nothing will happen if we do not have the right talent. Building talent should be an on-going programme for the nation. It should not be allowed to stagnate. Any disruption to human capital training can spell dire consequences for organisations. Many research institutes in the country which have not planned their human capital development now face serious issues of succession gaps. The gaps between those in top management and the second liners have widened. This has created problems identifying potential

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candidates for higher management positions. Tan Sri Ani is known among peers and subordinates for his tireless campaign of preparing future leaders who will eventually take charge. Even to this day, he has demonstrated undying passion to place human capital development as the highest priority in an organisation.

UNIVERSITY RANKINGS â&#x20AC;&#x201C; DO WE REALLY NEED THEM? These days, universities all over the world are under a lot of pressure. Some have called for drastic change in the ways universities operate. The ivory tower image is no longer tenable. Industries complain about the quality of graduates which has been deteriorating and lacking in the critical skills needed in the marketplace. Governments lament about universities not maximising their full potential to contribute towards nation building. Their R&D do not produce enough wealth-creating patents. Instead, the findings mostly end up in journals meant for the reading pleasure of scientists. Students complain about the limited placings in universities. They often end up not pursuing their course of choice. Parents complain about the rising cost of university education. Universities, on the other hand, also complain about the reduction in allocations. Universities in many countries are now expected to generate their own income to operate. They cannot fully depend on public coffers. However, not all countries demand that universities look for their own funds. While this phasing out of government support allocation for universities are mostly happening in UK and the USA, it is different in many European nations.

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Germany, for example, still provides free university education for their people. This has been going on for years and does not look like it will end. Germany obviously considers education as a high priority investment for the future of the nation. The country puts a lot of emphasis on the development of human capital to drive the nationâ&#x20AC;&#x2122;s economy. This explains why Germany is also ahead of many other countries when it comes to producing many innovative products for the world market. Germany is widely recognised as a global leader in many technology sectors. We only need to look at the car industry to see evidence of the widely acknowledged German supremacy in automotive engineering. Is there something the world can learn from the German model of innovation? Surprising enough, none of the German universities appears in the ranking that has been highly publicised. Does this mean Germany does not have world ranked universities? So how does ranking come about? Why is there suddenly the rush to participate in the ranking? Lately, Malaysian universities have had nightmares waiting for ranking announcements. We all know for a fact that university ranking is actually a new phenomenon. We never had it in the past. Yet, our universities had no problem producing the right kind of graduates. Ranking actually came into being when some opportunists saw the growing urgency of making a choice in university education. They saw ranking as the potent instrument to differentiate in the market. Universities also need to prove themselves to be worthy of support from government and industry. In the past, universities did not have to compete for good students. It is different now. It is more competitive. The growing disillusion among many stakeholders is another factor which calls for differentiation. That was why some saw the need to formulate and promote criteria-based ranking to help people make that choice. The arguments are that

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through ranking, parents can be better guided. So, can industries when looking to recruit graduates while governments can be more discerning in dishing out allocation. But do universities truly benefit from the ranking model that is practised now? A careful analysis of the ranking phenomena shows that it is the companies anchoring the ranking exercises which have more to gain than the universities, students or industries. The companies can in fact gain on many fronts. First, because of the scramble by universities to outrank each other, the ranking companies can now sell consultancy services to the universities. Universities may have to consult them on how to better strategise to improve their ranking. Some universities may also want to provide training to the relevant staff to help them manage and monitor their ranking performance. The companies can also make money on advertisements through their websites. As for the universities, they will just have to make changes in the way they operate so as to cater to the criteria set by the ranking companies. There are some from the university circles who view ranking as another instrument to colonise universities in developing countries. Is this true? Admittedly, ranking is a useful mechanism to plan for the continuous improvement in the performance of universities but the criteria set should be realistic. They should also be in line with the aspirations of the country. Different countries are at different stages of development. Their agenda on growth differ. Even universities in one country are at different stages of growth. Each university therefore must set their own criteria to drive performance improvement and the ranking should compete against itself not against other universities. For example, one of the criteria may be the number of R&D projects which reach the marketplace. Realistic yearly targets must

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be set and faculties must be given the right resources to meet the targets. Citations in referred journals may be another criteria or the number of patents produced. Another criteria worth considering is for the universities to initiate and groom their own journals to be among the top in the world. This can be done for subject areas unique to the country. For example, our own natural rubber journal, a palm oil journal or a science journal dedicated to the problems and issues of the tropics. Then only is ranking worth adopting!

CHAPTER 5 STRATEGISING SCIENCE

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This section dwells upon the need to strategise science. It is incumbent upon the nation to have a plan for science. This is because science is always viewed as an investment. As with any investment, there is the expectation of returns. Unless the spending on science is strategically planned, we may end up with unnecessary wastage. That is why proper governance is critical. It should provide the check and balance so that the countryâ&#x20AC;&#x2122;s investment in science will generate healthy returns for the nation and society.

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WE NEED A MASTER PLAN FOR SCIENCE

This does not augur well for the future of science in the country. Change is the only option.

Everyone accepts science is important in nation building. Few would dispute that science is a driving force for innovation but many including those from the scientific fraternity feel science is slowly losing credibility. Over the years, much have been invested in science. Funding science has not been cheap. However, there are signs that policy makers are not pleased with the outputs. Some have openly expressed disillusionment. At the same time, scientists are asking for more funding. Their usual excuse for the dismal performance is the low spending. They are asking the government to raise the country’s R&D spending to be at par with other developed economies. At present, the allocation is around one percent of Gross Domestic Product (GDP). They are asking for at least two percent. Most developed nations have surpassed three percent.

In the meantime, launches for all kinds of science programmes continue, but nothing to show in the implementation. In fact, the recently launched science policy has not been properly publicised. A recent survey showed that even many among the scientific community are in the dark about the elements of the policy. It is unclear where the failing is but we must recognise it would be difficult to implement all the six pillars of the policy without the buy in from the relevant stakeholders, especially the scientists and the industry. If science is to make real headway, the governance has to change. The “Science to Action” programme launched by the Prime Minister is a good start. However, there must be clear directions and everyone involved must lend support. It is a pity that the initiative to formalise the first ever Science Act has yet to see closure. This has been going on for a number of years now.

The more discomforting part is that not many students want to take up science. It is no secret that the ratio of students opting to take up science has dipped below 30%. The target of 60:40 in favour of science is no longer tenable. The talent in science is fast disappearing. This is made worse by the fact that many scientific talents have abandoned the country for better opportunities elsewhere. Many are working down under where the claim is that the ecosystem there is much better. How do we arrest this trend? How do we retain the many scientific talents that the country has invested in? How do we get them to contribute to the country’s innovation dreams? The sad part of it all is that we know where the answers lie. We all know what has to change. Unfortunately, the force to resist change is too strong. Apparently, turfism is still alive and well in the country’s administration of science.

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Maybe what we need is a national “Masterplan for Science”, something like the Education Blueprint. The Masterplan should provide clear directions on programmes and projects related to science education, R&D, enculturation of science including science literacy and links with the industry especially the SMEs. At present, science is only mentioned as part of other big blueprints such as the Education Blueprint, the SME Masterplan and also the Economic Transformation Plan. We believe Science is too big to be only a small part of other Masterplans. It must have a Masterplan of its own and the timeline of the Masterplan has to be longer. At least 20 years. This is because science itself is a long term agenda. The development of the Masterplan must be managed by an independent party. It cannot be clouded by issues of turfism and the resistance to change but it is important that the crafting of the Plan

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must involve all stakeholders. This is because science cuts across all Ministries and Agencies. The development of the Masterplan must necessarily involve the analysis of the relevant data. In the event of any missing piece of information critical to the development of the Plan, efforts must be invested in getting the data. This is where the Academy of Sciences Malaysia is well positioned to undertake the job.

S2A TO UNLEASH NEW VIGOUR IN THE NATION’S SCIENCE AGENDA Science is important in nation building. Not many would dispute that. A recent discourse on the future of science at the Academy, which brought together two MPs and an ex-Deputy Minister, was unanimous on this. The panel even went as far as articulating the need to urgently establish a parliamentary standing committee to monitor and debate the state of science in the country. Though there are many issues on science, very little has caught the attention of legislators. The Academy welcomed more discussion in parliament. In the USA, the President of the US National Academy of Sciences briefs the US Congress on the state of science every year. The reason why the Academy of Sciences is given the task is because it is independent and can therefore report objectively. Likewise, if Malaysia is to have a parliamentary standing committee, the Academy’s President is the right person to report to the committee. Many sectors have benefited from the country’s past investments in science. These include plantation, agriculture, electric, electronics and to some extent construction. Palm oil and rubber would not be where they are today without the

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prudent investment in science. The same goes for the ICT and electronics sectors. However, moving forward, science in the country faces new challenges. The most worrying is the declining interest among students to pursue science. This would complicate the need to have the right talent in the coming years. The demand on science has also changed. The years ahead would witness the emergence of new science such as nanotechnology, biogenetics and sustainability, just to name a few. The impact of climate change will also be felt more in the coming years. Though spending by government has been on the rise, the same cannot be said for the industries. Getting them to invest more in science continues to be a challenge. In the developed economies it is not uncommon to see industry bearing almost 80% of the country’s spending on R&D. We would not be far from wrong if we say that science in the country has reached a crossroad. New strategies are needed for science. It is therefore timely that a new initiative to reinvigorate science, S2A, was recently launched by the Prime Minister. S2A is short for Science to Action. S2A has three thrusts; Science for Industry, Science for WellBeing and Science for Governance. Science for Industry essentially aims to motivate the relevant industry to invest more in research and innovation. In developed economies, more than 70% of research funding is borne by the industry. This is especially true for applied research, or research closer to the market. It is the opposite here. Most of the funding comes from Government. Science for Well-Being covers the investment in science for the general good of the public. These include the science needed to resolve issues on the environment, climate change, public health and the likes. On the other hand Science for Governance insists on more transparency and accountability in the allocation of resources for science. After all science is an expensive investment.

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S2A reflects the new STI Policy anchored by the Ministry of Science, Technology and Innovation (MOSTI). The Policy is premised on six key pillars; Research, Development and Commercialisation (R,D &C), Talent, Energising Industry, Governance, Promotion and International Links. What is urgently needed now is the method to translate the two initiatives into action. Over the years, effective implementation of policies has always been a sore point. The monitoring mandate has always been weak. What we need is a robust institutional framework to drive the efficient delivery of both initiatives. In order to get the best out of both plans, S2A and the STI Policy must converge. This is where the National Science and Research Council should be given the necessary muscle to act. The long awaited Science Act must be concluded soon. The Act will hopefully provide more teeth to a new institutional framework of science governance. The new commitment shown by the government should pave the way for a new refreshed mood on the positive future for science. S2A will undoubtedly unleash a new vigour for science that will propel the nation’s growth and competitiveness in the global innovationled economy.

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TPPA IS GOOD FOR INNOVATION Issues surrounding the controversial TransPacific Partnership Agreement (TPPA) recently erupted in the media. It was to be expected. Many sensitive issues were raised. Some questioned whether it is wise to open up our market at a time when we still struggle to compete in areas such as medicine and healthcare. Will affordable generic drugs be disallowed under the Agreement? What will become of state-owned enterprises? Will our small and medium enterprises survive the onslaught of foreign competition? The general view is that TPPA may threaten local businesses with stiff competition coming from the more developed nations in the grouping. TPPA now involves eleven countries, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. It has been reported that seventeen rounds of negotiations have been held since the debut round in Melbourne in March 2010. Some are suggesting that multinationals are using TPPA to rewrite the rules of international trade to their advantage. They say multinationals want to rein in the role of state enterprises, which they claim blocks access to Third World markets. There is fear that the state can no longer exercise sovereign immunity over certain trade-related issues. There has even been some extreme view that with the multinationals in the driver’s seat, antismoking pictures or slogans like “smoking is bad for your lungs”, or “smoking leads to cancer” will no longer be allowed. In fact they went on to suggest that governments can be sued for displaying these slogans! Are such concerns justified?

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The fact of the matter is the Agreement (TPPA) is still under negotiations. As long as negotiations are still on, the outcome is at best uncertain. What is certain is TPPA will provide access to a market of 800 million people and combined Gross Domestic Product (GDP) of US$27.5 trillion. If China eventually joins, which many believe they will, the cake would be even bigger. As a country heavily dependent on external trade, are we ready to abandon this massive opportunity? Based on the performance so far, there is no reason for us to be scared of emerging competition. As recent as a month ago, we were already hailed as moving up to number six on the competitiveness ladder. The government views the TPPA as an important initiative as Malaysia seeks to expand market access. A recent UN study suggested that we will enjoy improved GDP growth. In fact, according to a simulation study done by the Peterson Institute of Economics in June last year, by 2025, Malaysia will benefit with an increase in gross national income by RM26.3 billion and increase in exports of RM41.7 billion. Admittedly, the government is aware of the challenges and controversies TPPA may bring but there are also the positives. For one, there are increasing numbers of Malaysian companies which have become global investors. They want TPPA. There is also interest from foreign companies from non-TPPA countries that are looking at Malaysia as a base for their operations hoping to enjoy the benefits of the TPPA. No doubt the combination of greater market access for Malaysian products and services under the TPPA and the continued inflow of foreign investments will create a powerful catalyst in driving Malaysiaâ&#x20AC;&#x2122;s economic transformation agenda. What is clear is that we need to tread carefully in negotiating some of the sensitive areas including government

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procurement and the issues surrounding Intellectual Property Rights (IPR). However, apart from such justified concerns, we also do need the right dosage of international competition to wake us up from the slumber of complacency and embrace innovation with more vigour. TPPA can provide that dosage. It has become clear over the years that, apart from a few of our industries such as palm oil, rubber, and electronic, the rest have not invested adequately in R&D and innovation. Many believe TPPA can motivate the change that we desperately need. Studies have confirmed that competition is a powerful agent of innovation. Unless innovation becomes an important part of our business culture, we may one day regret to find that we failed to capture a decent share of international businesses!

TECHNOLOGY LESSONS FROM GERMANY We are all familiar with the developments in the global car industry. We all know that despite the impressive progress made by Japanese carmakers, they still find difficulty unseating German cars in the highly competitive global automotive business. Surveys done show that German brands such as Mercedes and BMW are still preferred by car enthusiasts all over the world. They still rule the global car market. Their comparatively higher prices are of no consequence, especially to the rich and trendy. They are still looked up to as the ultimate driving machine. Why is this so? Why is it that the Japanese do not have much problems overwhelming the American car market, but find difficulties in beating the Germans? Even Germanyâ&#x20AC;&#x2122;s second tier brands such as Audi and Volkswagen can be considered world class. What is Germanyâ&#x20AC;&#x2122;s secret weapon in the global car business?

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Is it something to do with their popular diet? If you visit Germany, one cannot help but notice that most Germans like to eat those massive sausages. Everywhere you go, you will come across many food vendors enjoying a thriving business selling such king size sausages in various combinations. A popular recipe is the curry version branded as Currywurst. They all appear appetising but unfortunately not halal. On a few rare occasions, we did come across some halal ones sold. We never missed the opportunity to sink our teeth into the halal Currywurst when we bumped into one. These are often sold by Turkish food vendors. Yes, they are truly finger licking good! But it is quite obvious that such diet is definitely not the secret formula fuelling Germany’s runaway success in car making. Otherwise, the Japanese could easily have adopted such cuisine and done away with sushi and Sashimi! Many studies have been undertaken to better understand Germany’s secret and all came to one determining factor, technology. Yes, Germany’s secret weapon is their almost religious obsession with technology. They truly believe in the power of technology and therefore, invest heavily in R&D to pursue the ultimate frontiers of all forms of technology. As a result, it is not just the car business that Germany has assumed global leadership in. They also excel in technologies related to energy, water, health and even biotechnology. It is therefore no wonder that year in year out much of their foreign exchange earnings come from the export of high technology. It has been reported that last year alone, Germany came in second to China in export value despite the much lower volumes exported. It is the high value intensive technology items which make the difference.

recent years. If technology is Germany’s secret weapon, how do they do it? What contributes to the country’s success in developing and selling the right technology mix to the world? A recent visit and meetings held with a few technology centres under Germany’s highly successful Fraunhofer R&D network provided some compelling clues. When deciding to invest in R&D, the Germans would give the highest priority to market needs especially the needs of the country. For example, as a resource poor country, much of their R&D is devoted to the development of technologies to be more resource efficient. Many institutes dwell on technologies to recycle almost everything they use. These include plastics, metals, batteries and wood used in construction. R&D is also now focused on developing designs which support resource efficiency and the reduction of wastes. One interesting topic they pursued is to design concrete which will be recyclable once they reach the end of lifespan. Since resource depletion is now a global issue, the technologies that Germany develops also find good demand in the world market. Their technologies automatically become a source of new business for the country. It is time Malaysia also pursue a similar strategy for R&D. We need to focus more on developing technological solutions for the country’s critical needs which will eventually find demand in the global marketplace. It is time we take a cue from the Germans and invest more in technology as a potent tool to secure a decent share of global business.

This explains why Greece and a few other nations in the European Union (EU) had to turn to Germany for help when they were mired in economic difficulties in

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STRENGTHEN SME MASTER PLAN WITH S&T SUPPORT PLAN Small and medium enterprises (SME) account for a significant part of the nationâ&#x20AC;&#x2122;s economy. Statistics show that more than 90% of companies in the country are SMEs. This is also true for most countries in the world. The economic performance of a country depends, to a large extent, on the contributions of SMEs. The recent launch of the SME Master Plan 2012-2020 is, therefore, an important milestone for the SMEs in the country. If implemented well, the plan will no doubt lead to better days for our SMEs. More critical now is the effective execution of the plan. Over the years, we have been very good at formulating plans but unfortunately, we have, on many occasions, not done justice to the aspirations of the plans. It is good to know that the SME Master Plan has taken this into account. Constant monitoring and evaluation of the progress of the plan, for example, is an important activity to ensure effective execution. The suggestion to further strengthen SME Corp is extremely relevant. They should be given the authority and capacity to better coordinate the initiatives of SMEs which we all know are inevitably pursued in many Ministries. At the Academy of Sciences Malaysia (ASM), we have started engaging the SME community to educate them of the potential opportunities in science, technology and innovation (STI). We now have programmes which aim to bring together the SMEs with the countryâ&#x20AC;&#x2122;s academic and research community. Looking at the success of countries such as South Korea and Taiwan, there is no more doubting the fact that our SMEs need to pay close attention to STI if they

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are to effectively venture forward and participate in an increasingly competitive global economy. They need to appreciate the fact that spending in STI is an investment for their future. This has been demonstrated many times by SMEs in countries which have achieved leadership in the innovation economy. We at ASM welcome the emphasis on R&D commercialisation and innovation in the recently unveiled SME Master Plan. However, we feel a clear STI Support Plan will further strengthen the Master Plan. We need to craft a STI Plan to bring SMEs into the new emerging business of the low carbon green economy, for example. We need to develop specific STI Plans for specific SME business sectors. For example, an STI Plan for the automotive sector. As part of our SME engagement strategy, ASM is now working to draw up such a plan. We hope with the closer collaboration between the academics and the SMEs, the aspirations of the SME Master Plan will become a reality.

BIOETHICS, A MAJOR CHALLENGE FOR SCIENCE Science has undoubtedly made major contributions to the society. The advancement in medicine, for example, would have been difficult without the investment made in scientific research. The same can be said for the advances made in telecommunication, energy, agriculture and manufacturing. For example, the car of today is totally different from the one manufactured in the past. Much of the changes come from the advancements made in the scientific areas. But does science have its limits? Are we free to undertake any type of scientific research without encroaching into sensitive areas of societal concern?

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Recent years have brought to the fore intense discussions about some boundaries to scientific research. The debate has been especially heated in the area of medical research where it touches on issues of ethics and other cultural and religious sensitivities. The subject of Bioethics has been around for the last 20 years. It essentially describes a study of ways in which decisions in medicine and science have repercussions on our health and lives, and upon our society and environment. It is concerned with questions about basic human values such as the rights to life and health. It is also concerned about the right or wrong of certain developments in healthcare institutions, the health professions and about society’s responsibility for the life and health of its members. A recent report discusses of bioethics involving issues relating to the beginning and end of human life, including issues relating to in-vitro fertilisation and abortion to euthanasia and palliative care. There is no doubt that bioethics has an impact on every level of the human community. This can be from the local nursing home to the huge international conferences on issues like the Human Genome. Bioethics requires the expertise of people working in a wide range disciplines including: law, philosophy, theology, medicine, the life sciences, nursing and social science. Many basic values are at stake: human life, the dignity of the frail and elderly, healthcare and the ability to make reasonable decisions. Take cloning for example. Cloning can occur at many levels. This can be at the level of DNA, at the level of the single cell, or at the level of the whole organism. While the cloning of non-mammals has been done in research contexts for many years, the cloning of the first mammal, Dolly the sheep, surprised many in the scientific community. What quickly

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followed was the cloning of other species. However, the possible cloning of humans has become the subject of heavy speculation. Is it ethical? Should such research be prohibited? We must remember that there are possible benefits that can be derived from such research in human cloning. There are two major branches of cloning; cloning from embryo to birth which is called “Reproductive Cloning” and cloning for therapeutic reasons referred to as “Therapeutic Cloning”. A recent article pointed out that the key ethical issue with therapeutic cloning is the moral status of the cloned embryo, which is created solely for destruction. Whereas, the ethical issues with reproductive cloning include genetic damage to the clone, health risks to the mother, very low success rate meaning loss of large numbers of embryos and foetuses, psychological harm to the clone, complex altered familial relationships and commodification of human life. The promise of new therapeutic treatments for a range of conditions has led researchers to consider the use of stem cells. These cells have the capacity to become some or even all of the 206 different cell types found in the human body. It has even been suggested that one day stem cells may be able to form whole organs and hence contribute to organ transplantation therapies. Stem cells come in a wide variety of types. Adult stem cells have been found in nearly every tissue of the human body, where they carry out a role in tissue regeneration. Embryonic stem cells are located in the human embryo at the blastocyst stage (five to six days of age). Embryos at this age are often unwanted in reproductive technology treatment, and some parents have donated them for research. Cord blood stem cells are derived from the umbilical cord which is often still routinely discarded at birth.

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The key ethical issues concern the destruction of human embryos to obtain stem cells. The extraction of embryonic stem cells is unethical, on the grounds that the human embryo is a human life with moral value justifying its protection. The use of adult stem cells and umbilical cord blood stem cells have generally been considered to be free of any particular ethical issues. In fact, they have been applauded as ethically superior alternatives to the use of embryonic stem cells. One limitation to the possible use of embryonic stem cells in therapy is that they will likely be rejected by the recipient. In an attempt to overcome this, researchers are attempting to produce cloned human embryos to derive genetically near-identical stem cells for possible treatment.

PLANNING BEYOND GDP Gross Domestic Product (GDP) has always been the measure of progress for economies around the world. We are no different. Attempts to bring in other ways to measure progress have met with resistance from parties who view GDP as irreplaceable. Is this about to change? Is the resistance to embrace other measures to replace GDP about to buckle and dissipate? I recently attended a talk held at the Institute for Science and International Security (ISIS) given by a Malaysian born professor from the UN University based in Bonn, Germany on the very subject of “Beyond GDP”. His arguments on the need to develop new measures of progress were very convincing indeed. The key word is sustainability. Looking at GDP alone will not help the sustainable development goals agenda that the United Nations (UN) is pursuing post 2015. There are clear signs now that GDP will soon be history.

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Many may be familiar with the words once echoed by Robert F. Kennedy, that a country’s GDP measures “everything except that which makes life worthwhile”. Many would agree that the GDP measure was considered relevant when the concept was first developed in the 40s after the Great Depression. The urgency then was to increase economic activity to provide employment, enhance income and amenities to reduce social conflict and prevent another world war. The world today, however, is very different from the one faced then. Instead of promoting well-being, the emphasis on GDP in developed countries now fuels social conflicts and environmental degradation. It also misguides developing countries on possibilities for more-sustainable models of development. Interestingly, even when GDP was first used, the world was warned against equating GDP growth with wellbeing. Why is this so? Looking at what has since taken place in the world, that warning is now proven right. For one, GDP measures mainly market transactions. It ignores social costs, environmental impacts and income inequality. Though promoting GDP growth has remained the primary national policy goal in almost every country, there are signs that this is about to change. Researchers, for example, have now become much better at measuring what actually does make life worthwhile. The environmental and social effects of GDP growth can now be estimated, and so can the effects of income inequality. There is now a realistic chance to replace GDP as a measure of progress. By 2015, the UN is scheduled to announce the Sustainable Development Goals, a set of international objectives to improve global well-being. It would be a pity if the world misses this opportunity to embrace sustainable development. In fact, missing it would mean condoning the growing inequality. Not to mention the continued destruction of the natural capital which all life on the planet depends on.

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Soaring economic activity has depleted natural resources. Much of the generated wealth has been unequally distributed, leading to a host of social problems. One philosopher noted more than 200 years ago that, once decent living standards were assured, human efforts should be directed to the pursuit of social and moral progress and the increase of leisure, not the competitive struggle for material wealth. As the economist John Kenneth Galbraith once observed: “To furnish a barren room is one thing. To continue to crowd in furniture until the foundation buckles is quite another.” There is general agreement everywhere that global society should strive for a high quality of life that is equitably shared and sustainable. Several groups and reports have concluded that GDP is dangerously inadequate as a measure of quality of life. That conclusion was also echoed in ‘The Future We Want’, the declaration of the 2012 Rio+20 UN Conference on Sustainable Development. All the UN member states agreed to the same. Nonetheless, GDP remains entrenched. Most believe that vested interests are partly responsible for the resistance to change. It is often said that what you measure is what you get. Building the future we desire requires us to measure what we want. We must remember that it is better to be approximately right than precisely wrong. Therefore, taking the cue from the reasons that have now become mainstream, it may be time for us to seriously embrace the measures proposed beyond GDP to chart the country’s future development, which is anyway in line with the nation’s New Economic Model of high income with sustainability and inclusiveness.

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INNOVATION PUTS NATION’S FUTURE IN GOOD HANDS We live in a time of many global challenges. We have already seen evidence of climate change wreaking havoc in a recent monsoon flood. Issues on water and energy have also taken centre stage. Will we have enough for the future? Both are key drivers of development. Unless we as a nation effectively address these challenges, we may find ourselves trapped in even deeper complications. Such challenges may even threaten our future well-being as a nation. Are we prepared to face such challenges? Admittedly, one major challenge concerns the growing competition in the global marketplace. As a trading nation, we depend a lot on external markets for our products. This was not a problem before. In the past we competed well as a low-cost producer; not anymore. Our costs have gone up. We need to therefore look at new ways to compete. Innovation is one way to compete but to be effective, innovation has to be a sustained activity. For innovation to flourish, it needs the right ecosystem. We need to build a culture and make innovation come naturally to all. This is easier said than done because innovation involves a partnership between many stakeholders. We need people with ideas. We need a marketplace which appreciates the value of innovation. Most of all, we need people with money willing to take the risks to bring such ideas to market. This is where the right leadership is crucial. This can only happen if the nation’s top leadership shows commitment. A recent article by the Prime Minister Datuk Seri Najib Tun Razak himself is an excellent indication of the

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government’s commitment. Many have hailed the PM’s write-up as the push the nation needs to inject more vigour into our innovation agenda. Though many tend to associate innovation only with science and technology, the truth is innovation transcends all disciplines. There is innovation possibilities in most aspects of life. After all, innovation is about generating new ideas on better ways of doing things. We can have innovation in education. We have seen how innovation has worked miracles on the government delivery mechanism. The success in the issuing passports quicker is a case in point. We have also achieved success in implementing new social models for poverty alleviation and rural empowerment. FELDA and FELCRA are two glaring demonstrations of such achievements. In the article, the PM was quoted saying, “In this new era of high tech and information-driven economies, we cannot underestimate the importance of cultivating a healthy mind-set geared towards generating fresh ideas- and an economic and social environment that stimulates them. Innovation is what drives progress, and the potential for our nation to profit from is huge”. He further reiterated, “When it comes to innovation, Malaysia is doing well. But we must not be complacent. Encouraging innovation should be a moving target- because we can always do better”. We at the Academy of Sciences Malaysia (ASM), the country’s leading science think-tank under the Ministry of Science, Technology and Innovation (MOSTI) applaud the PM for coming out with such strong statements in support of innovation. Such commitment coming from the nation’s CEO does a lot to motivate those who thrive on innovation and are passionate about taking the innovation agenda forward. It is time

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we take the PM’s urgings on innovation seriously. In 2012, MOSTI organised for the first time ever the World Innovation Forum Kuala Lumpur (WIF-KL). Despite earlier apprehension, the Forum eventually turned out to be a success in many ways. More importantly, it was an eye-opener for the nation on the importance of innovation in moving forward in a knowledge-led global economy. This year in November, the second WIF-KL will be organised. The planning on the contents of WIF-KL 2013 is already underway. The plan is to make it even more impactful than the 2012 event. However, this can only happen if more stakeholders come forward to participate, especially those from business and the industry. It is time we make innovation the top most agenda of the nation!

INVEST IN SCIENCE FOR NEW GROWTH AREAS Come October, the Prime Minister Datuk Seri Najib Tun Razak will unveil the country’s budget for 2014. As usual the speech will include estimates of income and expenditure for 2014. Reducing the deficit will continue to be a crucial target. It is also expected to touch on ways to expand the country’s income base. GST is one option that is being discussed. However, it should not ignore other potential new growth areas. It has become evident in recent years that the country has to create new sources of revenue as it prepares to move up the economic ladder. The Economic Transformation Plan (ETP), is a good start but in addition to that, we also need to look for long term support for the economy. Some of the industries that currently feed the nation’s coffers are at various risks of decline.

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The palm oil sector, for example, still struggles to expand production. Land is a limitation. The other obstacle concerns objections by some groups on grounds of sustainability. There is, however, hope that yields may improve as a result of the recent breakthrough on the oil palm genome by the Malaysian Palm Oil Board (MPOB). The petroleum sector is also expected to witness a decline in the coming years. The oil deposits will not last forever. They are now forced to explore the marginal areas where extraction is more costly. The electric and electronic sector is also on shaky grounds. We are too dependent on the multinationals to drive that sector, some have moved to other lower cost countries. The country therefore needs to constantly scout for new potential growth areas. In an innovation-driven world economy, Science and Technology hold the key to many of the new growth areas. Over the years, the government through the Ministry of Science, Technology and Innovation (MOSTI) has invested in Research and Development (R&D) to develop new technologies. These are undertaken by universities and research institutes in the country. The R&D has delivered some potential technologies and products which may be commercialised. Commercialisation, however, should not be the only end game. Instead, such technologies should be strategised as forerunners of new growth areas. MOSTI is in essence the countryâ&#x20AC;&#x2122;s ministry for the new economy. It is where ideas on the new growth areas are born and nurtured for the nationâ&#x20AC;&#x2122;s sustained well-being. The new Science, Technology and Innovation (STI) policy that will be launched soon is designed to deliver exactly that. Among the six pillars identified in the policy, admittedly the most critical one is to energise the private industry. This is in fact the end game for the policy. After all, the vision for MOSTI

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has always been to harness STI for wealth creation. So, creating new growth industries is within the mandate given to the Ministry and MOSTI is now doing just that. A number of flagships have been identified for possible mention in the coming Budget. The important criteria for such flagships are that they should be technology-driven, new in terms of global business, and do carry some elements of risks which have to be managed. They should not be businesses that are already crowded. It has become evident that there are a number of potential growth areas if the global emerging technology business is scanned through. As expected, much of the emerging global interests are linked to green technology, halal pharmaceuticals and also to some extent healthy foods. Fuel cell-based business, for example, is an area that can be explored as a flagship. Much research has been conducted in Malaysia on this. It is now time to move the fuel cell technology towards a full fledged industry. In the energy sector, thorium, a safer replacement for uranium, is actively researched for nuclear. Alhough it is for the long term, experts see thorium-based nuclear plant as a big potential energy business in the future. For halal pharmaceuticals on the other hand, the world is now looking at plants as core ingredients to produce vaccines and medicinal drugs. Incidentally, tobacco is the best candidate to host such technology. With the nationâ&#x20AC;&#x2122;s tobacco farming facing threats post AFTA in 2015, such project should be welcomed by tobacco farmers in the East Coast states. All such projects conform well to the new economic model for high income, inclusiveness and sustainability. Budget 2014 should seize this opportunity.

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CHAPTER 6 EMERGING SCIENCE BUSINESS The discovery of new science and technology has created many global business these days. ICT, for example, is a business which transcends all other businesses. As a country, we must be on the constant lookout for new business opportunities that can be built on science. These include how to turn our natural resources into high value products through the deployment of good science.

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MAKE BETTER USE OF OUR SAND Many may not be aware that the humble sand is the most important initial raw material for the electronic gadgets that the world has become addicted to. These are also the gadgets that have been the subject of much debate on their sometime negative social impact. While here we quarrel over the mining rights for sand to be sold to the construction industry, in many countries the sand business is more to do with extracting the silica in sand to produce silicon. This is not different from the tin mining that fuelled the nationâ&#x20AC;&#x2122;s growth in the 60s and 70s. Just like tin those days, the silicon ingots produced now command very lucrative prices in the world market. The reason is simple, without silicon, it is virtually impossible for the world to continue churning out the many sophisticated electronic products that we now enjoy. The demand for such products is expected to continue growing. Semiconductors have no doubt become a major global business. The latest estimate suggests that the international business may have exceeded $300 billion. If semiconductors are the building blocks of consumer electronics, including computers, mobile phones and MP3 players, then silicon is what makes semiconductors tick. A semiconductor is described as a solid silicon material with electrical conductivity that is in between a metal and an insulator. Such property has proved useful in the making of the integrated circuits which deliver the many electronic functions of the modern consumer electronics. Over the years, Malaysia has attracted many prominent world class semiconductor companies to the country. These include Freescale, Intel and others. In fact for more than a decade now, our own Silterra has been a part of the global semiconductor business.

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It has not been easy for a small player like Silterra to do business in this highly competitive industry. The company has made commendable inroads in the global market thanks to the support of the government and our earlier investment in the right human talent. Even the R&D they do is world class. A recent chat with the CEO confirms that after the uncertainties earlier on, the next few years promise better days for the company. This is happening despite the volatility of the business. It has been reported that while the current 20 year annual average growth of the semiconductor industry is on the order of 13%, this has been accompanied by equally aboveaverage market volatility, which has led to significant if not dramatic cyclical swings. The semiconductor industry has gone through six major cycles since the 1970â&#x20AC;&#x2122;s, caused mainly by worldwide recession, overcapacity, and inventory difficulties. The last major semiconductor downturn occurred in 2000-2002. This was the harshest contraction the industry ever experienced. Global semiconductor sales plummeted from over USD200 billion in 2000 to USD160 billion in both 2001 and 2002. Semiconductor revenue has however recovered since January 2002. On the other hand, it has been reported that the USD300 billion semiconductor industry generates over USD1,500 billion in electronics systems business and USD5,000 billion in services, representing close to 10% of the worldâ&#x20AC;&#x2122;s Gross Domestic Product (GDP). Demand for consumer electronics including computers, digital TVs, iPods, and others have a strong correlation with the demand for semiconductor. As computers inch closer to saturation in developed countries, demand for them and the chips will also decrease in such markets. That is why there is now a shift in market interest to the developing economies.

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Malaysia is well positioned to capitalise on this market change especially Silterra. However, we should widen our interest beyond just producing semiconductors. Instead, we should even venture upstream to produce refined silicon ingots from the high quality sands that we have. It was reported that we have been exporting our high purity silica to Japan for the production of silicon ingots which are then sold back to us to make chips. This has to change. In fact, we should even look at developing the downstream electronics business sector more aggressively. Only then can we truly benefit from the whole value chain of the industry!

GLOBAL CERTIFICATION REFLECTS GROWING DISTRUST Obtaining a certificate to determine a genuine product is not new. It may have started during the gold rush when buyers requested experts to certify the authenticity of the metal. Experts then simply bit on the metal to declare whether the gold was genuine. Later, the more sophisticated chemical analysis certified the purity of the gold. There was also the practice of certifying a letter or an examination certificate. I still remember those days when we applied for a scholarship, our School Certificate had to be certified by the village head or a senior government officer. It was all free then. All such practices became necessary because people could not be trusted. That tendency is still with us, hence, the growing need for proper certification. What started as an instrument to ensure trust has developed into a major global business. With globalisation, the business of certification flourished. It has in a way developed into an instrument through which businesses exert control over other

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businesses. This is considered sensible. How can you trust a supplier of parts coming from a country thousands of miles away to deliver your specified goods without some means of assurance on quality? In fact, how can you be assured that the products you have just purchased from a faraway company arrive according to agreed terms? Now with the online business, the mechanism of assurance has become even more challenging. In recent years, certification has even gone beyond products and services. Nowadays, there is a growing business in certifying even the production and management systems of organisations. Companies looking for automotive parts for example would insist on suppliers being certified to some quality management system like ISO 9000. The growing consumer preference for safe and environment-friendly products, has pushed companies to enlist new certified management systems. These include variations of ISO 14000 for the environment and ISO 18000 for health and safety. As expected, some companies use certification as an instrument to compete in the marketplace. They have even developed their own stringent house standards which are normally improvements of the minimum set by the ISO family standards. The Japanese companies are especially active in devising such improved versions as seen in the famous Toyota Production System and others such as Six Sigma and Lean Management. The business of certifying sustainability is on the rise with sustainable development on the global agenda Consumers in the developed economies increasingly prefer products that demonstrate better sustainability. Years ago, the attention was on timber products. Logging for timber was reaching worrying proportions in terms of deforestation and other environmental consequences. So, it was decided by

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groups especially nonâ&#x20AC;&#x201C;governmental organisations (NGOs), purportedly in cohorts with timber users in the West, that timber production has to be certified with some sustainability criteria. The criteria are normally concocted by the environmental groups. Those certified were also guaranteed higher prices for their certified timber. Not all timber producers succumbed to the pressure. Those certified have not benefited from premium prices either. Now, the exact same scheme is being promoted to the oil palm industry. Many predict palm oil will eventually face the same end result as timber. Does certification improve trust? Or can certification be abused to remove competition? Lately, the certification business has begun encroaching into the education turf. Many believe the recent spate of university ranking is the beginning of a new certification scheme. Certification brings with it a host of other businesses. There are consultants who would provide advice to companies planning to be certified for a scheme. Then, there are the trainers who would train the companyâ&#x20AC;&#x2122;s staff on how to effectively implement the scheme. The auditors would regularly ensure that the documented procedures and processes are closely followed. Otherwise, the company may be judged for not complying. There is no doubt that all such requirements would add to the costs of business. In the case of the oil palm industry, small farmers may have difficulty complying with the criteria imposed. Certification is definitely a growing business, but at whose expense and at what costs?

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TAP ON THE GROWING BUSINESS OF GEOSPATIAL TECHNOLOGY Recent weeks saw news channels including the likes of CNN and BBC consumed with discussion and discourse on the subject of satellite, electronic sensing and radar technology. This goes to show how much the recent episode of the yet to be found MH370 has attracted world attention. However, analysis of the ping data from the fateful aircraft which suggested the plane disappeared in the southern Indian Ocean has yet to be corroborated. Locating the aircraft has been extremely challenging. This is one example of geospatial technology at work. Data have to be shared across geographic distances. The truth is, geospatial technology affects almost every aspect of life. The Global Positioning Systems, GPS, has been useful in navigating through unfamiliar neighbourhoods. However, not many are aware of the fact that geospatial technology has a number of applications. It has been reported that the eventual location of Osama bin Laden was made possible through geospatial technology. In fact, the world is so interconnected today; everything is based on spatial relationships. What exactly is Geospatial technology? Why has it emerged as a growing global business? Geospatial technology actually refers to the deployment of equipments used in visualisation, measurement, and analysis of the earthâ&#x20AC;&#x2122;s features. This typically involves systems like GPS, GIS (geographical information systems), and RS (remote sensing). Its use is well-known and widespread in the military but its influence is pervasive. It is deployed even in areas with a lower public profile, such as land use, flood plain mapping and

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environmental protection. It is also used in law enforcement to locate crimes and for fire emergencies and in disaster management. It is used to locate water resources, or to track the spread of disease in public health. There is increasing interest in the technology. In fact, many consider the field a high growth industry, even in regulated industries, such as telecommunications, utilities and transportation. The private sector has also started to embrace the technology. This is to be expected since many reports suggest that its market has been growing at an annual rate of almost 35%. According to an estimate from the Chinese government, the total business of the geospatial market in that country is USD31 billion. In fact, several governments, including Japan, South Korea, Canada, US, UK, Germany, India, Brazil and China, have been investing heavily in geospatial technologies. A recent Google-commissioned study estimated the global geo-services market to be between USD150 billion and USD270 billion. There are about 600,000 workers in geospatial technology today in the US alone. The number is expected to reach more than 850,000 by 2018. The US for example has established the National Geospatial Technology (NGT) Centre, one of 40 Advanced Technological Education programme centres of the National Science Foundation, NSF. The NGT Centre is funded with USD1.25 million annually for four years by the NSF. The centre works with schools to develop faculty training and curriculum skills development in the field. There is no doubt that learning to think spatially is something that society needs to do in todayâ&#x20AC;&#x2122;s world. It is something that needs to be encouraged in the education system. This is more than just geography, or drawing maps, but it has more to do with learning about spatial relationships, especially the cause and effect.

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Malaysia should consider investing in the growing geospatial technology business. The demand for such technology is expanding. It has been suggested that it can be deployed as a potent instrument to minimise the risks of disasters like forest fires. During the recent drought period, geospatial technology should have been used to map the hotspots of forest burning. Such information can help with the development of mitigation measures to prevent such disasters. At the Academy of Sciences Malaysia (ASM), we have an active group working on disaster risks reductions. The objective is to take proactive measures to not only minimise the costs of impending disasters but to also prevent them. The effective surveillance of the countryâ&#x20AC;&#x2122;s shores to improve the security of the nation is the other area which can make good use of geospatial techniques. It is time to tap on this potential global business!

DESIGNING SUSTAINABLE CITIES OF TOMORROW STARTS NOW The worldâ&#x20AC;&#x2122;s urban areas are growing. So are their problems. Rural urban migration is set to be a major challenge. How will cities cope with the housing pressures of a growing urban populace? How will cities manage the complex mobility demand? The build-up in wastes can be daunting. How can they be efficiently disposed or better still harnessed as a resource? Many in the developed world are already engaged on regular discourses to look for the right technological answers. Academy of Sciences Malaysia (ASM) recently completed a study on some of the key infrastructure issues 50 years from now under its Mega Science Flagship.

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Many are aware that scientists are busy investigating how cities can develop sustainably. Many believe the clever use of information and communication technology can help. People may not realise it but today, more than half of all people already live in cities and it has not shown any sign of stopping. In Germany, the proportion has reached 74%. It has been reported that megacities like Tokyo and Mexico City have long surpassed the 10 million mark. Therefore, any effort to build sustainable economies has to begin in the cities. There are certainly many approaches but it is widely believed that what is missing is a strategy to connect all these individual efforts into an overall design. Coordination is undoubtedly the biggest challenge. There are cities already ahead in some ways compared to others in practising sustainability. Most are in the developed economies. Cities in the developing world may not look at sustainability as high priority. They may regret it as the costs to begin now may be much lower than if it is delayed. Copenhagen, for example, had already begun constructing a district-wide heating network decades ago. Since then, 98% of all the buildings there are being heated with environment friendly energy. For us, we may want to look at district-wide air-conditioning using more sustainable energy. The city-state of Singapore is another example. It purifies large quantities of waste water to resolve its drinking water problem. Tokyo on the other hand has in place a specialised logistics system. Trucks there do not head for every individual shop, but instead hand off their cargo to small logistics centres. This reduces traffic and therefore improves productivity. Germany is one country which has been introducing innovative ways to manage cities sustainably. Berlin for example has organised numerous innovation projects. Kuala Lumpur may want to take a leaf from the innovations

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that have changed Berlin. There the online platform â&#x20AC;&#x153;infrestâ&#x20AC;? went live on the internet a year ago. Every company can now check where conduits for water, sewer, power and telephone lines run in the city and where sections of streets are supposed to be excavated for repair work. The advantages are obvious. Previously, construction workers could have dug a hole where their colleagues had just filled one in. This must sound familiar to KL folks. The lack of coordination not only consumes resources but costs money. Not to mention the inconvenience to road users. It is a fact that when laying cables, the biggest cost is the construction work. Imagine the savings if the work is better coordinated. Already we have seen signs of Kuala Lumpur bursting at the seams. This is not just due to rural urban migration, but also as a result of the increasing flow of immigrants. Even though the city transport still not as chaotic as busy Jakarta and Bangkok, it may be heading that way if solutions are not put in place early. The Mass Rapid Transit (MRT) should bring some relief. The situation is especially serious whenever it rains. There is still no solution to flash floods. Dealing with the massive volume of garbage is another challenge for Kuala Lumpur. Landfill takes up too much space, whilst incineration which is supposed to be the optimal solution faces a lot of opposition from environmental NGOs. As is the case with the other megacities of the world, KL desperately needs good research to help in planning. One common approach is to deploy systems analysis which would integrate all the processes of managing Kuala Lumpur into one. Only then can KL grow sustainably!

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LIGHTING SEES NEW LIGHT Everyone knows Thomas Edison. He was the scientist who persevered for years to invent the light bulb. It was not widely known however that he took several thousand experiments before he eventually stumbled on the winning formula. This is what science is all about. The struggle to develop a new product is never a straight forward, overnight exercise. The effort to introduce new scientific knowledge or formulate a new theory on science consumes a lot of time. It can take years and sometimes even decades. That is why patience is a hallmark of successful scientists. Just ask any Nobel Laureate. He or she will tell you of the slow and uncertain process of uncovering new evidence which would eventually shape and enrich scientific knowledge. When Edison went about his experiments, the issue of climate change and global warming was not a concern. His passion was to look for a more convenient way to light up the night. Even cost was not a constraint. Things have changed. Nowadays, scientists are looking at a lighting system which would not only brighten up the darkness, but also do that in an energy efficient way. The system must not only be reliable and safe it must also be cost effective as well as consume minimum electricity. All this is driven by the global concern for the changing world climate, which has not only led to a warmer climate, but also the growing occurrence of extreme weather conditions. For a number of years now, extreme cold, heat and rain have taken their toll on lives and properties around the world.

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Much of the changing meteorological conditions have been attributed to the rising levels of greenhouse gases in the atmosphere, especially carbon dioxide. The excessive burning of fossil fuels in cars and power plants has been cited as a prime contributor to the increase in carbon dioxide levels. Scientists have warned of destructive consequences if such emissions are not curtailed or reduced. Already we see evidence of polar ice melting. The rise in sea levels in some regions of the world has also been reported. The evidence of awkward weather conditions, for example, too much snow fall in some areas that seldom experience snowfall has convinced many that climate change is real. All these are in fact the driver of the growing global interest in the so called â&#x20AC;&#x153;greenâ&#x20AC;? technologies and products. There are now strong moves by governments to embrace the low carbon economy. The idea is not only to mitigate climate change but also to capture emerging business opportunities in the green products and services. Apart from cars and power stations, another major guzzler of electricity is the ordinary light bulb, similar to the ones that Edison invented. Over the years, various attempts have been made to make lighting more energy efficient. The latest one is developed using a technology based on organic light emitting substances, known also as OLEDs or organic light emitting diodes. The substance emits light once a current is applied to the molecules. Some initial versions of OLED lamps have been on sale but these are limited to the small-sized lamps. They are also expensive. Presently, scientists are working on a process which can produce much larger and cheaper lamps, suitable for the mass market. Not only will OLEDs eventually provide the foundation for a new generation of lamps which would deliver wide area light sources but can also be moulded into any shape and integrated easily into interior designs.

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Experts are not only looking at ways to clad entire walls and ceilings with luminescent layers but also the possibility of coating windows. During the day, these windows would be transparent as usual. At night, they produce light as if it were still daylight outside. OLEDs also have great potential for display technology. They can in fact be used to produce very thin screens, which could be folded and rolled up. The potential for OLEDs as a new feature of the lighting industry is indeed promising. Unfortunately, one long-standing issue with OLEDs is poor durability. The other is price. On the durability issue, scientists have made some good progress. They have already produced OLED lamps which have already achieved levels of 5000 hours continuous operation. This is considered adequate for standard applications. On the price issue, it has a lot to do with the complex manufacturing process. Scientists are working to reduce the process complexity. Now, it has been reported that a flat disc which is barely 8 centimetres in diameter can cost around RM1000. This is too expensive for the mass market. With a more simplified process, such high prices can be further reduced. At Technology Park Malaysia, we would like to attract tenants dealing with OLEDs. We would especially like to have OLED tenants who actively undertake Research and Development (R&D) in OLEDs. This is because it has always been the practice at the Park to give special preference to start-up companies which pursue businesses in the emerging technologies. From the technology scanning that we constantly undertake, OLEDs count among the technologies that we believe will pave the way for the development of a new technology-based industry. It is in line with the countryâ&#x20AC;&#x2122;s call to expand our involvement in the high value businesses that can lead to a high income economy for the nation. We have confidence in the future of OLEDs.

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HIGH SPEED BROADBAND VITAL FOR DIGITAL ECONOMY Imagine the PLUS highway was never built. Remember the days not too long ago when the journey by road from Kuala Lumpur to Penang would take almost the entire day. Not anymore, thanks to PLUS. I am sure many then dreaded driving behind slow moving lorries up the Bukit Berapit climb on that stretch from Kuala Kangsar to Taiping. It is no different driving southwards. The journey from Kuala Lumpur to Kuala Pilah through Seremban was also a trying experience. The worst was negotiating the road after Mantin before Seremban. While on the journey towards Kuala Pilah, manoeuvring the infamous Bukit Putus stretch was a real challenge. Nowadays, the drive from KL to Ulu Bendul, the resort just before Kuala Pilah, is very pleasant. It takes just over one hour with the brand new LEKAS highway and the new straightened road bypassing Bukit Putus. The message here is we should never take the highways for granted. They have been, without doubt, a big help in reducing travel time in the country. Not to mention the fact that they are comparatively safer. There is, therefore, no denying that the many investments in highways. All these have contributed positively to the economy. As they all say, time is money. In fact, it is now an accepted fact that excellent highways and reliable road networks are important prerequisites for healthy economic growth. This is because well-designed highways make logistics more efficient and cost effective. An economy which does not support logistics infrastructure including roads, rails and ports will find difficulty competing in the global economy. For one, inefficient logistics would increase the cost of doing business.

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This fact is even more critical for Malaysia. We rely heavily on the export trade where timely delivery is of the essence. If good roads are the key success factor for the traditional economy, then reliable high speed broadband is an important prerequisite of the digital economy. Broadband is in fact the equivalent of the PLUS highway. A reliable broadband will help move the vast amount of digital data at the right speed and acceptable cost efficiently. A slow broadband is definitely a big stumbling block to achieve a high level of competitiveness in the digital world where the internet rules. A recent discourse among Fellows of the Academy of Sciences Malaysia has produced extremely worrying conclusions on the state of broadband infrastructure in the country. Our broadband speed is still not up to the mark. These have been further corroborated by a recent global survey. According to the survey findings, the average broadband speed in Malaysia is slower than Vietnam and even Cambodia in the region. In fact at, 5.48 megabyte per second, we are just slightly better than Myanmarâ&#x20AC;&#x2122;s average speed of 5.0 megabyte per second. In terms of world ranking, we were placed a dismal 126 out of 192 countries surveyed. Looking at the findings for other countries, it looks like we have a long way to go to catch up. This is further aggravated by the fact that our cost of using the broadband is also comparatively high. Furthermore, consumers complain that the promised broadband speed offered by telcos are often not up to mark. This irks users even more.

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BATTERY MAKING TO BECOME BIG GLOBAL BUSINESS We are all familiar with batteries. They are now a part of our everyday life. They start our cars, power our pacemakers and allow us to communicate using smartphones. Many electronic gadgets cannot function without the right batteries. With the advent of the green economy, they will feature even more in our products. Batteries of today essentially store chemical energy. They are indispensable for electric mobility and hybrid cars. In fact, a big part of the cost of electric cars is attributed to the batteries. There is need to bring down the cost though to make hybrids more attractive. This is one of the reasons why scientists are frantically working on the next generation of batteries and beyond. Most modern day gadgets thrive on the lithium ion battery. Lithium ion is now the choice battery because it is lightweight and high in energy. It was first brought to the market by Sony way back in 1991. In the early days, the battery was not as good as it is today but through Research and Development (R&D), the battery has seen much improvement in its energy density. Despite being a relatively young technology, these batteries are found in almost every mobile device around today. Some have predicted that the lithium ion battery market will grow by almost 50% over the next five years. Its current turnover of USD28 billion is set to rise to USD41 billion by 2018. Though the current market mainly caters to mobile devices, future growth will be dominated by demand in electric mobility. The market for lithium ion batteries used in electric bikes and plug-in hybrid cars is expected to grow by 22% every year.

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Lithium ion batteries do have one major drawback. They are expensive. It has been reported that lithium ion batteries designed to power electric vehicles cost more than some compact cars. But this may change with technical advancements and better manufacturing processes. Notwithstanding the cost factor, there are other challenges in the battery design. In addition to holding more charge, future batteries will have to be safe, lightweight and robust. They will also have to last longer and can operate reliably at both high and low temperatures. It is undeniable that a key factor in creating the battery of tomorrow is safety. This is another of lithium ion batteryâ&#x20AC;&#x2122;s shortcoming. It can overheat and catch fire. In fact this problem has recently surfaced in one of the new design aircrafts. Scientists are now assessing new, safer electrolytes including polymer, glass and even the new revolutionary material graphene. We may want to also explore our own natural rubber. In Germany, experts at the Fraunhofer Institutes have high hopes that using new materials will lead to the development of batteries that deliver more power. One promising material is sulphur. Initial studies suggest that using sulphur in batteries provides them with much higher energy density. Since sulphur is widely available, it makes a cheaper alternative to cobalt which is the material used at the moment in the lithium ion batteries. The big advantage of the new lithium-sulphur batteries is that they can store more than twice the amount of energy compared to the conventional batteries using the same space. The drawback however is that their charge cycles are lower. This is the subject of much research. Scientists are looking at different combinations of materials to achieve this. It is still unclear when these technologies will hit the market.

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Meanwhile, researchers at MIT are developing a new device that has the potential to hold as much energy as a conventional battery. However, unlike present day batteries, the device can be recharged in seconds rather than hours. In view of the fact that the new device can be recharged hundreds of thousands of times before they wear out, they may last almost indefinitely. In fact, the device could prove to be the first economically viable alternative to todayâ&#x20AC;&#x2122;s battery. Many believe the manufacture of such new generation high powered batteries will develop into a major global business. It is high time we consider investing in such battery development and strategise to be a leading global player in battery making.

NEW MALARIA VACCINE SHOWS PROMISE One bite from an Anopheles mosquito can be fatal. Each year 600,000 people succumb to Malaria. Most victims are young children from Africa. According to a World Health Organisation (WHO) survey, half of all those who die from Malaria are under five years old. Around a million people die every year from the effects of a disease that is spread by seemingly harmless mosquito bites. An estimated half a billion people are currently infected with the disease. Over the years, there have been attempts to develop vaccines for Malaria, but it has not been easy. Unlike diseases caused by bacteria and viruses, for which vaccines are available, Malaria is caused by a parasite and parasites are more complex microbes. Developing an antiparasite vaccine has been exceedingly difficult. There are several reasons why we still have not seen a decisive breakthrough. At present, there are many different parasites responsible for spreading Malaria, and each one of these undergoes different life cycle stages; all mutate incredibly fast and

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many have already developed resistance to medications currently used to treat the disease. Lately, some measure of early success has been reported for a newly developed vaccine. Though it is still early for the vaccine to be made available in the market, early stage clinical trials show promising results. Researchers found the vaccine, which is being developed in the US, effective for 12 out of the 15 patients when given in high doses. The method used is also rather unusual. It involves injecting live but weakened Malariacausing parasites directly into patients to trigger immunity. The breakthrough came from a US biotech company called Sanaria. What they did was to take lab-grown mosquitoes, irradiate them and extract the Malaria-causing parasite under sterile conditions. The living but weakened parasites are then counted and placed in vials, where they can then be injected directly into a patientâ&#x20AC;&#x2122;s bloodstream. In the early clinical trial, 57 volunteers took part. None of them had malaria before. 40 were given different doses of the vaccine, while 17 did not. All were then exposed to the Malaria-carrying mosquitoes. It was found that those who were not vaccinated or were given low doses all were infected. For those given the highest dosage, only 3 out of 15 became infected. Though promising, the vaccine has to be subjected to further trials. A few remaining questions have to be answered. One is whether the vaccine is durable over a long period of time. Two is whether the vaccine can protect against other Malaria strains. The interesting part about this new breakthrough is the contribution by a Malaysian scientist to a significant part of the development. She is Dr Betty KL Sim who was born and raised in Kota Bharu, Kelantan. She has a first class honours degree from the University of Malaya and later a PhD from the same university. Her

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PhD research was done at the Institute for Medical Research (IMR), a renowned medical research centre in Kuala Lumpur. She did a postdoctoral fellowship in molecular biology at Harvard University. She was also a Research Assistant Professor at John Hopkins University. Some attribute her brilliant academic career to the fact that as a Kelantanese, she had significant amount of “Budu”, the famous fish sauce in her diet during her school days! On the breakthrough, she had managed to demonstrate to fellow scientists that it is not impossible to manufacture such a vaccine. Through sheer passion and perseverance, she has proven her sceptics wrong. She has perfected the entire process to do it and in the end emerged as the inventor of many patents surrounding the process. Such success goes to show that we do have full-fledged Malaysian scientists who can break new frontiers in science. They only have to be supported with the right facilities and motivation, as well as a conducive environment for research. Her achievement can truly count as another demonstration of “Malaysia Boleh”. Her success fits very well in the new branding that Malaysia is going for which is “Endless Possibilities”. Academy of Sciences Malaysia salutes Dr Betty Sim.

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BIOECONOMY, THE NEXT GROWTH OPPORTUNITY The Perdana Leadership Foundation recently organised a CEO Forum. A panel discussion on the global economic outlook was the curtain raiser. It dealt with issues on new growth drivers and their impact on Malaysia. Panellists agreed the global economy is still mired in sluggishness. Uncertainty still prevails. The USA still has difficulty recovering. The European Union (EU) debt issue which is seen spreading beyond Greece has yet to see the light at the end of the tunnel. There is no viable solution in sight. China, the other driver of global growth, is faltering. Many expect slower growth in 2013. China now finds difficulty increasing domestic consumption. Rising wages in China may see some investments moving out. Can Malaysia attract them here? The Malaysian economy is doing well now thanks to domestic sources fuelled by projects under the government’s Economic Transformation Programme (ETP). But for how long? The panellists agreed we need to look at the long term perspectives of the economy. What was clear from the views expressed is that we need structural changes to improve the country’s competitiveness. These include a strong fiscal regime, an expanded tax revenue base, a real improvement in purchasing power and more liberalisation. Goods and Services Tax (GST) is now seen as a realistic proposition. The desire for subsidies and other populist measures should be capped. There must be a rationalisation of subsidies. As often reiterated by development experts, Malaysia has to move up the value chain. We should target high technology projects to drive growth.

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The country’s dependence on oil and gas will not last forever. We need to be ready for its eventual phasing out as a major revenue earner. This is where the recently launched bioeconomy initiative by the government should be lauded. Though petroleum is a vital raw material for the chemical industry, this fossil resource is finite. It is becoming scarce and more expensive. The world is now looking at alternative sources. Biomass, for example, provides one alternative source of carbon. In Malaysia, biomass can come from the oil palm industry, natural rubber, timber, rice and even municipal solid wastes. Studies have shown that plastics, paints and other chemicals can be produced from the by-products of the food industry. Scientists have developed new processes for the biomass alternatives. These are now waiting to be transferred to the commercial platform. Despite all that, is it realistic to think that biomass could one day replace petroleum? What chemical products can we extract from plant sources? What is already known from the many researches done thus far is that renewable resources can be used to produce certain basic chemicals. These can then be used to make complex chemical compounds such as those required for fuels, packaging, paints, and cosmetics or virtually any consumer product. Yet, such “green” chemistry continues to be a niche topic. The management consulting firm, Arthur D Little estimated the global market for biochemicals at around USD77 billion in 2009, constituting only about four percent of total sales. However, they predict this market share could rise to up to 17% by 2025. Governments have introduced policies to support and promote the switch to green chemistry. In 2010, Germany approved a budget of 2.4 billion euros for its “National Research Strategy for Bioeconomy 2030”. This aims to tap into research and innovation to facilitate a structural shift from an oil-based to a biobased chemical industry. Malaysia may

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want to develop a similar blueprint for our bioeconomy targets. One of the most pressing needs is to replace petroleum-based plastics with ones derived from natural renewables. Despite the negative environmental publicity, demand for plastics continues to be high. In the EU alone, it is estimated that each person uses, on average, more than 100 kilograms a year. According to Plastics Europe, world production of plastics in 2010 touched 265 million tonnes. However, bioplastics only account for a small fraction of the demand. In 2010, just 724,000 tonnes of such “green” plastics were produced worldwide. Demand is expected to increase in the coming years. Experts from the industry group, European Bioplastics estimate that some 1.7 million tonnes of bioplastics will be produced come 2015. If we are to tap a share of this growing world demand, we need to start now. The bioeconomy initiative should develop a clear roadmap to develop bioplastics as an industry. Otherwise, we may miss the boat!

TAP ON NEW OPPORTUNITIES IN RAIL BUSINESS Rail transport is not new in Malaysia but new technologies have transformed rail travel for the better. In the 60s, travelling by train from Kota Bharu to Kuala Lumpur was slow, very noisy and tiring. I still remember the days when I had to travel by train from Kota Bharu (KB) to Kuala Kangsar. The journey would start at ten in the morning from Palekbang, the station which served KB. There was no bridge linking KB to Palekbang then. So, we had to take the boat to cross the river. We would reach Gemas around ten at night. There the coaches for Kuala Lumpur (KL) and Singapore would split, going their

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respective onward journey. We would arrive in KL around dawn. If only a tunnel could be cut through Karak, the time would have been halved! Things have changed since then. There is no short cut tunnel as yet but with the advancement in material and electronic technology, trains are now faster and quieter. In Europe, high speed rail has existed for a long time now. It is about time that we have one. A recent announcement on the proposed high speed train between KL and Singapore is welcome news. It is further testimony of the Governmentâ&#x20AC;&#x2122;s commitment to push the envelope on socio-economic transformation. As the nation struggles to move into the league of high income countries, an efficient mass transportation system is undeniably a key enabler. High speed mass transport is definitely the right way to support the low carbon agenda with the growing world concern over the environment and climate change. I was recently in Germany to visit the Fraunhofer organisation. Fraunhofer Institutes, which now number about 60 all over Germany, have gained world recognition among the top applied research centres in the world. In fact, over the years, the institutes have together made substantial contribution to Germanyâ&#x20AC;&#x2122;s strong leadership in many ground-breaking technologies including research in transport and automotive technology. Many may not know that the MP3 technology which has revolutionised the music industry came from one of the Fraunhofer Institutes. Each year, that technology earns the organisation close to 100 million Euros. Besides anchoring the global leadership in technology, Germany also boasts an efficient public transport system. In Munich, as is true with all the other German cities, travelling with the train and tram system is truly convenient.

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The ticketing system is also innovative. They have dispensed with the usual screening at boarding. You just need to buy a ticket and jump on to the train. Checking is done at random. If you want to take the risk, you can even travel without tickets but if you are caught by one of the inspectors, the fines can be very stiff. So, most passengers would not take the risk of travelling without tickets. Intercity travel is also convenient. Their high speed trains make it possible for people to live in a city 200 kilometres away from their work place and yet commute comfortably to work. More often than not, the trains are on time. Then, they also have the regional trains which are also comfortable and reliable. No wonder train travel is popular in Germany. In fact, as visitors in Germany, we can buy a special discounted ticket called the German Rail Pass. The Rail Pass allows one to go on unlimited travel anywhere in Germany on the days that you have paid for. These range from three days to ten days. Much have been written on how the recently announced high speed train from KL to Singapore is going to impact positively on the regionâ&#x20AC;&#x2122;s economy. Recent years have witnessed a revival in the interest in rail travel. It has been reported that USA has embarked on a number of projects to inject new life into their rail industry. So has China and many countries in the Middle East. It may be time for Malaysia to start investing in the technology development capacity for rail. It is time we establish a National Centre for Rail Research. Moving forward, we should position the nation to tap on the business opportunities offered by the revival of the rail business worldwide.

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MISUNDERSTOOD PLASTICS The humble plastic bag has been blamed for many things. It has hogged headlines almost every day, often for the wrong reasons. For some time now, this largely misunderstood material has been singled out for causing anything from polluting rivers to clogging up drainage. Even the frequent spate of flash floods that have plagued many townships is attributed to plastic bags choking up drains. Recently, the plastic bag has once again tested the patience of the City Hall authorities. It was the day after the New Yearâ&#x20AC;&#x2122;s Eve celebration. As usual, the crowd left behind a huge amount of rubbish waiting to be cleared. Yes, plastic bags formed most of the garbage. Almost immediately, the authorities called for a ban on plastic bags. As if by disallowing the use of plastic bags, the rubbish problem will just disappear. Is this right? Does plastic deserve all the blame for the many ills that haunt society? Are we, man, the root cause of the plastic bags posing problems for the environment? There are mixed views on the controversy surrounding plastics. Those involved in the plastics business believe the plastic witch hunt is misplaced. They say there is gross misunderstanding about the role of plastics in society. Environmental groups think otherwise. They say plastics should be replaced by less environmentally harmful materials. They have come up with a few options. They argue that paper, cloth and other natural fibres are more environmentally acceptable. They degrade more easily. Then again, both paper and cloth also have implications on the environment. Increasing the use of paper bags may lead to more deforestation for example. As for cloth, getting new land to plant cotton is now a big challenge. There are other

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priorities in agriculture. Food production, for example, is a high priority in view of the growing global demand. The use of natural fibres such as jute and hemp is declining because of unfavourable economics. Plastic is still therefore a viable packaging material. What exactly are plastics? How are they produced? Are they really a threat to the environment? In science, plastics are also known as polymers. They are a type of chemical substance made up of many large molecules. These molecules in turn form thousands of repeating units, much like the links in a chain. They are produced through chemical processes which convert petrochemical-based ingredients into plastics. Different plastics have different chain lengths and mixing polymers with various additives impart plasticsâ&#x20AC;&#x2122; many useful properties. There are basically two major types of plastics; thermoplastics and thermosets. Thermoplastics soften with heat and harden when cooled, while thermosets harden with heat e.g. epoxy and polyester. Both, however, have served mankind in many applications. It is difficult to imagine a world without plastics in some form or another. Plastics are attractive because they can be shaped easily to cater to different product configurations. Over the years, thanks to innovative research and development, various types of plastics have been commercialised. In fact, plastics have become a material which literally dominates life. It is used in almost all consumer products either on its own or in combination with other materials. It is almost indispensable in the car for example. In the household, plastics just cannot be done away with. In manufacturing, many types of machinery have plastic parts. It is not in fact far-fetched to say that life will not be the same without plastics. Instead of persecuting plastic, we should be looking at how to sustain the supply of plastic in view of the fact that the main raw material

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for plastic, which is crude oil, will soon be exhausted. Each year, the world produces about 130 million kilograms of Ethene, the most important raw material for plastics. Though crude oil is still the main raw material for producing Ethene, new research has uncovered the feasibility of using natural gas. Now, scientists are researching the possibility of Methane as well. If that become feasible, then the production of Ethene can be more sustainable. This is because Methane can be produced from the fermentation of organic waste materials. Another interesting development concerns the use of plastics to completely replace the metal parts in cars. Cars built entirely out of plastics could be the wave of the future. Mechanical engineers use a light weight high strength aerospace material called carbon-fibre reinforced plastic. Scientists believe such material will make metal in cars a thing of the past. Not to mention the fact that with the lighter weight, it will also improve energy efficiency and lower fuel consumption Those who are familiar with plastics would vouch for its wonder as a material created through science. In fact, its potential has yet to be fully exploited. The only concern now is whether, with the decline in the availability of crude oil, the world can continue to enjoy access to plastics. This is where researchers are evaluating other raw material sources. This supply concern is also the reason why many recommend recycling plastics. Blaming plastics for all the environmental ills is misplaced. What we need to do is to educate the public to better understand plastics. Only then can this wonder material be better managed.

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PATENT HAS LIMITS It has just been reported in the press that the future King of Britain may have Indian genes in him! This is not surprising considering the fact that we all came from the same root stock, Adam and Eve. Genes have been a subject of worldwide interest in view of claims that genes may help solve much of mankindâ&#x20AC;&#x2122;s problems related to medicine and agriculture. What drives research on genes? Undoubtedly, the strongest motivation comes from patent. Patenting the findings gives the researcher ownership of the discovery at least for a few years. That would be enough for him to recoup whatever investment he put into the research. While a patent is active, nobody else is allowed to copy an invention without a license. As a form of intellectual property, patent is increasingly one of the basic thrusts of an innovation led economy. In the USA, it is big business. From big pharmaceuticals to blockbuster Hollywood films, exports that depend upon the protection of intellectual property lie at the heart of American global competitiveness. To a layman, genes should not be patented. This is because they are discovered, not invented. Many people react negatively when told it is possible to patent human genes. However, it has been reported that patent offices around the world have been handing out such patents for decades. More than 2,000 are thought to have been awarded in America alone. A case came up for judgement recently in the US court. It was about a set of gene patents claimed by a firm called Myriad Genetics. They own the rights to two genes called BRCA1 and BRCA2. Mutations in those genes can dramatically increase a womanâ&#x20AC;&#x2122;s chance of developing breast or ovarian cancer. Thanks to its patents, Myriad has a monopoly on the diagnostic tests that can look for such

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mutations. The Association for Molecular Pathology, however, wants such patents struck down. So, what exactly is a gene patent, and why are they controversial? American patent law is sympathetic to the argument that “products of nature”— elements and naturally occurring chemical compounds such as water, for instance— are not eligible for patent protection. Myriad argue that their patents are not for the genes as they exist in the human body. Instead, the genes are isolated, modified versions that have been snipped from the original. Through some chemical alteration, they have turned the modified genes into a diagnostic tool. That tweaking, argues Myriad, makes them human inventions and, therefore, eligible to be patented. Opponents do not buy such arguments. They maintain the chemical alterations that Myriad makes are trivial. They are irrelevant. What patients, researchers and doctors are interested in is the information content of a gene. One analogy made is with a film: “Star Wars” is the same movie, whether it is encoded on a DVD or in the flash memory of an iPod. It is the content, not the format that is important. Opponents of gene-patenting have other complaints, too. They say gene patents hamper research and make genetic tests more expensive and less accessible. Some feel that it is either absurd or immoral to claim patents on the genetic make-up of the human race. Notwithstanding, beneath the court’s decision lies an attempt to reconcile the ethical principle that natural phenomena cannot be patented with the economic reality of the contemporary US. The US increasingly relies on the products of intellectual property to produce goods that the rest of the world might want to buy. If there are no patents available for gene identification, it would significantly reduce the incentive of big pharmaceutical companies to go after the

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basic science needed to identify genes and, potentially, create treatments for the diseases that those genes might cause. How will that decision impact the motivation to innovate? Will it seriously reduce the money that big pharmaceutical companies invest in for expensive gene research? What will the repercussions be if gene therapy is used as a cure for the many ills that continue to confront man? These are questions begging for answers if patents do have their limits!

NANOTECHNOLOGYTHE NEXT BIG THING AFTER THE INTERNET Some claim Nano is destined for big business; a simple word with promising potential. Others brand Nano as technology hype. Hype or no hype, this word “Nano” which is ancient Greek for “dwarf” has stirred up the kind of public and media debate in the same way that space travel and the internet did in their heyday. In the media, Nano has captured headline news on CNN, BBC and many web journals. A number of scientific findings on Nano have earned the coveted Nobel Prize for Science. The subject of Nano has been extensively written. One speculates Nano will spur a major shift in almost every aspect of science and engineering. Visionaries predict it as the panacea for all our woes. Some even hold the extreme view that Nano may be the next step in biological and chemical warfare. It could also provide the opportunity for people to create a species that will ultimately replace humanity. The Forbes magazine called Nano the “Next Big Idea”. Sceptics think such predictions are farfetched. This has not however stopped

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governments from pouring in tonnes of money funding Research and Development (R&D) on nanotechnology. In the USA alone, the federal government now spends more than USD1 billion on Nano research. Funding comes from multi-discipline groups including the National Science Foundation, the Department of Justice and the National Institutes for Health, the Department of Defence, the Environmental Protection Agency and many others. The US is not alone though. Dozens of major universities around the world including those in Europe and even China are building new facilities and sponsoring research groups for Nano. Malaysia has also taken some initiative albeit in a small way to invest in Nano research. The Ninth Malaysia Plan has promised more funding for Nano research that has been touted as a focus area. A new centre for Nano research has been announced. Worldwide, it is estimated that more than 4000 companies and research institutes deal with nanotech. In Germany, the FraunhoferGesellschaft, a consortium of 56 research institutes all over Germany, has in place a strong R&D alliance in nanotechnology. They do development work in material synthesis, processing, analysis, characterisation and modelling of Nano systems. They are now in a position to offer various techniques to generate Nano systems like bulk materials, coatings, fibres and composites, either by physical or chemical means. At the Fraunhofer institute in Bremen, researchers study the interface between the surface of nanoparticles and the polymer matrix. At another institute in Golm, studies there include looking at using nanocomposites as effective drug carriers for more precision drug delivery. In essence, they are involved in the development of techniques to enable drug carriers to be directed to the right target after injected into the bloodstream.

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There is no doubt that Nano has generated a lot of interest and passion among many. There is no shortage of opinions on where Nano is heading and what the implications are. There are also many rumours and misconceptions about Nano. Whatever the thinking, both critics and pundits have agreed on the fact that Nano and its spin-off technologies will significantly impact the world. Nano research cuts across many disciplines. In fact, nanotechnology is already having an impact on products as diverse as novel foods, medical devices, chemical coatings, personal health testing kits, sensors for security systems, water purification units for manned space craft, displays for handheld computer games, and high resolution cinema screens just to name a few. Nano skin creams and suntan lotions are already on the market not to mention the much publicised Nano-enhanced tennis balls that bounce longer and was featured at the 2002 Davis Cup! The National Science Foundation in the USA predicts that Nano-related goods and services could be a USD1 trillion market by 2015, making it not only one of the fastest-growing industries in history, but also larger than the combined telecommunications and information technology industries at the beginning of the technology boom in 1998. They also project that two million workers will be needed worldwide within 15 years just to support nanotechnology industries. It has been reported that the world market for Nano electronics may be worth hundreds of billions of dollars. The prediction is that Nano electronics will create computers and transistors with much greater power for use in telephones, cars, domestic appliances and a multitude of other consumer and industrial applications. In the area of public health, scientists are already talking about Nano research producing designer molecules for the development of biosensors, biomaterials and new breeds of biochips for treating

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life-threatening conditions, including cancer and heart disease. Such bioengineered devices, in the form of body implants, will deliver smart drugs or carry new cells to repair damaged tissue. It is mind-boggling but it is no longer science fiction. In fact, the fabrication of Nano structures will yield materials with new and much improved properties. These may be used in solar panels, anti-corrosion coatings, tougher and harder cutting tools, chemical catalysts and countless other applications in the transport and energy industries. Some claim that Nano may represent another giant leap for mankind but what exactly is nanotechnology? One defines nanotechnology as the technology of building things from the bottom upone atom or molecule at a time. One nanometre is one billionth of a metre. Half a nanometre is the linear dimension of a small molecule like methane. One piece of the human hair is about 100 thousand times bigger. Since all things are essentially made from atoms, their properties would be very much influenced by the way the atoms are arranged. In fact, if we can rearrange the atoms in coal we can very well make diamond. And in the same way if we can re-arrange the atoms in sand and add a few trace elements we can make computer chips. Nanotechnology therefore deals with the manipulation of atoms or molecules to produce materials, devices and even machines. Imagine the potential for mankind. It is almost limitless! Since the beginning of time, mankind has been known to make things starting from something big. For example, to extract pure mineral we have to start with the mineral ores. The rest of the constituents are often wasted. To make a canoe we have to chop off the whole tree. This approach has inadvertently led to us producing lots of waste and consuming a lot of energy. Nanotechnology, which makes things from small atoms and

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molecules, will reverse the process, thus reducing waste and minimising the consumption of energy. In Europe, Nano scientists are working to develop textiles that change properties as a function of needs; keeping you cool in summer and warm in winter. Dishes that do not get wet just like the lotus leaf. They are also developing materials that are very resistant and very light to make cars that can go on longer journeys with much less energy. The future holds many potential applications for Nano. These include measurements with one-atom precision, sensors to detect dangerous substances, electronics using every single electron, membranes for separation with very high precision, Nano-machines, even Nano robots that enter your body to clean or fix it. To realise all this, investment in R&D is crucial. A group of researchers in Hawaii is working on a species of squid which they believe will shine new light on optical nanotechnology. They have found that the creature has a built-in flashlight made up of a previously unknown type of protein with unusual amino acid composition. They call them reflectins which they note as â&#x20AC;&#x153;a marked example of natural nanofabrication of photonic structuresâ&#x20AC;?. The research should inspire the bottomup synthesis of new spectroscopic and optic devices. The message is clear. Nanotechnology is not one that can be dismissed lightly. The fact that many countries and numerous forward planning multinationals are investing in Nano research speaks volumes about its potential. It is a field of research which promises many potential applications for the world. Malaysia has taken the right decision to invest and build the critical capacity to help fuel future value realisation from Nano research in the country.

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THE UNTAPPED BUSINESS OF ENZYMES Poor digestion is a most common health problem. It inflicts many. It can be very discomforting when one is down with it. The cause can be traced to a number of reasons. The inability of the body to produce enough enzymes is one. The other relates to the absence of digestive enzymes in the food we eat, especially those subjected to heavy processing and cooking. Enzymes interestingly are more than just the substance needed to help digestion. Over the years, enzymes have developed into a product that can be used in many industrial and medicinal applications. So much so that enzyme production and trading is now a big business in many countries. However, despite Malaysia’s rich biodiversity, enzymes have yet to catch the attention of investors in the country. Why? Do we expect to see changes? What are these enzymes? What do they do? How are they produced? What are the various types of enzymes? It is now known that digestive enzymes are organic proteins that break down food particles such as proteins, carbohydrates and fats. The food particles that are broken down are then converted into smaller nutrients that are absorbed by the body to build cells, tissues, and organs. The enzyme, protease for example, helps digest proteins in the food and proteins are known to be difficult to metabolise. Protease can help the body metabolism in many ways. For example, an invading organism would normally wrap itself in a large protein shell as a form of disguise. Protease enzymes in sufficient amounts can help remove this protein shell and allow the body’s defence mechanisms to neutralise and destroy the invader. Studies have shown that large amounts of Protease can also help fight colds, flu and

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even cancerous tumour growths. In fact, protease helps in the healing and recovery from cancer by dissolving the fibrin coating on cancer cells. In the field of biotechnology, there are many industrial applications for enzymes. Most are used to make products we commonly consume. Enzymes are also utilised to improve food products not only in terms of quality but also function. In the dairy industry, for example, some enzymes are needed to produce cheese, yogurt and other dairy products while others are used to improve texture or even flavour. Milk contains Proteins, specifically Caseins that maintain its liquid form. Proteases are enzymes that are added to milk during cheese production, to hydrolyse Caseins, specifically Kappa Casein, which stabilises micelle formation preventing coagulation. Rennet and Rennin are general terms for any enzyme used to coagulate milk. Technically, Rennet is also the term for the lining of a calf’s fourth stomach. The most common enzyme isolated from Rennet is Chymosin. Chymosin can also be obtained from several other animal, microbial or vegetable sources, but indigenous Microbial Chymosin (from fungi or bacteria) is ineffective for making cheddar and other hard cheeses. Limited supplies of calf rennet have prompted genetic engineering of Microbial Chymosin by cloning calf Prochymosin genes into bacteria. Bioengineered Cymosin may be involved in production of up to 70% of cheese products. While use of bioengineered enzymes spares the lives of calves, it presents ethics issues for those opposed to eating foods prepared with GEMs.

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CHAPTER 7 ENERGY CHANGES THROUGH SCIENCE Energy has always been the crucial success factor of global businesses. As they all say, without energy, the world may even come to a standstill. We are very dependent on an efficient and inexpensive energy source, but with the advent of global warming and climate change, mankind is now forced to be more judicious in the choice of the energy type. There is now a big tussle between fossil based and the non-fossil sources. The fossil sector is trying hard to develop new ways of processing and the eventual utilisation to make their fuel cleaner and less damaging to the environment. They still, however, enjoy a competitive cost through the renewables. The renewables on the other hand are investing heavily in research in order to lower their costs. So, there is a lot of science in the energy debate. Everyone should be clear on the choices.

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ENERGY EFFICIENCY LESSONS FROM NATURE Of late, the world has been busy looking for ways to use energy more efficiently. There is concern that at the rate we are consuming energy now, the world will soon run out of supply. One of the most active Research and Development (R&D) topics in the world today is in fact to develop new products and processes which consume less fuel for the same output. The car industry, for example, which accounts for a major share of the worldâ&#x20AC;&#x2122;s energy consumption, has been busy designing cars which are more energy efficient. These include designing power trains which consume less fuel for more distance or hybrid versions which give longer mileage for less fossil energy. Experts believe future cars will focus more on delivering such energy efficient vehicles (EEVs) to the market. Our recently unveiled National Automotive Policy has also strongly emphasised the importance of the EEVs in the future car market. The aviation sector, another fuel guzzler, has also embarked on a similar mission to reduce the industryâ&#x20AC;&#x2122;s fuel costs. Over the years, many big airlines have either stopped flying to certain destinations or have rationalised their routes because of cost issues related to loading and high oil prices. A similar trend has been shaping up in the electric lighting industry as well, another major user of energy. Energy efficient light bulbs have grown more popular over the conventional tungsten variety as the world seeks to reduce electricity usage. All such developments have a lot to do with the growing global concern over depleting energy resources and the expanding per capita demand for energy. They have also been driven by the global attempt to replace fossil fuels with more renewable energy sources.

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Increasingly, scientists have also been looking at nature for inspiration on energy management. Apparently, there are many examples where nature can provide solutions to much of our problems. Biomimicry or the science of learning from nature has become a popular way to develop new, improved designs and processes. Lately, scientists have looked to insects for guidance. Insects are after all the most successful organisms on earth in terms of their diversity and adaptability. Take the termites for example. Though unwelcome in homes, termites can offer some tips on how to be more energy efficient. Studies have shown that termites are very good at keeping their mounds cool in the summer heat and warm during winters. The termite is acknowledged as one of natureâ&#x20AC;&#x2122;s more accomplished builders, erecting structures which can maintain a constant temperature inside despite wide temperature swings outside. The mounds they build are extremely durable structures of mud, often employing sophisticated design that optimises the effects of the sun. One African architect has built two buildings, one in Harare, Zimbabwe and the other in Melbourne, Australia inspired by the work of the tiny termites. Scientists now believe that there are many more lessons on energy management that man can learn from insects. Termites are only one example. According to biologists studying biodiversity, apparently insects are the most diverse of all the organisms on earth. There are now many groups investing in what is known as insect biotechnology. Many are convinced that the biodiversity among insect species is also mirrored at the molecular level. What this means is that insects represent a vast and diverse resource of active substances. Many research initiatives are underway to work on the discovery and characterisation

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of these new substances and their sustainable use for the benefit of humanity. As a country blessed to be among the top twelve biodiversity rich nations of the world, Malaysia is well positioned to benefit from our own indigenous insect population. What is desperately needed is to allocate sufficient resources and funding to undertake active research on insects. At the moment, the efforts have been lukewarm. This cannot continue if we are to truly gain from our biodiversity wealth. There have been some initiatives to put more vigour in the nationâ&#x20AC;&#x2122;s biodiversity research. The Ministry of Natural Resources has been trying hard to push for the establishment of the National Biodiversity Centre. Such a centre can better coordinate resources as well as anchor the countryâ&#x20AC;&#x2122;s biodiversity strategies. It is time this is given more priority.

DEPLOY SUBSIDY SAVINGS FOR ENERGY RESEARCH Fuel price has always been a contentious issue. Raising fuel prices is never popular. This is because once oil price goes up; all other prices will automatically increase. Bus fares will be hiked, while taxi fares will be spiked. Food prices will also be raised because of increased transport costs. So, understandably we will face objections and protests from the public. This is especially common in developing countries where fuel costs are subsidised. Often, such subsidy is at the expense of other much needed programmes. Fuel subsidy is a major cost burden for such countries. The people may not realise it but the fact is such costs are actually

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borne by the people themselves through the many taxes collected by the government. While subsidy helps to keep fuel prices low and cushion inflation, experts agree the harm it does to the economy far outweighs its benefits. Academy of Sciences Malaysia (ASM) has completed a study on the future of the country’s energy sector under its Mega Science Framework. What will the nation’s energy scenario be come 2050? How will the country cope with high energy prices? The conclusions are rather disturbing. The projection is that by then, we will be a net importer of fuel and the country’s energy demand will increase many fold. Unless drastic steps are taken to revise the nation’s energy policy, the economic consequences can be grave. A major revision will definitely concern the policy on subsidy. It has been reported that the cost of the subsidy to the country runs into billions of Ringgit Malaysia. In fact, as a result of the recent subsidy rationalisation exercise, next year alone the country can save more than RM3.3 billion. Imagine if the price of fuel is higher than what it is today, the cost of subsidy will also be much higher. It is therefore wise to gradually phase out the subsidy. The government should be congratulated for taking this brave decision. As explained by the government, the exercise will only be done for blanket subsidy. The poor and other less endowed among the population will still need support. So, targeted subsidy should remain. Even that should not be indefinite. Then again, subsidy is not all bad. In cases where new technologies need to be promoted for use, initial subsidy will help motivate market adoption. Take the solar panel for example. In Europe, the initial introduction of the solar system for public housing was heavily subsidised. However,

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when the technology improved and the cost came down, there was also a gradual phasing out of the subsidy. With further improvements in costs through R&D, the time will come when it will no longer be subsidised. That is when market acceptance is complete. In the case of the recent rationalisation in fuel subsidy, some percentage of the savings should be channelled for energy and fuel research. These can include research to improve energy efficiency, development of the renewable and alternative energy sources as well as social research to motivate public adoption and acceptance of such new technologies. All these come under the purview of the green technology and sustainable consumption that the world continues to emphasise. One suggestion is to craft an industry blueprint for the fuel cell business. If such commitments are made known to the public, it can improve the public’s understanding of the rationale behind the government’s recent move to phase out blanket fuel subsidies. Apart from investing in the relevant energy research, the savings from the subsidy should also be channelled towards further improvements in mass public transport. In fact, it is more sensible to subsidise public transport than subsidise the fuel if we are to reduce the per capita usage of fuel in the country. Though we have made commendable progress in public transportation, the cost and convenience issues are still wanting. This explains why use of public transport is still poor. The coverage for one has to be increased. Apart from that the ticketing system calls for drastic overhaul to be in line with international practice. The bottom-line is, if public transport is to attract more users, the system must provide good accessibility and convenience.

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BETTER TO SUBSIDISE SOLAR ENERGY The world crude oil price has gone past USD130 per barrel. Experts believe it may touch USD200 in the coming months. Never before has crude oil price reached such a historic high in so short a time. The high price has been fuelled by a combination of factors. Supply and demand is one but many concede speculative forces may have been the more contributing factor. It is natural for speculators to seize upon a profit opportunity presented by a market situation where supply is uncertain and demand is escalating. It is their business model. Oil is a cost in essentially all products and services. The sudden jump in price will put the global economy at serious risk. Already talk of inflation is common. In fact, a hike in interest rates is now a matter of when rather than how. A rise in transportation, energy and heating costs is also inevitable. For the man on the street, the cost of living will no doubt go up. As for the business community, they will have to juggle their profit motive against escalating cost. One way out is through the government subsidy. However, countries which have long subsidised fuel costs are seriously rethinking their policy. In Malaysia, the government has started phasing out its subsidy programme. Though politically unpopular, many will eventually appreciate the wisdom in that decision. In a situation of rising world oil price, subsidy will prove to be a massive financial burden for the country. Furthermore, there is ample evidence to show that the artificially low price of fuel tends to promote wastage and exacerbate

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demand. Economic analysts have plausible data to show that fuel subsidies tend to increase demand unnecessarily and encourage complacency. In countries where fuel is taxed, improving energy efficiency has become a matter of more urgency, which is also a more sustainable way to reduce cost. Even India and China, the two economies widely blamed for the current spike in global fuel demand, are taking steps to progressively phase out fuel subsidy. Indonesia, a net importer of fuel, like China and India, has also started phasing out their fuel subsidy. Indonesia recently raised fuel prices by 30%, slightly lower than Malaysiaâ&#x20AC;&#x2122;s 40% increase. The question is, what would be a good long term strategy for the country managing its fuel needs? Will alternatives to fossil be an option? If so, how do we increase the use of alternative energy? Taking the cue from initiatives around the world, investing in renewable energy may be a better way forward. In the USA, policies are aggressively pursued to increase the use of bioethanol and biodiesel in their fuel mix. Investments in such fuels are well supported and subsidised. In the European Union (EU), biodiesel has been supported for years as an option to fossil. Though there are critics who view such pursuits as unsustainable because of their impact on food prices, the fact is, without such commitment, there is no way bioenergy will be commercialised. Economics alone will not encourage investors to risk their money in such ventures. Governments need to intervene to reduce the risks through constructive subsidy. However, in due time, when there is sufficient critical mass demand, there is no reason why the subsidy cannot be gradually eased off. This is exactly what happens in the EU where the earlier support for rapeseed biodiesel is slowly

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being reduced as the popularity and acceptance of the fuel among the general consumers pick up. No new technology can be successfully commercialised without initial governmental support. It is not easy to change consumer habits and tastes. Examples are abound of efforts in the past where only aggressive support can effectively bring unfamiliar products to the marketplace. Convincing consumers is a big challenge. However, once consumers get use to the products and enjoy their benefits, the market can be left to its own mechanism. The same goes for renewable energy. In Malaysia, we have a number of renewable energy options to consider. Recently, at a technology business forum organised by the Technology Park Malaysia Corporation Sdn Bhd, some suggestions were mooted as to how Malaysia can embark on a more concerted renewable energy programme. Solar energy, though still expensive, is viewed by many as having the best potential to replace fossil. In fact, according to expert opinions, of all the electricity generation forms from renewables, solar photovoltaic power generation is the simplest and most elegant. This is because a solar photovoltaic device, or solar cell, converts sunlight directly into electricity. In addition to that, the device has no moving parts and a lifespan of 30 years or even more. A major obstacle to the widespread use of solar cell is its cost. They are manufactured the same way microchips are made and such solid state fabrication is expensive. However, over the years, thanks to R&D and process improvement, prices are falling and can be expected to continue declining. Data show that the cost to produce photovoltaic module has dropped from USD60/W in 1970 to USD3.20/W in 2003. This should make

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solar cells economically attractive in the future. In fact, many agree that if one technology is going to provide for future energy demand cleanly, reliably and sustainably, then that technology will surely be the solar cell. A solar relies for its operation on a special type of material called a semiconductor. The most common material is silicon which is used today to make microchips and transistors for electronic devices including computers, televisions and mobile phones. So how does it work? Unlike a conductor which will pass electricity, and an insulator which completely shuts out electricity, a semiconductor material weakly conductors electricity. However, its conductivity increases with temperature and it can also be improved dramatically by adding a small amount of impurity to the material. This is exactly what happens in a solar cell. With proper design and fabrication, the absorption of a photon of light from the sun will generate an electric current. In other words, the semiconductor has made possible the conversion of light energy into electrical energy. World production of solar cells has increased steadily in the past twenty years. In 1999, annual production was only 202 MW. In 2007, this annual production has increased to 3,800 MW, an increase by 19 times. The cumulative global production at the end of 2007 stood at 12,400 MW of solar cells. It is predicted that by 2010, cumulative global may reach 39,422 MW. The largest producer in 2006 was Japan with about 930 MW. The EU produced about 680 MW, mostly concentrated in Germany. For a country like Malaysia which enjoys many hours of sunlight throughout the year, solar is definitely a renewable energy option that merits serious consideration. Therefore, instead of continuing to subsidise fossil fuel, we must seriously

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think about expanding our support for solar. A subsidy for solar will go a long way in addressing the countryâ&#x20AC;&#x2122;s energy future.

FOSSIL SUBSIDY NO HELP FOR RENEWABLES A recent talk on climate change at the Academy of Sciences Malaysia (ASM) highlighted how fuel usage would influence the global temperature rise. The right energy choices can make a difference to sustainable development. There is no denying that the world needs more energy as demand grows. This is not expected to go down as world economies and population continue to expand. At the same time, we need to rapidly reduce the rate at which we are emitting carbon dioxide. We need to urgently rein in the volume of greenhouse gases entering the atmosphere. That means, switching to renewable energy as early as possible. No doubt there are many ways to induce the use of renewable energy. These include market-based measures such as incentives and subsidies. Other approaches include taxing carbon-based fossil fuels making them more expensive. That would also encourage users to invest in energy efficient measures and switch to renewable energy. Renewables also create economic opportunities in green technology. With the right incentives, businesses would rush to invest in solar panels and wind turbines. Such investments are known to just trickle in. The reason is simple. Despite the logic of encouraging the switch through subsidies for wind, solar and biofuels, governments still provide much larger subsidies for fossil fuels, especially oil.

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Subsidies come in different forms. Direct payments to producers, to expand production and keep their selling prices down is one. Another involves payment to consumers, so they can afford the prices. The United Kingdom (UK) government applies a lower rate of VAT to energy. In Australia, the coal industry has received indirect support through funding for coal-fired electricity generation. Despite this, it is the emerging economies that provide the biggest subsidies. It has been reported that Russia, China and India are leading examples, although they have begun to cut subsidies. Iran surprisingly, has been reported using approximately a third of its annual budget to keep energy prices down. Here at home, the government still spends billions to subsidise petrol and diesel. It has been estimated that global subsidies to fossil fuels were around USD400 billion in 2010, one-thirds higher than in the previous year because of rising energy prices. India provides an example of how such subsidy can impact negatively on businesses. Farmers pay a fraction of the cost of electricity and this is partly compensated by higher costs for industrial and commercial users. Energy subsidies do serve noble social and economic objectives. These include stimulating a particular domestic industry, reducing dependence on energy imports, or helping marginalised and disadvantaged groups. Abolishing them on the other hand can also be political suicide. When the Indonesian government reformed subsidies in 2005, there were street protests nationwide against the higher prices. There is undoubtedly a strong case for subsidising electricity for poor communities in developing countries. Unfortunately, poorly designed schemes often lead to waste. The supposed beneficiaries actually end up worse off. Recently publicised episodes on diesel smuggling is a case in point. Studies have shown that only 8% of the USD400 billion spent supporting fossil fuels in 2010 went

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to the poorest 20% of the population. There is ample evidence to suggest that subsidies disproportionately benefit the better off. Countries have begun to take notice of such convincing arguments against subsidies. Many gradually ending it. The G20 group of leading economies agreed in 2009 to phase out fossil energy subsidies. Unfortunately, progress has been rather slow even with the need to slash government spending in most countries. Germany was among the first to make the move. In 2007, the government agreed a gradual phase-out of its notorious coal subsidies, which had reached Euros 90,000 per miner. The subsidy, designed to keep domestic coal competitive with imports and preserve local jobs, will end by 2018. Arguably, more must be done. The IEA forecasts that fossil-fuel subsidies will reach USD660 billion in 2020, going by current policies. Eliminating them would cut the growth in energy demand by 4%. The move would also eliminate 1.7 Gt of Carbon Dioxide (CO2) emissions. It would also help businesses make the case for energy efficient investments. Not to mention it will motivate the switch to renewables. Fossil subsidy is definitely no help for renewables.

CHAMPION ENERGY EFFICIENCY FOR A SUSTAINABLE FUTURE At a recent talk on “Climate Change” held in Kuala Lumpur, a college student from Tunisia shared an interesting observation about Malaysia. She has noticed during her brief stay here that our hotels do not give high priority to energy efficiency. She is aware of the fact that in Malaysia, because of our hot climate, we need to

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use air-conditioning. At times, the heat can be unbearable but her question was, is it really necessary for the airconditioning in the hotels to be set at almost full blast? So much so that hotel guests have to wear thick clothing to keep warm. Wouldn’t it be better for the temperature to be controlled at a more reasonable setting? The aim should be at a level which does not require extra investment in winter clothing! Remember the third day of August in 1996? In case we have forgotten, that was the unfortunate day when Malaysia was hit by a major countrywide electricity black out. It has gone on record as the worst disruption in the country’s history. That blip which lasted more than 16 hours wreaked havoc on the nation. Damages to industries, especially the manufacturing sector, ran into millions. One estimate put it at RM123 million. The households were also not spared with severe losses. It was an experience many would not like to see repeated. It did however send home a strong message not to ever take electricity for granted. This is because without adequate supply of electrical energy, economies can come to a halt. In fact, energy in whatever form is undoubtedly a critical lifeline of any nation’s economy. Imagine what would happen if there is no more energy available. Can the world survive without energy? Though it is quite unlikely that the world energy supply will completely disappear, it is generally acknowledged that energy is not going to remain plentiful forever. It is only a matter of time before demand will outstrip supply. There are many examples of countries which went from net exporter to net importer. Indonesia is one that is close to home. Malaysia’s total energy demand is projected to increase 6.3% annually. The fuel demand for electricity generation will also increase. Despite various attempts to seek alternative sources, the world is still

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largely dependent on fossils. This is not expected to change any time soon. It is also common knowledge that the supply of fossils in the world is depleting. In Malaysia, natural gas which is now the major fuel used in electricity generation is expected to last only 39 years. Oil will dry up even earlier, may be 22 years at the most. It will not be long before Malaysia will have to depend on import to satisfy the country’s fuel demand. To make matters worse, the cost of imported fuel such as coal is cheap . Are we prepared for the day when we become a net importer? Over the years, much investment has gone into the energy infrastructure for the country. For both the Eighth and Ninth Malaysia Plans, it has been estimated that about RM58 billion may have been spent on the infrastructure for electricity generation, while a whopping RM92 billion was used for oil and gas. All these happened when we are still a net exporter. When we do become a net importer, which experts predict will happen in about half a decade, the cost implications will get more serious and complicated. For one, we will have to face the hazard of energy price volatility. A more threatening prospect however is whether we can have access to the world’s energy supply. We have two options really, either create a new source of supply or cut down on our consumption. The new source of supply can come from the many alternative sources including renewables. Malaysia has abundant agricultural wastes, particularly from palm oil and timber which can be harnessed for energy. Not to mention the all year round sunshine for solar photovoltaic. Up till now, they are sadly still cost prohibitive and logistically unattractive. Unless there is a breakthrough in the conversion technologies, such alternatives will have difficulty competing with fossils.

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Right now, the only attraction in renewables lies in the fact that they can help alleviate climate change concerns. Their so called carbon footprint is much lower than fossils. However, since renewable energy is still costly, cutting down consumption by becoming more energy efficient is a more realistic option. By being more energy efficient we can cut consumption. The question is, have we done enough? In the 2009 Budget, measures including the use of high-efficiency motors, energyefficient lighting, refrigerators and airconditioners and the use of insulation for air-conditioned premises were introduced. To be effective, such measures should be supported by attractive fiscal incentives and also simple approval procedures. Evidence shows that with the effective implementation of appropriate and pragmatic energy efficiency initiatives, the electric power demand and energy consumption can be significantly reduced. Even a modest and realistic reduction in demand growth could save capital investment by about RM4 billion over a Malaysia Plan period of 5 years. However, there are still not enough takers of the government’s energy efficiency initiatives. Why is this so? Some attribute the disappointing progress to low electricity tariffs which tend to promote wastage, the non-availability and high cost of energy efficient products and appliances, as well as the lack of promotional efforts on energy efficiency. However, all will not be lost if such shortcomings can be addressed. It is high time the government get serious with implementing energy efficiency measures. Unless this is done, the long term implications on the nation’s economy can be retrogressive.

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COMPREHENSIVE STUDY NEEDED TO PREPARE FOR CLIMATE CHANGE At a recent forum on climate change, organised by Academy of Sciences Malaysia (ASM), many issues became clear. One observation which stood out from the discussion is that the world remains helpless in the global efforts to arrest climate change. It has been difficult to reach consensus on mitigation measures and commitments. This is proven by the many years of international negotiations which have yet to reach an agreement. The Kyoto Protocol which was heralded as the best international instrument to deal with the issue is now regarded as a dismal failure. Big emitters of greenhouse gases use all kind of excuses not to endorse it. Why? Because the impact on big businesses involved in fossil fuels and related activities is simply unbearable. The fact that man is largely responsible for climate change is no longer doubted. There are many groups with vested interests unwilling to embrace the low carbon protocol in business. What is abundantly clear is that it is in fact man’s uncontrolled appetite for resources that has contributed immensely to the build-up in greenhouse gases in the atmosphere which fuel global warming, a key cause of climate change. Is Malaysia prepared for climate change? What should we do to adapt to the eventual occurrence of temperature rise and other consequences of climate change?

China and India achieving per capita consumption of goods and services at the current levels of the American and European consumers. First, there will not be enough resources to satisfy the expansion in demand. Second, the conversion of those resources into consumer products will consume a lot of energy and produce large amounts of wastes and of course the greenhouse gases that feed the climate change problem. Unless this natural human greed is addressed, finding solutions to climate change will be a futile exercise. The conclusion is that the capitalist economic model will eventually prove unsustainable in the long run. It is not easy to manage greed. So what should we do? It was clear from the forum that we still need a better understanding of how climate change will eventually impact the socio-economic future of the country. How will climate change impact the country’s resources? How will it affect the key sectors which drive the country’s development? What will be the impact on populations living in the exposed coastal areas? Many countries have embarked on comprehensive studies to assess the impact of climate change on their wellbeing. One that is often quoted is the United Kingdom’s Stern Report. Only through such studies can we begin to articulate the appropriate strategies to adapt to climate change. We should invest on a similar study. ASM through its vast international network is well positioned to anchor such study.

An air of pessimism permeated the forum. As long as man everywhere harbours this ambition to pursue the so called “American Dream”, the consumption of scarce world resources will continue rising unabated. Imagine highly populated countries such as

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CAN WE REALLY IGNORE NUCLEAR POWER? Imagine a day without power. No airconditioning. No escalators. No lifts. No lighting. No internet. No ATMs. No LRT. No TVs. These are things we normally take for granted. Many will have problem coping without electricity even for a day. We always assume that electricity breakdown is rare. It will not happen to us, we think. Not to a country like Malaysia where there is even surplus oil which we export to the world. That surplus may soon disappear. Whatever it is, energy is indispensable. This is why energy is a high priority. There are many energy concerns though. Adequate supply to meet the growing global demand is one. In fact, energy has been at the centre of many conflicts; most are about the struggle to assume control over key energy sources, especially fossil hotspots around the world. For decades, the world has been over dependent on fossil energy for fuel. These are mainly crude petroleum, coal and natural gas. But fossil fuels have also been blamed for global warming, a phenomenon which poses threat to the well-being of the planet. The search for less harmful alternatives has been going on for years. A number of options have emerged. Both solar and wind have received a lot of attention but solar is still expensive; whilst wind is limited to certain areas. Nuclear power has come under the spotlight. The revival of the global interest in nuclear power in the past several years has been attributed largely to the growing concern over the future supply of fossil. The almost explosive demand by India and China is one factor fuelling such worry. Nuclear is also attractive because of the global warming issue. Nuclear power has lower carbon emissions. However, those in the climate change committee have yet to include nuclear as

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a mitigation measure. Nuclear, however, does have its share of the negatives. Top of the list is the issue of safety, particularly those concerning the disposal of the reactorâ&#x20AC;&#x2122;s radioactive wastes. The other has to do with the potential abuse to produce nuclear weapons. Despite these, proponents of nuclear power say all such negatives are not unmanageable. In fact, the claim is that, the new generation of reactors have much reduced safety risks, thanks to improved design over the years. It has become evident that a major topic of concern in global energy is the security of supply, as countries experience interrupted deliveries of oil and gas. The abundance of naturally occurring uranium makes nuclear power attractive. Increasing fossil fuel prices have also greatly improved the economics of nuclear power. Several studies show that nuclear energy is the most cost-effective of the available technologies. As carbon emission reductions are encouraged through various forms of government incentives and trading schemes, the economic benefits of nuclear power will also increase further. A longer-term advantage of uranium over fossil fuels is the low impact that increased fuel prices will have on the final electricity production costs. This is because a large proportion of those costs is in the capital cost of the plant. This insensitivity to fuel price fluctuations offer a way to stabilise power prices in deregulated markets. As the nuclear industry is moving away from small national programmes towards global cooperative schemes, serial production of new plants will drive construction costs down and further increase the competitiveness of nuclear energy. In fact, nuclear energy is a wellestablished component of electricity supply in many Organisation for Economic Co-operation and Development (OECD) countries. There are now 439 nuclear reactors operating in over 30 countries, providing almost 16% of the worldâ&#x20AC;&#x2122;s

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electricity. The first commercial reactors came into operation during the late 1950s, but the industry really â&#x20AC;&#x153;took offâ&#x20AC;? in the 1970s, when concern over energy security and fossil fuel prices prompted many governments and power companies to consider nuclear plants. Over 200 reactors came into operation during the 1980s, but by the end of the decade, there had already been a marked slowdown in orders prompted by a range of economic and public acceptance issues.

produce less waste. Experiments on such options have already reached the pilot stage. Obviously, research and development (R&D) on nuclear should go on. This is because, whatever the risks, the technology does offer many benefits for mankind. It would be retrogressive for the world if we do not continue to rise to the challenge of this technology for energy generation.

However, the implementation of nuclear projects often raises social concerns about risks associated with possible releases of radioactivity in routine and accidental situations, radioactive waste disposal and nuclear weapons proliferation. The natural disaster that struck Japan recently has raised several questions on the reliability of the plant to withstand such damaging shocks. But, we should also be reminded that the Fukushima reactor design had not been upgraded to the latest in the market. New generation reactors which offer much better safety guarantee are available now. The superb safety record achieved by the current generation of reactors has led to increased confidence among the public. Such confidence in fact forms the basis of the renewed interest in nuclear plants. Many initiatives were taken in the aftermath of the Three Mile Island and Chernobyl to incorporate a strong safety culture throughout the world nuclear industry. So, should Malaysia go nuclear? While it is true that there are still lingering doubts among consumers on the safety of nuclear, such concerns are not as big as they used to be. Furthermore, with the new developments in reactor design, the safety standards of nuclear power plants continue to witness improvement. At the same time, nuclear scientists are exploring other reaction mechanisms in the interest of improving safety, reliability and cost. For example, the fusion rather than the fission reactions, has been claimed to

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CHAPTER 8 RESOLVING EARTHâ&#x20AC;&#x2122;S RARE MYSTERY The world is now venturing into new businesses which carry higher risks. The advent of Nano technology, for example, poses a certain level of risk on health if not properly handled. Genetically Modified Organisms (GMO) technology for agriculture promises to revolutionise food production. There are concerns of risks to the environment. Lately, there is a lot of interest in rare earths. This is because rare earth elements have been found to make a difference to the energy generation from wind turbines. Some elements would improve the performance of other renewable energy technologies including the solar photovoltaics. The demand for rare earths has witnessed a jump. However, the extraction of rare earths poses certain risks on radiation levels. The question is, can such dangers be managed? A major issue on rare earths safety took centre stage in the local media. The following articles were published to help explain the true science of rare earths.

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RARE EARTHS, NOT ALL ABOUT LYNAS Rare earths are big news. The protest against rare earths has not abated. While Malaysia is consumed with protests denouncing rare earths, the rest of the world is busy strategising where to invest. In Australia, the Arafura group is investing in rare earths processing. Japan is looking for new rare earths supply sources . The Japanese is even mulling deep sea exploration for rare earths. In the USA, the Molycorp group is investing big money to revive their rare earths processing in California. In China on the other hand, the government is consolidating their rare earths ventures, cleaning up illegal operations and putting into place strict environmental legislations. Many expect to see the demand for rare earths products exploding in the coming years. Here in Malaysia, we protest. To us, Lynas is rare earths and rare earths is Lynas. The truth is rare earths is more than just Lynas. When Lynas announced they were setting up the plant, downstream players wanted to invest alongside Lynas. A manufacturer of wind turbines for the European market was one. That would have created much needed jobs. They moved their investment to Eastern Europe fearing disruptions. Admittedly, the general public is still in the dark about real chemistry of rare earths processing. Some have been misled to equate rare earths processing with nuclear power plants. A recent international forum managed to clear up the air somewhat. There are risks involved, no doubt. The risks, however, are manageable. Despite that, experts emphasised that there must be strict health and safety protocols in place and they must be effectively enforced.

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This is of utmost concern to the general public. This is because we still need to improve our record of maintenance and enforcement. It is not impossible. The oil and gas industry is an excellent demonstration of our ability to manage safety and health in a high risk business. In the case of rare earths, what is needed is to balance the concern over the risks with the vast opportunities waiting to be tapped as we struggle to get out from the middle income.

LA ROCHELLE- FRENCH TOURIST TOWN HOME TO RARE EARTHS Ever heard of La Rochelle? Some may have heard of the chocolate brand with that same name. Not many, I suspect, know that La Rochelle is a popular tourist town, South-West of Paris. In fact, very few outside France know that La Rochelle is more than just a holiday spot. It is more than just a coastal township where holiday yachts of the rich and wealthy are parked. Many would be surprised that La Rochelle has for decades been hosting a rare earths processing plant just like Malaysia’s highly controversial Lynas facility. A recent visit to the facility in La Rochelle puts to rest any lingering doubts about the plant safety. Earlier, we were looking high and low for a rare earths plant similar to Lynas. We first tried China, the largest supplier of rare earths in the world. None in China is located close to a residential community like Lynas. The big rare earths plants in China are either in a desert area or close to the mountains. There, the radioactive residues are just buried either in the desert or the mountains. The La Rochelle

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facility which belongs to France’s Rhodia Group has for years been operating like Lynas. Forty years to be exact and there have been no reports of a health and safety scare in the tourist town. The Rhodia company is an active player in the rare earths business. It is a leading processor of rare earths in the world. They sell rare earth-based formulations for use in catalytic convertors, light bulbs and other value-added industries such as optics and flat screen TVs. In fact, it is the only fully-integrated industrial player to have manufacturing operations and raw material supply both within and outside China. In 10 years’ time, Rhodia plans to further diversify its sources for rare earths. It has recently launched a project to recycle rare earths contained in high-performance magnets as well as in low-energy light bulbs and rechargeable batteries. They are optimistic about the future of the rare earths business. In the early years, the La Rochelle plant processed rare earth ore concentrates coming from Australia and China just like LYNAS. For 40 years, the plant was operated in this manner, producing cerium for the world market. The radioactive thorium residues have been stored within the plant’s 40 hectare site for the last 40 years. During storage, the residues are regularly monitored by the country’s regulatory authority, the equivalent of our Atomic Energy Licensing Board (AELB). The plant operates under strict health and safety European standards. They believe the stored thorium salts will become a fuel of the future. How does the plant enjoy peaceful co-existence with the La Rochelle community? Their secret lies in their active engagements with the locals. Twice a year, the local people are invited to view the operation of the facility. They are given special briefings on measures taken to safeguard the health and safety of the

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plant. They also organise tours for school children. Such transparency has helped remove safety doubts among the local community. In 1996, the plant changed its business model from upstream processing to more downstream processing. This was done for economic reasons. They could not compete with the cheaper rare earths coming from China. What is clear is that the rare earths processing facility in La Rochelle has been operating for over 5 decades without harming the locals. Instead, La Rochelle has thrived over the years as an attractive tourist destination not only for the French people but also for holiday makers from the other European countries and even as far away as the USA. For 40 years, the plant has been operating like Malaysiaâ&#x20AC;&#x2122;s LYNAS. Through the deployment of stringent health and safety standards, the chemical plant has been of no consequence to the local community. Instead, it has contributed to the local economy not only in terms of job opportunities but also tax revenues. After visiting La Rochelle, I wonder why there are still people who are so hung up on LYNAS!

GLOBAL RISE IN RESEARCH HINTS RARE EARTHS IMPORTANCE Despite all the evidence which confirms that rare earths are safe, the anti-rare earth movement has yet to accept this fact. In a recent news, the die-hards among those who oppose rare earths processing in Malaysia have reappeared. They have not given up. Whatever it is, while this is happening in the country, elsewhere in the world, research on rare earths has witnessed a prolific rise. Admittedly, in this modern age, mobility would be difficult without electric motors

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and their powerful permanent magnets. The magnetic properties are attributed to the rare earth elements. However, there is concern for how long these raw materials can remain available on the world market. This has not been easy, especially with only one country, China, dominating global supply. We need more supply sources. This is why researchers all over the world are working on technologies to process rare earths more efficiently, reuse them or find suitable substitutes for them. We know now that without the use of rare earths, manufacturing cell phones, laptops, electric motors and wind turbines is quite impossible. All the signs show that demand for such products will continue to rise. In view of the expected advancement in green technologies in the coming years, it is already clear that adequate supply of rare earths will be crucial. This will mainly affect the automotive industry as well as the production of renewable energy. With around 48% of global reserves and around 85% output share at present, China dominates the global market. China has a significant self-interest in building their own high technology industry based on such strategic metals. This explains why it pursues a policy which restricts exports. The aim is to control the availability of rare earths for their domestic industry. Now research is also looking at options to cut the use of rare earths demand for permanent magnets in half by 2017. This involves finding substitute materials, designing more efficient manufacturing technologies and developing new ways of reusing or recycling electric motors. One research aims to find new materials that exhibit good magnetic characteristics comparable to those found in hard magnets made from rare earths. Similar strategies that have already been successfully implemented to find new materials for batteries will be deployed.

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Researchers are also developing alternative technologies to produce magnets with the required shape and size in a single manufacturing stage. The attempt is to eventually do away with the need for extensive post-processing, thus saving both material and money. Other research will look at ways to reduce the amount of rare earths required. For example, studies have shown that by just improving the cooling systems, the electric motors require 21% lesser rare earths. The other approach is to develop viable technologies to recover used rare earths. Researchers are exploring the potential for recycling the rare earths that go into electric motors. As there are no suitable concepts currently for returning and reprocessing used electric motors, this is another area where designs are needed to anticipate how motors are to be re-used. In the future, electric motors should be designed in such a way that, individual components can be easily removed and the raw materials recovered when the product’s operating life is over. Another important area of rare earths research concern the environmental impact of rare earths production. It is now known that estimating the risks rare earths production poses to people and the environment is not straightforward. Since mining releases toxic and radioactive substances, one of the key tasks facing the researchers is to evaluate how their research can help relieve the environmental burden. This is not only to help the industry better manage the environmental risks associated with rare earths, but also to provide support to industry members and policy makers in making strategic decisions. One thing is for sure, the rise in the global research on rare earths goes to confirm the strategic nature of the material in the new world economy. A recent blueprint produced by

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the Academy of Sciences Malaysia (ASM) should provide useful guidance on how we can invest in this industry.

RARE EARTHS IN THE GREEN ECONOMY; MITIGATING RISKS AND HARNESSING OPPORTUNITIES There is a famous saying that goes, “Where there is risk, there is opportunity”. The message here is that, the best place to seek and discover opportunities is in risky ventures. This seems to ring a bell when we examine the recent global revival in rare earths investments. Suddenly, there is a rush to re-open old mines and increase investments in the production of rare earths and their consequent downstream products. Somehow the surge in interest is not unlike the gold rush of the early years. Why is there such scramble to risk money in rare earths? What has ignited such explosive interests? Where are the opportunities? What are the risks associated with rare earths? Are the risks manageable? How can Malaysia benefit from this new growth industry? What should the strategies be for Malaysia? This report, produced by the joint Working Group of Academy of Sciences Malaysia (ASM) and the Majlis Profesor Negara (MPN), discusses all that and proposes some recommendations for the future. Evidently, many factors contribute to the global rush to invest in rare earths. The revival is unprecedented. One major reason has to do with the fact that the world demand for rare earths is projected to literally explode in the coming years. The other reason relates the price of rare

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earths which has become more attractive in recent years. This is projected to stay strong in the coming years in view of the prediction that supply may have difficulty keeping pace with demand. But why is there such optimism? Where is the growing demand coming from? There is expert consensus that a major driver of global rare earths demand is the forecasted boom in the green economy. However, what is driving the expanding consumer preference for green products? Climate change, admittedly, is a major reason. In climate change, there is concern that, unless appropriate actions are taken soon, the uncontrolled emission of the greenhouse gases, especially carbon dioxide, can lead to catastrophic consequences for the world. Another important driver of the green economy is the concern over the declining resources to meet global demand. With more than six billion people now and growing, the demographic pressure exerted on global resources including energy, water, food and shelter is worrying. The consumption pattern is simply unsustainable. The much quoted Stern Report from the UK has warned that, unless immediate steps are taken to reduce greenhouse gas emissions, it may create a costly impact on global Gross Domestic Product (GDP). Since energy use, especially fossil fuels, is a major contributor to climate change, greener options are being sought. Add to that the fact that the fossil energy resources of the world are not infinite, the need to seek alternatives become even more urgent. One option is to change to renewable energy sources. These include major possibilities such as solar, wind and biomass. The progress in technologies in such renewables has been commendable, and rare earth elements form an important feature of such technologies. Another option is to improve the efficient use of energy in transport, buildings and all the other energy intensive industries. Again, the technologies in energy

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efficiency rely a lot on the use of rare earths. These include applications in energy efficient lighting, reliable storage and efficient distribution. The growing demand for more efficient communication systems, not only in the world of business but also in defence and the military, is another significant driver of the global demand for rare earths. Mobility and miniaturisation, which feature prominently in the current specifications for telecommunication equipments, rely a lot on the deployment of powerful and efficient magnetic technology. Rare earths have also become a much sought after material in the latest magnets used in mobile phones, defence equipments and computer hardwares. With the rise in the global investments in smart cities and intelligent communities, the demand for such communication products will witness prolific expansion. This would inadvertently translate into a rising demand for rare earths. The value chain of the rare earths business involves mining, extraction, processing, refining and the manufacturing of an extensive range of downstream products. These products find wide applications in industries including aerospace, consumer electronics, medical, military, automotive, renewable wind and solar energy as well as telecommunications. In fact, the entire gamut of the high-tech industries depends on a sustainable supply of rare earths elements. The explosive demand in mobile phones is an excellent illustration of the massive potential that the rare earths business offers. In less than 20 years, the number of cellphones worldwide has reached a staggering five billion. Soon it may even exceed the global population!

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Admittedly, the rare earths business does pose certain risks. Top among the risks are the health and safety risks. The mining, extraction and refining of rare earths produce residues and wastes which carry health and safety risks. The residues from the extraction and refining are radioactive, while their effluent waste streams do pose pollution risks to the receiving rivers and waterways. However, as elaborated in a report by experts from the IAEA, there are technologies and systems available to efficiently mitigate such risks. It is also crucial that the risk management procedures are strictly followed and adhered to. This is where effective monitoring and surveillance throughout the life of such rare earths facilities is important.

RARE EARTHS INDISPENSABLE IN WIND POWER In the global search for renewable energy, wind power stands out as one viable option. This is especially true for countries where wind speeds are reasonably high. Unfortunately, not many places in Malaysia offer such high speed winds on a continuous basis. Sabah has been identified as one of the few areas which enjoy reasonably high wind speed. Notwithstanding that, scientists are actively researching to reduce the speed threshold for wind power. They say this would be possible if the weight of the wind turbine can be reduced and the power of the electromagnet increased substantially. Germany has laid down very ambitious goals for wind energy. By 2030, the country plans to have offshore wind farms boasting a total instaled output of 20 to 25 gigawatts. In order to meet this target,

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very large wind turbines with outputs of up to 20 megawatts will have to be erected on the high seas. At the moment, typical generators have only produced up to five megawatts. Scientists at the Fraunhofer Institute in Germany are working hard to meet such ambitious targets. In the 1990s, the benchmark was 250-kilowatt turbines on 30 metre towers. Now there are already in place two-megawatt turbines mounted on 100-metre towers. In off-shore towers, a rated output of five megawatts is now the norm. A recently concluded European project saw researchers agree that 20 MW wind generators are a realistic prospect. In fact, there is a good chance that the first of such very large generators will become reality by 2020. It is also important that such huge rotor blades are capable of withstanding the operational stresses to which they will be subjected to at sea. There is a reason why wind turbines are growing steadily in size to produce more output. Many governments are looking to renewable energies in order to cut their carbon dioxide (CO2) emission, as well as to reduce their dependence on fossil fuels. In the European Union (EU), the aim is to have around 20% of their energy coming from renewable sources by 2020 and offshore wind power will contribute to the target significantly. According to the European Wind Energy Association, the EU will have the capacity to generate 200 gigawatts of power off the coasts of Europe by 2030. Almost all turbine manufacturers would go for compact and lightweight constructions. The fact is that lean turbine design has a significant impact on the entire structure. The foundations and tower can be lighter because they have to support less weight. This makes it easier

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to erect the instalation as a whole. The rotor blades on the new generation of turbines must be able to withstand significant stresses. This is where new carbon fibre materials become indispensable. The only problem is that such materials are still costly to manufacture and fabricate. Researchers are working hard to reduce the costs for such materials. Weight reduction is only half the story if the ambitious targets of the EU are to be realised. The next challenge for scientists is to develop super powerful electromagnets to do the conversion to electrical energy. Judging by the developments in high powered magnets thus far, the incorporation of rare earth elements proves critical. The dilemma for the magnet manufacturers is the erratic supply of rare earth elements in the market. One reason for this is that there are not many suppliers of rare earths. In fact currently, China controls almost 95% of the world supply and the export from China is closely controlled through quotas. China wants to develop their own capacity for the production of super magnets. Manufacturers of such magnets outside China have been crying for certainty in supply. Yet demand is set to rise. This is the reason why they look forward to the supply from LYNAS in Malaysia. However, LYNAS has been bogged down by groups objecting to the business of producing rare earths in Malaysia, despite repeated assurances from experts that rare earth elements are safe to produce. It is clear that the rare earths industry present a new opportunity for Malaysia to tap into the expanding global demand for the materials. Unless those objecting come to their senses soon, this opportunity may be squandered.

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CHAPTER 9 BUILDING SYNERGY IN ASEAN SCIENCE ASEAN Economic Community will soon be a reality by 2015. This regional bloc of close to 600 million people offers massive opportunities for business of companies within ASEAN as well as partners of ASEAN. For many years, ASEAN has established a mechanism to collaborate in science. Under the banner of ASEAN Committee of Science and Technology, COST, various programmes have been implemented to bring together scientists from among member nations. Strategic plans such as the Krabi Initiative have been formulated to help move the cooperation. However, success has been limited. There are many areas of common interest which science can help develop solutions. One example is the problems with dengue and the haze pollution. The articles talk about the difficulties of fully maximising the benefits of COST.

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UNLEASHING ASEAN INNOVATION POTENTIAL The year 2015 is fast approaching. A significant milestone for ASEAN. The ASEAN economic community of 600 million will soon become reality. By then, a new trade protocol will come into force. Import duties on many products will be reduced. Some will be phased out. ASEAN businesses are already preparing for that day when they can access a market of 600 million. Joint venture partners from outside ASEAN are also eyeing on the action. All want a slice of the massive potential offered by the expected rise in consumption. These include car dealers, suppliers of food products, service providers and many others. 2015 is a turning point for ASEAN. The question is, will ASEAN become an important trading bloc of the world? Can ASEAN compete in a world market where winners are decided on their innovation supremacy? Innovation has emerged as an important investment in global business. ASEAN is no different. The talk about investing in science, technology and innovation has long become an agenda of political discourse among the 10 member countries. The ASEAN Committee on Science and Technology or ASEAN COST was earlier formed to anchor that agenda. Unfortunately, since its initiation, nothing concrete has materialised. In 2010, the group came out with a strategy called Krabi Initiatives, developed at Krabi. Under the Krabi Plan, a number of thematic tracks were identified. They are still talking about the action plans. Not much has been delivered but things are about to change. ASEAN COST will soon witness a transformation that will

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positively shape ASEAN’s innovation agenda in the coming years. A recent meeting in Bangkok promised to catalyse the change. Hosted by Nanotech Thailand, the meeting brainstormed on using grand challenges to drive innovation among ASEAN nations. Most member countries were represented at the meeting. A few did not come because of unfounded safety concerns. I found Bangkok normal with the usual traffic jams at peak hours. Apparently, the grand challenge approach is already practised in many developed economies. In Canada, the government has a company called Grand Challenges Canada. Fully funded by the Canadian government, the company has already made significant progress in implementing grand challenge projects, mainly focused on health. Some of the projects have partners including the Bill and Gates Foundation. One grand challenge which stood out was titled “Saving Brains”. As explained by Dr Singer, CEO Grand Challenges Canada, the project concerns brain development during the first 1,000 days of a child’s age. Apparently, science has confirmed that the most critical period in a child’s talent development is during the first 1,000 days. We have PERMATA, an equivalent initiative. What then are the grand challenges for ASEAN? A few comes to mind. The haze which has become common in the last few years poses serious health hazards to many parts of ASEAN. There is no reliable solution as yet. Not to mention the extreme weather disasters which have inflicted damage to lives and properties. Dengue which affects almost all of ASEAN continues to pose threats to lives. Efforts to develop vaccines have yet to succeed. Rural-urban migration has not shown signs of abating. Soon major cities of ASEAN will face issues of liveability and sustainability. Some cities already

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experience chronic transport and mobility difficulties. Managing the growing volume of wastes in cities has also become extremely challenging. No more land to dump wastes and strong objections by communities when the idea of incineration is ever sought. These coupled with issues related to rising urban poverty pose serious challenges for the cities of ASEAN. There is no doubt about the urgency to innovate. However, we need to have the right talent in science. Having the right talent to drive innovation is also a grand challenge for ASEAN. The waning interest in science among students needs urgent address. ASEAN should galvanise regional efforts to glamorise the scientific profession. There has been a suggestion for the establishment of the ASEAN University of Science, Technology and Innovation. This may be the right time to do it. There is no doubt that embracing the grand challenges is one sure way to unleash ASEAN’s innovation potential.

ASEAN SHOULD COLLABORATE MORE IN SCIENCE ASEAN is home to about 600 million people. Though there is still that disparity in income among the population, the middle class is growing. The rise in the middle class is the most significant factor driving demand in the region. Soon, the ASEAN Free Trade Area (AFTA) will become a reality. AFTA promises to bring about change to trade among member countries., AFTA is set to unleash new vigour in the intra-ASEAN trade come 2015. Many products will enjoy almost zero duty. Though trade is an important instrument of growth, leaders of ASEAN must not ignore innovation as a key driver of competitiveness. Yes, members of

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ASEAN do compete in the global business but there are areas where together, ASEAN can become a potent force in the global innovation-driven market. Take the palm oil business for instance. ASEAN member countries, especially Malaysia and Indonesia, control more than 90% of the global trade. There is no denying that companies from both countries compete for a share of the world market. As long as competition is healthy, it motivates business excellence. It is a win-win situation for all parties. The problem often arises during instances when competition turns unhealthy. One example concerns the constant juggling of export duties on crude palm oil. On most occasions, the decision to change the duties would benefit importing countries more. It is time ASEAN comes to some strategic consensus to formulate more win-win duty regime for their palm oil business. That is what the European Union (EU) have been doing all along to safeguard the trade interests of all its member economies. Why not ASEAN? The rise of the palm oil industry in both Malaysia and Indonesia owes a lot to the wise investments in science. Scientific research has helped uplift the yield profile of palm oil through various breeding programmes. It is also the investment in scientific research that has helped improve palm oil processing including the extraction and the modification of palm oil properties for various applications. All such investments in science have helped make palm oil not only more competitive, but also has expanded the use of palm oil in various products. They have all helped widen palm oil’s market access. It is understandable if Malaysia and Indonesia do not fully collaborate in such areas where they compete against each other.

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However, there are areas where the position of palm oil itself is threatened by the other edible oils. This is where collaboration in science can help both Malaysia and Indonesia defend the market interest of palm oil. One good example is the constant harassment by western non-governmental organisations (NGOs) on palm oil’s sustainability standing. The critics have constantly discredited palm oil’s performance on sustainability without offering truly credible scientific evidence to support their claims. Many in the Malaysian palm oil industry have likened such harassment to the apartheid era. This is because the white soybean oil has been spared from any form of sustainability interrogation by the same NGOs. Isn’t that a sickening form of discrimination on the ground of colour? Palm oil is only one example, but there are other common challenges for ASEAN member countries where collaboration in science is seriously overdue. These include finding scientific solutions to the haze problem, developing an effective vaccine for dengue fever and other unsolved diseases of the tropics, research and development (R&D) in energy, water and food, and building the science data base for tropical biodiversity. As population grows and urbanisation increases, problems related to water, transport, energy and wastes will emerge as major issues. Most of the solutions lie in science. ASEAN member nations should galvanise their talents in science to together develop sustainable solutions. Over the years the ASEAN Committee on Science and Technology have developed plans in both fields. Such plans would not mean much unless put into action and it require commitments by member countries on funding and other support. ASEAN may want to look at the models on science collaboration adopted by the European Union(EU), with some

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adjustments of course. Unless that is done, then all the plans developed will remain locked in the wisdom of the planners!

SCIENCE TO HELP BRIDGE ECONOMIC DIVIDE ASEAN will soon become an economic bloc. The dream of a free trade connectivity among member nations will soon be a reality by 2015. It has just been announced that bilateral trade between Malaysia and Indonesia may reach USD 30 billion by 2015. This will signal the beginning of a new era for ASEAN. While ASEAN is shaping up into another common market, the world has to grapple with many challenges; social, economic and environment. All such challenges pose serious threats to the global sustainability agenda. Climate change, for example, threatens food production, energy supply and water access. There is no viable solution in sight to date. Whilst, at the same time, poverty and social equity continue to haunt development planning. ASEAN has its own share of global problems. Climate change can negate much of ASEANâ&#x20AC;&#x2122;s development agenda. The fact that member nations are at differing levels of socio-economic progress will further complicate the regionâ&#x20AC;&#x2122;s strive to be an economic force. Some countries are relatively rich by global standards, while many still struggle to escape the poverty trap. The so-called bottom-of-the-pyramid is still a significant part of the 600 million consumers of ASEAN. Once properly mobilised and empowered with purchasing capacity, the ASEAN community can be a significant force in global demand. ASEAN is looking at science to close the gap.

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The ASEAN committee on science and technology (COST), established about three decades ago, recently found new vigour. It has recently put together a new recipe to deploy science, technology and innovation (STI) as the instrument to help ASEAN mitigate the risks posed by the global challenges as well as capture the new emerging opportunities. ASEAN COST recently developed some new initiatives for STI. Crafted in Krabi, Thailand, the new initiatives will form the backbone of STI programmes which will chart the future development of the ASEAN economic bloc. Operationalising the initiatives will be the challenge ASEAN needs to work out. The Krabi Initiatives (KI) propose eight thematic tracks. These are innovation for global markets, the digital economy, green technology, food security, energy security, water resource management, innovation for life and biodiversity and health. KI also identified five paradigm shifts including youth-focused innovation, bottom-of-the-pyramid focus, STI for green society, STI enculturation and public-private partnership platform. This means science and innovation should not be just academic-centric. All will have to embrace STI if we are to make a success of it in pushing socio-economic development. There is no denying that STI can help ASEAN build global competitiveness and effectively participate in the growing world market for low carbon green products and processes. Accessibility and affordability of ICT is crucial in this increasingly digital age. Investments in the support broadband infrastructure will make the difference that ASEAN seeks to fully exploit the power of digital technology and compete. Similarly, STI can be the weapon to achieve energy, food and water security. It will make these three available and accessible at

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affordable pricing for all. We shout a lot about the fact that the ASEAN region is among the richest source of biodiversity, both land-based and marine. STI will not only help sustain that resource but also allow us to harness the wealth offered in a manner that would not harm them. Evidently, in ASEAN there many divides which need bridging. There is the economic divide between member countries. The urban-rural divide ineach country also presents challenges in education and access to basic facilities. We are of course, familiar with the digital divide. We need to find ways to close such gaps if ASEAN is to emerge as a powerful economic bloc which will eventually benefit all member nations. STI through the KI can help ASEAN realise this. We should make sure the initiatives work. We need the right mechanism. The aspirations of the KI will be delivered if ASEAN member countries give it all the support needed. We may need a new financial modality. It is time ASEAN gives a higher priority to STI and emerge as an economic coalition.

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CHAPTER 10 SCIENCE AND THE ENVIRONMENT The environment is under serious threat as the world makes economic gains. This is because the planning for economic development seldom takes into account the impact on the environment. Again, finding solutions to environmental woes would involve looking at science. Articles alluding to the many issues of the environment are published to raise public awareness on the need for change. Change in the way we deal with wastes and their proper disposal. The hope is that the opinions offered would reach the ears of policy makers and consumers alike so that the necessary remedial actions are taken.

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DEALING WITH RISE IN ENVIRONMENTAL CONFLICTS Environmental disputes have become increasingly common nowadays. The rise in such disputes have a lot to do with the growing public demand to safeguard the environment. Such concern has become a major factor in driving public protest over any activity which can be potentially detrimental to nature. In fact, studies have shown that environmental conflicts have emerged as key issues challenging global security. It has been reported that environmental crisis and problems are widespread and increasing rapidly. Common sources of such conflicts include threats to biodiversity, air quality, forestry, water, land and resource management. Climate change, which is now hailed as mankind’s common enemy, has been a cause of tension. Its impact on environmental conflicts has also been documented. There are many definitions of conflicts. The African Centre for the Constructive Resolution of Disputes defines conflicts as “A state of human interaction where there is disharmony or a perceived divergence of interest, needs and goals. There is a perception that interests, needs and goals cannot be achieved due to interference from the other persons”. Such conflicts have remained a relatively neglected field of research. There are some universities that have initiated programmes to study such conflicts. The University of Queensland in Australia anchors a centre on conflict resolution in the mining industry. Many believe such conflicts will continue to rise as the growing world population fight for scarce resources. The world

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population will soon pass nine billion mark in a matter of years. At the same time, global economic output is expected to quintuple. As a result, the scarcities of renewable resources will rise sharply. High quality agricultural land may drop. The degradation of rivers and other water resources may also increase. Not to mention the decline of fisheries. Common conflicts centre around biodiversity, patent rights, coastal zone conflicts, air quality, noxious pollutants, land conflicts due to scarcity and ambiguous land rights, water conflicts where countries share rivers, droughts and water disputes also linked to food security since agriculture uses a lot of water. Poor communities are particularly at risk since they are exposed more frequently to such shocks. Moreover, they do not have the necessary resources to cope with such risks. Experts believe the world must therefore develop poverty reduction strategies consistent with resource conservation. Competition for finite environmental resources, divergent attitudes and beliefs as well as institutional factors trigger and exacerbate such environmental conflicts. Climate change is increasingly being called a security problem because it may increase the risk of violent conflicts. Another outcome is environmental migration. Studies have predicted that at least one billion people will be forced from home as a result of climate change. But how do we manage such conflicts? Theories are abound on the fact that management of such conflicts would involve information management and the utilisation of knowledge. Often times such conflicts are pursued in courts for settlement. However, many such legal cases get dragged on over long periods, thus negatively impacting the running of the businesses in question. Such approach can be costly in the long run. Now experts

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have begun experimenting with new mechanism to resolve such disputes. In the West, mediation has recently emerged as a powerful and effective instrument. It is still comparatively new in this part of the world. However, with the successes documented in the developed countries, there is no reason why it cannot find use here. In Malaysia, the Malaysian Mediation Centre (MMC) is one such body. Established in the year 1999, MMC has been promoting mediation as a means of alternative dispute resolution. There are plans to establish similar centres in the other states when the need arises. There is also a book written on the law and practice of mediation in Malaysia. It covers a wide range of subject matters such as civil, criminal, commercial, matrimonial, labour, negligence claims and land disputes. It highlights current issues affecting the law and practice of mediation. The underlying argument is that Alternative Dispute Resolution is the best and most expeditious form of resolving disputes. Mediation, according to the authors, can well help reduce the delay, expense and backlog of cases pending in the Malaysian courts.

THORIUM TO RID CHINA OF HEALTH THREATENING SMOG Ever visited China lately? A visit to Beijing will definitely leave a poor impression of the air quality there. Here in Malaysia, we complain about the haze that only appears during certain periods of the year. In Beijing, residents have to put up with even worse haze on a daily basis. The Chinese government is long aware of this health threatening air quality situation but finding solutions is not easy. Why? The

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country has to develop its economy to deliver social well-being for its people. Energy is always central to economic development and in China, coal is currently the most cost effective fuel for power generation. At the same time, with the ever increasing number of cars on China’s many highways, pollution arising from the emission of fossil fuel powered cars is almost unstoppable. There is no doubt that coal powered electricity generation and fossil fuel powered cars provide a lethal combination to produce the smog reminiscent of big cities like Los Angeles and London in those early days of air pollution. How does China plan to cope? It has been reported that China is actively looking at nuclear power as an option but not just the conventional Uranium based nuclear energy. China is investing in Thorium nuclear energy. Reports have surfaced that scientists in Shanghai have been told to bring early fruition to plans to build the first fullyfunctioning Thorium reactor within 10 years, instead of 25 years as originally targeted. China is not alone in the race to commercialise Thorium based nuclear power. The country faces fierce competition from overseas. Evidently it is not an easy task. Some have described a situation where researchers are working under “warlike” pressure to deliver. Proponents of Thorium power are elated with the excitement shown by China. Some hail the concerted move by China as doing the world a big favour. They may even help to close the era of fossil fuel dominance. The West risks being left behind, still relying on the old Uranium reactor technology that was originally designed for US submarines in the 1950s. What is publicised is that the technology promises to be safer, cleaner, and ultimately cheaper than Uranium. It is also much harder to use in nuclear weapons,

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and therefore limits the proliferation risk. There are ample supplies of Thorium around the world. Even Malaysia has large deposits of Thorium. Some big quantities are unfortunately already buried, since itis also viewed as a hazardous by-product of rare earth metal mining. It has been reported that China’s Thorium project has been launched as a high priority. China may have enough thorium to power its electricity needs for “20,000 years”. The project has begun with a start-up budget of USD350 million. They have recruited 140 PhD scientists from the Shanghai Institute of Nuclear and Applied Physics. They plan to have 750 staff by 2015. According to reports, the Chinese is opting for a molten salt reactor. This was first proposed by the US nuclear doyen Alvin Weinberg. Apparently, it is best adapted for Thorium. This in quite different from Thorium initiatives in the West which still rely on light water technology used in Uranium reactors. One significant advantage of Thorium power is that it can be done on a much smaller scale, at atmospheric pressure, without the need for the vast structures common in Uranium reactors. The Americans would have been first. Apparently, the Oak Ridge National Laboratory in Tennessee actually built a molten salt Thorium reactor in the 1960s. It was, however, shelved by the Nixon Administration. This was because of the prevailing cold war, where the Pentagon needed Plutonium residue from Uranium for nuclear bombs. The Thorium blueprints eventually gathered dust in the archives. A NASA engineer did publish it but was largely ignored by the US. China took notice and decided to evaluate the new technology. The rest is history. The Chinese are currently building 28 standard reactors. This is by far the biggest nuclear push in the world. This is not only to break away from dependence on imported fuel but more important also to fight pollution.

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RECYCLING DESTINED FOR BIG TIME Most businesses start small. Take recycling for example. Remember the 50s and 60s. Nobody talked much about pollution then. The word “sustainability” was not spoken of much either. But some form of reuse and recycling was already there. I remember as a child we used to scour the neighbourhood for disposed F&N bottles. When Coke became popular, we looked for discarded aluminium cans. I do not remember how much we earned selling the stuff to the neighbourhood coffee shop. But the money was enough to pay for some entertainment at the movies. At that time, RM1.50 was enough to cover the costs for the matinee show, including even a generous serving of “Nasi Sumatra”. That was the time when we were still a low-income economy. It is different now. Recycling has evolved into a thriving business. If one drives around Ampang, one cannot help but notice many shophouses being used as centres to sort and separate out discarded “rubbish” for recycling. The “rubbish” which often is made up of paper, plastics and metals is routinely sent by “semiprofessional’ collectors to the centres. In Ampang, the collectors are mostly either Bangladeshis or Myanmarese. They use energy efficient and non-polluting trishaws to transport their daily collection to the sorting centres. Apparently, the collectors make fairly decent living from the vocation and the centre owners also make good money. They drive luxury cars to work. Some of them own posh houses proportional with a high income. Their jobs, however, involve dealing with the not so clean environment which many ordinary Malaysians would normally shy away from. The so-called “rubbish entrepreneurs” show that there is money in wastes. Many believe the business is going to get bigger.

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Talking about wastes, all the signs point to a growing problem for the world. It is estimated that around 60 billion tonnes of raw materials are used worldwide every year. Demand is predicted to rise to 140 billion tonnes by the 2050. These resources are finite. Where is the world going to obtain such massive amount to feed the growing world demand? A major source of raw materials is, of course, the increasing amount of wastes the world produces. There is now serious thought to develop technologies to make possible systematic recycling of such wastes. Scientists in many countries are now frantically working to develop such high technology to recover high value materials in the electronic wastes or the e-wastes. In Germany alone, they have estimated that there are around 72 million old and unused mobile phones lying around. Each phone contains approximately 250 milligrams of silver, 24 milligrams of gold, nine milligrams of palladium and nine grams of copper. The total value has been estimated to be about 100 million euros! Recovering them will translate into big business. In the future, most of the wastes will be produced in the cities as more people move away from the rural areas in search of job opportunities and better infrastructure. Not to mention modern amenities. Rural urban migration has come to be recognised as a growing and almost unstoppable phenomenon in most countries of the world. It is especially rampant in the developing nations where the gap between rural and urban infrastructure is miles apart. As the urban population grows, the amount of wastes generated will also escalate. It has been reported that in the Greater Kuala Lumpur and Klang Valley alone, the generation of solid waste is expected to grow from 10,000 tonnes per day to 17,000 tonnes per day by 2020. With the limited sanitised landfill capacity available, safely disposing the wastes will become more

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problematic. This is further exacerbated by the fact that technologies such as incineration, which is known to be widely practised in developed countries, face stiff public opposition here. There is need to increase the recycling rate beyond the current low of 11%. With better technologies, the amount of valuable untapped resources which lie hidden in such wastes can be efficiently and effectively recovered. There is no denying the fact that waste recycling has all the potential to become a major global industry in only a matter of years!

INCINERATING GARBAGE BEST OPTION Garbage disposal has become a thorny issue. While the volume keeps growing, the landfills to accept the wastes have become scarce. This is especially true in the urban townships. Land close to the urban centres is not only limited because of development, but has also become more expensive. Disposing the garbage further away from the townships is not economic because of the transportation costs. It is not acceptable to have dumpsites for the garbage. The landfills have to be properly designed and operated to avoid groundwater contamination as well as to mitigate their potential fire hazards arising from the flammable gases such dumpsites produce. It has been reported that the pollution problems of the Sungai Balok near Gebeng Industrial Estate are attributed to an improperly managed landfill rather than the chemical industries located there. This is not surprising since a recent study showed that most of the landfills in the country are not designed and operated as sanitary landfills. Sanitary landfills would have proper control on the leachates and the gases.

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In many developed countries, the use of incineration to handle municipal garbage is widespread. Yes, as with most technologies, there are risks with incineration. But with proper measures in place, such risks are not insurmountable. Here in Malaysia, garbage incineration has somehow become a taboo. This has a lot to do with misinformation. It is made even more complicated when you have groups out to score a point. The opposition to incineration has a lot in common with the recent protests over rare earths projects in the country. A lot of misguidance by irresponsible groups. At the same time, these same groups talk about bringing the country to the next level of development. What a load of hypocrisy? It is therefore heartening to learn that the government has recently announced the decision to reconsider the use of incineration to handle the mounting garbage volumes coming from the urban areas. Here at the Academy of Sciences Malaysia (ASM), we have an active taskforce appointed to develop solutions for our many environmental challenges. We are ready to contribute and provide professional support to the government on the deployment of incineration system for garbage disposal. In fact, in many developed countries, the incineration process is also linked to energy production, especially electricity. This will also help alleviate the growing concern over electricity supply in the country. In order to make the incineration initiative a success, it is imperative that the public is actively engaged. There is a need to dispel all the unfounded fears among the public at large. Again, ASM is ready and willing to help the government.

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SUSTAINABLE DEVELOPMENT; LESSONS FROM CAMERON HIGHLAND Cameron Highland was in the news recently but not for the right reason. Instead of its usual portrayal as a tourist haven, this time around the story was about a disaster which could have been avoided. A disaster which has resulted from manâ&#x20AC;&#x2122;s own failings. The waterways which were supposed to absorb the sudden release of dam water were heavily silted and could not cope with the deluge. The disaster in the form of mud flows was imminent. The pictures which were splashed all over the media network, no different from the tsunami which wreaked fatal havoc in Acheh in 2004 or the Fukushima debacle in 2012. Houses were destroyed. Cars were literally squashed. Casualties included three deaths and one still missing. It was a sad day for the people in the affected area, many lost their belongings and their properties were destroyed. In fact, all Malaysians mourned that day. Who knows? Unless we learn from that unfortunate incident, it can happen again anywhere. There are lessons to be learned from that catastrophic day in Cameron Highland. Lessons which we should use to guide future development in areas with similar topography. Only a few weeks ago we were alerted to the fact that the tourism industry in Cameron Highlands is affected by the illegal clearing of land for agriculture activities, which also adversely impacts the environment in the area. Natural Resources and Environment Minister Datuk Seri G. Palanivel, who also happens to be the MP for Cameron Highland, said there had been a decline in the number of local visitors and tourists

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from foreign countries like Singapore, South Korea, Taiwan and Japan to the highlands. He admitted that illegal clearing of land is a big problem for the residents of Cameron Highlands. He further urged non-governmental organisations to play their role in helping to control the situation. Everyone agrees there has to be a balance between economic pursuits such as agriculture and tourism and preserving the environment. At the end of the day, if the ecosystem is compromised both agriculture and tourism cannot sustain. Worse still, the safety of the people may be compromised eventually. The problem is agriculture in Cameron Highland contributes over RM2 billion worth of exports every year. It is big business. It is not easy to limit further expansion in the cultivated areas. Therefore, the rampant encroachment on environmentally sensitive areas has proceeded almost unabated. As they say, greed will always rule. It has been reported that for the past 15 years, land clearing has continued unabated in Cameron Highlands but never before on such a large scale as in recent years. The residents of Cameron Highland inadvertently bear the brunt of the environmental destruction, including contaminated drinking water and polluted rivers. In almost all the villages stretching from Ringlet, Bertam Valley to Kampung Raja and Blue Valley, risk of landslides are real. The situation is not helped by the fact that temperatures in Cameron Highlands have increased. In the early days, Malaysians would adjourn to Cameron Highland to get a feel of the English weather. This is no longer the case. Some blame the global phenomenon of climate change for the warm weather but environmentalists also take offence on the rampant illegal clearing of land. There have been calls for

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a reprieve on the agricultural expansion in the highland. Unfortunately, such warnings were not heeded. Now that disaster has struck, as usual, promises of remedial measures are made. The Forestry Research Institute of Malaysia has been asked to carry out reforestation to keep Cameron Highland cool. A number of departments including the Department of Environment, Drainage and Irrigation Department (DID) and Forestry Department have been tasked to carry out efforts to rehabilitate and preserve the environment in Cameron Highland. These measures are well and good and should also be considered for similar areas in the country waiting to experience a repeat of the calamities in Cameron Highland. Experts on disaster prediction have cited the Lojing Highland in Kelantan as a case to be closely monitored. Otherwise, the lessons of Cameron Highland will remain unheeded! That would be sad day for sustainable development.

ENERGY FROM WASTES - THE HIGH TECH WAY Waste have become a major global issue. They not only smell but they also pose serious problems to the environment. We often experience this during festive breaks when garbage is left uncollected for days. The smell can be nauseating. Apart from being unhealthy, not to mention unhealthy, it can also attract all kinds of disease spreading vermin. The disposal of untreated waste from industries and households is also known to pollute rivers and waterways. There have been many reported cases of this. Some waste material contain toxic components which can be potentially hazardous. One that has been much publicised is the mercury pollution incidence reported some years

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back. It led to the infamous Minamata disease in Japan. There have also been reported cases of serious ground water contamination by heavy metals coming from waste. Many studies have shown that the garbage problem is going to get worse. For a start, the amount of waste generated is increasing by the day. With the growing rural-urban migration, many towns and cities now have reported massive increase in the volumes of household waste. One study has shown that in Malaysia, the local communities generate close to 20,000 tonnes of domestic waste per day. The amounts per capita vary from 0.45 to 1.44 kg per day, depending on the economic well-being of the areas studied. The management of municipal solid wastes (MSWM), for example, has taken up much of the revenue generated by local authorities in the urban areas. It has been reported that on average, 50% of the municipality operating budget is spent on MSWM and of this, 70% is spent on the collection of wastes. Not only that, the traditional way of disposing wastes by simply burying them cannot go on for long as land becomes scarce. New approaches will have to be developed and they have to be the ones that do not require much land area. In some developed countries, incineration is widely used. This has become a controversy in Malaysia as people see more negatives than the positives in incineration. A major worry, as demonstrated in a recent attempt to introduce wastes incineration in the Klang Valley, concerns the emission of dioxin and other health-threatening gases. Incineration, on the other hand, is widely used in Japan, where land is a major constraint. With proper maintenance, incineration is an attractive option in waste disposal. But in Malaysia, good

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maintenance is still a struggle. We can see evidence of this in many public amenities where poor maintenance has changed many such projects into white elephants. Lately, however, there has been some advancement made in the waste incineration technology. The technique involves tearing the waste into their constituent atoms using electricity. Proponents of the technology claim it is clean and might even be profitable. The technology essentially uses electric plasma torches. These are devices that heat matter to a temperature higher than that of the sunâ&#x20AC;&#x2122;s surface. The torch is actually a pair of electrodes, usually made from a nickel-based alloy. A current between the two electrodes turns the surrounding air into plasma by stripping electrons from their parent atoms. When fed with chopped up wastes, the intense heat and the electric charges of the plasma break the chemical bonds in the waste turning them into vapours. The vapours contain two main gases; carbon monoxide and hydrogen. Both are potent fuels. Metals and other inorganics in the wastes fall to the bottom of the reactor chamber as molten slag. The slags find potentially wide use in building and road construction. Actually, plasma incineration is not new. The use of electric arcs has been around for a while now. But the early plasma torches were not noted for reliability. Thanks to research and development (R&D), things have improved significantly. For example, the quality of the nickel alloys has improved. This allows the torches to work continuously. Furthermore, through developments in computational fluid dynamics, the rubbish going into the process can be mixed optimally to maximise the production of the gases using the least input of electricity. The latest plant to exploit this technology will be built in Florida, USA.

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Designed to be fed with waste from local households, the plant will provide electricity for more than 20,000 homes. The project is expected to make enough money for the company to service the project loan plus an attractive profit. The gases, apart from generating electricity, can also be fermented to produce ethanol for use in cars. In a world now gripped by the fear of global warming and environmental degradation, the new plasma technology should be a welcome change. Moreover, with the recent difficulties experienced in Japan on the dangers of nuclear power plants, such development in plasma technology should justifiably be an option which deserves serious consideration. In fact, with increased investment in R&D, there is no reason why there cannot be further improvement to the technology. What better technology to have then one which not only solves the waste management issue but also produces clean climate-friendly energy for the world? This is the kind of innovation that we in Malaysia should pursue if we are to tap on the growing world demand for green technology. Undeniably, it is only through such innovations that Malaysia can eventually reach the high income targets that the country aspires. There is no other way!

RETHINK BUSINESS MODEL FOR SEWAGE It is an accepted fact that cities of the world will continue to grow. Rural urban migration has not slowed down. It is especially rampant in the developing nations where rural living is not as preferred as city life. There is not much employment in the rural areas compared to the cities. Add to that the bright lights cities offer, we would understand why

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the rural folks rush to seek a better life in urban areas. It is therefore unavoidable that cities will be burdened with more people. Inadvertently, this would create more pressure on the cityâ&#x20AC;&#x2122;s infrastructure. There will be no end to road congestions despite the cities adding new highways. Public transport will also continue to be overloaded and the amount of waste that has to be managed by cities will not stop rising. How can cities better deal with such pressures? One type of waste which requires effective handling by the cities is the sewage. Sewage is generated by households and institutions such as hospitals, hotels and the other workplaces. Unlike the other material waste that households generate, sewage handling calls for a totally different approach. They cannot be loaded and transported on trucks the way the other garbage is handled. They in fact cannot be seen being moved around. Instead, they have to be moved by underground sewers to the treatment centres. Their disposal not only has implications on river pollution but they also have health consequences. Sewage is often loaded with microorganisms which can lead to serious diseases. This came to light recently in the Penang case where analysis of the Batu Feringgi beach water showed serious contamination by the deadly E. Coli bacteria. The only probable source of E. Coli is untreated sewage. The current business model for sewage companies is to provide a service to the community. The companies would treat the sewage for safe disposal. The community is expected to pay for that service. Unfortunately, more often than not, households hesitate to pay. The popular method for treatment is using biological systems. This is where the organic materials which comprise major components of the sewage are fed to a mix of microbes which convert the sewage

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organic pollutants into carbon dioxide, water and solid sludge. Solid separation is achieved more often by gravity clarifiers. The treated water which has to meet the discharge standards of the Department of Environment is then allowed for disposal into rivers and other waterways. The sludge solids are often dewatered and dried before they are carted away to an approved disposal site. The disposal site is often a sanitary landfill. This model of business has been practiced for years in most countries of the world. Is there a better model? Admittedly, the current business model presents many challenges for sewage companies. One major challenge involves payments for the service. Collections have been difficult. Households feel they are not under any pressure to pay up. The reality is once the stuff is flushed down the toilet, what happens next is of no concern. Unlike water or electricity, households do not face threats of supply cuts if they do not pay for sewage service. Other challenges include the escalating costs to treat the sewage, as well as the high costs of disposing the sludge solids. It is time to think of a new business model. It may be no longer be tenable to just operate as a service company. Sewage enterprises must embrace a new business strategy where the sewage is considered a resource rather than just providing service for treatment. There are new technologies available to process the sewage to generate energy, fertiliser and water. All three can be the revenue source for the company instead of totally relying on payments from households. In the new business model, households which pay up automatically become shareholders of the business. This way payment difficulties will no longer be a challenge. Instead households will willingly pay up knowing that they are investing. Once the revenue streams start flowing, they will also be receiving dividends. It is a win-win business model.

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CHAPTER 11 MANAGING THE SCIENCE OF WATER Water is always a contentious issue. Increasingly, with the advent of climate change coupled with the growing demand, water has been under much stress. Pollution of water sources has rendered a reduction in supply. Some countries have resorted to taking water from the sea using the latest desalination technologies. Water has given rise to a number of border disputes. In fact, there are reasons to believe that water may be the next reason for global conflicts. This is aggravated during occasions of drought brought on by the cyclical weather patterns. These articles focus on water issues in Malaysia.

EL NINO, A GAME CHANGER FOR WATER? We have just gone through a brief encounter with a water situation which left most people complaining and sweating. Now we are told of another possible bout of water shortage with the onslaught of the infamous El Nino. According to weather experts, the global weather phenomenon should rear its ugly head again around July. This time it may last up to three months. The prediction is that the drought it brings may be worse than the recent drought encounter we had. Fellows at the Academy of Sciences Malaysia (ASM) who specialise in water are again voicing out against the nation’s failure to pursue a longer term strategy to manage the country’s water resources. More often than not we have been reactive rather than proactive. However,what exactly is El Nino? Why are people so scared of this weather change which has been happening all the time in its usual cycle? Is it going to be different this time around? The term El Niño is Spanish for “the Christ Child”. It was originally used by fishermen along the coasts of Ecuador and Peru to describe a warm ocean current that typically appears around Christmas time and lasts for several months. This time, however, it will be unleashed before Christmas. Fish are less abundant then. So fishermen often take a break to repair their equipment and spend time with their families. It is not very different from the fishing communities in Kelantan and Terengganu during the North East monsoon season. In some years, however, the water is especially warm and the break in the fishing season persists longer. During the past 40 years, nine El Niños have affected the South American Pacific coast. The usual weaker ones raised sea

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temperatures only one to two degrees Fahrenheit. They had only minor impacts on South American fisheries The stronger ones, unfortunately, like the El Niño of 1982 to 1983, left an imprint, not only upon the local weather and marine life but also on climatic conditions around the globe. Well, that is what we know happened in the countries of the Pacific Coast of Latin America. On our side of the world, the opposite happened. Instead of more rain, we have dry periods. For example, the severe El Nino of 1983 gave rise to the heatwave that led to the unusually extensive bushfires in Australia. In Malaysia, people in the palm oil industry have become all too familiar with El Nino. In 1983, the severe drought led to drastic decline in palm oil yields but the good side is it also led to a firming up of the palm oil price. There is now serious thought among the palm oil fraternity to explore the use of irrigation as standard practice in oil palm cultivation. This has become urgent considering the belief that the frequency of the El Nino is likely to double in numbers as the planet warms. This has been corroborated by new evidence developed by an international team of scientists. They have published their findings in the journal Nature Climate Change. The prediction is scary. There will be more extreme El Ninos in the coming years. Extreme El Nino’s occur when sea surface temperatures exceed 28°C in the dry eastern equatorial Pacific Ocean. The impact on the world can be extensive. The 1997-98 event alone caused USD35 to USD45 billion in damages and claimed an estimated 23,000 human lives worldwide. In Malaysia, though palm oil price may increase, the net impact is a substantial loss of revenue because of production shortfall. The country cannot afford any serious shortfall in revenue especially to

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the oil palm smallholders who make up a sizable portion of oil palm planters in the country. Their contribution to the economy especially in the rural areas is considered substantial. We can no longer deny the urgency of sprucing up the country’s water management strategy. Over the years, the Academy has submitted a number of advisory reports on water to the Government. In a nutshell, the recommendations that have been put forward can be summarised in a few key steps. First, manage water resources in an integrated manner. Second, minimise wastage by effectively managing demand. Third, reduce contamination by minimising preventable water pollution. Fourth, diversify the sources of water. Finally the fifth, invest in R&D to develop technologies which can reduce the cost of supplying water. Then, El Nino will be of less consequence to water!

INVEST IN DESALINATION TO CUSHION WATER WOES It was only about a month ago that parts of the country were inundated with severe flooding. In some states, the damage incurred was so bad that those affected declared the calamity as the worst they have ever experienced. We in the Klang Valley saw pictures of houses being totally submerged and cars abandoned. Now the situation is in complete reverse. Drought is upon us once again. Grasses have gone brown. No more green green grass of home. There have been reports of sporadic forest fires. Water storage dams have shown signs of drying up. Water levels have come down. Unless the rain comes soon, the prospects of water rationing are real. The weather experts are saying rain will only come around

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April. Scientists predict this cycle of wet and dry season is becoming more regular as a consequence of climate change. We all know what the impact will be if the dry period goes on for much longer. Supply to the households and industry will be affected. Reduction of palm oil yield will be seen a few months down the road. There was a time not very long ago when the state of Melaka experienced chronic water shortage. The tourism business was severely affected. Hotel occupancy dropped. It was easy to figure out why. Who would want to stay in hotels with dysfunctional toilets? The stench would have been unbearable. That was the time when it dawned upon those in authority that water scarcity not only creates problems for the households but can also negatively impact industries like tourism. In the case of Melaka, tourism is the state’s major revenue earner. In fact, one of the key forces of the state’s future growth is the tourism business. Any disturbance to the industry will create serious hiccups in economic growth. Is there a way out of such water woes? Can something be done to cushion the impact of such water shortage? Academy of Sciences Malaysia (ASM) has undertaken a number of studies on the country’s water management. A few reports have been submitted proposing a number of measures to better manage the nation’s water resources. The recommendations mostly revolve around an integrated approach to manage supply and demand. The studies have uncovered serious cases of pollution of our rivers making them less suitable for use as a water source. We are now preparing to submit a case for water to be another National Key Economic Area (NKEA). We believe that with water as a NKEA, a number of Entry Point Projects (EPPs) can contribute to the economic transformation that the government is pursuing.

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Most important of all, we need to reevaluate new water related technologies to augment supply. Such technologies may have been ignored before because of cost issues. Now, thanks to the research and development (R&D) invested in such technologies, they have become more attractive. Many water stressed countries have started investing in them. We, however, have yet to seriously look at them because we still believe we do not have much problem with water. However, as evident in the last few years, we do have frequent bouts of water shortage which have proven costly for the economy, tourism and agriculture. In fact, studies have also shown that the frequent water shortfall can negatively impact our hydropower. Desalination is one such technology which has gained traction because of significant improvements in performance and cost. Many countries have taken the decision to invest in desalination plants in a big way. Technological advancements especially in membrane filtration have contributed significantly to the growing interest in desalination. We are not short of world class membrane scientists either. At ASM, we have expertise in membrane among our Fellows just waiting to be tapped. Though we are blessed with plenty of rain, desalination can be a viable water source that can help cushion much of our water woes during times of drought. It should be treated as a strategic investment for the country. In fact if we plan it well, with the experts that are locally available, we can even position ourselves to be a global provider of desalination technologies in the future.

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BUILD A NATIONAL CENTRE TO COORDINATE WATER RESEARCH Many among the older generation would still remember the days in the 50s and 60s, when not everyone had piped water in their homes. The younger generation may be unaware. Every morning, we would adjourn to the community well for our bath. There, we took turns to draw cold water from the well. There was no hot shower to speak of. Even the soap was the same one used for washing clothes. The most popular brand was “Labour”. It was as clean as present day brands, except for the fragrance which was just the natural soapy smell. No sophisticated perfumery found in today’s bath soaps but we enjoyed the morning rendezvous nonetheless. That was also the time when the local news of the community was shared. More importantly, in those days, nobody thought that water would one day be a scarce resource. Everyone instead was convinced that we will never ever run short of water. Not in a country that is blessed with plentiful rain year in year out. Not to mention frequent flooding. How things have changed. Nowadays, we often read discomforting water shortage news in the country. This can be due to a number of reasons. There have been occasions when shortage was attributed to long spells without rain. Nothing much can be done about that, but there were also times when some accidental spills of toxic substances into a water source had led to the shutdown of water treatment plants, therefore, no water for the households. Not to mention disagreement over the need to add new water treatment plants. Experts predict the situation may worsen in the future,

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especially in city areas as the urban population continues to swell. Rural-urban migration is now a confirmed global trend. People everywhere would flock to the cities looking for better job opportunities. Unless proactive measures are taken, such cases of water source pollution may become even more rampant in the future. This has been confirmed in a recent report released by UNESCO. By 2025, it has been estimated that 60% of the world’s population will live in waterstressed conditions. A similar proportion will be without adequate sanitation. Securing access to safe drinking water for all and wisely managing this resource is therefore a high priority on the global sustainable development agenda. UNESCO hosted the Future Forum on “Global Water Futures 2050” at the UNESCO Headquarters in Paris. It was a future-oriented event. Renowned water experts from different parts of the world participated in dialogues which touched on the status of the world’s freshwater resources and the role of science as a powerful tool for sustainable water management. Presentation was made on the UN Global Water Scenarios Project, aimed at giving the global community a road map for the future of water in the world. The Forum also reviewed the global progress made towards the sustainable management of water resources using integrated approaches. The dialogues were used to better understand how investment and financing in water can lead to a more sustainable future and what the future global water scenarios could look like. This, however, depends on decision-makers in the governments and societies in the next few decades. The prime objective was to enable leading experts to share their views with representatives of UNESCO Member States, the civil society, media and the general public so as to raise awareness about global water issues. The conclusion

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at the Forum was disturbing. Water is heading for scarcity in the future unless technologies are at hand to mitigate pollution risks and improve water use efficiency. This means more research is needed for water. In Malaysia, water research is done by many parties. These include universities, public research institutes and some government departments. In view of the growing concern over the future of water in the country, studies conducted at the Academy of Sciences Malaysia (ASM) provide convincing evidence that we need better coordination of water research in the country. We need a national centre which will strategically plan and drive water related research in the country. The time is right for the establishment of Malaysia’s own National Water Research Centre.

WATER SCARCITY, A GROWING CONCERN OF POWER SECTOR Imagine a day without water. Not many would want to experience that. It is miserable going through a day without electricity. Water and electricity have no doubt become indispensable in modern day living. Life is impossible without water and intolerable without energy. The fact that the world must have both is undeniable. Here in Malaysia, there are already serious discussions about water scarcity. Selangor, for example, is contemplating bringing water from Pahang through an expensive tunnel system. This is despite the fact that we enjoy very high rainfall each year. Not to mention the frequent flooding. In Kelantan, the public has lamented for years about the quality of their piped water. This still remains unaddressed.

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What is the relation between water and electricity? Will reduced water availability impact energy? There is now growing evidence that as a result of climate change, some energy supply source will be curtailed because of problems with water. A recent study published in the ”Nature Climate Change” paints grim prospects of the electricity supply in the USA and Europe as a result of changing water temperatures due to global warming. Higher water temperatures coupled with reduced river flows in Europe and the USA in recent years have resulted in reduced production, or temporary shutdown of several thermoelectric plants, both nuclear or fossil-fuelled power plants. This has to some extent pushed up electricity prices, raising concerns about future energy security in a changing climate. Are we in the region spared from this? There have already been reports of reduced water flow negatively impacting our hydropower plants. It is a major issue in the US and Europe. This is because in the US, about 91% of their electricity comes from thermoelectric power. In Europe, it is only slightly less at 78%. Any disruption to plant operation is therefore a significant concern for the energy sector in both countries. As there is yet to be a solution to the warming of the world, the study projects further disruption to supply in the coming years. According to their analysis, there is a likelihood of a decrease in thermoelectric generating capacity of between 6% to 19% in Europe and 4% to16% in the US for the period 2031 to 2060, all because of the lack of cool water. The thermoelectric power sector is one of the largest water users in the USA. This now stands at 40%. In Europe, 43% of surface water withdrawals end up being used as cooling water in their thermoelectric power plants. Malaysia, I am sure, is not very different because we also rely heavily on thermoelectric power

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based on coal. According to the study, power plants that rely on “once-through cooling” are the most vulnerable. These plants pump water direct from rivers or lakes to cool the turbine condensers. Water is then returned to its source, often at higher temperatures causing problems for downstream users. This can adversely impact the river ecosystems. For example, the life cycles of aquatic organisms can be disturbed. It is a real paradox. Fossil fuel driven thermoelectric power plants are known to be a major emitter of greenhouse gases which drive global warming. Global warming raises the water temperatures of rivers and lakes, making it difficult to supply cool water to the power plants. It is as if the gases emitted return to haunt the power plants. Either we do away completely with thermoelectric power plants, look for new sources of cool water, or we design power plants which do not require water cooling. The problem is even renewables such as biomass would require cooling in their power generation system. Whatever it is, the issue warrants serious attention of researchers. One option is to switch to gas-fired power plants that are both efficient and use less water. It is clear water which serves as an important component of power plants. If the supply and character of water change, then the performance of power plants will be affected. The study which looks at 61 coal-fired and nuclear power plants in central and Eastern USA as well as 35 power plants in Europe, reinforcing the need for improved climate adaptation strategies in the power sector.

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MAKE WATER A NATIONAL KEY PRIORITY AREA IN THE ETP Water is now a regular feature in the media. Water rationing has become common nowadays. With the emerging El Nino dry period, many predict water shortage will worsen. Unless there is proper water rationing, the consequences can be painful. Water pollution is also being reported more often. This usually arises from the indiscriminate disposal of waste. Silt from the uncontrolled discharge produced at construction sites is another source of river pollution. Pollution of the water source would increase the cost of treatment. Understandably, the largest coverage on the water issue is devoted to the politics of water. This is where opposing sides of the political divide would hurl criticisms at each other hoping to gain political mileage and score political points. This is normal and to be expected. The Academy has made an assessment on whether water qualifies as another NKEA. What is known is that in order to be accepted as an NKEA it has to fulfil certain criteria. Since NKEA is a key element of the government’s economic transformation programme, one important requirement is that water should create the so called entry point projects which can attract private investment. In other words, water can be the source for business projects which can offer decent returns. The government can only facilitate. Of course, the interest to the government is that the projects should create jobs and contribute to the nation’s gross national income, (GNI). Are there water related projects which can deliver such value? After a few consultative workshops with the relevant stakeholders, there are good signs that water can be a

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viable candidate not only to be another NKEA but to be a National Priority Economic Area (NPEA). It is quite clear that water impacts most the nation’s economic activities. In the manufacturing sector, water is critical not only for cleaning operations but also cooling. In fact, in power generation using thermal combustion, the process cannot proceed without sufficient cooling water and at the right water temperature. A recent study by Vienna’s International Institute for Applied Systems Analysis (IIASA) has shown that the impact of climate change is already felt in such power plants in the USA and the European Union. Of course, insufficient water flow will also create problems for the hydroelectric power source. In agriculture, water is crucial. In fact, the available data show that more than 70% of the nation’s water goes to crop irrigation for rice production. This is true for the world. The bulk of the world’s fresh water is actually taken up by agriculture. Water is also a key element of the tourism industry. We all know tourism is an important revenue earner for the country. It is also a major employment provider. If we are to sustain the industry into the future, we need to pay special attention to water. Take the classic case of beach tourism products. We are all familiar with Port Dickson (PD), for example. At one time, PD was a big attraction especially among local tourists. This is because it is the only decent beach closest to the capital city Kuala Lumpur. There used to be a regular train service from KL to PD at one time. Sadly, pollution changed PD. As a result of the uncontrolled discharge of wastes from hotels and other amenities, the quality of the water was badly affected. This was made worse by the indiscriminate disposal of wastewater from ships plying the Straits of Malacca. Improvements have been made of late but such incidence goes to show that

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water quality can be detrimental to the tourism trade. This will become even more critical as we open up more ecotourism products in the country where water is a contributing product feature. The message is clear. From the many challenges and risks that water present to the economy, the Academy has made an initial find of many potential entry point projects that can be developed. These can become even clearer once we hold the Pemandu style stakeholders idea laboratories as is done for the other NKEAs. It is time we explore this as an initiative of the ETP!

IMPROVE WATER USE EFFICIENCY TO AVERT CRISIS Without water, we can only stay alive for at the most a few days. This is a scientific fact. This is also the reason why water is so crucial for our survival. In fact, it is much more tolerable to go without electricity than to endure water cuts. This explains why people often fight over water, seldom over electricity. Sometimes, water access can even be a matter of life and death. We are quite fortunate here because water shortage appears only on rare occasions. However, we should not take this for granted. The prediction is that as global warming intensifies, the occasional drought situation may become more regular and last longer. We, therefore, need to be ready with the necessary safeguards if we are to cushion the pain which comes with water disruption. Academy of Sciences (ASM) through its Water Committee has been actively looking at possible scientific solutions to the nation’s water dilemma. How can we better manage this important resource in a more sustainable manner? Do we truly

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practise the preachings of the Integrated Water Resources Management (IWRM)? It is supposed to be the reference bible for all water planners. The Academy’s studies have evaluated both the supply and the demand side of the water equation. For example, why is it that a country blessed with plenty of rain can run short of water? In fact, the country’s meteorologists often report the nation’s weather forecast on rain. It is very seldom that our weather report touches on temperature changes. This is understandable since our temperatures do not change much. Unlike temperate countries, ours remain within a fairly constant range. The studies have revealed a number of key issues and challenges for the nation. These require urgent attention. On the supply side, we have yet to resolve the high percentage of losses because old pipings have yet to be replaced. Replacing them requires massive investment. At the same time, such non-revenue water costs the country millions. Not to mention the impact on business and industry during times of drought. Many believe some wastage is a consequence of our water tariff which is still comparatively low. As they always say, when things are cheap we tend not to value them much. This is normal. There is no urgency to be more water efficient either. Pollution of our water resources is the other factor affecting supply. This is especially true for the country’s rivers. Through the uncontrolled discharge of both household and industrial wastes, our studies have confirmed that many of our rivers are seriously polluted. Rampant logging near water catchment areas is also to blame.

achieve better efficiency, we may not need to worry so much about supply. The studies at the Academy have confirmed that there are steps which can be taken to better manage demand. Take agriculture for example. Agriculture takes the largest share of the nation’s water. It has been estimated that agriculture alone accounts for more than 70% of the nation’s water demand. Yet, the water accountability in agriculture is almost zero. First, the amount used is not properly measured. Second, because it is free, the urgency to conserve is also zero. Such leakages need plugging. The effort to conserve water is still miniscule among households. This explains why we are among the highest per capita user of water in the world! The time has come for a paradigm shift in the way we manage our water resources. Water demand needs better monitoring. Water use efficiencies need to be improved. In order to achieve better water demand management, we also need to revisit the tariff structure. As it is, the urgency to conserve is almost nil. As demonstrated in many developed economies, effectively managing water demand is one sure way to avert water crisis.

There is concern that when we discuss water issues in the country, the emphasis has always been on supply. How we create new supply source? How do we divert supply and move water from one state to another? Not much thought is given on how to better manage demand. If we can

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CHAPTER 12 PALM OIL THRIVES ON SCIENCE Palm oil is a major industry in Malaysia. It provides much needed revenue and employment for the economy. The rural areas thrives on the production of palm oil but the commodity is not without its share of challenges and threats. Topping the list is the growing objection by some, mainly NGOs, for the expansion of oil palm planting. There is concern that future expansion may encroach into sensitive forest areas. This is where the understanding of science may provide the answer to resolve the conflicts. There is still disagreement on the estimation of carbon stocks and the release of greenhouse gas when forests are cleared to be planted with the oil palm. The science is still inexact. The articles below touch on some of the science issues of palm oil.

MORE JOIN THE PALM OIL BANDWAGON Malaysia made what palm oil is today. From a crop which was pretty much neglected and ignored, it now attracts investments from many convinced about its promising future. Despite all the unfounded criticisms by environmentalists and nutritionists, there is consensus among investors that palm oil is worth putting your money into. This must have been what prompted companies like Delloyd Ventures, Metro Kajang, Jaya Tiasa and Mamee-Double Decker to diversify into oil palm. It has been reported that Jaya Tiasa and Delloys have already seen the fruits of their investment reflected in their bottom lines. Mamee and Metro Kajang have only started planting in Kalimantan. All admit that oil palm has proven to be resilient which helps to support the cyclical nature of their other business. Mamee, however, sees palm oil as their upstream integration. Mamee is of course big in instant noodles manufacturing where palm oil proves to be the best for frying. This is because among the many edible oils, palm oil demonstrates the highest heat stability. Mamee recently announced they would invest RM20 million in oil palm planting in Central Kalimantan. Many new investors have opted for Indonesia because Malaysia can no longer offer big plots of land for plantations. Even in Indonesia, only Kalimantan still has the potential land banks for plantations. Land is also running low in Sumatra where Indonesian oil palm is mostly grown. Mamee now has 10,000 hectares of land in Central Kalimantan. They are expected to start planting on the first 2,000 hectares this year. They hope to complete planting the entire 10,000 hectares by 2015.

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Metro Kajang, on the other hand, acquired close to 16,000 hectares of land in East Kalimantan. Apparently, it is believed that plantations in East Kalimantan can produce on average 30 tonnes FFB per hectare per year compared to the 25 tonnes FFB yield achieved in Malaysia. This is attributed to the better soil and terrain environment in the region. The company expects to see contributions from its oil palm by 2012 but they are hoping for a return of at least 15% a year. For timber companies such as Jaya Tiasa and Ta Ann, oil palm cultivation no longer a move to diversify their earnings, given the limited production capacity of logs and timber products. Their efforts have paid off. For the financial year (FY) of 2009, contributions from oil palms were 39% of total group profits for Ta Ann. They are in fact confident that earnings from oil palms in the future may even surpass their earnings from the timber division. In the next five years, they expect their FFB production to rise to between 600,000 to 700,000 tonnes. The company now has 55,000 hectares of land bank with 26,000 hectares cultivated. About 16,000 hectares have already matured. They have a 60 tonnes per hour mill in Sibu and they are planning a second mill. This is expected to start operations in 2012. Jaya Tiasa is also delighted with the returns they get from oil palm. For FY 2010, the sector contributed RM19 million or 45% of the group’s total profit. It is another timber company which ventured into oil palm. They have close to 70,000 hectares of land for plantation, of which more than 52,000 hectares have already been planted. About 25,000 hectares have reached maturity. Even for auto parts maker, Delloyd Ventures, their love for oil palm has grown. Its acquisition of 15,800 hectares in Indonesia turned out to be a good deal. According to the latest report, 11,157

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hectares have already been planted, of which 5,818 hectares have matured. The revenue from oil palm grew from RM11.2 million in 2006 to RM43.8 million in 2009, a whopping 291%. All the above show that the oil palm has truly become nature’s gift to the world.

MALAYSIA AND INDONESIA BATTLE FOR LUCRATIVE PALM OIL BUSINESS Pakistan has always been a major export destination for palm oil. It has been among the few countries which import massive quantities of palm oil. It is now estimated that total palm oil imports into Pakistan may soon breach 1.9 million tonnes. The high consumption of palm oil is driven by a few factors including population increase, high per-capita consumption of oils, improving purchasing power and of course the growing preference for palm oil in Pakistan’s Vanaspati formulation. Vanaspati is the main end product for palm oil in Pakistan. The preference is motivated not only by palm oil’s better cost economics but also more importantly by palm oil’s nutritional advantages. Ever since the US FDA declared war on Tran’s fatty acid, manufacturers of Vanaspati and other solid fats products have increasingly moved to palm oil rather than deploy the hydrogenation route to harden soft oils such as soybean. In the early days, the battle was between palm oil and soybean oil. That was when the scientific evidence against trans fats was not known. But now, the war between palm and soya has been eclipsed by the bigger battle between Malaysian and Indonesian palm oil. Import

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of soybean oil has declined significantly. For the January to July 2010 import, the recorded decline was as much 64% compared to the same period in the previous year. Palm oil import declined by only an insignificant 7.5%. Total edible oil import, inclusive of soybean oil and tallow, declined by slightly more than 10%. CPO and RBD palm oil declined by 30% and 67% respectively. But the import of RBD palm olein increased by a massive 120%, which more or less made up for the decline in CPO and RBD palm oil. The shift to palm olein has been driven by cost economics. It has nothing to do with any change in consumption pattern. The Pakistani consumers have not, for example, changed from solid Vanaspati to liquid cooking oil. It is all about changing price differentials. They use RBD palm oil instead of olein so the price difference is more than USD15 per tonne. The current price differential is only between USD5 and USD10. It does not make economic sense to use RBD palm oil, which explains why the import of RBD palm olein has witnessed drastic increase. Currently, the market share of Malaysian palm oil stands at 97%. A number of reasons contribute to the escalating market share for Malaysian palm oil since 2008. In 2006, the market share of both Malaysia and Indonesia was at 50% each. In 2008, however, Malaysia’s share shot up to 70%. A major factor driving the shift in Malaysian palm oil is the signing of the bilateral FTA between Malaysia and Pakistan in 2008. That was the first FTA between Malaysia and a member of the OIC. As for Pakistan, it was the first FTA with an ASEAN country. Under the agreement, Malaysian palm oil imports enjoy a duty discount of 10% for 2008 to 2009 and 15% for 2010 to 2014. Currently, the import duties for RBD palm oil, RBD palm olein and CPO are Rs10,800, Rs9,050, and Rs8,000 per tonne respectively.

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But Indonesia is not giving up. It is also pursuing a similar arrangement with Pakistan. However, it is expected to only come into effect in 2011. Even then, it will have to start with a 10% discount which is still lower than Malaysia’s 15%. So, Malaysia is expected to dominate the market at least until 2014. After that the battle for control will resume. The only consolation for Malaysia is that Indonesian palm oil also carries a lot of Malaysian interest because many Malaysian companies have invested there.

PALM OIL NEEDS PRICE RECOVERY TO REGAIN CONFIDENCE It was only less than a year ago when palm oil was literally on cloud nine. It was the toast of the country’s economy. The price of crude palm oil (CPO) breached the RM4,000 mark to touch RM4,312 a tonne on March 3, 2008. Prices in fact stayed above RM3,000 for about seven months, an all-time record. Palm oil companies were dishing out big fat bonuses to their employees. Many were declaring handsome dividends for their investors. Oil palm smallholders were enjoying lucrative returns. Nobody then thought that palm oil prices would ever drop to unprofitable levels. In fact, most in the industry were convinced that palm oil price would never again dip below RM2,000 a tonne. That just demonstrated the overwhelming confidence many had in the palm oil industry. Events of recent weeks have however shattered that confidence. On October 24, 2008, palm oil prices plunged to a low of RM1,390 per tonne, a massive drop from RM4,000! Not so long ago, such a price level was still considered lucrative by past standards. That was when cost of production averaged around RM600 to

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RM800 per tonne. It is not true anymore these days. The production cost has since escalated drastically. A large part of the blame is attributed to the rise in fertiliser cost and fertiliser is a major component of production. Ever since crude oil price rose to more than USD140 per barrel, price of fertilisers has followed suit. Though in recent days crude oil price has dropped to below USD40, a similar drop is not seen in fertiliser price. Add that to the rise in fuel and labour costs, it is easy to understand the big jump in palm oil cost. The average cost of production for 2008 may have hit RM1,000 to RM1,200. Change in palm oil prices is always big news in Malaysia. This is because for many years now palm oil dominates Malaysiaâ&#x20AC;&#x2122;s economy, especially in the rural areas. The prosperity of rural Malaysia, for example, is almost synonymous with palm oil. Any bearishness in the palm oil market is seriously felt there. Everytime palm oil prices drop too much, oil palm smallholders get hit the hardest. This is because most depend 100% on their palm oil income. Though many attribute the current price drop to the financial turmoil that has adversely affected global palm oil demand, many believe there are other forces influencing the price movement. Apart from market demand, it is widely known that palm oil prices are also influenced by such factors as palm oil supply, changes in regulations on import and export, oilseeds demand and supply, speculative activities, crude oil prices and the global economic outlook, just to name a few. At this point in time, the global economic slowdown is the major force no doubt. With many not discounting even a repeat of the 1930s type of recession for the world, the focus now is on how to revive the confidence level and remove any lingering doubts among investors about the future of palm oil. Right now, doubts are aplenty. Many believe such apprehension can only be put to rest through a sustained price recovery.

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So, where is the palm oil price heading? Is the recent low price just another correction blip in the price chart? Or is the low price going to persist longer than usual? Though prices have recovered slightly since the low in March 2008, the industry is convinced that new measures are needed to bolster further increase. What then are initiatives needed to bring back prices to more reasonable and sustainable levels? The industry has outlined six strategic initiatives to help sustain remunerative prices for palm oil. These include creating biodiesel demand, better stock management, use the big discount on other oils to expand demand and continue to do aggressive marketing, resolve the issues on the environment and invest in branding. The biodiesel policies which have already been enacted should be implemented without any further delay. This new demand will not only help reduce palm oil stocks but can also be leveraged as a protection against low prices. During period of low prices, a good replanting strategy can be effective in regulating and reducing supply. This, in turn, can help prop up prices. It has been suggested that at an average replanting rate of 4% of total matured acreage per year, at least 600,000 tonnes can be taken out from supply. The industry must continue to undertake aggressive market promotion to capture the market from the more expensive oils. It needs to tackle the issues on environment now before being confronted by the industry. Last but not least is to invest in branding and brand support. Concepts such as certified and sustainable palm oil should be exploited. It is true what they say, â&#x20AC;&#x153;fortunes can change in the most unexpected waysâ&#x20AC;?. As in the case of the palm oil industry, that long spell of good fortunes on the back of high prices and bullish demand had to one day come to an end. Many in the industry did not expect it to happen so suddenly. So much so that the confidence

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in the industry which has always been strong was seriously dented. However, a recent conference held in Phuket, Thailand sent a strong message that despite the recent setbacks the future of palm oil remains bright in the long term and why not? Palm oil is the most economic edible oil to produce. This, together with its other nutritional and technical attributes, can never be matched by the other competing oils. With new developments in technologies and applications, palm oil’s global competitiveness can only get better. The Malaysian Palm Oil Board (MPOB) has been in the forefront when it concerns developing new products based on palm oil. Whilst the Malaysian Palm Oil Council (MPOC) has been instrumental in opening up new markets. With the industry always closely monitoring business changes, the industry is armed with the right recipe to face crisis in whatever form. Many believe with the measures spelt out earlier, there is no reason why the price recovery cannot happen soon. It is only through price recovery that palm oil can regain the confidence it has temporarily lost!

WILL PALM OIL SURVIVE CLIMATE CHANGE? This year in June, world leaders met again in Rio de Janeiro, Brazil. This Samba capital of the world again hosted a global discourse on the fate of the planet we all share. The first meeting there was held 20 years ago. The subject matter remained the same. What do we do about the state of the world environment which is increasingly under threat? A threat by us, mankind. Dubbed Rio+20, the meeting proved to be another platform for protests and pledges. Orators as usual had world attention with their rhetoric. Some were even repeats of the last meeting, because admittedly, nothing

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much has changed. Will Rio+20 be a turning point for the world? Or will it be another merry-making event? One thing is certain though. The world’s climate is definitely changing. The evidences put forward by climate experts are convincing. The trend in rising global temperatures can no longer be disputed. Melting of the Arctic ice is real. Extreme weather conditions have been occurring at disturbing regularity. Sadly, global greenhouse gas emissions have not been effectively arrested. Despite various attempts to police such emissions, international agreements on the mechanisms have not been successful. One encouraging development is that more are now convinced that the change in climate is attributed directly to the activities of man. Earlier sceptics have literally disappeared. Many reports have been published on climate change. One often cited is the United Kingdom’s Stern Report. This talks about the implications of climate change on the UK. Academy of Sciences of Malaysia (ASM), for example, has recently shared a report on “Climate Change and the Nation’s Water Resources”. This is, however, sector specific. Experts agree that the repercussions for the world can be devastating. It is even more worrying given the fact that the world population has not stopped growing. It will soon touch nine billion. This is bound to exert excessive pressures on the world’s resources. At the rate the world is consuming, some say we may have to look for another planet. While demand for food and energy is rising, the supply side has difficulties keeping pace. Land for agriculture, for example, is fast depleting. This is exacerbated by extensive pollution of the world’s air and water resources. Many believe climate change will make the situation even worse.

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Things are no different for Malaysia. Climate change is bound to impact the country’s agriculture. The potential impact on the oil palm, which incidentally an important contributor to the country’s earnings, is worrying. The prediction is that with the rise in temperature, incidences related to water stress may become more prevalent. It is a known fact that during times of drought, oil palm yield suffers significantly. This has become evident during the many El Nino periods of yesteryears when water scarcity hit the oil palm sector. Unless something is done to develop a drought resistant variety, the supply of palm oil for the world market will come under intense pressure. Climate change, however, is not just about dry periods. The highly uncertain and extreme climate is another common feature. In the case of the oil palm, the unusually long period of flooding has also negatively impacted the supply because of harvesting difficulties. Not to mention the prediction of sea level rise which will inundate low lying coastal areas. Many oil palm plantations are in such low lying coastal areas. Destruction of biodiversity is another major concern of climate change. It has also become a growing concern for the palm oil industry, especially on the demand side. Already some markets are taking pot shots at palm oil for the loss in tropical biodiversity through deforestation. The European Union and the USA are now especially vocal. They are coming out with all kinds of import legislations that target to restrict palm oil access to their markets. Some of the criteria proposed have reached a level of absurdity. The calculations by both sides also do not tally. While the importing countries show palm oil failing to meet the minimum emission levels, the assessment by palm oil exporters shows otherwise. There is a need to come together to agree on the method of assessment. It would be unwise for the world if palm oil is unjustly judged on its

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contribution to climate change. Unless this is done, the demand side of palm oil will be negatively impacted. What is needed is a more comprehensive study on how the oil palm as a crop performs as emitter and sinks for greenhouse gases. It would be a pity if palm oil which incidentally is the most land efficient oil crop in the world is wrongly convicted. There is no doubt that the growing world population will need more food. Oils and fats form an important ingredient of man’s overall nutrition. In fact, foods will not taste as good without the inclusion of sufficient fats. In Malaysia, Fried Kway Tiau would not taste the same without a healthy dose of oil. In South Asia, what would happen to the taste of Briyani? While the world needs more oil, the land to grow them is growing scarce. Climate change is going to make it worse. For example, the rain fed oilseeds plantation region of India is now under intense pressure because of the changing patterns of the monsoon, thanks to climate change. The oil palm offers the best option because of its extremely high yield. In fact there is potential to increase it even further with recent advances made in palm oil genomics. So, the world should judge palm oil wisely when it comes to its contribution to climate change. With the expected temperature increase through climate change, energy demand in Malaysia may just escalate. As the country’s own energy source is approaching its limits, and domestic energy demand growing, it will soon end up as a net importer. The country’s energy expenditure will rise. It may no longer be tenable to go on subsidising fuel. Fortunately for the oil palm sector, it can be considered as energy sufficient. In fact, climate change and the growing quest for renewable energy is a positive factor for the oil palm industry. Already, much biomass from oil palm has become the target for more renewable source of

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fuel for energy generation. So, it is clear that though there are risks involved, there are also possible business opportunities for the palm oil industry. Many believe the demand for green technology will increase. There may even be novel ways to produce food which are less land based. There is need to understand what and where these opportunities are. Recognising such needs, the Academy of Sciences Malaysia (ASM) recently organised a public forum on the topic “Climate Change, Are We Prepared?” Many issues became clear. The world remains helpless in the global efforts to arrest climate change. It has been difficult to reach consensus on mitigation measures and commitments. This is seen in the many years of international negotiations which have yet to find agreement. The Kyoto Protocol which was heralded as the best international instrument to deal with the issue is now regarded as a dismal failure. Big emitters of greenhouse gases use all kinds of excuses not to ratify. The fact that man is largely responsible for climate change is fortunately no longer doubted. But there still remain many groups with vested interest unwilling to embrace the low carbon protocol in business. What is abundantly clear is that it is in fact man’s uncontrolled appetite for resources that has contributed immensely to the build-up in greenhouse gases in the atmosphere which fuel climate change. As long as man everywhere consume the way of the West, the consumption of scarce world resources will continue rising unabated. Imagine highly populated countries such as China and India consuming just as much. First, there will not be enough resources to satisfy the expansion in demand. Second, the conversion of those resources into consumer products will consume a lot of energy and produce large amounts of wastes and of course the greenhouse gases that feed the climate change problem. Unless this natural human greed is addressed, finding

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solutions to climate change will be a futile exercise. The capitalist economic model may eventually prove unsustainable in the long run. As an important world resource, palm oil is not spared from the rigours of climate change. It is clear it will be impacted on both the supply and demand sides. On the supply side yield will suffer because of climate induced water stress situation. On the demand side, the palm oil may be misjudged on its true contribution to climate change and may be wrongfully penalised. Unless these issues are addressed, they will upset the supply and demand equation for palm oil. Its price movement will be impacted. The bigger concern is that the world may be denied the benefits of a highly productive oil source! Will it survive?

TRANS FATS MAKE PALM OIL MORE POPULAR Despite all the available scientific evidence published in peer reviewed journals, there are still groups questioning palm oil’s health status. At a recent talk by Dr Sundram from the Malaysian Palm Oil Council, (MPOC), we were told there are now initiatives brewing in Europe to discredit palm oil. At one time, such adverse comments on palm oil were confined only to the USA. However, nowadays, consumers in the USA, after learning about the new science of palm oil nutrition, are now not as negative. Much of the shift in perception can be traced back to the revelation in the early 90s about the negative health consequences of trans fats. That proved to be a rude awakening for critics of palm oil in the US. Prior to the findings linking trans fats to heart disease, all earlier blames were put on saturated fats. Labels on saturated fats content in food products were then

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made compulsory. That was a challenging time for palm oil since it contains 50% saturates. But now, the blame is on trans fats. How things can change. What exactly are trans fats? How are they produced? What are the scientific evidences that have led to the conclusions that they are not good for health? What has been the impact of the revelation on fat choices in the US? What has been the consequence on palm oil use in the US? Why is palm oil now the preferred fats in a country where at one time it was even branded as poison? Actually, trans fats are not new. They have been around since man started making margarine and shortening to replace butter. Butter was getting rather expensive during the war years. It was also hard to come by. Someone developed an alternative to butter through a process called partial hydrogenation of seed oils. The product was margarine. It was unfortunate that palm oil was not around then. If not, palm oil would have been the ideal candidate for making margarine because of its natural semi-solid property. At that time, palm oil was produced on small scales by small farmers in West Africa. Not much of palm oil was traded then. The little that was traded was mainly exported from West Africa to Europe. Most ended as either lubricating oil or for making soap. This explains why many outside the palm oil producing states in West Africa knew a lot about palm oil. Palm oil only started making its appearance on the international scene when Malaysia invested in palm oil big way. When seed oils like soya or sunflower are partially hydrogenated to harden the fats, trans fats are produced. This has been consumed in large amounts in all kinds of products including biscuits and confectionaries. The interest to investigate the role of trans fats in fats nutrition came when scientists could not understand why despite the low consumption of saturated

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fats in the US, the incidence of heart diseases continued to rise. Some curious nutritionists took a closer look at trans fats. What they found was most surprising to many. They came out with very convincing data that trans fats are worse than saturates when it comes to increasing cholesterol in the body. The studies that were done showed that trans fats not only raised the bad cholesterol but also suppressed the good cholesterol. There was disbelief at first but eventually the evidence was too convincing to ignore. Labelling of trans fats soon became mandatory. More consumers became aware of the harmful nature of trans fats. Palm oil was also seen as the most optimal option for margarine and shortening manufacturers to suppress the content of trans fats in their products. Gradually, palm oil was seen in better light. Even export of palm oil to the USA started showing signs of increasing. Next, we were told that trans fats will eventually no longer be classified as GRAS, or generally regarded as safe. That will surely deliver more good news for palm oil export to the US. Now trans fats have quickly earned the name â&#x20AC;&#x153;silent killerâ&#x20AC;? and is to be avoided at all cost! One thing is for sure; trans fats make palm oil even more popular.

NEW QUESTIONS RAISED ON SUSTAINABLE DEVELOPMENT Ask any taxi driver about the importance of sustainable development in nation building, most will have many things to say. Nowadays, everyone talks about sustainable development. Though many pretend they understand what sustainable development means, they may not have the same interpretation. For example,

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does the criteria for sustainable development apply equally for developed or developing nations? There are views which maintain they should be judged differently along the lines of common but differentiated principle. Admittedly, it is difficult to deny the usefulness of the concept which was first pushed into world attention in the early 80s. We all agree that the concept of sustainable development as articulated in the many reports released is noble indeed. Who would not want to have sustainable development which promises almost unlimited progress for all generations? This explains why it has not been difficult to get the majority to buy in on the concept. The most popular definition for sustainable development must surely be the one proposed in the Brundtland Report released by the United Nations in 1987. Titled “Our Common Future”, the report defined sustainable development as the type of “development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. The report went further to emphasise that “A world in which poverty and inequity are endemic will always be prone to ecological and other crises. Sustainable development therefore requires that societies meet human needs both by increasing the productive potential and by ensuring equitable opportunities for all”. This definition, however, leaves much room for interpretations. In the context of land use, the developing world is currently being pressured by governments, powerful lobby groups and corporate bodies to subscribe to the ‘zero deforestation’ prescription, driven in the name of sustainability. The dilemma is that can a country can develop without opening up new land? Or for that matter which rich country would pay to leave forests untouched? Lately there is concern that the noble objectives of sustainable development may have strayed from its

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original course. Many are concerned that it has been hijacked for use as an instrument for trade discrimination. Worse still there are groups earning money under the guise of sustainable development by creating fear in some industries that have the slightest implications on sustainability. The palm oil industry is one which has to fight hard to ward off such discrimination. The question is whether such definition premised on people, profit and planet applies equally to all countries. Should the definition differ for developing countries? Land use is one of the contentious issues in sustainable development. Land is after all the most precious and irreplaceable resource. It is also one of the basic production factors within the economic system. The increased global demand for land in recent years is creating increased tension among competing needs at the global, national and local level. At the global level, land is increasingly seen as important for providing various ecosystem services for the planet. In this regard, land is viewed as a sink for pollution, as habitat for wildlife, as soil important for agricultural production and as a purifier for drinking water. At the national level, the availability of land raises prospects for poverty eradication, investment and wealth creation. At the local level, land provides the economic basis for people’s livelihoods and represents spiritual and cultural values. Much of the early ideas behind the debate on sustainable development were articulated by scholars of multidisciplinary backgrounds working in ivory towers and think tanks based in the developed world. The debate often challenges the belief that consumption is the most important contributor to welfare. Writing from the perspectives of post-industrial societies, however, their thoughts on sustainability was biased on the preservation of ecosystem services, while the social dimension was mainly under discussed.

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By not paying enough attention to other fundamental aspects of human well-being, the definitions by early sustainability scholars resulted in a weak conceptual framework to discuss issues of development. This contadicts the humancentric prioritisation of the poor people’s needs by the Brundtland Report. It is time for the sustainability agenda to shift from over emphasising land use, to giving more consideration to the human dimension.

SOUND SCIENCE TO REMOVE DOUBTS ON PALM OIL SUSTAINABILITY Recent months saw world palm oil prices reaching record highs. At one stage, the price even went over RM4,000. The palm oil industry literally laughed all the way to the bank. Plantation stocks became the darling of the investing community. The mood among oil palm farmers in rural Malaysia was one full of optimism and celebration. Though prices have softened somewhat in the last few weeks, there is consensual prediction among industry pundits that palm oil price will never again go down to as low as RM700 as was experienced in 2001. It is now trading at around RM2,500 a tonne. Increasingly, world oils and fats prices are now closely linked to the crude petroleum prices. This has a lot to do with the expanding use of oils and fats to make biofuel as countries move to replace fossil energy to mitigate climate change. As long as the price of crude petroleum stays high, the outlook for palm oil prices is likely to remain bullish. Recent decline in crude oil prices has also brought down world palm oil prices but will biofuel made from palm oil become a big business? Though many recognise and acknowledge the carbon emission advantage of biofuel,

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for palm-based biofuel, the road to commercialisation is still fraught with obstacles and challenges. Why is this so? Some of the answers were elaborated at a recent conference on palm oil. On August, Kuala Lumpur again played host to an international conference on palm oil. Organised by the Malaysian Palm Oil Council (MPOC) under its Palm Oil Trade Seminars (POTS) series, the event attracted almost 500 participants from around the world. As expected, the issues surrounding palm oil’s new found use as biofuel took centre stage. The subject of palm oil’s sustainability was under scrutiny. For example, questions were posed as to whether the new demand for biofuel will generate interest in new oil palm plantations? There was concern expressed that any massive expansion in palm oil demand will lead to deforestation and biodiversity endangerment? On the other hand, will oil palm cultivation contribute to an increase or a reduction in greenhouse gas (GHG) emission? Those opposed to the idea of turning palm oil into biofuel have always claimed that it will not help the environmental cause. It is a paradox really. Environmental diehards who have long fought to increase the use of alternatives to replace fossil fuel are now against any expansion in palm-based biofuel. Yet, palm oil is the most efficient among the vegetable oils. Logically, rather than using rapeseed or soya to make biofuel, palm oil is a much better bet, cost wise. Not to mention the better land use efficiency of oil palm over the other oils. However, they argue that any such expansion palm biofuel will lead to increased planting of the oil palms, and in view of the limited availability of suitable land, such increased planting is bound to lead the massive clearance of rainforest areas. This, they argue, will in turn also negate efforts to conserve biodiversity.

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Reading the blogs of some environmental groups, one cannot help but be bombarded with the message that the palm oil industry is damaging the tropical rainforests of South-East Asia. Despite the fact that most of the expansion in oil palm growing came from old rubber areas and abandoned land, such critics are still adamant that the expansion in oil palm area had all been at the expense of virgin tropical forests. Since no amount of statistics will convince them, a suggestion was jokingly made at the conference that may be the palm oil industry should now organise a swearing ceremony witnessed by a few friendly NGOs. We may include a few orang utans as witnesses! Due to such perception and the spread of misinformation about palm oil by some irresponsible groups, the European Union (EU) regulators in proposing new sustainability criteria have concluded that biofuel palm oil falls outside their acceptable limits on GHG dynamics. This is in stark contrast to the evidence presented in a paper put up by the Malaysian Palm Oil Council at the conference. According to the arguments contained in the presentation, all the available scientific evidence says the opposite of what is claimed by the EU regulators. For example, based on a life cycle analysis study done by a EU scientist, biofuel made from palm oil would give rise to a GHG emission of 835 kg/tonne of palm biofuel. This compares favourably against soya-based and canolabased biofuel which would generate 1,387 kg GHG/tonne and 1,562 kg GHG/tonne respectively. Fossil diesel would generate as high as 4,288 kg/tonne! In fact, data derived from a proper scientific study has confirmed that the oil palm ecosystem is a net carbon sink. Under normal plantation practice, it has been reported that the net amount of GHG sequestered is just above 300 kg/ tonne crude palm oil. Whilst under a new

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alternative approach where Methane released from waste treatment ponds are trapped, the sequestration level would approach 600 kg/ tonne. It would be a sad day for international trade if the EU regulators ignore such convincing scientific data and facts. Not only that, the biofuel industry will also be denied access to the most competitive raw material available. There is no doubt that the Malaysian palm oil industry is serious about sustainability issues. However, to be fair to the industry, any ruling to be introduced must be based on sound science. Rulings should not be influenced by distorted facts championed by groups pursuing extremist agenda. For the palm oil industry, a plausible source for such facts may be the Roundtable on Sustainable Palm Oil (RSPO) which has been established by all concerned stakeholders in the palm oil trade to essentially promote the fact that palm oil is a sustainable commodity. The fact that the majority among the Malaysian palm oil industry subscribe to the aspirations of RSPO should be clear enough signals of the industryâ&#x20AC;&#x2122;s commitment to the sustainability cause. It may be time for RSPO to come out more and say this to the other misinformed groups.

SUSTAINABLE DEVELOPMENT; THE GOOD, THE BAD AND THE UGLY Everyone is now talking about sustainable development. The better informed recognises the urgency of the matter. However, the public at large is still grappling with the concept. Many do not truly understand and are still in the dark about the implications of ignoring sustainable development. This explains

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why sustainable development has not truly evolved into a mainstream topic. This complicates the effective implementation of sustainable development since the key stakeholder is the general public. This also explains why programmes such as recycling, an important practice in sustainability, has yet to show positive outcomes in many countries. In Malaysia, we still struggle to motivate the households to separate the recyclables. Is there hope? At the global level, sustainable development is a subject of regular debate. At the June 2012 Rio+20 summit, world leaders agreed to make sustainable development a world agenda. In fact, the United Nations (UN) has already initiated the process to develop the sustainability development goals (SDGs) which will replace the MDGs after 2015. A UN High Panel of Experts recently came out with a report on Sustainable Development post 2015. The report recommended five transformative shifts including inclusiveness, putting sustainable development at the core, transforming economies for jobs and inclusive growth, open and accountable institutions for all and to forge new global partnerships. In view of the many risks the world faces as men negotiate the path to the future, sustainable development is more or less a do or die roadmap for the survival of humanity. So like it or not, we must embrace sustainable development. Though sustainable development promises a lot of good for mankind, it also has the negative side. Some markets create non-tariff restrictions to trade under the guise of sustainable development. They hijack the noble objectives of sustainable development to further trade interests. They resort to regulatory standards using criteria such as greenhouse gas emissions levels, deforestation practices and land use change to deny entry of imported products. The palm oil industry is one

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sector which has been subjected to such trade prohibition. The export of palm oil for fuel to the US and EU has been severely discriminated because according to their calculation, palm oil does not meet the threshold allowed greenhouse gas emissions. The basis of their calculations has been strongly disputed by palm oil exporters from both Malaysia and Indonesia, claiming their formula is not based on sound science. The more disturbing part of sustainable development is the fact that it also has the ugly side. Unless these are corrected, they will further negate the sustainable development goals post 2015 that the UN is actively working on. The worrying part is that, though the world recognises the critical need to embrace sustainable living, many developed nations have yet to toe the line. Logically these are the countries which should demonstrate leadership to the rest of the world. But alas no. The failure of the Kyoto Protocol to arrest greenhouse gas emissions is a case in point. It is a glaring example of countries which have all the credentials to lead absconding from their commitments. As a result, a recent assessment by the UN group on climate change has confirmed a worsening trend in global warming. In fact, the experts are now saying the earlier target of two degrees Centigrade is no longer tenable. They are now talking about four or five degrees being more realistic. Such an increase in global temperatures will prove even more devastating for the world. The poor will especially be at high risk. Though admittedly there are many positive sides of sustainable development, there are also the bad and the ugly sides. Unless the bad and ugly consequences of sustainable development are curtailed, convincing the public at large to take urgent actions may prove difficult. Like it or not, without the commitment from the common man, the goals of sustainable development will prove to be more

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elusive. Hopefully, the new UN initiative will take notice of this. Like the Clint Eastwood cowboy movie, the Good, the Bad and the Ugly, the hope is that eventually the good will overwhelm and win over the evil!

PALM OIL; ASSET OR LIABILITY At 65 years old, Pak Samad is now enjoying his days of retirement. He did not retire from a government job because he was never in the civil service. Instead, he now gets a decent income from his many years of toil as an oil palm smallholder. To Pak Samad, the oil palm is one crop which has drastically changed his life. For the better, of course. In his younger days, Pak Samad earned pretty meagre income as a fisherman. It was hard work, but as a small time fisherman, the money was pittance. Definitely not enough to support his family of four growing children. Then again, there was not much choice. Things changed when oil palm came along. The government then encouraged many like Pak Samad to join others from the countryâ&#x20AC;&#x2122;s hard core poverty group to trade their fishing nets to a life tending oil palms. Many were initially sceptical of the government scheme. Not anymore. A majority who opted to join the scheme now speak only good things about the oil palm. To them the oil palm is truly a golden crop. It is truly natureâ&#x20AC;&#x2122;s gift. Those like Pak Samad may hail the oil palm as a crop which has brought many like him much benefits and good fortune. Better quality of life. Better opportunities for their children and an escape from a life of extreme poverty. It has all been possible because of the oil palm. Alleviating poverty is as a matter of fact the most important agenda in almost all the developing countries of the world.

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In fact, lately, even the developed countries have turned their attention to address the pockets of poverty in their midst. Apparently, urban poverty which inflicts even the most developed of nations has started rearing its ugly head. Some have been blamed for the many social ills befalling such countries. In fact, the United Nations has singled out poverty eradication as the most urgent business in its Millennium Development Goals. The UN may have not mentioned the growing of crops like the oil palm as one potent instrument to help alleviate poverty but to people like Pak Samad, he knows how much the oil palm has contributed to save him from a life of almost certain destitute. What Pak Samad may not realise is that his love and appreciation for the oil palm is not necessarily shared by all in this world. Many have yet to appreciate and recognise the tremendous contribution made by this tropical wonder plant to mankind. While Pak Samad has been tending to his oil palm and earning reasonably well from the sale of his crop, the oil palm itself has been up against endless controversies. The likes of Pak Samad may have not noticed it, but somewhere, somehow, somebody was always saying something negative about palm oil. Poor palm oil. Over the years, it has to contend with a continuous onslaught of critics questioning its existence. It was not always like that though. Things were fairly quiet when the oil palm was a comparatively small player in the global oils and fats trade. That was in the 60s and early 70s when palm oil was not even 10% of the global production. Nigeria was the largest world producer then. Much of the palm oil ended up in the EU as cooking fats, margarine and some lower grade oil ended up in soap manufacture. By the 80s, when the world production of palm oil assumed sizable quantities, all of a sudden it became big news. Now, palm oil accounts for a sizable share of the world consumption.

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Many who follow the fortunes of the oil palm must be familiar with the massive publicity launched in the US in the mid-80s. That was when big advertisements were taken out in the US media blaming palm oil for all of the countryâ&#x20AC;&#x2122;s health problems. These ranged from heart diseases to obesity. In fact, one advertisement went even as far as describing palm oil as poison. Another suggested that palm oil may even be responsible for the increasing incidence of sexual dysfunction among American men. All the writings called on the population to stop consuming palm oil. Why? Because palm oil is loaded with saturated fats which clog arteries, slow blood circulation and lead to heart ailments. Never mind the fact that the US then consumed at the most less than 2% of their total oils and fats intake from palm oil. The bulk of their fats source came from soybean oil. Not even the straight soybean oil. Instead, most people in the US then consumed the hard soybean fats produced through hydrogenation. Despite such facts, they still singled out palm oil as the culprit. As a result of such negative publicity, palm oil producers had to spend huge sums of money to help fund nutritional studies by credible world nutritionists to get to the bottom of the scientific facts. In fact, looking back, they were actually doing experiments just to prove the obvious. Even without conducting rigorous studies, it would have been obvious to many that palm oil is as good if not better than all the other vegetable oils. Like all the other oils derived from plants, palm oil is cholesterol free. It is however better than the others, because palm oil is the only one which has the right balance of saturated and unsaturated fats. Not only that, almost all of palm oilâ&#x20AC;&#x2122;s unsaturated fats is made of the monounsaturate. Not unlike those present in the often touted as the healthiest of oils, the olive oil. The scientists have come out with credible

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evidence that palm oil, thanks to its balanced nature, may even be healthier than olive oil. In another revelation about the unhealthy nature of trans fatty acids associated with hydrogenated fats, palm oil once again came out ahead of the others on the nutritional score. Unfortunately, the story did not end there. A new controversy has just recently cropped up. Recently, the oil palm has been singled out by some environmental groups as totally responsible for the declining population of Orang Utans in Borneo. They say the clearing of large tracts of rainforest to plant the oil palm has destroyed much of the Orang Utanâ&#x20AC;&#x2122;s natural habitat. Unless the expansion in oil palm cultivation is arrested, the world may not see any Orang Utan anymore in the near future. They may not realise the fact that almost all the oil palm grown in Malaysia are grown on land vacated by rubber and other crops. Some have been abandoned for years. In Malaysia close to 70% of land is still under forest reserves. The government has maintained that level for years through the creation of many forest preservation projects unlike many countries in the west where the countryside is literally bald! It is a good thing that these groups have not also blamed the oil palm for the extinction of dinosaurs! Some say they may not now, but they may be already looking for facts to link the disappearance of the dinosaurs to the oil palm. Through such hypothesis, the groups have been calling consumers especially in the UK to boycott palm oil, unless big retail chains there join their roundtable session on sustainable palm oil. The session was created a few years ago to come out with clear guidelines and criteria on the sustainable production of palm oil. Many in the palm oil supply chain have in fact joined the roundtable. Most palm oil interest groups in Malaysia and Indonesia have actively participated in the

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roundtable agenda. In spite of such commitment from the palm oil fraternity, it has not stopped other environmental groups from continuing to raise the issue. One way or the other, palm oil is publicised as the bad boy. Oddly enough, not much has been mentioned about the environmental consequences of the expansion in the other oils. This is despite massive clearing of land in Latin America to make way for soybean cultivation. Could it be that the soybean industry is not bothered about the NGOs? The other environmental concern of the world is the issue of global warming. Though there is still dispute among scientists, a majority agrees that unless the release of greenhouse gases, principally carbon dioxide, is not checked, the world is destined for drastic temperature changes. If that happens, the consequences can be frightening. These include implications on climate, diseases and agriculture. In fact, the popular prediction is that much of the island countries may totally disappear from the world map. It is not sure why the environmental groups have not mentioned this in their criticism of the oil palm. It may be because the oil palm can make positive contributions to slow down the build-up of carbon dioxide in the atmosphere. The oil palm is, in the language of the environmentalists, a net carbon sink. In fact, studies have confirmed that the oil palm has double the capacity to sequester carbon dioxide and generate oxygen compared to soybean. It has been estimated that the 4 million hectares of oil palm in Malaysia, has the capacity to sequester 117.2 million tons of carbon dioxide each year and generate 85 million tons of oxygen. This compares favourably with the 17 million hectares of soybean which at the most can sequester less than 60 million tons of carbon dioxide and generate 43.5 million tons of oxygen.

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If indeed there is some kind of boycott by consumers in the West on palm oil, the one to suffer the most would be small oil palm farmers like Pak Samad. Oil palm smallholders in both Malaysia and Indonesia just want to have a share of the growing global economy. Through their involvement in the growing of oil palms, Pak Samad and his friends have managed to enjoy a decent income which has helped them rise above poverty through the years. To them, palm oil is most definitely an asset. Sadly, as they all say, the world is never a fair place. Inadvertently, there will always be groups, for their own selfish agenda, who are bent on creating difficulties for struggling communities like Pak Samad. If only these groups can appreciate the bigger picture, the world will definitely be a better place to live.

PALM OIL INDUSTRY TAKEN FOR A RIDE I would like to refer to an article written by Alan Oxley, Chairman of Word Growth which appeared in the NST dated April 25, 2013. Titled “WWF agenda punishing the poor”, the article provided chilling evidence on the defects of the Roundtable on Sustainable Palm Oil (RSPO). This goes to confirm my unwavering stand that RSPO is not in the best interest of the sustainability of palm oil, as an important food provider for the world. As alluded to in Alan’s article, even the World Bank rates oil palm as one of the most effective crops for raising living standards and promoted the industry in Southeast Asia as a poverty reducing crop. In fact, years ago, many in the industry already saw this coming. Whatever it is, it is not too late to reverse the decision. Indonesia has done the right thing. If Malaysia is to truly sustain the viability of the industry, then it is time we develop our own scheme on sustainability.

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As pointed out in the article, many tend to associate sustainability only with the environment, whereas a true definition of sustainability is clear on the fact that it has to promote balanced growth. The three major pillars of sustainability, which are people, profit and planet, should feature in the criteria for any scheme to promote sustainability. They should not be biased towards any one of the pillars. Unfortunately, this is not the case for RSPO. The bias towards the environment is most glaring. According to the article by Alan, there is no scientific justification for the claim that the oil palm is largely responsible for deforestation. Even the United Nations has pointed out that worldwide, poverty is a primary driver of deforestation, as people clear land for housing, subsistence farming and fuel wood. It is understandable because these people need to survive. Even in those days when the developed economies of the world were not as rich, they had to resort to the same measures. No wonder forest covers in many such developed economies are almost non-existent. The message here is, let us get real. Create whatever sustainability scheme we need to motivate us to progress on a sustainable path. We must nevertheless be reminded of the three pillars of sustainability. Otherwise, RSPO may become “Ruining the Sustainability of Palm Oil”.

NEW CHALLENGES FOR PALM OIL Palm oil in Malaysia has come a long way. From almost nothing in the early 60s, the export of palm oil now earns big money for the country. Last year alone, the export revenue from palm oil stood at a massive RM 80 billion for Malaysia. Together with natural rubber, which brought in RM 40 billion, they accounted for about 17% of the country’s export

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income. This goes to show agriculture can be a high income earner. In fact, the recent highly successful public listing of FELDA Global Ventures provides further testimony to this. The main business of FGV Holdings is palm oil. Add to that companies like Kuala Lumpur Kepong (KLK), Sime Darby, IOI and many others, one can see why palm oil has been often cited as Malaysia’s success story. The question is, will everything continue to be okay with palm oil? Will the future remain lucrative? I recently attended a forum hosted by the Malaysian Palm Oil Council (MPOC) to award leaders of the palm oil industry. The annual event attracted the who’s who from the Malaysian palm oil industry. The Chairman of KLK, Tan Sri Lee Ooi Hian, was announced this year’s winner. Speaking to industry leaders at the event, one could detect concern about the challenging years ahead for Malaysian palm oil. There was also talk on how investment in technology can make a difference to the future of palm oil. Though, over the years, palm oil had to deal with many challenges, there are new ones emerging which equally threaten the oil’s future well-being. The earlier challenge questioning palm oil’s implications on health is now a nonissue. The later challenge on palm oil’s environmental repercussions is still being hotly debated. Nevertheless, looking at the arguments from the science perspective, palm oil is also winning. The problem is, the industry also has to deal with the perception issue which distorts the truth. The new emerging challenges are more worrying. They are labour, productivity and the escalating costs of production. Unlike the earlier health and environmental issues, these have nothing to do with perception. They are real and not the work of any outside elements. The industry will have to find the answers to the challenges. Take labour for example.

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The industry currently depends very much on foreign labour. More than 80% of the plantation labour are reported to be immigrant workers from Indonesia. If one day all decide to return to work in the expanding oil palm plantations in Indonesia, Malaysian palm oil will face problems harvesting the oil palm fruits. At the rate the wages in the Indonesian oil palm plantation are rising, there is a real possibility that many will return. Apparently, by law in Indonesia, the plantation wages have to increase by about 10% annually. It is just a matter of time. This explains the urgency to develop a reliable and mechanised harvesting technology for the industry. So far, nothing can beat manual labour, despite many years of research. The worry over unskilled labour is just the tip of the productivity concern. Even skilled and professional labour are now hard to come by. The university system is no longer producing the workforce needed by the plantation sector. This is the reason why there is a cry for a university to be established to cater to the talents needed by the plantation industry. So far nothing has materialised. A more important repercussion of this is the increasing costs to monitor the agronomic state of the palms on the ground closely. The traditional way of collecting soil and leaf samples is no longer adequate. Some from the industry are calling for the deployment of more sophisticated monitoring technology including the use of remote sensing and drones. Such advanced technology may prove more effective in spotting diseases as well. The bud rot disease, for example, can be devastating if not detected early enough. It is clear the future of palm oil is not all rosy. Though opportunities are still abound, there are new challenges emerging. Top on the list is the continued availability of workers. Next is the issue of stagnating productivity. Not to mention the threat of diseases. As in the case

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of earlier challenges, the industry will have to increasingly look to science and technology for solutions. Investment in R&D is critical.

HIDDEN AGENDA BEHIND PALM OIL SUSTAINABILITY? Remember the much publicised London raid on the palm oil giant Guthrie in 1981? According to records, it only took about four hours for the transfer of ownership to take place. Malaysia eventually succeeded in taking over the 100-year old company built during the colonial era. From then on, Guthrie grew to become a respected global player in the palm oil business, managed fully by Malaysians. It is now merged with the Sime Darby conglomerate and Malaysia has single handedly turned palm oil into a leading oils and fats commodity for the world. Malaysia and Indonesia together now control about 90% of worldâ&#x20AC;&#x2122;s palm oil production. Additionally, palm oil dominates the international trade in edible oils exporting to literally all corners of the world. Looking back, this may have been difficult if that historic London dawn raid did not take place. Even to this day, competing oils had tried all sorts of tactics to suppress the global expansion of the palm oil industry. However, despite the growing popularity of palm oil among consumers and manufacturers worldwide, competitors have not stopped thinking of new ways to deny palm oil its rightful place in global trade. Palm oil is for example the preferred oil in frying because of its unique heat stability. In China, Korea and Japan, instant noodle makers use 100% palm oil. In the USA and European Union (EU), palm oil has emerged as the preferred fats for

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manufacturing margarines and shortening. This is more to do with the health benefits of a trans fat-free product offered by palm oil. In fact, consumers should thank palm oil for the findings on the deleterious nature of trans fats. This came about when scientists were looking for the scientific explanation as to why palm oil, despite its higher content of saturated fats, did not raise cholesterol when consumed. That was when they found the real culprit, trans fats from partially hydrogenated liquid oils. The rest is history. Now all nutritional labels especially in the West carry warnings on trans fats content, which is good news for palm oil. However, the enemies of palm oil are not giving up easily. Their latest attempt is disguised under the widely popular sustainability agenda. Nowadays, it is easy to sell any idea which promises to help develop solutions for the global sustainability challenge. All you have to do is to come out with convincing arguments that a crop like the oil palm is bad for climate change and has to be policed using the many sustainability criteria. Actually, the palm oil industry in Malaysia has no real problem with that. The problem starts when the criteria imposed become unrealistic and irrelevant. In fact, before all the hue and cry over sustainable palm oil, Malaysia had long embraced the commitment to adopt environmentally management practices for palm oil. The industry has long implemented biological control of pests, zero burning techniques in oil palm replanting, effective treatment of palm oil mill effluents, recycling of treated water for irrigation, conversion of biogas into energy and many more. Moreover, sustainability is not just about the environment. We must not forget the other two pillars of profit and people. Admittedly, the oil palm is one crop which brings us lucrative income. It has also helped alleviate the countryâ&#x20AC;&#x2122;s hardcore poverty through schemes like FELDA

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and FELCRA. However, recent developments in Europe suggest that we may soon lose control again over its destiny. We are already seeing laws in the EU enacted to deny the export of our palm oil for biofuel to the EU. All are under the guise of the environment and sustainable development. The Renewable Energy Directives, RED, for example, have classified palm oil as not meeting the criteria for sustainability. The criteria for assessment keep changing. New elements such as land use change and indirect land use change were introduced to make it difficult for palm oil. Though we do recognise the noble intentions of sustainability to guide future global growth, it can also be abused. Is colonisation coming back to haunt palm oil producing nations under the guise of the environment?

EXPERTS DELIBERATE ON SUSTAINABILITY OF THE PALM OIL BUSINESS Palm oil is now riding high on the crest of the current bullish commodity wave. Prices which have reached historic highs are still showing no signs of softening. They have instead continued to remain lucrative for some time now. At more than RM3000 plus a tonne, profits have never been better. This time it has nothing to do with a falling ringgit, as was the case in 1998. If at all, it is happening at a time when the ringgit is appreciating in value against the greenback. No wonder plantation stocks are now the darling among investors. Palm oil may even be a key factor which may well decide the outcome of the coming general election! Many reasons have been offered to explain the booming fortunes of palm oil. Rising demand from China and India is one. The other has a lot to do with the

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supply squeeze in global edible oils. Much of world production have ended up as feedstocks for biofuel. Since biofuel prices move almost in tandem with the crude oil prices, it is therefore no surprise that the rising fossil fuel oil prices has also supported the price escalation of edible oils, palm oil included.

now, the event which also features a well patronised exhibition and golf has been attracting large groups numbering more than a thousand each year. Many come from overseas, some from as far as Brazil and Colombia to listen to the price predictions made by knowledgeable speakers invited for the conference.

The big question now is how long can this last? On Tuesday, February 26, Kuala Lumpur will again host a major palm oil event. This is Bursa Malaysia’s annual Palm Oil Conference. Probably the experts at the conference can tell us more about where palm oil prices are heading. Though price forecasting is always a major agenda of the meeting, many expect a major part of the conference to dwell on issues concerning the sustainability of the palm oil business itself. For example, how will palm oil cope with the new and more challenging demands of the knowledge and innovation economy? The world is now entering an economic phase where consumers demand more transparency and accountability from businesses.

Among them is Thomas Mielke of the Oil World, a much sought after speaker for such events. He has actually replaced his equally eloquent father Siegfried Mielke who was featured prominently in the earlier days of KLCE seminar. Dr James Fry of LMC International is the other speaker who has become a permanent feature of the annual event. His analysis makes a lot of sense. Dato’ Syed Jabbar must feel proud of the fact that his earlier effort is now bearing fruits and the event has become almost an annual must-attend for players in the global edible oils business.

In the early 90s, the event now known as the Palm Oil Conference actually had fairly humble beginnings. It started as a Palm and Lauric Oils Price Outlook seminar organised by the then Kuala Lumpur Commodity Exchange (KLCE). Many must still remember the early days when the then CEO of KLCE, Syed Jabbar had difficulties rounding up participants to attend the seminar which was literally free then. He almost single-handedly managed the event which was done on a very low budget. Even the speakers for the seminar were tapped from PORIM’s annual programme advisory committee meetings. Talk about innovation! Now the picture is in stark contrast to its early days. Many in the edible oils trade would think twice about missing the event. In fact, there have been occasions when late registrants had to be denied entry to the conference. For a few years

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Though the palm oil business is now enjoying a bull run, many among the industry know for a fact that there are some strong undercurrents which can derail the industry. To many in the industry, these issues have become a growing concern. Many of course have not forgotten the nutrition issue which did a lot of damage to palm oil in the past. However, thanks to investment in sound scientific research, that nutrition scare is now over. In fact, the revelations about the dangers of trans fats has turned the tables around in palm oil’s favour. The growing recognition over the negativities associated with trans fats is also the reason where export of palm oil to the USA has escalated. Will the palm oil industry also resort to sound science to resolve the growing issue of the environment? For a few years now the environmental issue has taken over nutrition as a matter of highest concern among the palm oil fraternity. Groups championing global concern over

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climate change, loss in biodiversity and worsening environmental degradation have started blaming palm oil. They claim that the planned expansion of oil palm cultivation, if left unchecked, can increase greenhouse gas emissions and also destroy the natural habitats of the orang utans. They have somehow influenced palm oil importers, especially those in the West, to insist on some kind of guarantee that the palm oil they import comes from a source which implements sustainable practices in their plantation and mill. In fact, for a few years now, a group which brings together key stakeholders of the trade has been meeting and developing criteria which will eventually set the standards for sustainability. It is still unclear whether the criteria are realistic for a majority of the oil palm growers or whether producers who meet such demanding criteria can enjoy some kind of premium in pricing. What is clear is that there are strong indications that those who fail to produce such â&#x20AC;&#x153;greenâ&#x20AC;? palm oil will not be allowed to export to some environmentally sensitive markets. The worry among industry members is that what is stopping such requirements being imposed across all export destinations? Though environment is a matter of immediate concern to the industry, many believe given time the palm oil business will come out with some acceptable solutions to resolve the issue. On a longer term, many among the industry have expressed concern over the growing difficulties in securing the right human capital to sustain the industry. Lately, many plantation companies have faced problems recruiting people trained to work in the estates and mills. Even the downstream businesses in palm oil have encountered difficulties. Not to mention the R&D institutions pursuing research and innovation in palm oil. Since palm oil is a major contributor to the national coffers and an important provider of employment for the country, this human

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capital issue should be of concern to the government as well. There is now a strong move by some industry members to put up a case for the plantation industry as a whole to have its own university. Many believe they have a strong case considering the fact that the plantation industry is not only unique to the nation but it has the potential to contribute to the entire value chain of the innovation economy. When one speaks of the sustainability of the palm oil industry, one always tend to equate the issue of meeting the so-called environmental demands. The bigger issue however, which may well kill the industry, is the issue of having the right human capital to drive and sustain the industry.

MALAYSIAN SCIENTISTS BREAK YIELD CODE OF OIL PALM Recently, Malaysian scientists from the Malaysian Palm Oil Board (MPOB) made headlines. Their breakthrough in deciphering the oil palm genome was well received. A Fellow of the Academy of Sciences Malaysia, Dr Ravigadevi Sambanthamurthi, who led the team could not hide her excitement in a recent talk at the Academyâ&#x20AC;&#x2122;s Idea Exchange event. The discovery promises to break the deadlock in palm oil yield which has stagnated for many years now. When that happens, palm oil production in Malaysia is set to expand again. This is expected to also bring comfort to the industry which is under pressure from environmental groups calling for further restrain in opening new land for oil palm cultivation. With the expected 30% improvement in yield, the oil palm will definitely continue to widen its lead in productivity over other competing oils.

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What exactly was the breakthrough? How significant was it? How would the findings be put to beneficial use? Though led by Malaysians, the team also had international collaboration from Orion Genomics, a US biotech company. The discovery involves the identification of a single gene, called Shell that is responsible for increasing the plant’s oil yield. It is definitely significant in terms of scientific advancement considering the fact that two papers from the work were accepted for publication in the prestigious international journal, Nature. More important is the potential the findings will have in bringing benefits to the palm oil industry. For decades now, palm oil is a source of nearly one-half of the worldwide edible vegetable oil supply. This is now expected to be sustained for a longer term. According to MPOB director general, Datuk Dr Choo Yuen May, “The discovery will have a significant impact on the Malaysian economy, because for every 1 percent increase in palm oil yields, Malaysia gains RM1 billion (USD330 million) in income”. The oil palm that is widely grown in Malaysia is a hybrid of two varieties; Dura which has thick shells and therefore lower yield, and the Pisifera which is shellless which makes processing difficult to separate the palm oil from the kernel oil. The hybrid of the two is the Tenera which is the common variety cultivated. It has a thinner shell than the Dura and therefore also has a better yield. Currently, seed producers rely on selective breeding techniques to maximise plantings of Tenera palms. The problem is that they often end up with up to 10% of the lowyielding yielding Dura. This arises due to the uncontrollable wind and insect pollination. Identifying whether an oil palm plantlet is the desired shell type can take up to six years. This can be costly because by then the trees cannot be uprooted. The identification of Shell has already enabled the development of a simple molecular screen that can be

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used with seeds and plantlets to prevent the cultivation of undesired non-Tenera plants, thereby raising the efficiency of oil palm plantations. The researchers also hope that their public release of the genome will allow other scientists to pinpoint more genes that might be useful for improving oil palm trees, such as resisting drought and diseases. “We’re not going to stop here,” said Dr Ravigadevi. The board, which is financed by the Malaysian government, paid for most of the research. Genomedriven improvements to oil palm trees, the researchers argue, could allow farmers to produce more oil on less land. Writing in Nature, they claim that the genome will “help to achieve sustainability for biofuels and edible oils, reducing the rainforest footprint of this tropical plantation crop.” The new study is “a major breakthrough,” said a conservation biologist at James Cook University in Australia David Edwards. “The only way that we will be able to feed the projected human population of 9 to 10 billion without huge waves of deforestation is through increases in crop yield.” Apparently, French scientists have been working for seven years to break the yield code. The breakthrough is further testimony of the fact that Malaysia is not short of high calibre world class scientists!

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CHAPTER 13 NATURAL RUBBER & SCIENCE FUTURE OF NATURAL RUBBER - INVEST IN NEW IDEAS We all know about Vision 2020. We are all familiar with the call to become a developed nation enjoying high income with inclusiveness and sustainability. We do not have to embrace the exact mould of the developed nations, even if they are exploring anew. This is basically because their current mould has serious imperfections. It is not inclusive. The income disparity among their people is still widening. Chronic social problems have not shown signs of abating. It is not sustainable. So, Vision 2020 suggests we need to create our own. We need one which invigorates a civilised society, creating wealth in harmony with nature and man. Can we bring back the glory of Natural Rubber? It is not impossible if the right strategies are put in place. In recent years, NR prices have shown a positive trend. The price has even reached a high of more than RM10 per kilogram. This was never achieved before. Investors are reevaluating NR. Its tag as a sunset industry is now being critically re-assessed. Is NR bouncing back? Some say it is still too early to make any conclusion. The signs, thankfully, are encouraging. The spike in prices has been mainly linked to the surge in oil prices as well as the escalating demand in China. Experts agree that both the world oil price and the pent up demand in China will remain bullish for many more years to come.

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For Malaysia, income from oil export will start declining once the country becomes a net importer. This is expected to occur in a matter of less than ten years. We need to explore other income sources. Will NR be an option for the country? How can we sustain the present bullish spell of the NR business? Is there a role for science, technology and innovation, (STI)? Academy of Sciences Malaysia (ASM) recently teamed up with the Malaysian Rubber Board to explore such opportunities. A forum was held to discuss how Science and Technology can chart new directions for the countryâ&#x20AC;&#x2122;s natural rubber industry. The verdict from the meeting was that NR can bounce back if the right strategies in STI are pursued. We now live in a new global business environment. Country borders have mostly disappeared. Goods can move easily between countries. Competition is growing more intense. Consumer expectations have also changed. Increasingly, products which negate environmental well-being are less preferred. Buying environmentally friendly products or green purchasing is becoming more popular. In fact, green procurement has even become a regulatory practice in many countries. In line with that, there is also a growing preference for natural and renewable materials. NR is definitely natural and renewable. This means NR can command a preference over synthetic materials in the green economy. This can be further enhanced with the right strategies. At the moment, NR as a whole is still a thriving global business. The world NR production has increased from six million tonnes in 1995 to 9.6 million tonnes in 2009. Consumption has also increased to 9.5 million tonnes. Demand is not a problem for NR. Among the NR producing countries, only Malaysia has shown a decrease in production. The biggest increase is in Vietnam, where production has jumped by more than

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489% for the period of 1995 to 2009. Malaysia’s production had decreased by 21% during the same period. The NR acreage in Malaysia is also on a downward trend. Can something be done to stop the decline? How do we inject new vigour in NR? NR consumption in Malaysia is about 595,000 tonnes, of which more than 470,000 tonnes end up as latex products. Malaysia is now the world’s largest consumer of latex concentrate, world’s largest supplier of medical rubber gloves and world’s largest supplier of latex thread and cord. The import of NR into the country has been increasing. In 2009, the total NR import has exceeded 730,000 tonnes. Export has, however, declined to about 700,000 tonnes. With the decline in rubber cultivation, not only is the export revenue decreasing but equally worrying is the downstream sector’s growing dependence on import. This may not be sustainable because as soon as the other producing countries start expanding downstream, they will have less latex concentrate for export. This means Malaysia’s latex products sector will be adversely affected. It has been predicted that in 2018, the world’s rubber consumption will reach 28 million tonnes. NR share is expected to increase to about 50% in 2018, and 65.5 % of NR consumption is now in Asia. China leads the NR consumption in Asia. Additionally, 80% of NR ends up in tyres where Asia is now a dominant market for NR. So the question of lack of demand does not arise at all but supply may face challenges. There are constraints on further yield improvement. Climate change is one factor. There is now more rainy days, higher morning temperatures affecting latex flow, extended wintering days and the emergence of new diseases. All these will contribute towards the growing tightening of supply. This may have been partly responsible for the high prices.

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How can we arrest the decline in the rubber areas in Malaysia? The industry may have to rethink its policies to drive the growth of the rubber business. Malaysia is now behind Thailand and Indonesia in NR production. In fact, very soon, the production in India may also exceed Malaysia’s. Though oil palm has taken most of the areas earlier under NR, there are still sizeable areas available. There are areas in the dryer North where oil palms do not perform as well. Why aren’t big plantations venturing there? For that matter, why aren’t big rubber plantation houses venturing into Indonesia and the other emerging rubber growing countries? They do that for oil palm but not rubber. Why? At the same time we see China and even Vietnam already looking beyond their borders to plant NR. The focus should be on new and unique downstream technologies in latex products and the dry rubber products which will strengthen Malaysia’s position as the place to manufacture rubber-based products. The Malaysian NR industry should capitalise on the growing green consumerism movement in the world. Modification work on NR, whether chemical or biological, should be a useful research area not only to develop new materials but also to improve the properties of NR vis-a-vis competing materials such as synthetics. The rubberwood sector, now an important revenue earner for the industry, needs careful planning to further strengthen the sector. These would include the forest plantation programme and other process improvement research. Research in the basic science of NR and also the non-rubbers in the latex will need a new vigour. We also need to research new rubber-like materials which can complement NR in production. For all you know, it may be another rubber producing crop. We are already hearing about a promising rubber crop which produces latex without the allergenic

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proteins associated with Hevea. We have to explore this. New breakthroughs in genetic engineering have made it technically feasible to deploy the rubber tree as a biofactory for various products including pharmaceuticals and fuel. The potential application of nano technology to further improve NR properties calls for serious research. Whatever it is, technology holds the key to the future of NR in Malaysia. It would therefore be strategic to establish a technology intelligence group tasked with the responsibility to scout for and collate information on global technology developments related to the NR industry and undertake the relevant technology foresight studies. It is clear that with the emergence of new scientific tools, NR can harbour new hopes. In fact, with the right investment in scientific R&D, there is no reason why the glory days of NR cannot be brought back.

NATURAL RUBBER UNDER PRESSURE TO CHART NEW DESTINY I recently attended the National Rubber Economy Conference 2013. Themed “Natural Rubber at the Crossroads; Blazing New Trails”, the conference brought together many from the natural rubber industry. It was also a chance for me to touch base with old friends from the former Rubber Research Institute of Malaysia who have yet to give up hope on rubber. As for me, I left rubber for palm oil when I saw estates cutting down their rubber trees to plant oil palm. Natural rubber then was labelled a sunset industry. However, in the last few years, thanks to the growth frenzy in China, the price of natural rubber literally bounced back to reach levels never thought possible.

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The interest in natural rubber was rekindled. Some plantation companies seriously contemplated reinvesting in rubber but this proved to be temporary as rubber prices recently took a beating again. The slowing down of growth in China is partly to blame. Natural rubber now needs a new strategy. The conference essentially deliberated on the plan to chart a new destiny for a crop which has served the nation well over many decades. Despite the decline in plantation, natural rubber is still a force to be reckoned with. In 2012, natural rubber contributed RM36.4 billion to the nation’s coffers. Though natural rubber export has been down, the shortfall is made up by expansion in the export of rubber products and rubberwood furniture. Malaysia remains the world’s largest consumer of natural rubber latex and the number one manufacturer of NR medical gloves. At one time, there was a strategy to turn Malaysia into the regional hub for all kinds of rubber products using both natural and synthetic rubbers. Unfortunately, that plan fell through and we did not make much headway even in the manufacturing of tyres or other rubber-based products for the car industry. Instead, the latest report suggests that Thailand is making commendable progress in this. Although natural rubber was not among the earlier twelve National Key Economic Areas (NKEAs) under the Economic Transformation Plan (ETP), it is now included with palm oil. The hope was that through the ETP, natural rubber would unleash a new vigour for expansion and contribution to the nation’s coffers. Natural rubber has four Entry Point Projects (EPPs) viz; Increasing Average National Rubber Productivity to 2,000 kg/ ha/year by 2020; Ensuring Sustainability of the Upstream Rubber Industry ; Increase World Market Share of Latex Gloves to 65% (RM30 billion or USD10 billion) by 2020 ; and Commercialising the chemically modified natural rubber now renamed Ekoprena and Pureprena.

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As highlighted in the keynote presentation by the MRB director general, implementing the EPPs present many challenges. For one, 95% of rubber is now produced by smallholders. More than 50% of smallholders are old. Understandably, managing the plantings has not been easy. Poor materials are mostly used in the fields. Fertilizer application is not according to recommendations made by the extension agents. Stimulant use to boost yield is also low at only 4%. As a result, diseases are rampant in smallholders’ areas. Even the number of smallholders’ areas are decreasing and their income is low. It is worse when the price is not right. The average area operated by smallholders has also dwindled. It is therefore no surprise that Malaysia’s productivity is low compared to other natural rubber producing countries. This is further exacerbated by the fact that 28% of the trees are above 20 years old. Another worrying trend is that both the SMR and Latex Concentrate processors are operating at low capacity utilisation. Profits in processing are also down. So what are the remedial measures? What are the new trails that will be blazed? After much deliberation and engagement with key stakeholders of the industry, MRB has unveiled a One Nation Strategy to chart the new destiny for natural rubber. In a nutshell, the strategy proposes better coordination among the many institutions to achieve improved synergy and performance. Through such coordination, it would be easier to address the productivity shortcomings of the smallholders and therefore breathe new vigour in the industry. Executing that strategy is, of course, the next challenge.

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BRING BACK THE GLORY OF NATURAL RUBBER For many years now, revenues from the oil and gas sector have been the country’s leading paymaster. The economy would not have been the same without the income from the country’s petroleum resources. Not very long ago, it was the revenue from Natural Rubber (NR) that was the mainstay of Malaysia’s socioeconomic development. NR was in a way the darling of the nation’s economy before palm oil and petroleum came along. In the days when NR ruled, employment in rural Malaysia was very much related to the rubber business. Things started changing when the more lucrative oil palm and later petroleum came along. NR began to slowly phase out from the investment radar. It was all a question of economic choices really. This, however, does not mean that NR is no longer a priority for the country. On the contrary, NR is still a major revenue earner for the economy. The export of rubber products, especially latex based products brings in billions every year. If we add the earnings from the export of rubber-wood furniture, NR is still a major economic force. In recent years, with the significant improvement in NR prices, no thanks to rising crude oil prices and the booming demand in China and India, investors are seriously re-evaluating the increasingly attractive NR business. Its famous tag as a sunset industry is now being questioned by many. Is NR bouncing back? In assessing the future of NR, we need to consider a few issues. First, it is a fact that Malaysia cannot forever count on petroleum as the country’s economic powerhouse. In a matter of years, we may not see the earnings that we now enjoy from crude oil. Even natural gas has its finite life time. In fact, experts are already predicting

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that in less than 10 years, we will be a net importer of crude oil. We need to explore other economic options to replace the income we now get from petroleum. Will NR be one of the options? How we can revive the glory days of NR? Is there a role for STI? Secondly, it is also made perfectly clear by many that we now live in a new global environment. We live in a world which is highly borderless. Competition is on the rise. Consumer expectations have evolved. There are now new dimensions of consumer demand. Concern for the environment is one which has dominated the business and trade meetings of recent years. Green procurement has become a feature of most purchasing activities. Green technology is now the norm of international business. Are there opportunities for NR in the green economy? Can S&T turn NR into a high income industry? How do we exploit S&T to add value to NR? The workshop discussed how S&T can reshape the future of NR.

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CHAPTER 14 INNOVATION SUCCESS BRING BACK THE GLORY DAYS OF IMR Not too distant in the past, Malaysia was known and respected worldwide for its high quality scientific research. The Rubber Research Institute of Malaysia (RRIM), for example, enjoyed world prominence in building the science of natural rubber. Scientists at the RRIM made many impressive breakthroughs transforming natural rubber from the backwaters of Brazil into the limelight of the international business. Experts from all over the world would often land in Kuala Lumpur to personally engage scientists at the RRIM on the latest published findings on natural rubber. RRIM became the centre of the global network of rubber scientists. Those were the days. The other research centre which enjoyed global reputation and respect was the Institute for Medical Research (IMR). During those glory days, IMR was known worldwide as one of the major centres for prolific research in the diseases of the tropics. Many of IMR’s scientists were literally the who’s who of the global scientific fraternity of research on tropical diseases. Not unlike their natural rubber counterparts, IMR scientists were often sought after for their views and analysis of tropical ailments. There was active research not only on developing the therapy for tropical diseases but also formulating preventive protocols which eventually became standard practice in other countries. Many scientific experts emerged from the rubric of IMR. One such personality

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who has since made an international name for himself in the field of tropical diseases, particularly studies on the mosquito-borne filariasis, is Dato’ C P Ramachandran. As a Senior Fellow of the Academy of Sciences Malaysia (ASM), he recently unveiled his biography which details his struggle to pursue prominence in his field. Attended by many of his past colleagues from IMR, the launch showcased his groundbreaking research which eventually gained international recognition. He had his beginnings at the IMR during its heyday but as a result of his impactful research, he soon landed in a senior position at the World Health Organisation, WHO, in Geneva where he spent 17 years of his working life. Another IMR luminary, Tan Sri Dr Jegathesan, read out the citation on Dato’ C P as he is affectionately known. At an age when many would have called it quits, he remains active in many of the country’s scientific bodies including the Academy. Admittedly, all such individuals are now a rare of breed. The IMR of today has unfortunately lost much of the scientific glitter that used to be their signature. What has gone wrong? Can we revive the glory of the early years? A chat with many of his ex-IMR colleagues during the launch provided some answers to the query. One glaring reason offered by those who have been following the story of IMR for the unfortunate decline in reputation is the structural decimation of the institute itself. It now enjoys much less autonomy. Even in the recruitment of talents, the institute does not have much say. Add to that the gradual withdrawal of the much needed funding, one can understand why the IMR is now reduced to mainly providing laboratory support for the Ministry. Research work is now at a minimum. It is a real pity that IMR has come to this. Not because of its own doing but more because a decision was taken years ago to change its role. It is not too late to reverse that decision. In fact, it has

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become even more crucial now to revisit the decision. This is because in recent years, evidence has surfaced on the fact that some of the diseases, which we have earlier declared being totally eradicated, are making a comeback and this has come about because of a number of factors. One relates to the growing movement of people from still infected regions as a result of economically-driven migration. The other is attributed to the development of resistance by disease carrying microbes to present drugs. We need the constant search for solutions if we are to effectively deal with the challenges and there are new scientific tools available. We need to reinvigorate medical research in the country. It is time to give life back to IMR and return it to its former glory.

TABUNG HAJI, A SUCCESS STORY IN SOCIAL INNOVATION Back in the 50s and 60s, only the wealthy could afford to go for Haj. The less affluent could only dream of it. Though not compulsory for those who cannot afford, all Muslims would yearn to have the opportunity to visit the holy sites of Makkah and Madinah at least once in their lifetime. In those days, the rich would normally sell their property to pay for the trip. Some sold houses while others would sell livestock to cover the costs of the Haj. There were some who were known to have sold everything they had to make the pilgrimage. It is different now. Tabung Haji has changed all that. Now everyone who is willing to put aside savings in the Tabung Haji can eventually make the trip. If AirAsia can make “Now Everyone Can Fly” a reality, Tabung Haji can claim to have made “Now Every Muslim Can

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Perform the Haj” also a possibility. Those who follow the Tabung Haji story know that the brilliant idea to create Tabung Haji came from the nation’s illustrious economist, the iconic Royal Professor Ungku Aziz. The idea may sound like common sense nowadays but not back then. This is the reason why we should encourage avenues for generating new ideas among all Malaysians, especially the young. The young should be taught the ideation process so that innovation will eventually become a common phenomenon. This year, Tabung Haji celebrates its 50 years of existence. Though there were many trials and tribulations during those years, Tabung Haji has now emerged as a credible and successful fund management organisation. It has become the envy of many other Muslim countries. Royal Professor Ungku Aziz should be proud of the fact that his original concept has now germinated into a world class investment entity which many other Islamic countries would want to emulate. Depositors are also motivated to save more by the generous returns gained from their savings. This is all made possible by the judicious choice of investments guided by Tabung Haji’s investment panel. Tabung Haji’s investment in oil palm plantations must surely count as one of those that give attractive returns. In fact, nowadays, any investment in palm oil can almost guarantee lucrative returns. Though the price of palm oil does occasionally fluctuate, the long term trend is that it will remain profitable. This is because palm oil is the most competitive oil in the global oils and fats market. The growing world population will continue to demand more of the oil as food because palm oil also offers functional advantages over competing oils. It has been reported that Tabung Haji now produces slightly over 700,000 tonnes of palm oil annually. It should aim to expand more. It should

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also give serious consideration to venture into the higher value downstream products from palm oil. In fact, among Muslims in many countries, the name Tabung Haji has become a respected halal brand. Tabung Haji should capitalise on this positive brand image. It should give serious thoughts to strategise entry into the expanding global halal market. It can start with halal products based on palm oil. There is no reason why it should not also consider venturing into halal pharmaceuticals, especially vaccines. Vaccination is compulsory for the pilgrimage. It should be opportune to now look at the new emerging halal vaccine production technologies based on plants. Tabung Haji has certainly come a long way since it was first established 50 ago. In fact, it has become so successful that nowadays, people have to queue to perform the Haj. The number of people wanting to perform the Haj has literally swelled. Many are from the younger generation, unlike the situation in the early years when performing the Haj was only confined to retirees and the elderly. Thanks to the excellent management of the fund, Tabung Haji can now count as a success story in social innovation. Moving forward, it is time for Tabung Haji to seriously consider venturing into the global market. Tabung Haji can be another potential platform for Malaysia’s Muslim ummah to tap on the global business opportunities. It is not impossible!

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FELDA, A SUCCESS STORY IN POVERTY ALLEVIATION The World Cup is now a hot topic. All are feeling the heat of this quadrennial football fever. Almost every time, the World Cup never fails to grip the world with its controversy. It is even hotter now that Brazil is host to the competition. Not just because Brazil has always been the hot favourite at every World Cup but more because Brazil has been a constant feature in the global debate on sustainability and the emerging economic powerhouse. The country has been on the world map for a number of reasons. Now fresh stories have emerged assessing Brazil’s struggle to reduce the economic divide. Though this still remains a challenge as demonstrated in the days before the competition, the popular verdict is that Brazil has made impressive progress. Their numbers tell of a definite improvement in the country’s wealth distribution thanks to strategic actions taken by the country’s leaders in recent years. Here at home, Malaysia has also received worldwide attention in a number of success stories dealing with poverty alleviation and the equitable distribution of wealth. The Federal Land Development Authority (Felda), model of rural development, is definitely one which has gained global recognition. Many countries looking for viable solutions to the challenge of reducing the incidence of poverty among their population have taken the initiatives to emulate Felda. We must thank our leaders of the early years for having the foresight to create Felda. The formula is quite simple. It is a case of sharing resources and responsibility. The government would put up a parcel of new land, decision is then taken on a crop to cultivate based on professional advice from the nation’s crop experts.

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It started with rubber, but over the years, this has shifted to oil palm. Each family selected for the programme is allocated 10 acres each to work on the land. In addition to that, each family is given another plot of land for dwelling and subsistence. The actual development of the land and the crop is managed by professionals working under Felda. The result is for all to see. The participants in the scheme have benefited enormously from the arrangement not only in terms of better income but more importantly better educational opportunities for their children. Many have now assumed key positions in both the government and business sector. Felda, however, did not limit its investment only to planting oil palms. Instead it has ventured into processing and other downstream activities to further add value to the crop. The beauty of the whole scheme is that the profits from the value added business are also shared with the original planters or settlers as they are often referred to. This explains why the scheme could be sustained over many decades. Though there have been hiccups but most have been overcome. One challenge concerns the opting out by settlers once they take possession of the land. Some have been persuaded for whatever reasons to sell their crops outside the Felda network. If this is not handled properly, this can negatively impact the key principles of the Felda arrangement, which is unfortunate. This is because the success of Felda is based on the effective utilisation and sharing of management and processing resources. Recent years have also seen Felda moving more aggressively to tap on the business potential not only further downstream but also investing beyond Malaysia’s shores. The listing of Felda Global Ventures (FGV) did invite some concerns from certain groups. Though admittedly there are some negative implications of such moves, those in the

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know recognise the fact that the positives far outweigh the downside. As a country with a comparatively small domestic market, investing overseas is an option that Felda should not avoid if it is to witness further expansion in its assets and capital. Ultimately, such ventures will eventually deliver benefits to the Felda settlers. No doubt there are risks involved here but these are risks which can be managed. At the end of the day, what is important is Felda should deliver a sustained solution to poverty alleviation. Felda is no doubt a success story that we all should be proud of!

FELCRA, A SUCCESS STORY IN RURAL TRANSFORMATION Malaysia has many success stories to tell in rural empowerment. This explains why the country’s rural economy has witnessed progressive change since Independence. Much has been written about the success of the country’s Federal Land Development Authority (FELDA), established many decades ago. It was the brainchild of the country’s second Prime Minister, Tun Abdul Razak. FELDA is a scheme in rural developments which has become a model many countries have tried to emulate. Learning from Malaysia’s experience, many have implemented similar programmes as part of their nation’s poverty alleviation agenda. Over the years, FELDA grew from an experiment in poverty eradication into an international conglomerate in the palm oil business. In fact, FELDA is now a global brand with the recent public listing of the Felda Global Ventures Holdings (FGVH). As a highly diversified palm oil giant, FGVH has now ventured beyond the country’s borders seeking new investment opportunities in the oils and fats business. Though some question the

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wisdom of such a move, many applaud such initiatives as a strategic way for Malaysia to tap into the global expansion in the lucrative edible oils business. For decades now, Malaysia has led the world in palm oil trade. It is now time for palm oil companies to expand into the other edible oils including soya, canola and even sunflower. Taking on a slightly different path is the countryâ&#x20AC;&#x2122;s Federal Land Consolidation and Rehabilitation Authority (FELCRA). It is another success story for Malaysia in rural empowerment. Instead of opening up new land settlement for agriculture as in the case of FELDA, FELCRA empowers existing land owners in the rural areas to better manage their crops. The aim is to achieve better returns. Inadvertently, the most popular crop is the oil palm. Rubber is a distant second while rice is also grown as another estate crop. Judging by the performance in the many years since it was first established, FELCRA can also account for much of the impressive development in rural Malaysia. Each year, rural households which participate in the FELCRA schemes enjoy lucrative dividends, a far cry from the days when they had to fend for themselves. What FELCRA does is not just to provide professional support in crop management but also provide market support in terms of processing and distribution. Though there have been other attempts to alleviate rural poverty, both FELDA and FELCRA must surely count as the two most successful initiatives by the government.

limited. Many plantation companies are now looking at investment opportunities in West Africa, the original home of the oil palm. Thanks to recent improvements in the political climate of the region, the risks associated with investments there have been drastically reduced. The region is also attractive by virtue of being close to the western markets of the European Union (EU) and the USA. It may therefore be opportune for FELCRA to evaluate such investment potentials. Admittedly, human capital is one of the key challenges of the palm oil sector. Increasingly the sector has raised concerns over the difficulties to engage managerial level talents to take over the running of the industry. FELCRAâ&#x20AC;&#x2122;s recent move to invest in a university to train manpower for the plantations sector is seen as wise. It would be prudent for the university to provide courses for the entire value chain of the plantations industry. There is no reason why, with the right strategies and planning, the university cannot eventually become a global centre for sustainable plantations management. In order to achieve such acclaim, the university should also give serious attention to investment in Research and Development (R&D) and entrepreneurship. Over the years, there is no doubting the fact that Malaysia has made impressive progress in rural development. Both FELDA and FELCRA are testimony to such achievements.

Following in the footsteps of FELDA, FELCRA recently announced ambitious plans to expand and diversify. Unlike FELDA, FELCRA has yet to tap on the full downstream potential of the palm oil business. Admittedly, its annual palm oil production is not as big as FELDA but there is no reason why this cannot be boosted through new plantings. Nowadays, expansion in Malaysia is

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MALAYSIA AIRLINES WILL EMERGE STRONGER Malaysia Airlines, MAS, has been under a lot of pressure lately. First, its recent business performance became the subject of much media scrutiny. The company’s struggle to return to profitability has yet to materialise. It has been in the red for a few years now. This is despite all the efforts to cut costs and expand revenue through route rationalisation and various other initiatives. Then, came the unfortunate incident linked to the unexplained disappearance of MH370 on its routine journey to Beijing. The Malay adage “Jatuh ditimpa tangga” would perfectly describe the situation MAS is in right now. MAS shares took a beating as well. Though described by many as the most unprecedented event of the global aviation industry, there are still those who continue to question the way the situation has been handled. To me, unprecedented means we are dealing with many unknowns never before experienced by the aviation business anywhere in the world. The issue is truly complicated. It is easy to criticise. It is more difficult to offer alternatives. As expected, all kinds of theories have been proposed to explain the disappearance. Suddenly, we see many experts coming forward to share their takes on the incident. The blame game also continues to flourish. On the other hand, there are also many who sympathise with the difficulties faced while communicating the latest developments on the search and rescue mission, SAR. As they always say, it is easy to find fault! Whatever it is, there is no denying that the incident would in some ways dent the excellent brand image of MAS. For years,

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despite the burden of business losses the airlines had to bear, the brand image of MAS has always been above par. Countless surveys done by independent marketing companies have consistently shown the positive brand image of MAS as a safe, dependable and trustworthy company. Most travellers, be they for business or leisure, would always look forward to the excellent service that MAS offers its passengers. There is no negative talk about MAS crew, for example. Instead, many offer praise to the pleasant way they treated as guests of the airlines. For us Malaysians, MAS has always been the preferred way to travel. Not just because MAS is our national carrier, which we should all be proud of, but because MAS compares most preferably to the other airlines in terms of service, reliability and the friendliness of its crew. On a personal basis, I have travelled with most of the world airlines in my former capacity promoting palm oil to the world. I would categorically maintain that MAS stands ahead of all the others. I can vouch the same sentiments from many of my foreign friends. They all speak highly of MAS. Should MAS be assessed only on its bottom-line? To me, MAS should not be judged on its profitability alone. It is of course good to have a national airline which is also in the black as far as the bottom-line goes. A national airline, however, should be judged more on its overall contribution to the nation’s economy. Take tourism for example. If we begin to measure the contribution of MAS to the country’s tourism coffers, we will appreciate more the role that MAS plays. Not to mention the role of MAS in the actual promotion of tourism to the world. In addition to that, we should also look at the contributions of MAS cargo operations, especially how they have helped support our export trade in fresh produce destined for the overseas market of the EU, Japan and the USA.

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Yes, MAS has been on a losing streak for a number of years now. We must be reminded that this is not just unique for MAS. For the record, this is also true for most other national airlines. It is time we assess the big picture on how MAS has and will contribute to the countryâ&#x20AC;&#x2122;s overall economic agenda. This would be a more constructive way to assess MAS. The truth is, there is more to lose without an effective national airline like MAS! MAS will emerge stronger!

REBRAND MAS AS HALAL SYARIAH COMPLIANT For many years, Malaysia Airlines enjoyed a strong and positive brand image in the airlines business. The MH brand has been especially known for its excellent in-flight service. I have travelled with many international airlines but MAS has always come out on top. I say this not because I am Malaysian. It is the truth. All the surveys done have all reached the same conclusions. I have travelled on airlines where stewards would literally throw food at you. I have personally experienced having to catch sandwiches bowled at you like in a cricket match! This is no exaggeration. I am sure others have similar stories to tell. The other thing MAS was also known for was its many years of impeccable safety record. It is rather unfortunate what happened to MH 370 and MH 17 but we must remember both calamities are very much beyond the control of MAS management. Both are consequences of unseen hands. One disappeared without a trace for no valid reason, while the other was shot down. Even to this day, after months of searching, there is as yet no clue as to where MH 370 went. At least for MH 17, there is closure except it is still

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unclear why it has to be MAS that got shot at. Notwithstanding that, in both instances, the MH brand has taken a severe beating. This is where perception sets in. Reality is just thrown out the window. It is sad for an airline which has been hit by two consecutive tragedies in a space of just a few months. All of a sudden, its excellent safety record is smashed! It is not fair. So how then do we erase such negative perceptions? Admittedly, whatever strategy taken to reposition the airlines, the perceptions will not change overnight. It will take time but I believe it can be done. Despite the negativities arising from the recent events surrounding MAS, there are still many positives which can help the airlines recover. Apart from the usual business restructuring that the airline needs to work on, MAS now has to work on a new safety branding. At the same time, its strong image on in-flight service should be further enhanced. On building the safety image, MAS should develop a powerful communication strategy to inform customers regularly on its maintenance record. It should communicate its uncompromising commitment to invest in preventive measures to ensure all its aircrafts are technically sound before being deployed. MAS may want to even organise open days when the public can visit the airlineâ&#x20AC;&#x2122;s maintenance facilities. However, we have to be mindful of the fact that technical failures are not the sole contributor to safety. There have been many reports providing evidence that what happens on board the flights can also influence safety. These include unruly behaviour by passengers and crew members, often times arising from the influence of alcohol. It is time alcoholic drinks are taken off the on-flight menu. I am still baffled by the denying syndrome by some of the danger associated with alcoholic addiction. The facts speak for themselves. Alcohol adversely affects the

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senses. Under the influence of alcohol, normal individuals become abnormal and often unreasonable. I am also not convinced by the view that serving alcohol helps the airlines business. To me, the reality is all passengers just want a safe and comfortable flight to their destinations. There is no doubt in my mind that all is not lost for MAS. The misfortunes that have befallen MAS may even be a blessing in disguise. This is not to take away the sadness that all Malaysians share on the tragedies, but they are both signals that MAS has to embrace drastic change in its business model. It has to rebrand. It has to differentiate itself from the other airlines. To me, the most plausible rebranding strategy is to make it a truly Halal Syariah compliant airline. To make it even more unique, start serving truly Malaysian cuisines on board. Including of course “Nasi Dagang”, “Nasi Kerabu” or even “Budu”! Then, I am convinced MAS will again return to its former glory.

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Science Matters by Datoâ&#x20AC;&#x2122; Dr Ahmad Ibrahim FASc Fellow, Academy of Sciences Malaysia

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