Malaysia Economic Monitor: Towards a Middle-Class Society
Kuala Lumpur, December 17, 2014--- Malaysia’s economy is projected to grow by 5.7 percent in 2014 and 4.7 percent in 2015, with robust domestic growth, yet a less favorable external outlook, according to a new World Bank report. The Malaysia Economic Monitor, launched today, supports enlarging the middle class as critical to reducing income inequality and promoting shared prosperity in Malaysia.
“Malaysia has used its rich natural resources and high economic growth to lift millions of households out of absolute poverty,” says Ulrich Zachau, World Bank Country Director for Malaysia. “It now has the opportunity to transform from a middle income country into a middle class society--fulfilling the aspirations of lower-income families and workers to join a dynamic, better educated, higher-earning middle class that is already becoming the engine of Malaysia’s economic growth.”
Enlarging Malaysia’s middle class means creating pathways for an “aspirational group”, families that are not poor or at a meaningful risk of falling into absolute poverty, but not sufficiently well-off to consider themselves “middle class”. This group now comprises the majority (51 percent) of Malaysian society. Largely urban and with smaller families, many in the aspirational group are better educated and wealthier than poor and vulnerable households, but currently have neither the human nor financial capital to join and remain in the middle class. Most strikingly, only 16 percent of the aspirational group have post-secondary educations compared to 55 percent of the middle/upper-class group.
“Most higher-paying, ‘middle-class’ jobs require a bachelor’s degree or at least a diploma,” says Frederico Gil Sander, Senior Country Economist for Malaysia. “Expanding access to post-secondary education is therefore a cornerstone of creating pathways to the middle class.”