In 1963, Malaysia was the global leader in natural rubber exports. In 2003, Malaysia is a net importer of natural rubber mainly from Thailand. The downstream rubber-based manufacturing industries are increasingly dependent o­n imported rubber as Malaysia's rubber production has declined drastically by 54 percent between 1990 and 2002.

The decline has been especially significant in the rubber plantation sector with a decline of 56 percent in terms of planted area in estates and a corresponding 80 percent decline in production. More tellingly, in terms of productivity, the rubber yield per hectare of planted area for estates has declined by 51 percent over the same period.

It is interesting to note that this drastic decline in production took place over a period when the average price of rubber increased by 32 percent. While the value-added from manufacturing rubber products is significantly higher than from selling natural rubber, the decline in rubber production cannot be explained simply in economic terms. It is quite inconceivable that Malaysian manufacturers find it cheaper to import rubber from Thailand than to source it locally.

It also does not seem to make sound economic sense to allow the rubber plantation industry to wither and die and depend solely o­n imported rubber to support the growing demand of the domestic rubber goods manufacturing sector. The global demand for natural rubber is expected to grow at between 4 to 6 percent per year over the next five years. Why is Malaysia missing out o­n this growing market?

The Malaysian Rubber Board claims that efforts have been undertaken to guarantee the future supply of natural rubber and rubber timber for the country's downstream industries. Their own production statistics as quoted above certainly do not support these claims! What emerges instead is a story of mismanagement and myopic neglect and it is certainly damning evidence that the crowing achievement of the Malaysia rubber industry in the 21st century is to secure a historic wage deal for its workers that guarantees a monthly wage that is significantly below the national poverty line income!

Over the past 10 years, rubber estates were ready targets for conversion for property development and the temptation of acquiring large tracts of land from a single owner/plantation company was too much for state governments to ignore. Rubber estates that were not acquired for development of industrial estates, golf courses or housing projects were converted to oil palm estates. The growing demand for rubber wood was also clearly a factor in the decision to clear rubber estates.

With the collapse of the property market bubble in 1998, most of the grand real estate projects such as the Guthrie Corridor fell through. It is obvious that Malaysian plantation companies, which are mostly indirectly controlled by the government, were too busy selling off their capital assets for short-term gains without any thought of investing in the long-term future of the industry.

However, it is in the area of human resource management that the plantation industry has failed miserably. The industry is struggling to remain competitive through artificially suppressing labour costs having failed to enhance productivity and efficiency through technological innovation. Unable to attract and retain foreign labour, the rubber estates are now dependent o­n ageing workers who are untrained and whose skills are unrecognised; the outcome of a glaring absence of an enlightened human resource strategy.

Trapped in poverty and the corresponding social stagnation and its myriad indignities, Malaysian rubber estate workers today are the tragic victims of an industry leadership that has failed them and the nation. A key factor for this lack of leadership in the industry is the crony appointments of retired politicians and former civil servants, who have absolutely no knowledge of the industry, to the boards and senior management of the plantation companies.

One does not need to look further than the list of past chairpersons of the Malaysian Agricultural Producers Association (Mapa) which reads like a veritable list of Malaysia's ruling elite! Unfortunately control of plantation companies by Permodalan Nasional Berhad (PNB) did not result in the steadying hand of the government in directing the private sector towards long-term strategic goals. Instead, these firms were viewed and treated as ready sources of largesse. A case in point is the misadventure of Sime Bank that frittered away colossal amounts of money that have not been accounted for until today.

Under the present global economic environment, Malaysia needs to get back to basics and build o­n areas where we have a traditional competitive advantage and established core competence. Rubber production is certainly o­ne such area and natural rubber is o­ne of the very few industrial raw materials supplied from a sustainable source which is actually beneficial in terms of the global carbon dioxide budget. Commercial rubber forestry for rubber wood production requires specific government incentives and support.

However, what we need is a well-thought-out strategy for the development of the rubber industry cluster in Malaysia. Mapa should cease committing energy and legal resources to engaging the National Union of Plantation Workers over meaningless tinkering with what is essentially a ridiculous wage system that would ultimately prove self-destructive. Instead their time and effort is better spent o­n ways to enhance the productivity of the rubber industry through modern human resource practices and innovation thorough intensive adoption of information and communications technology and advances in biotechnology.

Plantation firms need to establish innovative supplier relationships with estate workers and former estate workers as well as smallholders (thus rewarding private enterprise and enhancing productivity) instead of still depending o­n the colonial 'mandor-coolie' model. This requires a total change in the mindset of the industry. Confining workers to poverty level wages and wishing for productivity gains through reducing absenteeism is certainly not the most enlightened way to go forward and unless the captains of the rubber industry and the government wake up to this reality, the rubber industry and Mapa may not be around for much longer.