KEY FINDINGS
- Malaysia's economy is expected to grow by 5.4% in 2014 and 4.6% in 2015. The outlook for 2014 and 2015 will benefit from better conditions in advanced economies.
- Higher employment levels and the full implementation of minimum wages (RM 900 in peninsular Malaysia and RM 800 in Sabah and Sarawak) suggest higher labor incomes in the economy.
- Exports rose in the previous two quarters and lifted Malaysia’s economic growth.
- About 60% of goods and services produced in Malaysia are ultimately consumed abroad, highlighting the benefits of boosting trade competitiveness.
- Exports of services, such as those in health, education, and oil and gas, in Malaysia have a huge potential.
- In manufacturing, Malaysia can do more in the higher-value added tasks, like design, research and development.
- More training is needed to address the apparent mismatch between the skills produced by the education system and those demanded in the labor markets.
- Universities and Malaysian firms can drive innovation and growth by working together to improve student skills in communication, problem-solving, and information technologies.
- Regulations that affect the ability of firms to access foreign markets rules mostly have valid policy objectives. However, some regulations limit trade. It’s important to strike the right balance so that regulations are fair and also encourage competition to offer consumers the widest possible choice and the best value.
- As ASEAN Chair in 2015, Malaysia can encourage other member countries to advance the trade and competitiveness agenda. For instance, Malaysia can urge other countries to take “mutual recognition agreements” (MRAs). These MRAs will allow Malaysian professionals to export their services elsewhere, and they will also allow other countries to export their services to Malaysia.