Editor’s note: This speech was delivered by former Bank Negara Governor Tan Sri Muhammad Ibrahim during the Bumiputera Education Congress organised by the Umno Education Bureau at the Putra World Trade Centre today.
DISTINGUISHED colleagues, respected educators, policymakers, and fellow Malaysians,
We are already 25 years into the 21st century and looking at the direction of our education is certainly timely.
A moment where the resources beneath our soil will not determine the future of Malaysia, but by the capabilities within our people.
And at the centre of that future, quietly but decisively stands our education system.
Let us begin with honesty.
Malaysia has not failed in education. We have achieved near universal access. In terms of accessibility, we certainly did very well. We have invested significant public resources. We have built a system that reaches almost every child.
Since independence, Malaysia has consistently allocated one of the largest shares of public expenditure to education, typically around 15–20% of total government spending annually. In cumulative terms, this amounts to hundreds of billions of ringgit invested over decades.
But access is no longer the question. Quality, relevance, and outcomes are.
When benchmarked against global standards such as PISA, our performance tells a story we must have the honesty to read in full.
In the most recent cycle, PISA 2022, whose results were published in December 2023, Malaysia scored 409 in mathematics, 388 in reading, and 416 in science.
The OECD averages stand at 472, 476, and 485 respectively. Singapore, our nearest benchmark in the region, scored 575 in mathematics and 543 in reading.
That is not a gap. That is a gulf, equivalent to several years of schooling. But the score gap alone is not the most alarming part of this picture.
What is more alarming is the direction of travel. Between 2018 and 2022, Malaysia’s overall PISA performance fell by more than six percent. Mathematics dropped from 440 to 409.
Reading fell from 415 to 388. We are not standing still. We are moving backwards. And we must say so plainly.
The World Bank in its Malaysian Economic Monitor (2024), ‘Bending Bamboo Shoots: Strengthening Foundational Skills’, concluded that Malaysia has achieved strong access and investments, but learning quality and outcomes lag behind expectations.
Of more concerning, the World Bank report showed that Malaysian students spend approximately 12.9 years in school, but learning outcomes are equivalent to only about 8.9 years of effective learning, indicating a ‘learning deficit’ or inefficiency, causing many students struggled with basic literacy and numeracy, especially in early grades.
The WB suggested that more investment should be directed to preschool and primary. More damning, it concluded that Malaysian education system is not yet producing the skills needed for a high-income economy.
Within ASEAN, Malaysia performs better than some peers, but remains behind the regional frontier, particularly Singapore, and increasingly Vietnam.
And then there is the question of who, precisely, is being left behind. In reading, only 42 percent of Malaysian 15-year-olds reach the minimum proficiency level, against a 74 percent OECD average. In mathematics, the figure is 41 percent, against 69 percent.
At the very top of the performance scale, the students who will become our scientists, our engineers, our innovators, just one percent of Malaysian students qualify as top performers in mathematics. The OECD average is nine percent. Singapore stands at 41 percent.
Malaysia does not lack basic capability. Malaysia lacks high-level excellence at scale.
And the data tells us that this deficit is not shrinking. It is widening.
Transformation is imperative
And when our students enter the workforce, too many are found wanting, not in qualification, but in capability.
This yawning gap is a problem we must confront head-on.
We need transformational change, not piecemeal tweaks that merely paper over deep-rooted cracks in our education sector. Incremental fixes have prolonged inefficiency, eroded public trust, and squandered opportunities for sustainable growth.
True transformation demands bold, systemic overhaul, reimagining governance structures, harnessing digital innovation, and embedding accountability at every level.
Only then can we unlock Malaysia’s potential in building a strong education system that leads towards a resilient and strong economy and a nation that leads, not lags, in the global arena.
The challenge before us is not one of funding alone. It is a challenge of design, discipline, and direction.
We must ask ourselves:
Are we teaching too much, and learning too little?
Are we examining too narrowly, and preparing too broadly?
Are we managing education, rather than leading it?
I want to offer my perspectives. Based on my experience as a student with the privilege of studying both domestically and overseas, as a job seeker, and as an employer.
First, we must redesign what we teach.
Our curriculum today is dense, perhaps too dense.
We must have the courage to do what systems rarely do, teach less, but teach better, reduce content and deepen understanding. Prioritise mastery in fundamentals, literacy, numeracy, and scientific reasoning.
The 21st-century education is no longer just about how much students know, but how effectively they can use what they have learned. At its core, it requires students to develop the ability to think critically, solve unfamiliar problems, and make sound decisions in a world where answers are not always clear.
Equally important is their ability to communicate ideas clearly and work with others, often across different cultures and perspectives.
In a digital age, students must also be capable of navigating technology, understanding not just how to use tools, but how to evaluate information, distinguish fact from misinformation, and act responsibly online.
Alongside these, the ability to manage oneself has become essential, being adaptable in the face of change, resilient when encountering setbacks, disciplined in effort, and committed to continuous learning.
These skills are not separate subjects to be taught in isolation. They must be embedded within the learning process itself, shaping how students engage with knowledge, rather than simply what they memorize.
Ultimately, while academic content may help students succeed in examinations such as SPM, it is these broader capabilities that will determine their ability to thrive in life and in a rapidly evolving technology and the economy.
But beyond that, cultivate what the future demands, the ability to think critically, to communicate clearly and to solve problems that are not in textbooks.
The future economy that our children will inherit will not reward memorisation. It will reward adaptability, judgement and the agility for them to reinvent themselves.
Second, we must change how we assess learning.
As long as success is defined narrowly by examinations such as SPM, our classrooms will continue to teach to the test.
Don’t misunderstand me. Examinations should remain. In fact, they must. Eliminating examinations to my mind, is regressive. And foolish. We need examinations to identify talent, streaming, and catch those who lag, so that remedial actions can be administered.
But they must evolve. From recall to reasoning. From standard answers to applied thinking. From certainty to judgement.
Because what we test ultimately shapes what we value. If we do this, we will equip our young generation with the necessary ‘survival skills’.
Third, we must embrace multilingual proficiency as a strategic advantage, supported by the return of English-medium pathways.
Bahasa Malaysia anchors our national identity and unity.
English and now, Mandarin connects us to global knowledge, commerce, and innovation.
We must depoliticize language, harnessing it as a source of national competitiveness rather than a weapon of endless parochial polemics.
A language cannot be mastered through instruction alone.
It must be used as a medium of learning to acquire emerging knowledge.
This is why Malaysia should reintroduce English-medium schools or streams within the public system.
Not as a replacement for Bahasa Melayu, but as a complementary pathway. It also gives additional choices to parents for the type of education they prefer for their children. Government ought to be less paternalistic when it come to educational choices.
Another language that the future generation of Malaysians should master is Mandarin.
Mastering Mandarin offers clear benefits. First, it boosts employability in business, diplomacy, tourism, and technology sectors deeply engaged with Chinese-speaking markets. Second, it can be aligned with national education strategies by equipping students with a globally rising language and access to cutting-edge Chinese research. Third, as China emerges as one of the world’s foremost economic powers and a major trading force, it unlocks vast economic, business and employment opportunities.
Adopting multilingual system in public education will strengthen real proficiency in languages especially English and Mandarin. It will also reduce dependence on costly fees imposed by private and international schools. It will democratise access to global competencies, and improve readiness for higher education and the workforce. It will also give an opportunity to B40 group to acquire a skill that will enhance their social welfare.
At the same time, Bahasa Melayu must remain strong and compulsory as it reflects the national identity that must remain anchored as a national pride.
The goal is not monolingualism. The goal is to have confident multilingual Malaysians.
Fourth, we must recognise that one pathway cannot serve all, and that TVET must become a future-focused pillar of our education system.
The future economy will not be built by academics alone.
It will be built by engineers, technicians, designers, coders, digital specialists, and skilled craftsmen, individuals whose talents are diverse, but equally critical. These are critical lessons derived from the economic history of developed economies.
Technical and Vocational Education and Training, TVET, must therefore be repositioned:
Not as a fallback, but as a first-choice pathway for future industries.
This would require a fundamental shift in the thinking of policy makers, turning TVET education, from low perception to high prestige, from narrow skills to advanced, technology-driven competencies and from isolated training to strong industry integration.
Malaysian TVET education must be aligned with advanced manufacturing, digital technologies, green economy and sustainability, automation, AI, and robotics.
Given that TVET education will provide a major contributor to future economic growth, its pathways must be fully integrated into the national qualifications framework, allowing progression from certificates to diplomas, degrees, and beyond.
TVET education is a different route to excellence.
And the budget allocation to TVET education must reflect the criticality of these future pathways.
A single ‘MQA’ for TVET education is an imperative
Another critical point, a single, centralised system for quality assurance may appear efficient on paper, but in practice, it risks blurring fundamentally different missions.
This is particularly true in the case of the Malaysian Qualifications Agency (MQA) and Technical and Vocational Education and Training (TVET).
MQA was designed to regulate and assure standards in academic and higher education pathways, degree programs, research quality, institutional accreditation, and comparability with global frameworks.
Its orientation is scholarly, standards-based, and internationally aligned. TVET, by contrast, is industry-driven, skills-based, and closely tied to labour market needs, employer practices, and rapidly evolving technologies.
To place both under a single institutional framework risks forcing a false convergence. Academic pathways may become overly bureaucratized by compliance requirements designed for skills training, while TVET risks being over-academised, judged by criteria that do not reflect workplace competence or industry relevance.
The result is neither efficiency nor clarity, but dilution.
There is also a deeper structural issue. TVET must be agile. It must respond quickly to changes in industry demand, technological shifts, and evolving skill requirements. This requires close and continuous engagement with employers, sector bodies, and regional economic priorities.
An agency dedicated solely to TVET can be designed with this responsiveness at its core, governed with strong industry representation, empowered to update standards rapidly, and measured by employment outcomes rather than academic benchmarks.
MQA, on the other hand, must safeguard academic integrity, comparability, and long-term institutional credibility. Its strength lies in consistency, rigor, and alignment with global higher education standards, not in rapid iteration.
MQA should also be selective in its regulation, giving as much freedom as possible to educational institution to response quickly to the demand of industry, advancement of technology and free will to innovate. It must increasingly adopt ‘light regulation’ giving universities autonomy as much as possible. By ‘light regulation’ means less regulation, less bureaucracy and less heavy handedness.
Separating the two into independent agencies is therefore not fragmentation, it is clarity of purpose. It allows each system to be governed according to its own logic, evaluated by appropriate metrics, and developed with the right stakeholders at the table.
Importantly, separation does not mean disconnection. A well-designed interface between the two systems, through credit transfer frameworks, recognition of prior learning, and lifelong learning pathways, can ensure permeability without forcing uniformity.
In short, if Malaysia is serious about elevating both academic excellence and skills mastery, it must resist the temptation to treat them as variants of the same system.
They are complementary, but distinct. And they will perform best when each is entrusted to an independent institution with a clear mandate, focused governance, and accountability aligned to its purpose.
Fifth, we must place teachers at the centre of reform.
No system rises above the quality of its teachers.
Yet today, too many are burdened not by teaching, but by administration.
We must free them to do what matters most, to teach, to guide and to inspire. We need to invest in their development and strengthen their professional standing. And we must trust them, because without trust, reform becomes mere compliance.
In this respect, the government might want to consider imposing a one percent ‘contribution fee’ on all private higher institutions for the purpose of training and developing school teachers.
Sixth, we must rebalance governance.
Our system today is highly centralised under the Ministry of Education Malaysia, with quality assurance functions performed by bodies such as the Malaysian Qualifications Agency. This structure has served us very well over the last few decades.
But when policy, implementation, and evaluation sit too closely together, accountability becomes blurred.
The challenges of the 21st century compel us to move toward a new model. I would like to propose an independent Education Commission, to set standards, measure outcomes, and report transparently.
It ought to focus on delivery and be empowered to innovate within clear national parameters.
Not fragmentation, but clarity of roles, dispelling perceptions of a politically driven education system.
Let me elaborate.
Recent surveys by the Merdeka Centre (2024) suggest that a substantial majority of Malaysians view education policy as overly politicised, eroding trust in institutions like the Ministry of Education and state education departments.
A role-clarity model, inspired by successful federal-state hybrids in Australia and Canada, assigns the MOE to national curriculum frameworks and funding equity, states to localised delivery and teacher training, and independent bodies like the Malaysian Examinations Council to unbiased assessments.
The benefits are tangible, enhanced trust through transparent role matrices that reduce accusations of federal overreach or state capture, stronger outcomes through more focused delivery and sustainability, shielding education from electoral cycles and aligning with the nation’s aspirational goals for merit-based governance.
We ought to be mindful that this is not decentralisation for its own sake, but a deliberate architecture for excellence, ensuring education serves national unity, not political expediency.
Therefore, restructuring Malaysia’s education system demands precision, not fragmentation. By clearly delineating roles, empowering autonomous state-level implementation while preserving federal oversight on standards and equity, we foster accountability without diffusion of responsibility.
This approach directly counters the entrenched perception of a politically driven system, where appointments and curricula appear swayed by partisan agendas.
Seventh, we must embrace controlled decentralisation
Malaysia is a tapestry of diversity, not a uniform monolith. The bustling classrooms of Kuala Lumpur, equipped with cutting-edge technology and facing urban challenges like overcrowding, demand solutions worlds apart from the rural schools in Sabah, Sarawak, Terengganu and Kelantan, where access to teachers, internet, and even basic infrastructure remains a daily struggle.
Similarly, the Orang Asli communities in Peninsular Malaysia require culturally attuned education that honours their traditions, languages, and lifestyles, rather than one-size-fits-all mandates from Putrajaya.
To thrive, we must empower states, districts, and local authorities with the flexibility to tailor policies to their unique contexts, adapting curricula, teacher training, and resource allocation to local realities.
Yet, this devolution cannot descend into chaos. National standards must serve as our unbreakable guardrails: core competencies in Bahasa Melayu, STEM, and civic values; rigorous accountability through performance metrics and audits, and equitable funding formulas to prevent any region from falling behind.
This controlled decentralisation is not a dilution of unity, it is the smart amplification of it. By trusting our federal structure, we unlock innovation from the ground up, ensuring every Malaysian child, from the coasts of Kelantan to the coasts of Sabah, receives an education that propels them forward.
Eighth, we must ensure stability in policy, and remove politics from education.
One of the most damaging features of our system has been frequent policy shifts, changes in language of instruction, changes in curriculum direction and changes in assessment emphasis.
Each shift imposed will involve adjustment costs on teachers, confusion for students and inconsistency in outcomes.
Education cannot be governed on short-term cycles. It requires long-term consistency and discipline.
Equally important, education must not be politicised.
Decisions on curriculum, language, and standards must be guided by evidence, pedagogy and national interest. Certainly, not by short-term political considerations.
Ninth, we must give parents a voice within a fair system.
Choice matters.
But choice without equity creates division. We must design a system where parents can choose what is best for their children, where schools are accountable and where access remains fair to all.
If necessary, introduce an Education Voucher Scheme targeted at eligible low-income families in rural and underserved areas. This program would provide redeemable vouchers, valued at approximately RM500–1,000 per child annually, enabling parents to enroll their children in approved after-school tuition classes, online learning platforms, or supplementary programs.
These vouchers complement formal day schooling by addressing key gaps in STEM, language proficiency, and critical thinking skills, which are often limited in under-resourced rural schools.
Tenth, we must align education with the economy we are building.
Finally, it is imperative that we realign our national education system with the contours of the knowledge-based economy we are strategically constructing, a digital, innovation-led, and globally integrated Malaysia poised for sustainable prosperity.
Certificates alone are insufficient, artifacts of a bygone industrial paradigm. Instead, we require a cadre of analytical thinkers adept at uncertainty navigation, action-oriented implementers capable of enterprise creation, proficient communicators bridging multicultural and transnational markets, and committed lifelong learners resilient to technological disruptions such as artificial intelligence and evolving geopolitical dynamics.
By systematically integrating science, technology, engineering, and mathematics (STEM) competencies, rigorous critical thinking frameworks, and entrepreneurial acumen across educational institutions, from metropolitan centres like Petaling Jaya to underserved rural regions, we can cultivate the human capital essential to propel Malaysia’s ascent in the global knowledge economy, ensuring equitable advancement for all citizens.
Education alone is not enough. We must also fix the economy.
Education reform, on its own, cannot carry Malaysia into the next stage of development. It can produce better graduates, stronger institutions, and more agile and adaptable citizens, but if the economy they enter remains structurally unchanged, their potential will be underutilized, and in many cases, wasted.
At present, Malaysia’s economic model still bears the imprint of an earlier era, one built on cost competitiveness rather than value creation. Growth has long been supported by relatively low wages, a steady inflow of low-cost foreign labour, and export industries that compete more on price than on innovation or sophistication.
This model delivered results in the past, lifting incomes, eradicating poverty and industrialising the economy. But it has now reached its limits.
The consequence of this economic model is a growing mismatch between aspiration and opportunity.
On one hand, education reforms are rightly pushing toward 21st-century capabilities, critical thinking, digital fluency, creativity, and multilingual competence.
On the other hand, a significant portion of the economy continues to generate jobs that neither require nor reward these skills.
Employers operating within a low-cost framework have limited incentives to invest in automation, technology adoption, workforce upskilling or engage in high-value-added businesses. Cheap labour becomes addictive and a substitute for productivity gains.
This creates a structural trap. Even if the education system improves, graduates may find themselves in an economy that does not demand higher-order skills.
Underemployment rises. Talent either migrates abroad or shifts into sectors unrelated to their training. Wage growth stagnates because firms are not competing on productivity, but on cost minimisation.
Dependence on low-cost foreign labour further entrenches this equilibrium. It suppresses wage signals that would otherwise push firms to innovate. It delays necessary investments in mechanisation and digitalisation. And it fragments the labour market, especially the B40 group that bear the brunt of an economy relying on low-cost model and unskilled foreign labour, making it harder to build a cohesive, high-skilled workforce.
Similarly, an export model that remains concentrated in mid to low-value segments faces intensifying competition from lower-cost economies. Without moving up the value chain, into design, R&D, advanced manufacturing, and services, Malaysia risks being squeezed from both ends and perpetually entrenched in the middle-income category, too expensive to compete with the lowest-cost producers, yet not sufficiently innovative to compete with advanced economies.
In this context, education reform becomes necessary, but not sufficient to make real comprehensive changes.
For reform to be meaningful, it must be matched by a deliberate restructuring of the economy. This means shifting from a cost-based model to a productivity and innovation-driven one.
It means reducing structural reliance on low-wage labour and creating incentives for firms to automate, upgrade, and invest in human capital. It means reorienting industrial policy toward high-value sectors, digital industries, green technologies, and knowledge-intensive services.
Crucially, it also requires policy coordination and consistency. Frequent shifts in direction undermine investor confidence and discourage long-term investments in skills and technology. Education and economic policy must move in tandem, reinforcing each other rather than operating in isolation.
Education and economic policies are Siamese twins that must move in tandem to build a skilled workforce and a resilient economy.
Technical and vocational education and training (TVET) becomes particularly important in this transition, not as a secondary pathway, but as a central pillar of a modern economy. A restructured economy will demand highly skilled technicians, engineers, and specialists who can operate, maintain, and innovate within advanced systems.
Ultimately, the issue is one of alignment.
An education system that produces high-quality human capital must be met with an economy capable of absorbing and rewarding it.
Otherwise, reform risks becoming an exercise in frustration, raising expectations without expanding opportunities.
Malaysia’s next phase of development will therefore not be determined by education policy alone, nor by economic policy in isolation, but by how effectively the two are integrated into a coherent national strategy.
Without that alignment, education reform will improve the supply of talent, but not the returns to it. With alignment, however, Malaysia can move decisively from a low-cost economy to a high-value, high-income nation.
Conclusion
Reform will not come from a single announcement. Nor from a single blueprint. It will come from discipline in execution, from consistency over time, from resisting the temptation to change course too often, and from the courage to focus on what truly matters.
Malaysia does not lack investment. Nor talent. What we must now ensure is that our system does not dilute either, and that we restructure our economy so that education reform is not wasted.
If we get this right, we will not only climb rankings like PISA and close the gap with leaders like Singapore. We shall build a generation of Malaysians, confident in who they are, competent in what they do, and capable of shaping the future they inherit. – May 1, 2026
***Tan Sri Muhammad Ibrahim is the former Bank Negara Governor