KUALA LUMPUR — June 24, 2019: The International Monetary Fund is telling Malaysia to increase productivity if it is to achieve its goal of becoming a high-income nation in the next decade because despite the economic success over the past 20 years, Malaysia’s productivity did not grow as much as the country had hoped.
And it is the view of IMF managing director Christine Lagarde that Malaysia can meet this challenge with creativity and enhance its recipe for success. But to get there, it needs the right mix of ingredients to create an inclusive and sustainable long-term growth.
At an engagement session entitled ‘Ingredients for Good Governance and Economic Prosperity at the University of Malaya today, Lagarde outlined three key ingredients that Malaysia should pay attention to in order to improve productivity, namely improving governance and tackling corruption, investing in high-quality education and boosting the labour force participation of women.
Lauding the efforts that had been taken by the government in combating corruption to date, Lagarde said when corruption becomes institutionalised, it poisons the ability of a nation to attract investors and create jobs.
“Corruption is the root cause of so much of the injustice people feel in their daily lives. That is why the IMF is focusing on this issue and will be including improving governance in more of our work with members going forward. I know it is a focus for the Malaysian government as laid out in their election manifesto.
“This is excellent progress. As always, the key will be following through by enshrining these changes in law and implementing each step of the reform agenda,” she said, adding that the IMF was eager to work with Malaysia to fight corruption.
On the second ingredient, she pointed out that while the resources invested in education have dramatically improved over the past twenty years in the country, the results have not yet been fully realised.
In this respect, regional and socio-economic disparities persist across the country and for certain groups, especially lower-skilled adults, automation is threatening their jobs.
“Investments in a high-quality education can reduce skill mismatches, raise wages, and help all Malaysians harness the potential of new technologies,” she said.
The last ingredient is empowering women and currently Malaysian women tend to have less access to the labour market and fewer career opportunities compared with their peers in neighbouring countries, she said, adding that Malaysia women earn about one-third less than men on average and data suggest that this gap is largely due to discrimination at the work-place.
“Progress is being made. The share of women opening bank accounts in Malaysia now outpaces the gains in other Asean countries. Since the global financial crisis, female employment has grown at a faster pace than male employment,” said Lagarde. — Bernama