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LETTER | The Ministry of Human Resources will need to revisit the role played by the Human Resource Development Fund or commonly known as HRDF.

As far as I recollect, the main purpose to establish the HRDF Act in 1992 was to encourage employers to provide learning and development opportunities for their employees to address productivity needs.

Therefore, the main objective of the HRDF body, as enshrined in the Act, was the imposition and collection of a human resource development levy for the purpose of promoting training and development of employees by establishment and administration of the fund.

It is must be noted that a payment made to HRDF should be seen as payment to a consolidated fund and not perceived as a contribution.

Therefore, I wish to provide some suggestions to keep the HRDF true to its original intent and purpose:

a) Scale down the Board of Directors composition from 15 to nine members. Some blue-chip companies generating huge profits have smaller boards and remain effective. The HRDF business model generates income from mandatory levies to meet its objectives. For a start, keep the training providers out of the board to avoid conflict of interest. They could be incorporated in working committees to support the objectives.

b) Avoid HRDF to manage tenders. Let the respective employers’ associations manage them based on their industrial needs. These employers’ associations will advise HRDF on the accepted trainings to receive the grant for disbursements. It is their fund and they have every right to decide. The newly-appointed Governance Oversight Committee may assist in establishing the framework for inspection and regulating this process.

c) Since the projected contribution of small and medium enterprises (SMEs) to the country’s GDP will be more than 40 percent by 2020, HRDF could further concentrate on the development of capabilities for SMEs. Encourage their participation as keen builders of peoples’ capabilities by providing special grants and tax exemptions.

Overall, in the long run, the government should relook at its GDP Value Chain that will help to emphasise its human resource development initiatives in the right direction.

As a country blessed with all features suitable for agriculture, Malaysia should concentrate on this sector and move to downstream manufacturing activities based on the agricultural produce and build its R&D capabilities to improve its manufacturing.

Malaysia could be the food hub for the world and the industrial revolution has created food scarcity as countries became prone to bolts and nuts and forgetting grains and nuts as the source of human sustenance.

HRDF will support these three value chains by building capabilities in motor, psychomotor and cognitive skills in accordance to the sectoral needs. This will be the distinctive role that HRDF can play, keeping true to its original objective.

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