KUALA LUMPUR, March 31 ― The government should consider implementing long-term structural reforms, such as a holistic labour market policy framework to guide policymakers in building a robust labour market ecosystem post-Covid-19.
BNM said broadly, this framework could encompass policies to catalyse economic transformation, enhancing skills, training and education systems, strengthening Active Labour Market Policies (ALMPs), and promoting inclusive labour market outcomes.
“Drawing from this policy paradigm, the following three policy strategies could be considered.
“First, there is an urgent need to introduce policies and economic reforms that would ultimately lead to the higher creation of and demand for high-skilled and knowledge-based workers.
“Second, efforts to enhance skills and facilitate the reallocation of workers to more resilient, productive, and high-growth areas must be intensified, with more focus towards the ‘future of work’.
“And third, initiatives to enhance labour market resilience should be intensified, beginning with closing gaps in, and enhancing access to, social security and insurance,” BNM said in the Economic Monetary Review 2020 released today.
On the ALMPs in Malaysia, BNM said as pointed out recently by the World Bank, even though Malaysia has made significant progress in its skills development system since the 2000s, there exists duplication and fragmentation in Malaysia’s ALMPs.
“Specifically, implementation and deployment are spread over multiple agencies, leading to inefficiency and high administration costs.
“As a result, this manifests in relatively lower levels of programme spending and fewer beneficiaries,” it said.
BNM also said this fragmentation in the ALMP system also results in a lack of overarching strategy and importantly, weak linkages between training and employment support with the needs of industry.
“Over the long term, economic policies should be geared towards creation of high-skilled, high-paying jobs, with complementary focus on advancing skills enhancement, enhancing search and matching mechanisms in the labour market, and promoting more inclusive outcomes for vulnerable segments of the labour market.
“Current efforts by the government to enhance the labour market statistics landscape are also welcome, as comprehensive, granular, and timely data on developments in the labour market is key to enabling quality analysis and the formulation of impactful policies,” it said.
Nevertheless, BNM said during the pandemic, the impact of the virus in Malaysia was mitigated by a slew of measures to soften the economic burden of lockdowns on households, businesses and workers.
Among the key policies included Prihatin, Penjana, Budget 2021, Permai, and Pemerkasa packages encompassing, among others, the Wage Subsidy Programmes (WSP 1.0, 2.0 and 3.0), increased access to the Micro Credit Scheme and micro-SME special grants, as well as enhanced hiring incentives under the Penjana Kerjaya initiative, it added. ― Bernama
