MALAYSIA. Developing a high-income economy summary of the Tenth Malaysia Plan. GDP growth rates (percentage changes) GDP per capita

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Oswald Freeman
6 years ago
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1 MALAYSIA Medium-term economic outlook (forecast) percentage change) Medium-term plan Theme Basic data (in 21) Charting development towards a high-income nation GDP growth rates (percentage changes) Malaysia Average of six ASEAN countries Average of Emerging Asia 23-7 (average) (average) Source: GDP per capita Total population 28 million 1.7 million Malaysia ASEAN Average (current USD) Sources: Notes: Six ASEAN countries Emerging Asia Composition of exports (in 21) Emerging Asia Average OECD Average Sources: Composition of imports (in 21) (percentage of total imports) Chemicals & Allied Industries 5% 7% Vegetable Products 9% Others 2% Mineral Products 16% Machinery / Electrical 43% 5% Chemicals & Allied Industries 7% Others 24% Mineral Metals Products 9% 11% Machinery Electrical 44%/ Source: Trademap. Developing a high-income economy summary of the Tenth Malaysia Plan by 22. SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD

2 domestic demand and productivity. The increased reliance on domestic demand is to be achieved by improving Table The Tenth Malaysia Plan (211-15): key development targets Macroeconomic environment Initial status (29) Target (215) (21) (21) 2.8 Human capital development Number of students enrolled in higher education (million) Inequality and poverty Source: Box Summary of the New Economic Model i) reaching high- ii) achieving a sustainable economy that meets iii) creating an inclusive economy that enables all The NEM was launched because the policies and strategies of the old growth model outlined in the New is characterised by private sector- and productivity-led growth. i) ii) iii)iv)v) instituting transparent vi)vii) enhancing the viii) ensuring the sustainability of growth. Source: 94 SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD 212

3 Structural policy focus Malaysia s medium-term policy challenges and responses Enhance SME development with special attention to capacity building and innovation enhance research and development POLICY FOCUS Enhance SME development with special attention to capacity building and innovation overseen by the National SME Development Council (NSDC) comprises policies and programmes across 15 ministries and 6 agencies. The specialised agency responsible for the co-ordination and management important role. 12 SME Corporation further increased the scale of its efforts by implementing 267 programmes with a total 13 are generally in favourable condition. Figure Number of business establishments by size Figure Contribution of SMEs to GDP (percentage) Micro entreprises Small entreprises Medium entreprises Large establishments Sources: National SME Development Council and national sources Strengthen training programmes SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD

4 Improve the regulatory environment for SMEs. regulatory costs are critical to encourage entrepreneurial activities. Foster international SMEs. capacity to be internationally competitive. Such government support should be well designed with challenges (e.g. (e.g. introduction to potential clients) or grants to allow them to draw on specialised sources of support. be of use in the case of Malaysia. The report emphasises that governments can do more to publicise the POLICY FOCUS Strengthen the link between industries and academic institutions to improve labour force skills and to enhance research and development value chains. tertiary education) 14 and literacy rates in Malaysia are improving by the fact that the percentage of students enrolled in upper secondary technical and vocational education 17 of tertiary-school graduates. These efforts need to be reinforced by strengthening both TEVT and tertiary education. 96 SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD 212

5 Figure Share of employment in the higher skilled bracket (percentage) Figure Unemployment among the population with tertiary education (percentage) Sources: CEIC and national sources i.e. would be important to put in place appropriate incentive schemes or institutional arrangements to enhance Box Promoting linkages between industries and academic institutions: examples from OECD countries In Australia Centre (CRC) programme. A CRC is a company formed through a collaboration of private sector organisations agencies as well as other end users. It is characterised by close interaction between researchers and the user. In the Netherlands In Norway of the main features of the programme is the placement of researchers into companies as well as company sector. Source: OECD (28c) SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD

6 POLICY FOCUS 18 i) heavy dependence on oil and gas revenues and ii) 19 and the 2 online (i.e. Table Recent regulatory changes to diversify and increase government revenues better cash flow management for petroleum companies. 211 imposed on paid television broadcasting services. Source: 21 Such subsidies have also encouraged over-consumption of both fuel and sugar 22 together with substantial smuggling activities. The rationalisation of subsidies has already started. Implementation is scheduled to be gradual in order to 98 SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD 212

7 Figure Share of subsidies to total operating expenditure (percentage) Figure Federal government revenue Share of subsidies to total operang expenditures Share of fuel subsidies to total operang expenditures Federal government total revenue Federal government tax revenue Source: CEIC Box Fiscal councils: examples from OECD countries Mandate Country Austria Sweden UK Normative recommendations and independent analysis on fiscal policy Economic and fiscal forecasting Independent fiscal councils/ institutions Danish Economic Council High Council of (reformed in 1989) Debt Committee Office for Responsibility Analysis of budget X X X Estimates of short- and long-term effects of policy measures X X Analysis of whether budgetary plans and outcomes are in line with fiscal rules Alert function to signal a possible deviation from plans in the budgetary plans X X X X X X X X Macro forecasts X X X government balance and debt levels X X Source: X X SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD

8 Notes Doing Business million in for both girls and boys aged 15 to 24 years. 16. (Universiti Malaya (167 th th The share of energy (i.e SOUTHEAST ASIAN ECONOMIC OUTLOOK 211/12 OECD 212

Conference for Competitiveness: Driving Innovation for Competitiveness Malaysia Productivity Council

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