PETALING JAYA: Despite the rebound in Malaysia’s productivity growth last year, the country needs to restrategise its policies to spur productivity in view of the geopolitical uncertainty and record high inflation.
Deputy International Trade and Industry Minister Datuk Lim Ban Hong had announced that the country’s productivity growth rebounded to 1.8% or RM90,697 per person in 2021 from minus 5.3% or RM89,106 per person in 2020.
Although the Malaysia Productivity Corp (MPC) is optimistic that the country is on the track to achieve 3.6% productivity growth this year, experts warned that 2022 would be a challenging year for productivity due to supply chain constraints and high inflation amid global uncertainties.
As such, Malaysian Institute of Economic Research (MIER) chairman Tan Sri Sulaiman Mahbob said there is an urgency for the country to reconfigure its policies for high productivity growth in the long run.
Malaysian Institute of Economic Research (MIER) chairman Tan Sri Sulaiman Mahbob said there is an urgency for the country to reconfigure its policies for high productivity growth in the long run.
He explained that the policies must become increasingly skewed towards attaining English proficiency, leveraging on technical and vocational education and training (TVET) as well as bringing in highly qualified professionals into the country.
“We can’t be romancing the old strategies for long as we should move forward. We have to get away from conservative and protective policies that may be not needed.
“The pandemic has given us the opportunity to reset as the whole supply chain has changed. So we have got to position ourselves in the global supply chain,” Sulaiman said after the launch of the Productivity Report 2022 and Subsector Productivity Reports in conjunction with MPC’s Productivity Conference themed “Driving productivity of the nation” yesterday.
To spur productivity growth, he also pointed out that policymakers must minimise unnecessary bureaucratic procedures, follow market standards as well as liberalise economic regulations to support trade policies. Sulaiman noted that the country needed to focus on bringing in foreign direct investments in capital and technology intensive industries that would attract highly qualified professionals.
“We need to follow what Singapore is doing with regard to bringing in highly qualified talents. They make it easy for foreign talents to be given permanent resident status to retain them. It is good to bring in thousands of highly qualified talents rather than unskilled workers in labour intensive industries. “If you do not ease these immigration measures, you would not attract highly qualified talents and it would be difficult for the country to come out of the middle-income trap for many years to come,” he said.
Echoing similar views, the productivity institute managing director Dr Bart van Ark said the country’s policies need to be more agile and resilient as productivity is likely to be “uncertain” in the coming years due to the global uncertainties and changes in the global value chain.
“Malaysia has been building its economic developments based on multi-year plans which have become too rigid and are not sufficiently agile considering the uncertainies and changes in circumstances globally.
“The ability to respond to the current changes quickly and helping companies to prepare for the future is becoming more crucial. Executing these development plans is going to be important in the coming decade,” he added.
MPC chairman Ram Ganesan Karthigasu said the first step in building a productive nation was acknowledging there are barriers hindering robust productivity growth.
