Even as living standards have risen, new priorities are coming into focus. A growing middle class is seeking greater upward mobility. For example, some young graduates face a mismatch between skills and available jobs, and many older workers have modest retirement savings. Foundational learning also needs strengthening, with about 42 percent of late-primary students unable to read an age-appropriate text. These are solvable challenges. With continued investment in skills, higher-quality jobs, social protection, and better classroom outcomes, Malaysia can turn these gaps into the next wave of inclusive, resilient growth.
Competing successfully on the global stage requires addressing the challenges of job quality, the distribution of wealth, the aging of the population, and the changing nature of work brought about by new technologies. Skills development is critical to increasing productivity and wage growth and reducing skills-related underemployment. Narrowing income inequality is also essential. Further improvement and investment in social protection, facilitated by enhanced taxation, would allow the government to address such challenges as Malaysia moves toward high-income status.