KUALA LUMPUR: The next stage of Malaysia's economic development will have to deal with increasing global value chains (GVC) to ensure that there is more value-added components domestically, says Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin.In making the call, he said the country needed to look for new trade opportunities, as well as, nurture new export players.
More than 50% of the world's manufactured imports are intermediate goods which was evidence of the trend towards heightened GVCs, he noted.
"Some issues will have to be plugged, and we have the commitment to do that. Research and development (R&D) is one such issue.
"We need R&D to innovate as it is essential to the development of science and technology, it is no less essential in management and social sciences," said Muhyiddin when opening the two-day National Economic Outlook Conference 2014-2015 here today.
He said the space of taking advantage of GVCs depended on two factors namely participation and value addition.
"A country may not actively participate in GVCs and it may be a low value-added economy. "On the other extreme, a country may actively participate in GVCs and be a high value-added economy. The latter is the more desirable situation," he said.
Meanwhile, Muhyiddin said Malaysia has made huge economic strides since the introduction of the Economic Transformation Programme in 2010.
"Gross Domestic Product growth has been strong and stable, unemployment and inflation remained at low levels and private investments was at an all-time high in 2012," he said.
He said economic growth was likely to remain over 4.5% in 2013 and between 5% and 5.5% in 2014, despite softer global conditions. - Bernama