PETALING JAYA: Initiatives announced under the 12th Malaysia Plan (12MP) mid-term review put Malaysia on a firm footing towards becoming a high-income nation by homing in on increasing productivity, says an economist.
Universiti Tun Abdul Razak’s Barjoyai Bardai said a key component of making Malaysia a high-income country is boosting median household income.
“To become a high-income nation, we need to get a median household income of at least RM10,000. This will ensure that 50% of households are earning above RM10,000,” he told FMT.
Presently, the median income for the working Malaysian population is RM2,500 per month, which brings the median household income to about RM4,000 in double income families.
Barjoyai said to obtain employers’ buy-in to pay their workers higher wages, an increase in productivity is a must.
He said the government, in its 12MP mid-term review, had rightfully identified and focused efforts on several high growth and high value (HGHV) industries that could “boost the economy and household income”, namely renewable energy, digital and technology, as well as agriculture.
The 71 main strategies announced under the 12MP mid-term review include implementing the National Energy Transition Roadmap (NETR), introducing a natural gas roadmap, and implementing carbon pricing.
Putrajaya also aims to implement digital leadership and upskilling programmes, strengthen the tech start-up ecosystem, accelerate digitalisation through government technology (GovTech), diversify agro-based industries to rely less on food imports and promote low carbon agriculture practices.
Barjoyai said the strategies involved could likely boost the salaries of those working in both the private sector and civil service with the adoption of technology to improve efficiency as well as service delivery.
He lauded the government’s move to push for employers sharing 40% of their profits with employees by 2025. Currently, the figure stands at only 32%, while developed nations record 60%.
Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman described the 12MP mid-term review as “radical”, as it did not merely take stock of the implementation of the 12MP in the last two years but also introduced necessary reforms.
He said the implementation of the progressive wage policy as one of the strategies would help ensure an increase in wages would be in tandem with higher productivity.
Syed Hussain said the government’s plans to enhance technical and vocational education and training (TVET) would also provide due recognition to graduates and promote the programme as a respectable career path.
“TVET can help to accelerate the percentage of skilled workers, which is currently at about 28%, to achieve the desired 35% target,” he said.
A group representing small and medium-sized enterprises (SMEs) said Malaysia was stuck in a “middle-income trap”, primarily due to the country’s stagnant labour productivity and the “lack of a new economic driver in the form of sectoral leadership”.
“At the heart of these strategies under the 12MP mid-term review is the drive to support our SMEs in pushing up the value chain.
“By doing so, we can create higher-paying jobs and increase the wages for Malaysians as our productivity as businesses rises,” said Small and Medium Enterprises Association (Samenta) chairman William Ng.
The 12MP mid-term review also aims to digitalise micro, small and medium enterprises to broaden market access.
Source: https://www.freemalaysiatoday.com/category/nation/2023/10/12/12mp-mid-term-review-paves-way-for-higher-productivity-income-says-economist/