Expansionary fiscal policy ensures Keluarga Malaysia's well-being

He said in line with the 12th Malaysia Plan (12MP), the initiatives under Budget 2022 had focused on speeding up recovery, strengthening economic resilience and accelerating reforms.

Mustapa said the government's short-term policies are important to drive economic recovery in 2022, and it is equally critical to put medium and longer-term institutional reforms in place to strengthen resilience.

In his opening speech at the launch of the 'World Bank Malaysia Economic Monitor Report - Staying Afloat' today, he also stressed that the government remains committed to eliminating hardcore poverty by 2025.

"We acknowledge the inputs from the World Bank team here and globally in sharing best practices in poverty alleviation.

"I'm also taking note of the World Bank's report on multidimensional poverty (MPI) in Malaysia, 'Improving Measurement and Policies in the 2020s'," he said.

In making the measurement of MPI more inclusive, Mustapa said the government would take into account the World Bank's suggestion of setting more ambitious income and non-income poverty indicators.

He also said the government will adopt a holistic and targeted approach to eradicate hardcore poverty in about fifty localities throughout the country next year.

He had also highlighted the need to address the issue of low wages.

"In the 12MP, our target is to improve the share of Compensation of Employees (CE) to gross domestic product from 37.2 per cent to about 40 per cent.

"If we want to achieve this target, we need more and more Malaysians working in the skilled category," said Mustapa.

He added that the government will continue to work closely with the World Bank and other international organisations, as well as the private sector and civil society organisations in improving the lives of the Malaysians.

Meanwhile, World Bank country director for Brunei, Malaysia, Philippines and Thailand, Dr Ndiame Diop said while the re-opening of the economy and continued support from external demand are expected to facilitate economic recovery next year, the economic shock has exacerbated the hardships that the poor and vulnerable were already facing before COVID-19.

"Addressing the challenges faced by these groups, as well as narrowing the educational disparities will require both immediate and longer-term policy responses," he said.

In the short term, he said it is essential that policy measures are geared towards maintaining financial support for the poor and vulnerable, ensuring greater inclusivity with social insurance and mitigating further learning losses.

"Over the long run, Malaysia should take steps to reform its social protection system, making it more broad-based, robust, and progressively targeted," he said, adding that emphasis should also be given to strengthening the education system.