In an earlier letter (' From Asia's No 1, where are we now? ') I raised concern of the fact that since Merdeka, our country's per capita income has dropped from being the highest in Asia to a position behind Japan, Hongkong, Singapore, Korea, Taiwan and Brunei.

A foreign academic estimated that we are now about 15 to 20 years behind Singapore, Taiwan and Korea - countries once not even our economic equal.

There are more bad news on the horizon. A London Sunday Times article put China's economy now as the sixth largest in the world after overtaking Italy two years ago. It will overtake France next year, the UK in 2006 and Germany in 2007. It will then overtake Japan in 2016 and America in 2041 to become the largest economy in the world.

The article quoting a Goldman Sachs report also said that India will pass Britain within 20 years and Japan in 30 to become the world's third after China and the US.

Meanwhile, the Thai prime minister has proclaimed that the countryt will beat Malaysia to become a developed country before 2020. Indeed Thailand is now running ahead of us with a higher growth rate.

Does this mean that within the next generation Malaysia will further drop another three notches in the economic league table in the region? What is our response?

In the West, it is now recognised that universities will play a crucial role in their post-manufacturing economy of this century. Silicon Valley owes its birth to Stanford University. Silicon Fens, the name given to the region surrounding Cambridge, has seen huge inflow of investments; Microsoft built its largest software centre outside the US here two years ago.

Bangalore owes its high-tech prosperity to the drawing power of the Indian Institute of Technology in nearby Madras, a top-rated technological university in the last Asiaweek survey.

This week, Britain has just seen the biggest technology float of the year in Wolfson Microelectronics, which is a spin-off company of the University of Edinburgh.

Cambridge Display Technology, another leading technology company was founded by researchers at the Cavendish Laboratory of Cambridge University. MIT is now legendary in its rate of turning out high-tech spin-off companies.

High-tech investments flow to where talents are found, and talents in turn flock to top-class universities where there are exciting opportunities for learning and research.

Can Malaysia stand up to the challenge? The record so far has been disappointing. Graduates from our universities, from being hotly sought after at one time, are now being shunned by employers who prefer foreign graduates.

In its first two decades, degrees from Universiti Malaya were highly respected. MU medical degree was registerable with the General Medical Council in Britain and engineering degrees were accepted for chartered engineer. By the late 1970s, the hard-earned recognition was lost.

When standards were lowered, the value of the degree was destroyed. The noble intention of helping the weaker students backfired. What is the point of issuing inferior degrees to those you want to help?. How can we rebuild a world-class university to take Malaysia into the K-economy?

By admitting some on the basis of lower qualifications, whatever you may call it, you have classified those students as second rate. This is patronising to say the least and induces a sense of inferiority and division. Further, when serious staff members and students see others admitted not on merit, those who can afford will leave and the university slides into mediocrity.

This policy is also unfair to the increasing number of those from the perceived disadvantaged community who were admitted and qualified on their own merit. These graduates are also treated with the same suspicion by future employers. To help weaker students, we should start by improving schools.

There are some simple facts about good universities, the most important being the commitment of good lecturers and their heads. This is more so when you have the cream among so many weak students. The best students admitted on merit will thrive on their own even given mediocre lecturers. But not the weaker students who gained entry by preferential means. They suffer and become unemployable graduates.

To help the weak students, it is more important that the best teachers available are hired. The weaker students who form the majority in the class will benefit.

It will benefit us to reflect on the fact that both Oxford and Cambridge, while having some of the best brains anywhere, have just chosen their vice-chancellors not even from within the UK. Oxford got the vice-chancellor of Auckland University and Cambridge hired the provost of Yale University.

Finally to build a first-class university, you have to give it autonomy and set it free. Students are participating members of an intellectual community and should have say in running the institution.

Alienating them and treating them as children will not promote intellectual development, which is of course the aim of a university education. We have in the past produced graduates who are trained, but not educated.

"A university stands for humanism. For tolerance, for reason, for the adventure of ideas and for the search of truth. It stands for the onward march of the human race towards ever higher objectives. If the university discharge their duties adequately, then it is well with the nation and the people." - Jawaharlal Nehru.