Malaysia
To enjoy the same success in the future as in the past, Malaysia will need to ensure that more people develop the right skills and use them effectively in the workplace. Special attention needs to be devoted to supporting disadvantaged students and adults in developing critical skills and reducing the skills imbalances in the labour market, which can contribute to higher productivity and growth.
In light of the importance of skills for fostering labour productivity, this paper examines evidence of skills imbalances in Malaysia and assesses Malaysia’s performance in a number of key policy areas that can help reduce imbalances. The first section provides an overview of skill imbalances in the Malaysian labour market and presents new evidence from the OECD Skills for Jobs database. The subsequent sections discuss how Malaysia performs in four policies areas that are important for minimising imbalances: i) improving teacher quality and practices, ii) strengthening the connection between education institutions and employment, iii) providing training opportunities during working life, and iv) making better use of women’s skills. The final section focuses on demand side policies that can support Malaysia to move towards a high-skill equilibrium and discusses areas of action to improve the conditions that promote the development of a more innovative and dynamic economy.
This Working Paper relates to the 2019 OECD Economic Survey of Malaysia (http://www.oecd.org/economy/malaysia-economic-snapshot)
This report contains the 2019 Peer Review Report on the Exchange of Information on Request of Malaysia.
Malaysia’s economy is doing well, but social and governance challenges must be addressed. The new government prioritises inclusive growth and improving trust in public institutions. Further progress towards the planned target of high-income country status by 2024 will also require focusing on productivity growth with structural reforms to move up the value chain and improve skills. Ensuring environmental protection will improve the quality of growth.
Growth is set to moderate in the near term, mainly due to slowing global trade. The rising cost of living has been a source of concern for large segments of the population. Progress could be made by providing a more targeted support, boosting entrepreneurship, improving productivity and employability among the low-income households.
Fiscal policy needs reform. Building up fiscal space and ensuring medium-term sustainability will require increasing the low level of tax revenue. Improving budget process transparency and strengthening public debt management are key to fiscal accountability.
Human capital development is needed to boost productivity and promote inclusive growth. Labour market imbalances hinder productivity and make it more difficult to climb up the value chain. Investment in education and training would help under-qualified workers. Policies to stimulate the demand for high-level skills would support those who are over-qualified.
SPECIAL FEATURE: REDUCING SKILLS IMBALANCES TO FOSTER PRODUCTIVITY GROWTH
This dataset comprises statistics pertaining to pensions indicators.It includes indicators such as occupational pension funds’asset as a % of GDP, personal pension funds’ asset as a % of GDP, DC pension plans’assets as a % of total assets. Pension fund and plan types are classified according to the OECD classification. Three dimensions cover this classification: pension plan type, definition type and contract type.
This dataset includes pension funds statistics with OECD classifications by type of pension plans and by type of pension funds. All types of plans are included (occupational and personal, mandatory and voluntary). The OECD classification considers both funded and book reserved pension plans that are workplace-based (occupational pension plans) or accessed directly in retail markets (personal pension plans). Both mandatory and voluntary arrangements are included. The data includes plans where benefits are paid by a private sector entity (classified as private pension plans by the OECD) as well as those paid by a funded public sector entity. Data are presented in various measures depending on the variable: millions of national currency, millions of USD, thousands or unit.
Asian cities are particularly vulnerable to risks associated with natural disasters. While they are exposed to various types of natural hazards, flooding and other water-related disasters pose particularly significant risks and undermine long-term economic growth, especially in coastal cities. Managing such natural disaster risks is an essential component of urban policies in fast-growing Southeast Asian cities, especially as the impacts of climate change worsen.
In addition to providing a framework for assessing disaster risk management policies in cities, this report also presents the results of assessment and locally tailored policy recommendations in five cities of different institutional, geographic, socio-economic and environmental contexts in Southeast Asia. They include Bandung (Indonesia), Bangkok (Thailand), Cebu (Philippines), Hai Phong (Viet Nam) and Iskandar (Malaysia). The study highlights that Southeast Asian cities are largely underprepared for natural disaster risks.
Through an assessment of disaster risk management (DRM) policies at national and subnational levels, the study aims to enhance urban resilience by: i) identifying policy challenges related to DRM ; ii) assessing the impacts of current DRM policy practices; and iii) proposing more efficient and effective policy options to enhance urban resilience.
The SME Policy Index is a benchmarking tool for emerging economies to monitor and evaluate progress in policies that support small and medium-sized enterprises. The ASEAN SME Policy Index 2018 is a joint effort between the Economic Research Institute for ASEAN and East-Asia (ERIA), the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME). The report is the outcome of work conducted by the ten ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam).
Divided into eight policy dimensions, it builds on the previous edition of the ASEAN SME Policy Index 2014. The current edition presents an updated methodology which makes this document a powerful tool to assess the strengths and weaknesses that exist in policy design, implementation, and monitoring and evaluation for SMEs, and allows for a benchmarking of the level to which the ASEAN Strategic Action Plan for SME Development (SAP SMED) 2016-2025 has been implemented. Its objective is to enhance the capacity of policy makers to identify policy areas for future reform, as well as implement reforms in accordance with international good practices.
The report provides a regional perspective on recent developments in SME-related policies in Southeast Asia as well as in individual ASEAN Member States. Based on this analysis the report provides a menu of concrete policy options for the region and for the individual countries.
This dataset comprises statistics pertaining to pensions indicators.It includes indicators such as occupational pension funds’asset as a % of GDP, personal pension funds’ asset as a % of GDP, DC pension plans’assets as a % of total assets. Pension fund and plan types are classified according to the OECD classification. Three dimensions cover this classification: pension plan type, definition type and contract type.
This dataset includes pension funds statistics with OECD classifications by type of pension plans and by type of pension funds. All types of plans are included (occupational and personal, mandatory and voluntary). The OECD classification considers both funded and book reserved pension plans that are workplace-based (occupational pension plans) or accessed directly in retail markets (personal pension plans). Both mandatory and voluntary arrangements are included. The data includes plans where benefits are paid by a private sector entity (classified as private pension plans by the OECD) as well as those paid by a funded public sector entity. Data are presented in various measures depending on the variable: millions of national currency, millions of USD, thousands or unit.
Southeast Asia has experienced unprecedented growth and development as a result of market-led and export-driven policies over the last thirty years. This has had pulled millions out of poverty and drastically improved living standards over the course of a single generation. As industry becomes more diversified, job requirements demand more complex and sophisticated skills. Strong vocational education programmes at the local level can play a significant role in helping national economies to adjust to changes in the labour market, advances in technology and challenges associated with globalisation.
This report on Building local responsiveness in employment and skills systems in Southeast Asia presents learnings from local case studies in Thailand, Viet Nam, Malaysia and the Philippines in an effort to showcase successful examples of partnerships between employers and the vocational education system. It draws from local experiences to provide policy makers with practical advice for the implementation of vocational education programmes.
The Revenue Statistics in Asian Countries publication is jointly undertaken by the OECD Centre for Tax Policy and Administration and the OECD Development Centre, with the co-operation of the Asian Development Bank and with the financial support of the European Union. It compiles comparable tax revenue statistics for Indonesia, Japan, Kazakhstan, Korea, Malaysia, the Philippines and Singapore. The model is the OECD Revenue Statistics database which is a fundamental reference, backed by a well-established methodology, for OECD member countries. Extending the OECD methodology to Asian countries enables comparisons about tax levels and tax structures on a consistent basis, both among Asian economies and between OECD and Asian economies.
Over the past ten years economic growth in Asia has contributed to a reduction of poverty as well as fertility rates, and greater prosperity has contributed to gains in life expectancy. However, at present many workers still work in informal employment, frequently for long hours at little pay and without social protection coverage. A growing demand for social support, extending the coverage of social protection benefits and improving the job quality of workers will be among Asia’s major challenges in future. This report considers these challenges, providing policy examples from countries to illustrate good practice, including Bangladesh, Indonesia, Japan, Korea, Malaysia, Pakistan, Singapore and Viet Nam.
Productivity growth is essential to providing sustainable increases in living standards. Malaysia has reached a development stage where growth needs to be driven more by productivity gains than the sheer accumulation of capital and labour inputs. The 11th Malaysia Plan (2016-20) sets an ambitious labour productivity growth target of 3.7% per year, well above the 2% average growth recorded from 2011 to 2015. Co-ordinated structural reforms will be necessary to achieve the productivity improvements needed to attain high-income country status. Areas where reforms would deliver the greatest boost to productivity include increasing the quality of education and skills training, spurring innovation, adopting information technology more widely, fostering a well-functioning competition policy framework, improving the functioning of the labour market and the regulatory framework for small and medium-sized enterprises, fostering regional integration and raising public sector productivity.
Malaysia has sustained over four decades of rapid, inclusive growth, reducing its dependence on agriculture and commodity exports to become a more diversified, modern and open economy. GDP per capita is now higher than in a number of OECD economies, while poverty and income inequality have declined considerably. Growth has also been remarkably resilient in the face of external shocks. Going forward, the Malaysian government's 11th Malaysia Plan (2016-20) emphasises the need for greater inclusiveness. Continued, gradual fiscal consolidation is a key policy priority, building on earlier energy and food subsidy rationalisation and on the introduction of a goods and services tax. So is continued prudent monetary and financial policy. Further reforms are needed for Malaysia to become a high-income nation around 2020: productivity growth needs to be reinvigorated through various structural reforms while growth needs to become more inclusive.
Malaysia has followed a comparatively equitable development path, largely eliminating absolute poverty and greatly reduced ethnic inequality. Income and wealth inequality have gradually declined since the mid-1970s. With the “people economy” at the centre of Malaysia’s ambition to become a high-income country by 2020, the focus is shifting to the challenges of relative poverty and achieving sustainable improvements in individual and societal well-being through inclusive growth. This shift would be aided by reforms in several policy areas where Malaysia may compare favourably within its region but less so relative to OECD countries. This includes reforms to increase access to quality education, provide comprehensive social protection, raise the labour force participation of women and older persons, maintain universal access to quality public healthcare, improve pension system sustainability and adequacy and move towards a tax and transfer system that does more for inclusiveness.
This publication compiles comparable tax revenue statistics for Indonesia, Japan, Korea, Malaysia, the Philippines and Singapore. The model is the OECD Revenue Statistics database – a fundamental reference, backed by a well-established methodology, for OECD member countries. Extending the OECD methodology to Asian countries enables comparisons about tax levels and tax structures on a consistent basis, both among Asian economies and between OECD and Asian economies. This work has been is jointly undertaken by the OECD Centre for Tax Policy and Administration and the OECD Development Centre.
The OECD Reviews of Innovation Policy offer a comprehensive assessment of the innovation system of individual OECD countries and partner economies, focusing on the role of government and concrete recommendations to boost innovation performance and R&D policies.
While Malaysia successfully transformed its economy from agriculture and mining towards manufacturing and more recently services, it is currently facing an economic slowdown and new competition. Mobilising new sources of growth will allow Malaysia to respond to these challenges and re-energise its economy through innovation-driven productivity gains.
This 2016 OECD Economic Survey of Malaysia examines recent economic developments, policies and prospects. The special chapters cover: Productivity and Inclusive Growth.
This dataset includes pension funds statistics with OECD classifications by type of pension plans and by type of pension funds. All types of plans are included (occupational and personal, mandatory and voluntary). The OECD classification considers both funded and book reserved pension plans that are workplace-based (occupational pension plans) or accessed directly in retail markets (personal pension plans). Both mandatory and voluntary arrangements are included. The data includes plans where benefits are paid by a private sector entity (classified as private pension plans by the OECD) as well as those paid by a funded public sector entity. Data are presented in various measures depending on the variable: millions of national currency, millions of USD, thousands or unit.
This dataset comprises statistics pertaining to pensions indicators.It includes indicators such as occupational pension funds’asset as a % of GDP, personal pension funds’ asset as a % of GDP, DC pension plans’assets as a % of total assets. Pension fund and plan types are classified according to the OECD classification. Three dimensions cover this classification: pension plan type, definition type and contract type.