Productivity Unplugged : The Challenges of Malaysia's Transition into a High-Income Country
As Malaysia continues to strive toward high-income status, accelerating productivity growth has become the country’s central economic policy challenge. Productivity growth has become increasingly important as the country’s traditional economic engi...
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| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/185861527855417221/Productivity-unplugged-the-challenges-of-Malaysias-transition-into-a-high-income-country http://hdl.handle.net/10986/29869 |
| Summary: | As Malaysia continues to strive toward
high-income status, accelerating productivity growth has
become the country’s central economic policy challenge.
Productivity growth has become increasingly important as the
country’s traditional economic engines have slowed.
Declining oil and gas output, coupled with the slowing
growth of the Malaysian mining sector, has reduced the pace
of capital accumulation, while demographic trends are
slowing the growth of the labor force. Demographic trends
underscore the vital importance of productivity growth to
the continued development of the Malaysian economy.
Malaysia’s demographic transition is inhibiting the
expansion of the labor supply, and female labor-force
participation is low by the standards of comparable
countries. Weakening external demand and intensifying global
competition in Malaysia’s key export industries confirm the
necessity of increasing productivity levels. The report
presents an empirical analysis of the role of productivity
in the Malaysian economy. It evaluates the country’s
institutional and policy framework, and identifies key
constraints to productivity growth. Using time-series data
and cross-country comparisons, the report examines the ways
in which infrastructure and institutional quality, market
efficiency, innovation, and workforce skills influence
productivity in Malaysia. This analysis is designed to
inform a productivity-focused economic agenda, and the
report concludes by presenting a set of policy
recommendations and institutional reforms designed to
bolster long-run productivity growth. |
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