Professional Documents
Culture Documents
The Association of South East Asian Nation (ASEAN) has stated its intention
to establish an economic integration amongst ASEAN country members
called ASEAN Economic Community (AEC). The AEC aims to transform
ASEAN into a single market and production base, a highly competitive
economic region, a region of equitable economic development, and a region
fully integrated into the global economy. In realising a single market, service
liberalisation was introduced and ASEAN has agreed to liberalise the trade of
services through the workings of ASEAN Framework of Agreement in
Services (AFAS) in addition to existing commitments through General
Agreements on Trade in Services (GATS) in the World Trade Organization
(WTO). The aim of this study is to investigate the potential benefits of AECs
policy on free flow of skilled labour to the Malaysian construction industry
and its effects on the Quantity Surveying profession in Malaysia. Data
collection was conducted through questionnaire survey among registered
practicing quantity surveyors (QS). Responses from 31 respondents were
analysed using the average index. This study finds that among the potential
benefits of AEC towards the Malaysian construction industry is that the
construction industry will be opened to more domestic and foreign markets,
construction firms become more competitive and target market becomes
larger. The potential effects of service liberalisation towards the QS
profession include greater competition between domestic and foreign QS,
increase competition of QS employment and more diverse QS services.
APPROVAL PAGE
_____________________
Head, Department of Quantity Surveying
ii
DECLARATION
I hereby declare that this dissertation is the result of my own investigations, except
where otherwise stated. I also declare that it has not been previously or concurrently
submitted as a whole for any other degree at IIUM or other institutions.
Signature ______________________
Date ___________________
iii
Copyright 2013 by Ainul Ashiqin Binti Ahmad Shuhaimi. All rights reserved.
ASEAN ECONOMIC COMMUNITY (AEC): EFFECTS OF SERVICE
LIBERALISATION TOWARDS THE QUANTITY SURVEYING
PROFESSION THE QS PERCEPTIONS
No part of this unpublished study may be reproduced, stored in a retrieval system or
transmitted, in any form by any means, electronic, mechanical, photocopying,
recording or otherwise without prior written permission of the copyright holder
except as provided below.
1. Any material contained in or derived from this unpublished study may only be
used by others in their writing with due acknowledgement.
2. IIUM or its library will have the right to make and transmit copies (print and
electronic) for institutional and academic purposes.
3. The IIUM library will have the right to make, store in a retrieval system and
supply copies of this unpublished study if requested by other Universities and
research institutions.
Signature _______________________
iv
Date ______________
DEDICATION
Specially dedicated to...
My family;
Ahmad Shuhaimi bin Mat Dom
Ainon Jariah binti Muhamad
Amin Arif & Yuslinaniza
Ainil Ainiah & Mohd Zulhairy
Anis Adriana
Amin Ashraf
Ammar Hadif
Zahara Amani
My classmates;
Nawwar Harliyana
Nur Athirah
Nur Ayunni
Nur Najiah
Su Thazin Tun
Najwa Izni & others
My cheerleaders;
Alfatihul Sakinah
Hafizah Mohd Zaidi
Siti Hajar Madina
... for the love and support. Thank you.
ACKNOWLEDGEMENT
In the name of Allah, The Most Gracious, The Most Merciful. All praises be
to Allah (SWT) who gave me the opportunity, time, strength, courage and patience to
complete this dissertation successfully.
My sincere appreciation goes to my supervisor, Asst. Prof. Dr. Sharina
Farihah Hasan for her guidance, encouragement as well as for the academic and
moral support. Her constructive comments and suggestions have contributed to the
success of this research. I am extremely indebted to her who keenly devoted so much
time in giving guidance to me despite her busy schedule.
My highest gratitude goes to my beloved parents, Ahmad Shuhaimi Mat Dom
and Ainon Jariah Muhamad for their unconditional love, prayers and encouragement.
Special thanks also dedicated to my supportive siblings; Amin, Yuslinaniza, Ainil,
Zulhairy, Anis, Ashraf for their endless support and tolerance throughout my
academic years.
To my favourite cheerleaders; Alfatihul, Hajar and Hafizah, thank you for
your undying encouragements and care. To my wonderful classmates; thank you for
making these 4 academic years a joyous one despite of all the stress from exams and
deadlines.
And, to those who have indirectly contributed to this research, your kindness
means a lot to me and may Allah bless you always. Thank you.
vi
CONTENTS
ABSTRACT
APPROVAL PAGE
ii
DECLARATION PAGE
iii
COPYRIGHT PAGE
iv
DEDICATION PAGE
ACKNOWLEDGEMENT
vi
TABLE OF CONTENTS
vii
LIST OF TABLES
xi
LIST OF FIGURES
xii
LIST OF ABBREVIATION
xiii
INTRODUCTION
1.2
PROBLEM STATEMENT
1.3
1.4
SCOPE OF RESEARCH
1.5
RESEARCH QUESTIONS
1.6
RESEARCH METHODOLOGY
1.6.1
RESEARCH DESIGN
1.7
1.8
SUMMARY
10
2.1
INTRODUCTION
11
2.2
11
2.2.1
12
Formation Background
vii
2.2.2
2.3
12
2.2.2.1
12
2.2.2.2
16
2.2.2.3
17
2.2.2.4
18
SERVICES LIBERALISATION
19
2.3.1
19
2.3.2
21
2.4
23
2.5
CONCLUSION
23
3.1
INTRODUCTION
3.2
3.3
24
24
3.2.1
24
3.2.2
Current Status
25
3.4
3.5
3.3.1
26
3.3.2
27
3.3.3
27
34
3.4.1
34
3.4.2
Potential Benefits
35
3.4.3
Potential Effects
37
CONCLUSION
40
viii
4.1
INTRODUCTION
41
4.2
RESEARCH STRATEGY
41
4.2.1
41
4.3
44
4.3.1
44
4.3.2
44
4.4
52
4.5
SUMMARY
54
5.1
INTRODUCTION
55
5.2
56
5.3
58
5.3.1
Respondents Gender
58
5.3.2
Respondents Age
58
5.3.3
59
5.3.4
Years of Experience
60
5.4
61
5.5
63
5.6
67
5.7
68
5.8
SUMMARY
72
ix
6.1
INTRODUCTION
73
6.2
73
6.3
74
6.3.1
76
6.4
6.5
77
6.4.1
79
SUMMARY
80
7.1
INTRODUCTION
81
7.1.1
Objective 1
81
7.1.2
Objective 2
82
7.1.3
Objective 3
82
7.2
LIMITATIONS
83
7.3
RECOMMENDATION
83
REFERENCES
xiv
APPENDICES
xxi
LIST OF TABLES
Table 3.1
37
Table 3.2
40
Table 4.1
43
Table 5.1
56
Table 5.2
Returned Questionnaires
57
Table 5.3
Respondents Gender
58
Table 5.4
Respondents Age
58
Table 5.5
59
Table 5.6
Years of Experience
60
Table 5.7
62
Table 5.8
65
Table 5.9
The awareness
67
Table 5.10
70
Table 6.1
74
Table 6.2
76
Table 6.3
77
Table 6.4
79
xi
LIST OF FIGURES
Figure 1.1
Research Background
Figure 2.1
Summarised Relationship
22
Figure 3.1
28
Figure 3.2
31
Figure 3.3
Professional Vacancies
32
Figure 4.1
45
Figure 4.2
Method of Sampling
51
Figure 4.3
Research Methodology
54
Figure 5.1
57
Figure 5.2
Returned Questionnaires
57
Figure 5.3
Respondents Gender
58
Figure 5.4
Respondents Age
59
Figure 5.5
60
Figure 5.6
Years of Experience
61
Figure 5.7
62
Figure 5.8
66
Figure 5.9
The awareness
67
Figure 5.10
71
xii
LIST OF ABBREVIATION
ASEAN - Association of South East Asian Nation
EU - European Union
AEC - ASEAN Economic Community
AFAS - ASEAN Framework of Agreement in Services
MNP - Movement of Natural Persons
BQSM - Board of Quantity Surveyors Malaysia
QS - Quantity Surveyors
AFTA - ASEAN Free Trade Agreement
WTO - World Trade Organization
GATS- General Agreements on Trade in Services
RTA - Regional Trade Agreements
CER - Closer Economic Relations Agreement
AIA - ASEAN Investment Area
FDI - Foreign Direct Investment
AUN - the ASEAN University Network
IPR - Intellectual Property Rights
CLMV - Cambodia, Laos, Myanmar and Vietnam
GDP - Gross Domestic Product
SME - Small And Medium Enterprise
IAI - Initiative for ASEAN Integration
MRA - Mutual Recognition Agreements
AFAFGIT - ASEAN Framework Agreement on the Facilitation of Goods in Transit
AFAMT - ASEAN Framework Agreement on Multimodal Transport
AFAFIST - ASEAN Framework Agreement on Facilitation of Interstate Transport
CIDB - Malaysian Construction Industry Development Board
xiii
CHAPTER 1
INTRODUCTION OF RESEARCH
1.1
INTRODUCTION
The Association of South East Asian Nation (ASEAN) has stated its intention to
according to Zhen Li (2012), takes place when a country removes its marketing
barriers allowing foreign investors to invest in the countrys domestic market and the
domestic investors in turn are given the right to invest in foreign shares. This idea of
market liberalisation according to Azryani and Rubi (2009) is an act of removing the
legal and informal restrictions to allow integration of capital market within the
region.
One of the ways towards realising the free flow of skilled labour under the AEC
is through the ASEAN Framework of Agreement in Services (AFAS). This
agreement is made, believing that the ASEAN can benefit from this service
liberalisation through greater efficiencies and greater growth from goods trade
liberalisation (Hartarto, 2011). In 2003, the Labour Ministers noted the need to
accelerate the service liberalisation by 2010 (Chia, 2011). The AFAS 1995 provides
inter alia, regulatory convergence and regulatory harmonisation including MRAs that
allows ASEAN countries to recognise the education and experience gained and
granted licensing or certification to the service providers by the other ASEAN
countries (Chia, 2011).
According to Chia (2011), AEC aims to provide the market access for ASEAN
professionals and skilled workforce under the Movement of Natural Persons (MNP).
According to Steiner and Mohr (1998) as cited by Ponnusamy, Mohamad bin Ayob
and Muhamad Azani Yahya (2011), skilled workers are defined as those with the
acquisition of university degrees and with possession of a long-line of experience in
the field. Chia (2011) mentions that, these skilled workers range from business
visitor, trade and investors, intra-corporate transferees and professional (i.e. doctors,
lawyers, engineers and etc).
Professionals such as engineers, accountants, technical workers and many others
from developing countries were driven to take chances in developed countries to
seek for better payment or better lifestyle standards, and Malaysia is not an exception
to this trend. As a result, this phenomenon has led local entities to seek foreign talent
to fill in the gaps, (Junaimah and Yusliza, 2011). Involvement of foreign
professionals in Malaysias construction industry does make positive changes
towards the local industry. However, this according to Ponnusamy, Mohamad bin
Ayob, Muhamad Azani Yahya, (2011) does not mean that local professionals are
incapable of performing as good.
1.2
PROBLEM STATEMENT
Over the past decade the movement of professionals across country borders has
been a trend and have clearly grown over the years especially in fast developing
countries even during the economic crises (Abella & Ducanes, 2009; Ponnusamy,
Mohamad and Azani, 2011). The main concern is the scale of such movement upon
the establishment of AEC in 2015 that encourages regional market integration
facilitates through free flow of skilled labour among the ASEAN country. The
movement of foreign professionals for the construction industry into Malaysia is
currently restricted by several policies one of which requires foreign talents to be
pre-employed before being granted access into Malaysia (Ponnusamy, Mohamad and
Muhamad, 2011).
In the case of the Quantity Surveying profession, the Board of Quantity
Surveyors Malaysia (BQSM) clearly states the regulations pertaining to the practice
of foreign Quantity Surveyors (QS). According to the Quantity Surveyors Act 487
(1967), Clause 10.A, under the heading Temporary Register Quantity Surveyor, a
foreign QS may practice in the local construction industry provided that the foreign
QS obeys and fits all regulations under the clause. It is also stated that the QS is only
allowed to practice Quantity Surveying for a period not more than two calendar years
and with a job that his physical presence is required in Malaysia. However, with the
encouragement and new arrangements made through AEC, it is forecasted that the
movement of foreign skilled workers into Malaysia shall be even greater. As of 2010
as reported by the Ministry of Home Affairs Malaysia as cited by Luqman Ahmad
(2012) in his report, the number of expatriates in Malaysia has reached 200 000
personnel. However, there is no exact figure to reflect the number of QS moving into
the country to practice Quantity Surveying works. The figure mentioned only reflects
the overall number of expatriates in Malaysia.
Then there is the outflow of professional skills, which according to Ahmed
Usman Awil and Abdul Rashid Abdul Aziz (2001), occurs based on two main factors
that drive local firms and professionals towards foreign market. The first factor
includes the individuals and the organisations goals with regards to their
capabilities, strategies and resources. The second factor is driven by the different
lifestyle standards and the difference in the market policies such as legal
requirements, tax regulations and others. The concern of this study is whether as of
2010 the number of Malaysians residing in foreign countries, like Singapore, United
Kingdom, United states, Brunei, Australia totals 1million in which a third of them
are skilled labours as reported by Luqman Ahmad (2012), citing The World Bank
2012. Furthermore, according to the Australian Governments Department of
Immigration and Citizenship (2012), 4,617 visas on skilled labour were granted to
Malaysian nationals between 2011 and 2012, the professional line includes Contract,
program and project administrators, engineering professionals and others service
sector professionals. Again, there has been no exact statistics on the movement of QS
professionals in particular.
1.3
on free flow of skilled labour to the Malaysian construction industry and its effects
on the Quantity Surveying profession in Malaysia.
OBJECTIVES
The objectives of this research are:
1) To understand AEC and its policy
2) To identify the potential benefits of AEC policy on the Malaysian
construction industry
3) To assess the potential effects of AFAS and MNP on the QS profession
in Malaysia.
1.4
SCOPE OF RESEARCH
This study looks at how AEC affects the Malaysian construction industry in
general. It focuses on how the free flow of skilled labour under the establishment of
AEC could affect the QS profession in Malaysia. The allowance for less restriction
of services, goods, skilled labours, and investments will certainly take its toll towards
the local construction industry, thus, this study intends to identify the benefits of this
movements towards the local construction industry through collective perceptions of
experienced QS. Assessment of the impact of AECs free flow of skilled labour will
be gathered from the perceptions of those practicing QS firms. Their collective
genuine perceptions are crucial for this research study because of their years of
experience in the profession and their exposure to how the QS profession in Malaysia
has changed throughout the years.
The collective perceptions of these QS are obtained through primary data
collection, which will be further explained in Chapter 4. The data collected shall then
be analysed using the frequency distribution that uses the average index formula to
find the final weightage on respective potential benefits and potential effects.
1.5
RESEARCH QUESTIONS
Based on the objectives of the research, the research questions to be addressed
are as follows:
1) What are the QS perceptions of the potential benefits of AEC policy on
the Malaysian construction industry?
2) What are the QS perceptions on the potential effects of the free flow
skilled labour policy on the employment of Quantity Surveyors?
1.6
RESEARCH METHODOLOGY
1.6.1 RESEARCH DESIGN
Participant/ Sample
The target sample for this research study are Quantity Surveying firms; in this
research context, Quantity Surveying firms includes QS individuals, Senior
QS, QS companies, QS firms Principles, and QS firms Directors.
Data Collection
Data collected is based on a survey using a self-constructed questionnaire.
Data Analysis
Respondents for the survey questionnaire will be descriptively analysed based
on percentage means.
1.7
the AEC policies affect the movement of the skilled labours, specifically that of the
Quantity Surveying profession in Malaysia. The findings of this study also help the
young graduates and young Quantity Surveyors to be prepared for what is in store
with the establishment of AEC in 2015. Malaysian QS firms and policy makers
would be made more aware of the impacts of the AEC policies on the construction
industry. Knowledge of theirs can therefore be a helpful guide in planning and
decision making.
1.8
SUMMARY
BACKGROUND STUDY
ASEAN ASEAN Economic Community (AEC) Service Liberalisation AEC Core
Element, Free flow of Skilled Labour Professionals in the Construction Industry
Quantity Surveyors Perceptions on AEC
PROBLEM STATEMENT
Issue: Implication of free flow of skilled labour via AEC
Problem: Greater competition for job opportunities locally and predictions on professionals
brain drain
AIM
The aim of this study is to investigate the potential benefits of AECs policy on free flow of
skilled labour to the Malaysian construction industry and its effects on the Quantity
Surveying profession in Malaysia.
RESEARCH QUESTIONS
RESEARCH METHOD
1. What are the QS perceptions of the
potential benefits of AEC policy on the
------
Survey
-----Survey
DATA ANALYSIS
Descriptive Analysis Frequency Distribution/ Percentage/ Average Index
OUTCOME OF RESEARCH
The perceptions and views of Quantity Surveyors firms in the establishment of AEC towards
future construction industry, QS profession in particular.
Figure 1.1 - Research Background 1
CHAPTER 2
ASEAN ECONOMIC COMMUNITY
2.1
INTRODUCTION
Chapter 2 is a chapter that presents the review of the literature on ASEAN
Economic Community (AEC) by looking at two major sections. Each section focuses
on two different aspects of AEC with a common aim to explain, describe and analyse
in order to understand the purpose of the AEC agenda and to relate it to the
objectives of this study, which are:
1) To understand AEC and its policy
2) To investigate the potential benefits of AEC policy on the Malaysian
construction industry
3) To investigate the potential effects of AFAS and MNP on the QS
profession in Malaysia.
2.2
formed for geopolitical reasons (Chia, 2011). It is only later after the formation of
ASEAN, that the country members worked towards economic cooperation (Chia,
2011). The Heads of State/ Government of ASEAN envisioned that the region shall
be a zone of Peace, Freedom and Neutrality in 2020 (ASEAN Secretariat, 1997).As
part of the ASEAN Vision 2020, the leaders have resolved towards an economic
integration through the ASEAN 2020: Partnership in Dynamic Development
(ASEAN Secretariat, 1997). The AEC aims to transform ASEAN into a single
market and production base, a highly competitive economic region, a region of
equitable economic development, and a region fully integrated into the global
economy (ASEAN Secretariat, 2008). The Association of South East Asian Nation
(ASEAN) have stated their intention to establish an economic integration amongst
ASEAN country members, an initiative made upon witnessing the success of the
European Union (EU) (Moorthy& Benny, 2012).
8
implementation of AEC. There are four pillars under the AEC, which are; (1) single
market and production base, (2) competitive economic region, (3) equitable
economic development and (4) integration into the global economy.
2.2.2.1
movement of goods and services among the 10 countries within the ASEAN region
(Reyes, 2004).
system for products covered by the ASEAN Free Trade Agreement (AFTA),
electronic
processing
of
trade
documents,
harmonization
of
standards,
minimise operation cost and to maximise trade gains (Trairatvorakul, 2011). The full
implementation of this pillar shall result in a more advanced competitive production
environment among ASEAN producers (Reyes, 2004). Pillar 1 has five (5) core
elements which are: (i) free flow of goods; (ii) free flow of services; (iii) free flow of
investment; (iv) freer flow of capital; and (v) free flow of skilled labour. There are
also another two additional components under the first AEC pillar, which are: the
priority integration sectors, and food, agriculture and forestry.
(i)
Box 2.1
National Treatment
National treatment is a rule that a good or factor that crosses the border should
receive the same treatment. In World Trade Organization (WTO) and in many
treaties, National Treatment is couched in terms of treatment that is no less
favourable than the treatment accorded national products or corporations or persons.
10
(ii)
This is one key element in AEC, where there will be no extensive restriction
to ASEAN services suppliers in providing services and in establishing companies
across national borders within the ASEAN, subject to domestic set of laws (AEC
Blueprint, 2008).
The role of the service sector in the domestic economy is reflected in the
international economy as well (Zakariah et. al, 2009). According to Zakariah et al
(2009), General Agreements on Trade in Services (GATS) was established by the
Uruguay Round in order to promote trade in services and service liberalisation and
went into full effect in 1995. Seeing how liberalisation has become an important part
of the regional trade agreements (RTA), several other agreements aside from GATS
have been agreed upon; ASEAN concluded on the ASEAN Framework Agreement
on Services (AFAS) and Australia and New Zealand concluded on the Closer
Economic Relations Agreement (CER).
(iii)
11
enhancing capital account liberalisation that shall allow both inflow and outflow of
capitals (Trairatvorakul, 2011).
(v)
12
2.2.2.2
Competition Policy
Consumer Protection
According to
Infrastructure Development
13
Taxation
E-Commerce
This core element is to set out policies and legal infrastructure for electronic
business and permit online trading in goods through the execution of e-ASEAN
(AEC Blueprint, 2008).
2.2.2.3
SME Development
contribution to the overall economic growth in the ASEAN region (AEC Blueprint,
2008).
(ii)
compete in the global market. ASEAN needs to create tighter business integration
beyond the borders of ASEAN (ASEAN Secretariat, 2008). One of the ways to be
recognised in the global market is via production sharing. East Asias trade in parts
and components have been getting lots of attention in the international market, this is
credited through the rise of production sharing (Rosellon & Medalla, 2011;
Bhattacharyay, 2009). Production sharing or production network is a fragmented
production carried out in two or more different countries; eventually the part and
components are assembled into the final products and exported (Chia, 2013).Global
supply chains permit small and medium-sized enterprises (SMEs) to perform as
suppliers of labour-intensive parts and components or to supply other basic services,
largely on a subcontracting basis (Abe, 2012). It is important when it comes to
developing policy for AEC, all external regulations shall be taken into consideration:
(i)
All ASEAN members shall work towards sustaining the idea of ASEAN
Centrality in performing their external economic relations (AEC Blueprint, 2008).
(ii)
2.3
SERVICES LIBERALISATION
The ASEAN regional economy growth was designed to accommodate
movements of trades, capital flows and labour flows (Amarjit, 2009). In the market
of services in which the supply is inadequate, the imports of services become
essential (WTO , 2001). WTO (2001) also stated that, service liberalisation is
encouraged due to its positive impacts that go beyond the service industries itself; the
effect that can be felt on other economic activities as well. As of 2005, Malaysia had
received service requests from twenty-one countries (Cheen, 2005).
Immigration from neighbouring countries has also been a successful strategy
for poorer Southeast Asians to improve their economic position (Amarjit, 2009).
According to Amarjit (2009), the economic growth of Singapore, Malaysia and
Thailand have increased the demands for professionals and highly skilled labours.
Amarjit (2009) also stated that, the reduction of conflicts within the region have it
easier for international movement. GATS and AFAS are formed in order to achieve
service liberalisation.
2.3.1 ASEAN Framework of Agreement in Services (AFAS)
AFAS was signed and agreed in 1995 by ASEAN. It was formed towards
realizing the liberalisation of trades in services, as well as to improve the efficiency
and competitiveness of ASEAN service providers, (Chia, 2011). The GATS
framework was used as the basis for negotiations under AFAS. (Zakariah, Zhai,
Petri, Plummer, & Chia, 2009). According to Amarjit (2009), AFAS seeks to
encourage the movement of labour for services within the region moving towards
achieving AEC by 2020 which was then brought forward to 2015. The progress has
16
been weak, due to the nature of certain sector of services that are politically sensitive
(Plummer, 2006). Chia (2011) also stated that new negotiations on the agreements of
World Trade Organisation (WTO) were formed. In terms of regional service
liberalisation, ASEAN has agreed to liberalise the trade through the workings of
AFAS in addition to existing commitments through GATS in the WTO (Indira &
MacLaren, 2012). AFAS was signed by ASEAN Economic Ministers in Bangkok,
1995. AFAS aims to:
17
The 10th ASEAN Summit in 2004 agreed to facilitate the movement of skilled
labours, business people and talents within the ASEAN region and have started
exploring Mutual Recognition of professional qualifications (Lloyd, 2007).
Mutual Recognition Agreements (MRA)
The main action towards realising free flow of skilled labour among ASEAN
countries is through the implementation of Mutual Recognition Agreements (MRA).
MRA was introduced in order to minimize transaction costs that cover several
sectors (Chia, 2011). However, even when a standardised quality assurance was
empowered, MRA still finds difficulty in overseeing the wide economic gaps
between the ASEAN countries (Chia, 2011). MRA enables qualified professional
services suppliers to be recognised by the respective ASEAN countries local
authorities. This mutual recognition requires a great deal of work but it shall offer
good opportunities for the ASEAN region and many would welcome this approach
(Plummer, 2006). As of 2009, several MRA were signed by ASEAN Economic
Ministers:
18
AFAS and GATS (Indira & MacLaren, 2012), however, Indira and MacLaren also
stated that in terms of the depth of the commitments, GATS has greater liberalisation
impact on the service sector, especially on the financial service, in comparison to the
AFAS.
Movement of Natural Persons (MNP) under GATS
Trade in services under GATS have been conventionally classified under these
typologies:
19
Traders and investors: Natural persons carrying out particular trading and
investment activities
2.4
20
21
ASEAN
ASEAN FREE TRADE AREA
(AFTA)
Service
Liberalisation
ASEAN FRAMEWORK
AGREEMENTS ON
SERVICES (AFAS)
GENERAL
AGREEMENTS
ON TRADE IN
SERVICES
(GATS)
Service
Liberalisation
Competitive
Economic Region
Mode1:
Cross border
Supply
Mode2:
Consumptio
n Abroad
Mode3:
Commercial
Presence
Mode4:
Movement Of
Natural
Persons (MNP)
Equitable Economic
Development
22
Free Flow of Goods
Free Flow of Services
Free Flow of Skilled
Labour
MUTUAL RECOGNITION
AGREEMENTS (MRA)
Mode1:
Cross border
Supply
Mode2:
Consumptio
n Abroad
Mode3:
Commercial
Presence
Mode4:
Movement Of
Natural
Persons (MNP)
22
Figure 2.1 shows helps to visually understand the relationship between AEC,
GATS and related policies and agreements.
2.5
CONCLUSION
The AEC Blueprint has clearly stated the contents of the first pillar; from
what aspect does the AEC try to shift it into a single market and production base,
which includes the service sector. Mattoo and Stern (2008), stated that services
activities includes the transport of goods, educations, transport of people, financial
services, communication, distribution, health care, hotels and restaurants, accounting
and constructions. The construction industrys supply and demand of the
manufacturing and construction activities contributes greatly to the economic growth
(Langford & Male, 2001).
This chapter is written to understand the workings and policies of AEC. The
focus of this study is on the free flow of services and how it relates to the free flow of
skilled labour. The discussion surrounds the agreements made by ASEAN for trades
in services covering AFAS, GATS, MRA and MNP.
23
CHAPTER 3
MALAYSIAN CONSTRUCTION INDUSTRY
3.1
INTRODUCTION
3.2.2.1
25
driven by civil engineering works and residential sub-sectors (BNM, 2012). The push
factor for the construction sector is mainly driven by the Mass Rapid Transit (MRT)
projects including other oil and gas related construction projects (BNM, 2012).
The civil engineering subsector showed growth of 27.5% which was of great
contribution from major infrastructure projects such as Ipoh-Padang Besar electrified
double-track, Mass Rapid Transit (MRT) and many more. As for the residential
subsector, it is reported that 22% growth was achieved during the 2012 first half.
This growth was significantly supported by the high demand for housing and
investment purposes. These construction activities show that the Malaysian
construction industry is performing actively and that the impacts are positive towards
the countrys economy.
The Edge Malaysia (March 20, 2013) reported that BNM forecasted that
Malaysias 2013 GDP will grow 5 to 6 percent. According to BNM, the construction
industry is expected to contribute to the growth; the sectors growth could go up to
15.9 percent due to wide infrastructure developments.
3.3
Skilled labour according to Amarjit (2009), are workers who are considered
professionals, possessing specific skills. These professionals are greatly demanded
and usually being offered high income. In terms of migrant skilled workers,
26
according to Kanapathy (2008), they are all professionals and technical workers who
are in possession of short term contracts or Employment Pass.
3.3.2
There are several professional profession that are involved in the construction
industry such as Engineers, Architect, Landscape Architects, Land Surveyors,
Quantity Surveyors to name some. However, for the purpose of this study, Quantity
Surveyors (QS) will be the main focus. There is no doubt that QS play an important
role in construction projects, especially in terms of procurement, cost and contract
management, (Hee & Ling, 2011). Globalisation and rapid global construction
growth have sky rocketed the demand for construction professionals and workers
around the world. This rise in demand has led to global skill shortage (Smith, 2008).
Brain Drain
Definition
Brain drain is the migration of talents across borders (World Bank, 2011).
According to Carrington and Detragiache (1998), Docquier and Rapoport (2004) and
Docquier and Rapoport (2011) as cited by Malaysia Economic Monitor, brain drain
27
represents
28
According to Jumaimah and Yusliza (2011), there has only been little
research on the push and pull factor Malaysian Brain Drain and the data collection
sample was relatively small. Figure 3.1 shows the summarized figure of the push and
pull factor of Brain Drain in general, without particularity in which profession it
covers. The content of Figure 3.1 is further explained later in this chapter.
Push Factors
Lack of Promotion
Wong (2010), from a survey she conducted in 2010 concluded that, out of
814 Malaysia respondents who study abroad, a total of 530 respondents are residing
overseas. Issues like political situation, economic situation, safety, education and
human rights in Malaysia greatly affect their decisions to migrate.
The salary in Malaysia is not at par with the living cost especially in Kuala
Lumpur. The Economic Intelligence Unit (EIU) ranked KL as the worlds most
expensive cities and Kuala Lumpur was spotted at 74th place out of 140 cities in
terms of living costs. However, the salaries have not increased simultaneously with
29
the living cost (Malaysia - Addressing Talent Issue, 2012). According to Chia
(2011), brain drain occurs when some countries failed to efficiently employ the local
talents, which may occur due to slow-moving economic development or high
unemployment rate.
Pull Factors
Promotion Prospects
According to Asian Strategy & Leadership Institute director Tan Sri Ramon
V. Navaratnam (The Star, July 9, 2007), as cited by Jumaimah &Yusliza (2011),
Malaysia is suffering a great loss of skilled labours and professionals due to better
payments offered by foreign companies. Many young Asians wish to further their
studies, whether it degree, masters or even doctorates in western countries, and this
has become a trend (Abella & Ducanes, 2008). Abella and Ducanes (2008) also
stated that these main destination countries; US, Canada, Australia and the UK offers
easier market access, taking advantage of the Asians desires towards meeting their
shortage of skills and talents.
The desire to pursue further education, attraction towards better job offers,
better working condition and better living standards are generally the most common
pull factors, (Chia, 2011; Jumaimah & Yusliza, 2011; Tansel & Grungor, 2003). The
movement of these talents are either by personal initiatives or through recruitment
agents, or are sent by their home countries for overseas postings. All these are
closely related to expanding international trade in services, including financial and
communications (Amarjit, 2009).
30
Winters (2008) wrote that the movement of talents are fairly driven by higher
wages offered to employees and that different wages corresponds to different
productivities. Better working environment, job experience, and research
opportunities are some of the reasons for the movement of skilled workers (Chia,
2011).
Family Influence
There are two status of skill movements; temporary and permanent mobility.
Temporary skill mobility usually is not accompanied by their family members, in
contrast to the permanent mobility where the tendency for permanent mobility to
bring along family members to the host country is higher (Winters, 2008).
31
The shortages of skilled and talents in the western industries and the desire of
the young Asian talents to further their degrees in western institutions is the perfect
invitation for migration (Abella & Ducanes, 2008). To fill in the shortages of skilled
and professionals, some countries opt for outsourcing and some prefer foreign
professionals to fill the gaps in their countries (Jumaimah & Yusliza, 2011).
However, the official number of Malaysian students studying abroad whether for
Quantity Surveying or other specific courses was never issued, assuming that a
portion of that sum may seek employment overseas (Kanapathy, 2008).
32
Figure 3.3 shows the number of weeks required by each ASEAN country to
fulfil the professional vacancy with the right talent. Indonesia shows the lowest
number of weeks, Indonesia takes only approximately two weeks to fill in the
vacancy while the highest figure is reflected by both Thailand and Malaysia. Both
these fast developing economy countries requires up to 6 week fulfilling a
professional vacancy. This shows how the outflow movement of skilled labour
affects each of the countries.
According to the Ministry of Home Affairs and Economic Planning Unit, the
number of expatriates in Malaysia has been decreasing since 2008, especially in the
construction industry. The movement of foreign professionals are restricted by
several restrictions; from persons who could contribute to the countrys commerce
and industrial expansion, and persons who are highly skilled in areas that are not
available locally, to families of the local residents and to those who are on special
compassionate grounds (Amarjit, 2009).
33
3.4
Transport cooperation
Land transport
Information infrastructure
Energy cooperation
Mining cooperation
34
Deardoff (2001) stated that there are large positive gains through the
elimination of barriers in trades in services. Service liberalisation implies larger scale
of economic activity (Indira & MacLaren, 2012). There are several benefits to
service liberalisation and are seen as potential benefits of service liberalisation
towards the construction industry.
Construction works become more efficient
The standardisation and harmonisation of regulations between host and
receiving countries allows services to be delivered more efficiently (Mattoo & Stern,
2008).
Construction Firms become more competitive
The liberalisation under the AEC pushes service providers to be more
competitive. The competition and competitiveness of these service providers
increases with the implementation of competition policies, protection of intellectual
property rights and open regionalism (Plummer & Chia, 2009).
Construction industry is opened to domestic and foreign markets
The firms become more competitive and efficient in delivering their services. This
allows improvement in service providers performance and opens up service sector to
domestic and foreign entry (Ray, 2013).
35
Ray (2013)
WTO (2001)
Zakariah et al (2009)
CIE (2010)
Hermann (2011)
Plummer & Chia (2009)
The QS practice can widen its range of services from the traditional cost
estimating, measurements and preparing for Bills of Quantities, to the other filled of
optional skills acquire by QS. Those of optional sets of competency skills include
facilities management (Nkado, 2001). According to WTO (2001) liberalisation of
services creates greater development access to world class services. Liberalisation of
services that shall aid the movement of professional shall open more variety of
services to the market (Matoo & Stern, 2009).
Increase in quality of service & Better job qualities
38
Increase in service quality (Hermann, 2011; Ray, 2013) is also a pull factor.
One of the pull factors of Malaysian brain drain is the international exposure
(Jumaimah and Yusliza, 2011). Less restriction on movement of high skilled talents
could lead to a great deal of talent loss. According to Zakariah et al (2009), the
sending countries face brain drain or loss of talents in the short term, but a reverse
brain drain in the medium and long term returnees.
39
Potential Effects
Author
Hermann (2011)
Mattoo et al (2001)
Hermann (2011)
Indira & MacLaren (2012)
Hermann (2011)
Indira & MacLaren (2012)
Hermann (2011)
Ray (2013)
Jumaimah and Yusliza (2011)
Zakariah et al (2009)
3.5
CONCLUSION
Movement of professionals has a great impact on the economic development
of a country. The outflow and inflow of professionals in the service sectors is not a
new topic, as several studies and research have been conducted to assess these
movements. There has been growing recognition on the movement of talents
(Solimano, 2008). The industry shall face a greater impact from the introduction of
AFAS under the AEC, in support of the movement of natural persons under GATS.
AEC shall accommodate the movement of professionals in the service sectors, with
less restriction implemented.
40
CHAPTER 4
RESEARCH METHODOLOGY
4.1
INTRODUCTION
Chapter 4 of this research describes the details of the research design and the
methodology used in this study. It consists of the research strategy, approaches to
data collection and data analysis used in order to achieve the aim and objectives of
the study, as discussed earlier in the first chapter; Chapter 1.
4.2
RESEARCH STRATEGY
Naoum (2004) stated that there are generally two types of research strategies
that can be applied in research studies which are quantitative and qualitative
research. According to Naoum (2004), deciding on the research strategy depends on
the purpose of the study, the type and the availability of the information required in
order in achieving the research aim and objectives. This study adopts the quantitative
approach, considering the nature of the study that requires collective perceptions and
opinions.
4.2.1 Reviews on Research Methodology of Similar Researches
Several studies use survey as the data collection technique. Benny, Guido and
Kamarulnizam (2011) administered questionnaires in five major cities in Indonesia
to assess the public awareness, understanding and perceptions on the achievements
of the implementation of ASEAN Community. Similarly, Moorthy and Benny (2012)
conducted surveys in three selected ASEAN countries, namely, Malaysia, Indonesia
and Singapore. These countries were selected due to their close trade and diplomatic
ties (Moorthy & Benny, 2012). The survey was conducted to study the public
opinions on the perceived obstacles on the implementation of AEC. Wong (2010) on
the other hand conducted a minor survey on factors that influences Malaysian Brain
Drains. Another study on perceptions that employed the survey technique was also
conducted by Hajar (2010). It was on the perceptions of contractors towards the
introduction of New Economic Model (NEM); the study too was conducted in
Malaysia.
However, there were also studies done on AEC and the service trades
agreements which employed document analysis as the research method (Narjoko &
Wicaksono, 2010; Jumaimah & Yusliza, 2010; Rajan & Sen, 2010; Hapsari &
MacLaren, 2012; Suplico-Jeong, 2010; Kruszka, 2005; Karim & Naveed, 2011;
Hermann, 2011).
For the purpose of this study, the questionnaire survey method is perceived as
the most suitable in relation to the background of this study as it seeks to investigate
the QS perceptions on the potential benefits and effects of AEC towards the QS
profession in Malaysia. All in all, the common research methodologies used were
questionnaire surveys and case studies. The research methodology adopted by the above
mentioned studies are summarised in Table 4.1.
42
No
Author
Year
Research
Methodology
Document
Analysis
43
2002
Kruszka
2005
Hajar
2010
Suplico-Jeong
2010
2010
Wong
2010
2011
2011
2011
10
Hermann
2011
11
2012
Survey
12
2012
Document
Analysis
Document
Analysis
Survey
Document
Analysis
Document
Analysis
Survey
Document
Analysis
Survey
Document
Analysis
Document
Analysis
Country
Indonesia
Malaysia
Thailand
Central and East Europe
Countries
Malaysia
Research Area
Research Focus
Services
Liberalisation
MNP
NEM
South Korea
MNP
Indonesia
AEC
Perception
Malaysia
Brain Drain
Decision influences
Brain Drain
Factors
Indonesia
ASEAN
Community
Bangladesh
MNP
Europe
Service
Liberalisation
AEC
Perceived obstacles
Commitments
Indonesia
Malaysia
Singapore
Indonesia
Malaysia Philippines
Singapore
Thailand
43
4.3
There are two types of data collection; those are secondary data collection
and primary data collection (Naoum, 2004). For the purpose of this study, both
secondary and primary data collection are used.
4.3.1 Secondary data collection
Naoum (2004) stated that primary data collection has three approaches which
are case studies, surveys and problem solving approach. For the purpose of this
research study, the survey approach is applied. According to Naoum (2004), there are
two types of surveys, which are: (1) the descriptive survey and (2) the analytical
44
survey. This study uses the descriptive survey to show the trends based on the
numbers of respondents that agrees with certain opinions and attitudes towards the
subject matter.
Data Collection
Survey Questionnaire
Postal
Face to face
Survey Questionnaire
The AEC is yet to be fully realised, thus, the potential benefits and the potential
effects of its establishment are still considered as genuine forecasts by previous
researches. Consequently, this research study is looking at the potential benefits and
effects of AEC towards the Malaysian construction industry and the QS profession
from the perspectives of Malaysian QS practices. Data to be gathered from this
questionnaire includes the following:
45
After brainstorming, the next stage is to finalize the questions. At this stage,
Naoum (2004) stated that the researcher needs to form sections for the listed
questions, rearranging the questions to categorise their respective themes. The
questionnaire therefore has been constructed to meet the objectives of the study. This
is achieved when the research questions are answered based on the items in the
questionnaire. The questionnaire is divided into 5 parts, A, B, C, D and E.
Part A
The questions in Part A are questions using a multi-optional format that aims
to gather the respondents particulars. The questions in this section are all closeended format that only requires the respondents to tick in the appropriate box. It
46
comprises of four questions; (1) the respondents gender; (2) the respondents age;
(3) the respondents QS field; and (4) the respondents years of experience in the
construction industry. These questions are asked to just to get a better picture of the
respondents professional background. It is one of the ways to determine the
reliability of the data collected.
Part B
The questions in Part C are designed to directly achieve the studys second
objective which is; to investigate the potential benefits of AEC policy on the
Malaysian construction industry. It consists of 10 items. The last item, named
Others is provided to allow the respondents to contribute additional ideas that is
related to the potential benefits of the implementation of AEC towards the Malaysian
construction industry. For part C, the items are designed to use the likert scale
format. Naoum (2004) stated that the likert scale format is based on attitudinal
statements that requires the respondents to rate the statement; ranging from the one
extreme of favourableness to the other. Each scale represents the following ratings:
47
1 Strongly Disagree
2 Disagree
3 Not sure
4 Agree
5 Strongly Agree
As mentioned previously, the items listed in this section are in regards to the
benefits of AEC towards the Malaysian construction industry which have been
discussed in the literature review chapter. The respondents are required to rate their
level of agreements for each of the variables by selecting any one of the scale
provided.
Part D
Part E is designed directly to achieve the third objective of this study, which
is; to investigate the potential effects of MNP on the QS profession in Malaysia. This
section relies on the experience of the respondents in the construction industry. The
10th item in the table named, Others is provided in case the respondent wishes to
provide an additional idea in relation to the potential effects of the MNP toward the
QS profession in Malaysia. The items listed are obtained from the literature review
chapter, Chapter 3. 9 items will be answered using the likert scale. The format used
48
for this question is similar to that in Part C, which is the likert scale format. The scale
used for the question is as follows:
1 Strongly Disagree
2 Disagree
3 Not sure
4 Agree
5 Strongly Agree
The respondents are required to answer by stating their level of agreement for
each of the statement by selecting any of the scale provided.
The researcher has also prepared a covering letter to be attached together with the
survey questionnaires when the questionnaire distribution takes place. The intention
of the covering letter is to briefly explain on the purpose of the survey to the
respondents. The covering letter also acts as a medium to persuade the respondents to
participate in the survey. Among the details mentioned in the covering letter
includes:
49
After the completion of the questionnaire and the covering letter, the
questionnaires are then distributed to target samples. According to Naoum (2004),
there are five types of sampling designs available:
1) Non-random accidental sampling.
2) Non-random purposive sampling
3) Simple random sampling
4) Systematic random sampling
5) Stratified random sampling
For the purpose of this research study, the non-random purposive sampling is used.
This study requires respondents to be among registered Quantity Surveyors because
of their years of experience in the industry. These experienced professionals are the
target samples because they have experienced the change in trends in the
construction industry and in the QS profession. The registered QS are among those
who work as QS consultants, academicians, QS for contracting firms and QS who
work for the clients.
50
registered with the BQSM. For Contracting Firms, the respondents were chosen from
Corporate Bodies (Total 10); the same goes for Client Organisations (Total: 5).
Public Universities
(Total: 5)
KLANG VALLEY
(Total: 130)
Staff Directory
(IIUM)
Staff Directory
(UTM)
Registered QS Academicians
(Total: 15)
51
questionnaires,
the
Once the data from the 30 samples has been received, data analysis follows.
The data shall be analysed using frequency distribution and based on the percentage
means.
The data collected from the questionnaires are analysed based on average
index obtained from:
1) The potential benefits of AEC to the Malaysian construction industry.
2) The potential effects of AFAS and MNP towards the QS profession in
Malaysia.
52
Average Index =
After the average indexes for each of the potential benefits and effects are
obtained, the results are then rated according to the average index scored. The ratings
of each of the average index obtained are determined by these scales:
( 1.00 Average Index < 1.50 ) = Strongly Disagree
( 1.50 Average Index < 2.50 ) = Disagree
( 2.50 Average Index < 3.50 ) = Not Sure
( 3.50 Average Index < 4.50 ) = Agree
( 4.50 Average Index < 5.00 ) = Strongly Agree
Source: Shiadri (2008); Hajar (2010)
Finally, the potential benefits and effects which have the average index
between 3.50 and 5.0 will be considered critical for this study, while the rest will be
disregarded.
53
4.5
SUMMARY
The research methodology applied for this research study is to achieve the
research objectives. Step by step procedure was laid out to facilitate the research
process. The steps are summarised through the following flow chart.
Formulation of the Research Topic
Malaysian Construction
Industry
AEC
54
CHAPTER 5
DATA ANALYSIS AND DISCUSSION
5.1
INTRODUCTION
Chapter 5 presents the analysis of the data collected from the survey
questionnaire conducted earlier in the study. This study adopts frequency distribution
method as explained previously in Chapter 4.
This chapter aims to convey the results gathered from the survey
questionnaire that seeks achieve the second and the third objectives of this research
study. The objectives are:
1) To investigate the potential benefits of AEC policy on the Malaysian
construction industry
2) To investigate the potential effects of AFAS and MNP on the QS
profession in Malaysia.
In order to achieve these two objectives, a questionnaire is constructed consisting of
five separate parts. The parts are:
1)
Respondents particular
2)
3)
4)
55
5.2
The questionnaire was distributed among local QS practices, ranging from those
working as consultants, academicians, contractors and clients. As explained in
Chapter 4, the questionnaires were distributed by:
1)
2)
3)
38
48
NOT- RETURNED
42
52
TOTAL
80
100
56
52%
48%
Returned
Not-returned
31
82
REJECTED
18
TOTAL
38
100
82%
18%
USEABLE
REJECTED
57
5.3
RESPONDENTS PARTICULAR
Table 5.3 and Figure 5.3 below show the distribution of the respondents gender.
22
71
FEMALE
29
TOTAL
31
100
71%
29%
MALE
FEMALE
Based on the above figure, the total respondents for this survey are 31. The
numbers of male respondents are 71% which is greater than the female which is
29%.
5.3.2 Respondents Age
Table 5.4 and Figure 5.4 below show the distribution of the age of the respondents.
AGE
NO. OF RESPONDENTS
58
10
32%
26%
19%
16%
6%
25-29
30-39
40-49
50-59
60-65
The data above shows that the number of respondents age raging from 50-59
years old represents the majority of the respondents reflected with 32%, while the
minority of the respondents are represented by those aged 60-65 which are 6%.
5.3.3
Table 5.5 and Figure 5.5 below show the distribution of the respondents
profession in the Quantity Surveying field.
23
74
CLIENT
CONTRACTING
10
ACADEMICIAN
OTHERS
TOTAL
31
100
59
74%
10%
3%
CONSULTANT
CLIENT
6%
6%
CONTRACTING ACADEMICIAN
OTHERS
Based on both the tables and the figures above, the result shows that the
majority respondents are represented by consultants, reflected by 74%, while the
lowest percentage is represented by client which is equal to 3%. The Academician
and others share the same frequency which is 6%; other QS profession are those
working as both a consultant and as an academician. Another QS profession gathered
from the survey is from contracting firms that take about 10% of the distribution.
5.3.4 Years of Experience
Table 5.6 and Figure 5.6 represent the frequency distribution of the years of
experience of the respondents.
YEARS OF EXPERIENCE NUMBER PERCENTAGE (%)
LESS THAN 5 YEARS
23
6-10YEARS
19
11 15 YEARS
13
16 20 YEARS
13
42
TOTAL
31
100
60
42%
23%
19%
13%
3%
6-10 Years
11-15 Years
16 - 20 Years
More than 21
Years
The table and figure above shows that the highest number of respondents
came from those with more than 21 years of experience with 42% which is equal to
13 respondents. The second highest is represented by those with less than 5years
experience with; 7 respondents; which is 23%. Followed by those with 6-10 years
of experience reflected by 19% and then there are those with 11-15 years of
experience that form 13% of the distribution. Those with working experience of 1620 years are represented as the least number of respondents which is only one (3%).
5.4
61
YES
NO
27
87
13
Q2
29
94
Q3
26
84
16
Q4
22
71
29
YES, 94%
YES, 87%
YES, 84%
YES, 71%
NO, 29%
NO, 13%
Q1
NO, 16%
NO, 6%
Q2
Q3
Q4
For the first question, majority of the respondents (87%) answered YES
while only 13% of the respondents are not aware of the implementation of AEC in
2015. As for the second question, still, it can be seen that the majority; which is 94%
of the respondents knows that AEC aims to achieve regional economic liberalisation.
There are only two respondents (6%) that have no knowledge of AECs aim. Similar
pattern can be seen for the third and the fourth question. Even though the percentage
may differ but for most of the respondents, they are aware of service liberalisation
under AEC and majority are aware that free flow of skilled labour is part of the
AECs agenda.
62
5.5
For this section, the data is generated from the questionnaires using frequency
analysis, based on the average index on each of the benefits of AEC towards the
Malaysian Construction Industry as listed in Table 5.8 below. The measure of
agreement in the survey provides quantitative indication of qualitative judgements
(Hajar, 2010). The formula used to find the average index is as mentioned in Chapter
4; the formula is:
Average Index =
63
The total number of respondents is 31. Therefore, the average indexes for all
the potential benefits of AEC towards Malaysian Construction Industry are as follow:
Benefit No.1
11 + 25 + 37 + 417 + 51
31
= 3.39
Benefit No.2
11 + 21 + 32 + 424 + 53
31
= 3.87
Benefit No.3
11 + 20 + 33 + 420 + 57
31
= 4.03
Benefit No.4
12 + 21 + 312 + 414 + 52
31
= 3.42
Benefit No.5
11 + 23 + 39 + 416 + 52
31
= 3.48
Benefit No.6
11 + 23 + 35 + 416 + 56
31
= 3.74
Benefit No.7
11 + 21 + 39 + 416 + 54
31
= 3.68
Benefit No.8
12 + 24 + 310 + 413 + 52
31
= 3.29
Benefit No.9
11 + 20 + 314 + 410 + 56
31
64
= 3.65
After all the calculation has been done using the stated formula, all the
average indexes are tabulated as in Table 5.8. The average indexes are then
illustrated into Figure 5.8.
FREQUENCY
ANALYSIS
No.
Benefits
AVERAGE
INDEX
NUMBER OF
RESPONDENTS
1
2
17
3.39
24
3.87
20
4.03
12
14
3.42
16
3.48
16
3.74
16
3.68
10
13
3.29
14
10
3.65
65
5
4.5
3.87
4
3.5
4.03
3.74
3.48
3.42
3.39
3.68
3.65
3.29
3
2.5
2
1.5
1
0.5
0
66
5.6
Table 5.9 and Figure 5.9 below show the distribution of the respondents
awareness towards service liberalisation in AEC.
NUMBER PERCENTAGE (%)
YES
26
84
NO
16
TOTAL
31
100
84%
16%
YES
NO
In reference to the above table and figure, the results show that only 16%
which is equal to 5 of the respondents are unaware of the implementation of service
liberalisation under AEC. The rest of the respondents who represents the majority are
aware of the said agenda and is reflected by 84% which is equivalent to 26
respondents.
67
5.7
For this section, the data is generated from the questionnaires using
frequency analysis, based on the average index of each of the potential effects of
AFAS and its movement of natural persons towards the Malaysian QS profession as
listed in Table 5.10 below. The measure of agreement in the survey provides
quantitative indication of qualitative judgements (Hajar, 2010). The formula used to
find the average index is as mentioned in Chapter 4; the formula is:
Average Index =
N
is weighting given to each factor by respondents;
n is the frequency of the respondents;
N is the total number of respondents;
The original number of respondents is 31. However, for this section, only 26
responses are analysed based on their responses on awareness in the previous section.
For the respondents perceptions to be considered in this section, the respondents
need to be aware of the implementation of service liberalisation under AEC. Those
who are aware are represented by those 26 respondents which is equivalent to 84%.
Therefore, it is important to take into consideration opinions of only those who are
aware of the matter.
68
The calculations for the average indexes for the potential effects of AFAS
and its movement of natural persons towards the Malaysian QS profession are as
follows:
Effect No.1
10 + 22 + 35 + 417 + 52
= 3.73
26
Effect No.2
10 + 21 + 30 + 418 + 57
= 4.19
26
Effect No.3
10 + 21 + 313 + 49 + 53
= 3.54
26
Effect No.4
10 + 20 + 37 + 413 + 56
= 3.96
26
Effect No.5
10 + 22 + 38 + 415 + 51
= 3.69
26
Effect No.6
10 + 23 + 311 + 49 + 53
= 3.46
26
Effect No.7
10 + 21 + 30 + 414 + 511
26
= 4.35
Effect No.8
12 + 24 + 37 + 44 + 59
26
= 3.54
Effect No.9
12 + 27 + 37 + 46 + 54
26
69
= 3.12
All the average indexes obtained from the Average Index formula are
tabulated as shown in Table 5.10 below.
FREQUENCY
ANALYSIS
No
Effects
AVERAGE
INDEX
NUMBER OF
RESPONDENTS
1
2
17
3.73
18
4.19
13
3.54
13
3.96
15
3.69
11
3.46
14
11
4.35
3.54
3.12
70
4.5
4
4.35
4.19
3.73
3.96
3.54
3.69
3.5
3.46
3.54
3.12
3
2.5
2
1.5
1
0.5
0
71
5.8
SUMMARY
Overall, data collected through survey conducted are analysed in this chapter.
There are five sections altogether; Part A, B, C, D and E. Part A describes the
respondents professional backgrounds. Part B looks into the level of understanding
of the respondents regarding the aims and backgrounds of the AEC agenda. Part C
provides the potential benefits and Part D determines the awareness of the
respondents on the AECs service liberalisation. Lastly, Part E provides the potential
effects of the movement of natural persons towards the QS profession in Malaysia.
72
CHAPTER 6
DISCUSSION AND FINDINGS
6.1
INTRODUCTION
This chapter discusses the findings of this study. The objective of the
questionnaire as mentioned previously in Chapter 4 is to achieve both the second and
the third objectives. The objectives are:
4) To investigate the potential benefits of AEC policy on the Malaysian
construction industry
5) To investigate the potential effects of AFAS and MNP on the QS
profession in Malaysia.
These objectives are translated into the two research questions to be
addressed in this study which are:
1) What are the QS firms perceptions of the potential benefits of AEC
policy on the Malaysian construction industry?
2) What are the QS firms perceptions on the potential effects of the free
flow skilled labour policy on the employment of Quantity Surveyors?
6.2
2)
73
6.3
This section ranks the findings gained from the data analysis in accordance to
ascending average index of every benefit listed in Table 6.1 below.
No.
1
2
3
Benefits
Average
Index
Rating
Rank
3.39
Not Sure
3.87
Agree
4.03
Agree
3.42
Not Sure
3.48
Not Sure
3.74
Agree
3.68
Agree
3.29
Not Sure
3.65
Agree
7
8
9
Greater transfer of
technology
Faster physical
development
Greater job opportunities
The ranking for each of the potential benefits of AEC towards the Malaysian
construction industry is achieved by referring to the scale as discussed in Chapter 4.
The potential benefits that obtained average index of 3.50 and above; are considered
critical for this study, while the remaining shall be disregarded. The scales are as
follows:
74
According to Table 6.1, there are five potential benefits that meet the 3.50
average indexes and shall be considered critical potential benefits of AEC towards
the Malaysian construction industry as a result for this study. The potential benefits
are ranked as follows:
1) Construction industry is opened to domestic and foreign markets (4.03)
2) Construction Firms become more competitive (3.87)
3) Larger target market (3.74)
4) Greater transfer of technology (3.68)
5) Greater job opportunities (3.65)
The researcher also obtained several additional potential benefits from the
respondents through the open-ended item in the questionnaire. They are:
1) There could be greater opportunity to become experts in niche areas
2) International resumes shall add to professional value
3) The trend for cost services are very likely to increase
4) Regional integration compliments domestically established firms
5) Domestic or newly established firms would have to enhance their
competitiveness or be left out unless certain protective incentives are
recorded
75
No.
1
2
LITERATURE REVIEW
Construction works become more
efficient
Construction Firms become more
competitive
FINDINGS
Table 6.2 Comparison of the Potential Benefits between the Literature Review and
Findings
76
6.4
This section ranks the findings gained from the data analysis in accordance to
ascending average index of every benefit listed in Table 6.3 below.
No
Effects
Average
Index
Rating
Rank
3.73
Agree
4.19
Agree
1
2
3
3.54
Agree
3.96
Agree
3.69
Agree
3.46
Not Sure
4.35
Agree
3.54
Agree
3.12
Not Sure
Increase in quality of
services
Change of employment
form
Greater competition
between domestic and
foreign QS
Less opportunity for local
firms
5
6
7
8
9
77
78
No
LITERATURE REVIEW
FINDINGS
1
2
Table 6.4 Comparison of the Potential Effects between Literature Review and Findings
79
6.5
SUMMARY
This chapter discusses the findings obtained from the primary data collection
conducted through survey questionnaire as explained in Chapter 4. The findings are
discussed section by section; starting with the findings on the potential benefits of
AEC towards the Malaysian construction industry, followed by the findings on the
potential effects of ASEAN Framework of Agreement in Services (AFAS) and its
movement of Natural Persons towards the QS Profession in Malaysia. The findings
in Chapter 5 are then compared with the review of literature as discussed in Chapter
3. Finally, the following chapter, Chapter 7 shall conclude this study and make
further recommendations on possible research areas.
80
CHAPTER 7
CONCLUSION AND RECOMMENDATION
7.1
INTRODUCTION
Chapter 7 is the concluding chapter of this study. This research has been
designed with the aim of investigating the perceptions of Quantity Surveying firms
on AECs free flow policy of skilled labour in the construction industry and its
effects on the QS profession in Malaysia.
81
7.1.2 Objective 2
The third objective is to investigate the potential effects of AFAS and MNP
on the QS profession in Malaysia. This objective is achieved through the primary
data collection; survey questionnaire. The findings of the survey shows that seven (7)
out of nine (9) potential effects dissected from the literature review in Chapter 3, are
found as critical potential effects of AFAS and MNP on the QS profession in
Malaysia. The potential effects are:
8) Greater competition between domestic and foreign QS
9) Increase competition of QS employment
10) More diverse services
11) Increase in job opportunities for QS
12) Increase in quality of services
13) Better job qualities
14) Less opportunity for local firms
82
7.2
LIMITATIONS
There are several impediments throughout the progress of this research. The
main limitation is due to time constraints. The researcher was given a fixed time
frame to finish this study; the most difficult part was during the data collection. The
accuracy and reliability of the findings could have been better if the researcher was
in possession of more time to conduct more personal interactions with selected
registered QS and QS Directors when filling in the questionnaires.
The researcher also faced difficulties during the data collection stage, as the
process had taken more time than what had been planned. There was lack of
cooperation by some of the selected samples. This could be due to their workload or
work schedule resulting in their reluctance to meet and, or to complete the
questionnaires.
7.3
RECOMMENDATION
83
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xx
APPENDIX A
SURVEY
SURVEY TOPIC:
ASEAN ECONOMIC COMMUNITY (AEC): EFFECTS OF SERVICE
LIBERALISATION TOWARDS THE QUANTITY SURVEYING
PROFESSION IN MALAYSIA THE QS PERCEPTIONS
Prepared by
Matric No.
: 0912914
Year/ Semester
: YEAR 4, SEMESTER 2
Session
: 2012/2013
Course Title
APPENDIX A
SURVEY
____________________________________________________________________
ASEAN
ECONOMIC
COMMUNITY
(AEC):
EFFECTS
OF
SERVICE
APPENDIX A
2. Age: __________
YES
Do you know that the free flow of skilled labours is part of the AECs
plan?
NO
APPENDIX A
No.
Benefits
Construction industry is
opened to domestic and
foreign markets
Greater transfer of
technology
10
1
Strongly
Disagree
SCALE
3
2
Not
Disagree
sure
4
Agree
5
Strongly
Agree
PART D: The awareness on the ASEAN Economic Community (AEC) and the
service liberalisation
7. Do you know that the movement of professionals would be less restricted
under the implementation of AEC in 2015 and beyond?
Yes
No (Please skip Part E, your question ends here)
APPENDIX A
Effects
Increase competition of QS
employment
10
1
Strongly
Disagree
2
Disagree
3
Not
sure
4
Agree
5
Strongly
Agree