KUALA LUMPUR, APRIL 12, 2012--- Malaysia’s economy expanded a robust 5.1 percent in 2011. GDP growth exceeded earlier estimates because the Government stepped up public consumption spending towards the end of the year and also because of higher investments by public and private companies. GDP is expected to continue to expand healthily by 4.6 percent in 2012 and, assuming the global economic recovery picks up, 5.1 percent in 2013.
The Malaysia Economic Monitor: Modern Jobs, launched today, notes that there is momentum for the country’s reform agenda. Although the Government’s transformation programs have made progress, structural reforms needed to turn the economy into a high-income country can be further accelerated.
“The ultimate goal in becoming a high-income country is to support higher and more secure incomes for Malaysian households. That requires a transformation of the types of jobs available,” says Annette Dixon, World Bank Country Director for Malaysia. “Malaysia needs to create more modern jobs”, she added.
During the early stages of Malaysia’s industrialization, good infrastructure and institutions were crucial and routine skills sufficed. As Malaysia has progressed, higher productivity jobs are required to pull wages up. ‘Modern jobs’ involve a higher and more diverse set of skills such as communication, problem-solving, and proficiency in modern information technology, explains the report. Modern firms in a high-income economy derive their competitiveness from the productivity and talent of their workers, not low wages. Measures to increase competition in the economy will encourage firms to modernize.
Nurturing, attracting, and retaining skills are needed for the creation of modern high-productivity jobs. In line with this, the World Bank supports the Government’s New Economic Model recommendation that the education system needs to be reviewed and the ‘rote-learning’ approach’ shifted to an approach that stimulates ‘creative and critical thinking’. Malaysia can also benefit from complementing its talent base by bringing scarce skills from abroad.
“Recent trends in Malaysia’s labor markets are encouraging. Unemployment has been low, more young people are receiving higher education, more women have careers, and more high-skilled jobs are being created,” says Mathew Verghis, World Bank Lead Economist for Southeast Asia.
Frederico Gil Sander, World Bank Senior Economist for Malaysia, adds: “Malaysia’s labor markets are reasonably flexible but can be modernized by protecting workers, not jobs, and by promoting flexible work arrangements to attract women back to the labor force. Women are a largely untapped source of skills in Malaysia.”
The Malaysia Economic Monitor series provides an analytical perspective on the policy challenges facing Malaysia as it grows into a high-income economy. The series also represents an effort to reach out to a broad audience, including policymakers, private sector leaders, market participants, civil society and academia.