KUALA LUMPUR, March 16 — Malaysia must step up efforts to intensify digitalisation and address issues of poverty and income inequality in order to achieve its long desired goal of being a high-income nation, Datuk Seri Mustapa Mohamed said today.
The minister in the Prime Minister’s Department in charge of economic affairs said the country has managed to record approximately 6.1 per cent in steady growth from 1971 to 2019 despite facing five economic downturns since 1970.
He added that Malaysia was able to bounce back from those economic crises due to its resilience and competitiveness.
“The factor-driven growth in the past has served the country well, to bring us to the cusp of attaining high-income status.
“However, that is not enough to carry us past the high-income threshold,” he said during the launch of the World Bank’s flagship report titled “Aiming High — Navigating the Next Stage of Malaysia’s Development” here.
However, he said such factors have become costlier to maintain, and will have a reduced contribution to Malaysia’s GDP growth as time passes, compared to in the past.
“New sources of growth are needed, to ensure that it is driven by multifactor productivity. We need to build a workforce for the future, drive digitalisation, and spur productivity improvements, at the sector — and enterprise-levels.
“With this mind, Malaysia has strengthened its resolve in intensifying the digitalisation journey, that first began with the Multimedia Super Corridor, and with the Malaysia Digital Economy Blueprint launched by the Prime Minister on February 19,” Mustapa said.
Equally important is to find new ways to address poverty income inequality, which is one of the country’s key development agenda, he said.
“Based on the Household Income and Basic Amenities Survey Report 2019, the Gini coefficient has increased from 0.39 in 2016 to 0.41 in 2019. Additionally, the income gap between regions and states, has gone up, and of course between races and within races as well.
“While we have done well in the past, there is certainly a lot more that needs to be done,” he said.
To accelerate balanced and inclusive development, Mustapa said rural areas will be transformed to bridge the development gap and to optimise regional economic potential.
“Strategic collaboration and coordination between the federal Government and state governments will be strengthened, to support effective regional development planning and implementation.
“States will continue to play an important role in socioeconomic development, to achieve more balanced and inclusive growth,” he said.
With Malaysia aspiring to join the ranks of the world’s high-income and developed economies, it also needs to be able to compete on the global stage.
“The challenge is how to do things differently, creatively and innovatively. We need to learn from our shortcomings, and how we can do things better, as well as take into account the best practices in other countries.
“This new World Bank flagship report, will help us to further explore the steps, that Malaysia needs to take in order to maximise its potential, to transition successfully to high-income and developed status, and to sustain equitable growth beyond the Covid-19 pandemic,” Mustapa said.
