Malaysia

Malaysia's structural transformation from low to middle income is a success story, making it one of the most prominent manufacturing exporters' in the world. However,... Show More + like many other middle income economies, it is squeezed by the competition from low-wage economies on the one hand, and more innovative advanced economies on the other. What can Malaysia do? Does Malaysia need a new growth strategy? This paper emphasizes the need for broad structural transformation; that is, moving to higher productivity production in both goods and services. This paper examines productivity growth for Malaysia at the sectoral level, and constructs several measures of the sophistication of goods and services trade, and puts these comparisons in a global context. The results indicate that Malaysia has further opportunities for growth in the services sector in particular. Modernizing the services sector may provide a way out of the middle income trap, and serve as a source of growth for Malaysia into the future. Show Less -

The Malaysian economy grew robustly in 2011, outperforming forecasts. Growth was driven by domestic demand. Public consumption picked up more than expected toward the... Show More + end of the year and fixed investment was also buoyant on higher investments by public and private companies. Private consumption spending remained strong, sustained by solid consumer credit, civil service bonus payments, and firm commodity prices benefiting smallholders. Inventories were a drag on growth as post- financial crisis restocking was completed. There is momentum to the reform agenda, but implementation could be accelerated. The government's transformation programs registered notable progress, but the challenge now is to go beyond quick wins and accelerate the implementation of more difficult, but critical, structural reforms that lie at the core of transforming the economy into a high-income one. Implementation can be assisted by increasing the coordination of related reform efforts (such as safety nets and education), building capacity within the civil service to lead reforms, and working towards consensus in key areas such as educational reform, subsidy rationalization and broadening the tax base. Show Less -

The Malaysian economy decelerated as solid domestic demand was not sufficient to offset a weakening external environment. Private consumption growth continued at a healthy... Show More + pace. Favorable rubber and palm oil prices drove up incomes of smallholders while continued employment and wage growth supported urban incomes. In contrast, fixed investment was more volatile, with private investment showing signs of picking up while public investments lagged. Malaysia's overall balance of payments recorded a larger surplus in the first half of the year reflecting a widening current account surplus and substantial net financial inflows. Malaysia's open economy is expected to slow further in the remainder of 2011 and into early 2012 mainly due to the deterioration in the outlook for external demand. Cities are central to Malaysia's aspiration to become a high-income economy. Smart cities are skilled and innovative. They play a crucial role in catalyzing economic growth by generating productivity gains through agglomeration economies. Smart cities are green and sustainable. They ensure a high quality of life to all citizens and the sustainability of economic gains. Finally, smart cities are resilient. Show Less -

About a year ago, the Government of Malaysia and the World Bank set up a knowledge partnership centered on the policy objective of transforming Malaysia into a high-income... Show More + economy. The Malaysia economic monitor series is a key pillar in this partnership and serves as a platform for public discussion, analysis, and the sharing of knowledge on the challenges facing Malaysia in achieving this objective. This third issue of the Malaysia economic monitor is themed inclusive growth. The report reviews recent economic developments, updates the World Bank's view on the economic outlook, and analyzes in the report's thematic section how Malaysia can promote the objective of inclusive growth. Following a spectacular year-on-year recovery, the growth momentum of the Malaysian economy is ebbing. After a period of crisis-related volatility, the economy transitioned into more normal patterns of growth: the pronounced inventory cycle began to subside, private consumption became more buoyant, and fixed investment picked up as capacity utilization gaps were closed. Interrupting this process was the return of external weakness, with exports slowing in the second quarter and then contracting. Since import demand for export processing did not react immediately, inventory volatility picked up again. Achieving Malaysia's Vision 2020 goal of high-income status requires average growth of 6 percent during the 10th Malaysia plan period a marked improvement on the 4.4 percent achieved over 2006- 2010. The challenge is not only to boost the level of growth but to ensure that growth is inclusive and sustainable. The policies and projects of the Economic Transformation Program are the key to meeting this challenge through greater, and higher-quality, investment and productivity improvements. Show Less -

In November 2009, the Government of Malaysia and the World Bank signed a three-year partnership agreement focused on the policy challenge of growing into a high-income... Show More + economy. The Malaysia economic monitor series is a key pillar in this partnership and represents an effort to promote discussion, analysis, and the sharing of knowledge on the challenges ahead. This second issue reviews recent economic developments, updates the World Bank's view on the economic outlook, and analyzes in the report's thematic section how Malaysia's economy can improve its growth performance through innovation. The report is accompanied by an outreach effort to a wide audience of policymakers, private sector leaders, market participants, civil society, think tanks, journalists and the public at large. Show Less -

This country level trade brief summarizes insights from the world trade indicators database as well as analyzes national impacts and responses to the food crisis and... Show More + global recession. The trade at a glance tables for Malaysia provide a snapshot of key aspects of trade policy and performance. Show Less -

The Southeast Asian Tigers feel threatened. Even though their growth rates have remained above the average for the world and also above the average for developing countries,... Show More + their economic performance falls short of that in the first half of the 1990s. The underlying worry is that it presages the beginning of a downward trend, the harbingers of which are lower rates of investment, persistently low rates of total factor productivity, and low levels of innovativeness. The Southeast Asian Tigers' worries motivate three questions, which this book attempts to answer. First, are the Tigers rightly threatened by a creeping economic sclerosis or what some observers are calling the middle-income trap? Second, if the threat is real, what are the underlying causes? Third, are there ways of neutralizing the problems and at least maintaining if not raising the growth rates of the recent past? This book will respond to these questions by means of a comparative analysis of the Tiger economies that is centered on Malaysia. This analysis draws on a comprehensive set of techniques and indicators to assess competitive pressures, to gauge industrial and technological capabilities, and to indicate some of the directions industrial change in Southeast Asia could take. Thus, the book seeks not only to view industrial evolution in the region from a comparative perspective taking account also of what is happening and has happened in other parts of East Asia but also to illuminate this ongoing and uncertain process using some of the latest empirical techniques devised for this purpose. The balance of this chapter provides the developmental and international contexts with reference to which these questions will be addressed. It explains the book's preferred angles to tackling them. The chapter also outlines the contents of the volume and foreshadows the principal findings and conclusions. Show Less -

This country level trade brief summarizes insights from the world trade indicators database as well as analyzes national impacts and responses to the food crisis and... Show More + global recession. The trade at a glance tables for Malaysia provide a snapshot of key aspects of trade policy and performance. Show Less -

The services sector occupies a large and growing component of the Malaysian economy, accounting for nearly 54 percent of aggregate production and 57 percent of national... Show More + employment. Of the 1.9 million jobs that were created during the past ten years, fully 1.8 million were located in the services sector. As levels of income per capita continue to rise in Malaysia, the emphasis on services as a source of employment creation and income growth can be expected to increase. The purpose of this study is to examine the performance of the Malaysian services-producing industries in detail, both in comparison to the goods-producing sector as well as the services-producing industries in other countries. The study has six primary components. First, in order to provide a macroeconomic context, we compute measures of labor productivity and total factor productivity (TFP) growth at the level of the total economy and three major sectors of agriculture, industry, and services. Second, the author extends the productivity analysis to the level of the 12 principle service-producing industries, and compares their performance with comparable industries in Korea, Taiwan, and Thailand. Third, the author use available data on five detailed industries (airlines, banking, telecommunications, land transport, and port operations) to construct measures of productivity performance, with an emphasis on international comparisons where possible. Fourth, the author analyzes the current state of Malaysia's external trade in services, and its potential for growth in the future. Fifth, the author considers how changes in the educational attainment of the workforce contribute to the performance of the services sector and to economic growth more broadly. In a concluding section, the author provide a brief report on the quality of the available data necessary to compute indicators of economic performance and suggest areas of greatest need for improvement. Show Less -

The corridor between Malaysia and Indonesia is the second largest remittance outflow for Malaysia and the largest remittance inflow for Indonesia. In the East Asia and... Show More + Pacific Region, Indonesia is the second largest supplier of labor migration with 680,000 overseas worker contracts concluded in 2006 alone. Since 2003, the number of contracts has more than doubled. Malaysia, in general, is a destination for foreign workers because of its economic performance and government recruitment policies aimed to alleviate labor shortages. In addition to these factors, the cultural and geographical proximity of Indonesia makes Malaysia a destination for both documented and undocumented Indonesian migrant workers. This report is a combined effort between the Financial and Private Sector Development and the East Asia and Pacific Social Development units of the World Bank. It is part of a series of studies under both the global Bilateral Remittance Corridor Analysis program and the Indonesia Female Migrant Worker Program. The report analyzes the transfer of remittances by Indonesian migrant workers known as Tenaga Kerja Indonesia (TKI). The main objective of this report is to contribute to policymaking efforts to increase the impact that remittances have on economic growth and poverty reduction in Indonesia, and investigate options for attracting more migrants to use the formal sector. The report aims to provide a descriptive overview of the Malaysia-Indonesia remittance corridor and to suggest some policy avenues for improving access to formal remittance transfer channels; increasing the transparency of the flows and cost structure; and facilitating the transfer of remittances, particularly for undocumented and female migrant workers. Show Less -