Malaysia has achieved high levels of growth, but must do more to address governance and social challenges

Malaysia

Kuala Lumpur, Malaysia (Unsplash)

This article is brought to you in association with OECD.


Malaysia’s economic performance has been very successful, but public policy can do more to address social and governance challenges while making growth stronger, greener and more inclusive, according to a new report from the OECD.

The latest OECD Economic Survey of Malaysia discusses how boosting productivity and implementing new structural reforms can help Malaysia move up global value chains and reach its goal of achieving high-income country status by 2024. The Survey projects the economy will remain resilient, with growth just under 5% this year and next, but cautions that trade tensions, geopolitical uncertainties and weaker advanced economies are downside risks.

The Survey, presented in Putrajaya by OECD Deputy Secretary-General Masamichi Kono and Malaysia’s Deputy Finance Minister Dr. Radzi Jidin, discusses the need to make public finances more sustainable, improve skills acquisition for all, strengthen integrity and boost productivity.

“Malaysia’s economy is doing well, but the march toward high-income status will require further reforms,” Mr Kono said. “The challenge facing policymakers today is not only to boost growth, but to improve the quality of growth. That will mean ensuring greater environmental protection and creating the conditions for the development of a more innovative and dynamic economy that promotes higher living standards for all.”

To ensure sustainability of public finances, Malaysia will need to reform fiscal policy, the Survey said. This should include increasing the currently low level of tax revenue, notably by eliminating numerous tax exemptions, but also through improving efficiency of the tax system, broadening tax bases and increasing indirect tax revenue, in particular consumption-related taxes to reduce reliance on oil-related revenues. Strengthening fiscal accountability and improving budget process transparency and public debt management will also be necessary.

The Survey also underlines the need to further enhance integrity across the public sector. This could include ensuring greater transparency and more competition in public procurement processes, better accountability in the governance of state-owned enterprises, stronger regulatory frameworks for public-private partnerships and enhanced anti-corruption measures.

Malaysia faces substantial labour market imbalances and shortages of workers across the skills spectrum, with further difficulties expected under the impulse of automation and population ageing. Greater investment in education and training will be required to prepare the country for the future of work and help it move up the value chain. Adults need better access to up-skilling and re-skilling opportunities to ensure that their skills remain relevant, the Survey said.

Technological adoption is critical to boost productivity and transition to a high-income economy. Efforts should continue to attract foreign direct investment, promote entrepreneurship and uptake of new technology.

To make growth greener, the Survey says Malaysia can eliminate energy subsidies, in favour of targeted cash transfers. It also highlights the positive impacts of greater coordination of environmental policy at the sub-national level and points out the opportunity for greater use of environmental taxation, notably a carbon tax.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

It’s time to move: 5 ways we can upgrade our SDG navigation systems

G20 LIVE: The European Sting covers online world news and the latest developments at G20 from Antalya Turkey

Youth Internationalization: part of everyday life in JADE

Parliament compromises on Banking Union but sends market abusers to jail

A lack of affordable homes is forcing young Britons to live with their parents

Methane levels are increasing – and scientists aren’t sure why

From a refugee camp to Davos: one Co-Chair’s story

COP22 addresses a strong global pledge to effectively implement the Paris Agreement

For resilient, sustainable city mobility after COVID-19, these trends must continue

Coronavirus: here’s what you need to know about face masks

Monsoon rains turn millions of children’s lives ‘upside down’ across South Asia

Financial services: Commission sets out its equivalence policy with non-EU countries

Promoting rule of law and fundamental rights in the EU

European research priorities for 2021-2027 agreed with member states

UN experts urge India to align new anti-trafficking bill with human rights law

The Ecofin deceives the SMEs with the EIB €10bn capital increase

The ethics of the Medical Technology Civilisation era

Cyber defence: MEPs call for better European cooperation

Protector or polluter? The impact of COVID-19 on the movement to end plastic waste

Coronavirus response: Team Europe supports Somalia with three EU Humanitarian Air Bridge flights

If this is Globalization 4.0, what were the other three?

Your morning cup of coffee contains 140 litres of water

EU Citizenship: New survey shows EU citizens are more aware of their rights

The miserables and the untouchables of the economic crisis

MFF: Commission’s plan “impossible to implement” with Finnish proposal

George Floyd: these are the injustices that led to the protests in the United States

How cities around the world are handling COVID-19 – and why we need to measure their preparedness

Parliament calls on EU Commission to step up action against dangerous chemicals

5 ways for business leaders to win in the 2020s

Humane leadership must be the Fourth Industrial Revolution’s real innovation

Romanian Presidency priorities discussed in committees

Ahead of State of the Union the European Youth Forum highlights lack of action on youth employment

How Sierra Leone is using 3D printing to become a model state

Air quality: Commission takes action to protect citizens from air pollution

Illegal fishing plagues the Pacific Ocean. Here’s how to end it

Female African coders ‘on the front-line of the battle’ to change gender power relations: UN chief

This is the critical number that shows when housing breaks down

Apple’s tax avoidance scheme remains as creative as their new iPhone

TTIP wins Merkel’s endorsement ahead of 2016 tough deadline

Three countries losing ground and one new prime minister

Look no hands: self-driving vehicles’ public trust problem

CEOs in these countries are more likely to go with their gut

EU Facility for Refugees in Turkey: €5.6 billion out of €6 billion now allocated in support of refugees

EU report: Implementation of reforms continues to bring EU and Ukraine closer together

Here’s why the tech sector could be the next target for Chinese investment in Africa

Medical Front liners Need Not To Be Called Heroes; They Need Emotional Stability By Giving Them Proper Support

Huge data gaps’ hampering ‘evidence-based’ national migration policies

At last a good price for the Greek debt!

After the European Parliament elections – what happens next?

Family businesses are the lifeblood of the Middle East. How do we ensure they survive?

Aid convoy for north-east Syria postponed over security concerns – UN relief chief

Sudan: UN rights chief alarmed over ‘excessive force’, alleged use of live fire against protestors

Upgraded EU visa information database to increase security at external borders

Mental disorders: a raging fire tearing apart the Moroccan society

Chart of the day: When do young Europeans leave home?

Switzerland fast-tracks emergency aid for small businesses weathering COVID-19

COVID-19: What you need to know about the coronavirus pandemic on 9 April

New technologies, artificial intelligence aid fight against global terrorism

Unity, regional cooperation and international support needed for Horn of Africa to develop sustainably

European Union presents its progress towards sustainable development

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s