Education not Bank Negara's business, says MP
Bank Negara Malaysia should drop its plans to enter into a 10-year business deal to establish the Asia School of Business (ASB) in Kuala Lumpur, an opposition MP says.
"The business of education is not, and should not be, the business of the central bank.
"Indeed, Act 5(1) of the Central Bank Act of Malaysia 2009 states that the 'principal objects of the (central) bank shall be to promote monetary stability and financial stability conducive to the sustainable growth of the Malaysian economy'.
"Nowhere in this list, or in this Act, does it say that Bank Negara should get involved in the business of education, especially when it has no direct implications on the financial and banking sector in the country," Serdang MP Ong Kian Ming ( photo ) said in a statement today.
Ong was referring to the announcement in April that Bank Negara was entering a business relationship with the Massachusetts Institute of Technology’s Sloan School of Management (MIT Sloan) to set up ASB.
Running a school, said Ong, is an expensive affair and it would be a financial risk that the central bank should not get involved in.
"The fact that Bank Negara has deep pockets should be even more worrying, since this means that more money can be spent on this endeavour over the course of the 10-year collaboration."
Ong, who over the past months has been studying issues related to private higher education in the country, had warned in April that the recent changes made to funding rules could cause as many as 70 percent of the private higher education institutions in Malaysia to go into the red.
History of failed ventures
Ong said while Section 48 (1) of the Central Bank Act 2009 has certain provisions related to involvement in training, research and development of human resources in the area of banking and finance, the ABS seems to have little direct relationship to these sectors.
"We have seen this script before," he said, citing past failed university collaborations.
For example, he said, the Malaysian University of Science and Technology's (Must) collaboration with MIT in 2001 was cancelled after the government spending on a founding grant of RM100 million.
The Perdana University's tie up with the Johns Hopkins School of Medicine in 2010 also collapsed in 2014 after spending on JPA scholarships at almost RM1 million per degree.
"Bank Negara will most definitely face similar challenges in having to stump up generous scholarships in order to attract the initial batch of students and this could create a vicious cycle which will be unsustainable," said Ong.
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