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.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

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

On Youth Participation: Are we active citizens?

Corporate tax remains a key revenue source, despite falling rates worldwide

JADE President opens JADE Spring Meeting 2014

Venezuela: ‘A worrying destabilizing factor in the region’, Bachelet tells Human Rights Council

Mental health and suicide prevention: why focus on primary care

Restoring government control across Central African Republic is ‘key’ to lasting peace, stability – UN envoy

Don’t take African generosity towards refugees for granted, says UN refugee chief

UN agencies call for more resettlement and end to detention of asylum seekers in Libya

EU-Russia summit in the shadows of Kiev’s fumes

Make no mistake: the purpose of business is to serve society

Brexiteer May gets lip-service from Trump and Turkish promises from Erdogan

A digital tax sounds like a great idea. Here’s why it might not be universally popular

UN report on Syria conflict highlights inhumane detention of women and children

Ukraine: The West and Russia negotiate shares of influence

EU Parliament: It takes real banks to fight unemployment and recession

Service and Sacrifice: Guinean peacekeepers make their mark in Mali

China and China-EU Relations in the New Era

ITU Telecom World 2018 takes place in Durban, South Africa

The US-Mexico trade deal a threat for others, Trump to single out China, Europe

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

UN Security Council offers Yemen Special Envoy ‘their full support’

MWC 2016 LIVE: EC adds Brazil to partner tally

Road safety: Data show improvements in 2018 but further concrete and swift actions are needed

The Sting’s Values

China in my eyes

Service and Sacrifice: Ugandan ‘Blue Helmets’ support UN efforts to bring peace to Somalia

Bundesbank’s President Weidmann criticises France and the EU. Credibility at risk?

Why women aren’t allowed to work

The 100-year climate catastrophe of Mont Blanc

Economic sentiment and business climate stagnate in miserable euro area

‘Stand united against anti-Muslim hatred’ urges Guterres, after mosque shootings in New Zealand leave 49 dead

Prisons are failing. It’s time to find an alternative

Still recovering from devastating cyclones, Mozambique, in UN address, warns of global warming’s ‘nefarious consequences’

5 things to know about the Western Balkans

Commission presents EU-Vietnam trade and investment agreements for signature and conclusion

What keeps me up at night? Two strategists reply

Collaboration and connectivity at ITU Telecom World 2019

Hungary: people born in the 2020s won’t have legal rights any more to buy tobacco

UN highlights profound implication of population trends on sustainable development

The mental health of health professionals: is it worth it?

The world just took a step closer to eradicating polio

Global Citizen – Volunteer Internships

A few, or rather two, trade and economic alliances may rule our brave new world

Upgraded EU visa information database to increase security at external borders

MEPs want to ensure sufficient funding for Connecting Europe’s future

Privatisation and public health: a question of Human Rights

Why a healthy planet and a healthy economy go hand-in-hand

“If the job market doesn’t exist, then even the most brilliant Youth Guarantee cannot ensure a job to these young people”, European Youth Forum Secretary General Giuseppe Porcaro on another Sting Exclusive

The future of suicide and depression prevention

These countries have some of the highest voter turnout in the world

On World Day to Combat Desertification, UN shines spotlight on ‘true value’ of land

To beat hunger and combat climate change, world must ‘scale-up’ soil health – UN

UN chief laments ending of Cold War-era disarmament treaty

10 reasons why today’s cyber leaders are tomorrow’s world leaders

The world to teach Germans to…un-German

Europe’s richest regions actively seek investment from China’s biggest banks

How distorted is the EU labour market by this crisis?

Boris to end up in jail if he loses the next elections?

‘€1 million’ fines for rescue boats prompts UN concern for future sea operations

Why artificial intelligence is learning emotional intelligence

More Stings?

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