Malaysia Economic Monitor: Transforming Urban Transport
Integrated, local-level planning can reduce high costs of congestion
and transform urban transport in Malaysia, World Bank says
KUALA LUMPUR, June 16, 2015 --- Malaysia’s economy is projected to expand by 4.7 percent in 2015 and 5.0 percent in 2016. The outlook reflects the overall strength of Malaysia’s domestic economy amid ongoing fiscal consolidation, lower commodity prices and weak global trade, a new World Bank report notes. Risks are significant, however, considering the possibility of new declines in commodity prices and volatile capital flows.
Enhancing resilience to external shocks and maintaining the pace of growth requires continued structural reforms to unlock productivity gains. The Malaysia Economic Monitor, launched today, makes the case that improved urban transportation is essential to reduce the high costs of traffic congestion and to ensure urbanization remains a positive force in Malaysia’s transformation into a high-income, inclusive and sustainable economy.
“Urbanization has given more Malaysians economic opportunities and has helped generate good jobs, raise incomes, and reduce poverty,” says Ulrich Zachau, World Bank Country Director for Malaysia. “Yet, urbanization has also brought urban sprawl and congestion. People lose time and businesses lose money from delays. Malaysia can now invest in smart urban transport solutions, which will make cities more productive and livable across Malaysia.”
To transform the planning and delivery of urban transport, Malaysia may consider prioritizing the following reforms: (a) Establish lead transport agencies at the metropolitan level to spearhead integrated approaches towards the planning and delivery of both public and private urban transport; (b) Identify and implement sustainable financing mechanisms; and (c) align public transport with incentives to discourage the use of private transport in congested areas, as London, Singapore and other major world cities have done successfully. Introducing congestion charges, user fees and gasoline taxes would not only result in environmental gains but could also trim the fiscal deficit by as much as RM19 billion.