KUALA LUMPUR, Nov 21 — Malaysia is unlikely to reach its targeted 40 per cent wage (CE) to gross domestic product (GDP) ratio by 2020 as outlined in the 11th Malaysia Plan, a local economic think tank said today.
Malaysian Institute of Economic Research executive director Professor Emeritus Zakariah Abdul Rashid said the country’s wage-to-GDP ratio — or wage share — is currently at 35.5 per cent.
“At the 11th Malaysia Plan we targeted the CE to GDP ratio to be at 40 per cent but we won’t achieve it at the rate we are going now.
“However, household income is increasing. It’s not bad and it is improving. We started low, at 31 per cent CE to GDP ratio and hopefully we will reach that benchmark level we targeted slightly later than 2020,” he said at the National Economic Outlook 2018-2019 conference here.
Zakariah explained that to achieve better wages there must be an increase in productivity.
“Right now our production level is at RM78,000 per employee. If we remove the mining and quarrying sector, it will drop to somewhere around RM66,000 per employee.
“Our target was RM92,000 per employee by 2020 and at the current rate of change, the target won’t be met,” he said, adding that the mining and quarrying sector was highly affected by the oil price.
Zakariah said that in order to embrace the so-called “Industrial Revolution 4.0” Malaysia needs to increase its productivity rate and skill level.
