KUALA LUMPUR: Malaysia needs an underlying structural economic transformation to increase productivity growth, according to the World Bank.
East Asia and Pacific Regional vice-president Manuela V. Ferro highlighted that while the country has done relatively well compared to its regional peers, it has lagged its global aspirational peers that have nearly three times the productivity levels.
"Further, there are significant variations in productivity levels among firms within Malaysia.
"Pre-pandemic estimates suggest that smaller firms generally lag significantly behind their larger counterparts," she said, adding that firms in the top 25 per cent of the productivity distribution are nearly 12 times more productive than those in the bottom 25 per cent.
"The pandemic has further exacerbated these differences," she noted.
"This falls short of Malaysia's envisaged goal of 2.0 per cent of GDP and the Organisation for Economic Co-operation and Development (OECD) average of 2.6 per cent."
"Our engagement with the government has provided us opportunities to look at relevant policy areas to assist in charting a path forward.
"One aspect of this which we focus on in our recent work relates to increasing small and medium enterprises' (SMEs) contribution to Malaysia's economic growth," Ferro said.
Based on analysis undertaken in the 'SME Program Review', the World Bank said that Malaysia could consider realigning its public support for SMEs to not only enable a private sector-led recovery from the pandemic but also support firm-level innovation.
Another World Bank study titled 'Assessment of the Malaysian Start-Up Financing Ecosystem' revealed that Malaysia's venture capital activities are relatively low compared to the region, in relation to its level of economic development.
"Thus funding activities are performing below potential, affecting investible deal flow down the line. We also find that public support is concentrated on the more advanced stages of innovative activities, calling for a possible need to rebalance this to earlier and hence the riskier stages of the innovation cycle," she added.
Meanwhile, the assessments on the effectiveness of public research institutions found that while the linkages between academia and industry have increased over time, it broadly remains weak, hence affecting commercialisation of research outputs.
"It has been encouraging to see that in response to the report's recommendations, the government established a Research Management Unit to reorient its technology transfer and commercialisation programmes to be more responsive to industry needs," Ferro said.
Based on the reports, the World Bank recommended the government to enhance evidence-based policymaking for SME development by increasing monitoring and evaluation of government programmes and coordination among agencies; recalibrate SME programmes to support needs on digitalisation and skills upgrading; and rebalance the policy mix towards the ideation stage with programmes that crowd in private investments.
-- BERNAMA
Bernama
Thu Mar 24 2022
Ferro highlighted that while the country has done relatively well compared to its regional peers, it has lagged its global aspirational peers that have nearly three times the productivity levels. - REUTERS
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.