Enhancing Productivity-Driven Growth: Malaysia's High Income Goal

This report provides four key recommendations for Malaysia to achieve a high-income developed economy by 2020. It emphasizes the importance of productivity-driven growth, highlighting critical areas such as education and training, innovation, market competition, and trade and regional integration. The report suggests improving education quality and boosting the tertiary sector to equip graduates with industry-relevant skills. It also advocates for government support for innovation through tax incentives and research and development funding. Enhancing market competition through effective regulatory structures is also emphasized. Furthermore, the report stresses the significance of investment, trade, and regional integration. The report also champions inclusive growth through labor market participation, family-friendly schemes, access to healthcare, and social protection. Finally, the report calls for prudent policies and structural reforms to ensure economic resilience and sustainable development. The report concludes with a bibliography of relevant sources.

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Recommendations for Malaysia attain High Income Developed Economy in 2020
Enhancing productivity-driven growth
The accumulation of labor and capital inputs is insufficient to enable Malaysia to achieve
high income developed economy. Therefore, the growth that is driven by productivity is vital for
the advancement of the country’s economic progress to higher levels. Some of the critical areas
this country need to focus on productivity improvement include education and training,
innovation, market competition, as well as trade and regional integration.
Education and Training
The education policy of Malaysia has for long emphasized on inclusiveness, and the
access to education has enhanced considerably in the recent years. To further strengthen human
capital development and workforce productivity, Malaysia should improve the quality of
learning and training (Lee, 2014). Malaysia should focus on boosting the tertiary sector to
produce job-equipped graduates with the skills needed by the industry.
Spurring Innovation
As Malaysia endeavors to become a high-income economy, sustainable long run progress
will increasingly rely on the input of innovation-motivated efficiency. Innovation will be
essential for competitiveness in the global markets as well as participation in international value
chains (Konov, 2015). Therefore, the government of Malaysia should devise ways of boosting
innovation. For example, the government should avail sufficient tax incentives and fund support
to facilitate the SMEs to undertake research and development and also establish local innovation
hubs.

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Boosting Competition
Malaysia should ensure effective regulatory structures to enhance efficiency through
robust and market-driven competition to enable companies to develop their products, processes,
and services continually. As a result, there is a need for the country to come up with a
comprehensive competition policy and provide adequate resources and staff to guarantee
competitive market.
Improving Investment, Trade, and Regional Integration
Investment, trade, and regional integration have played a significant role in the economic
development of Malaysia and avail remarkably substantial leverage for productivity-improving
structural reforms. Moreover, Malaysia is geopolitically and geographically well located to
benefit from the regional connectivity of market, trade, and investment. Therefore, this nation
should decrease the nontariff barriers to achieve such benefits for its growth and development
(Ogun, 2015).
Championing for More Inclusive Growth
Foremost, the leadership of this country should focus on developing an inclusive labor
market by raising the participation rate, particularly among the women. The government should
strengthen family-friendly schemes such as increased access to better child care and flexible
working hours as well as enhancing access to useful labor market information (Konov, 2015).
Moreover, Malaysia should put measures in place to uphold universal access to enhanced health
care to guarantee a productive workforce to stir the economy of the country to prosperity.
Inclusive growth should also be ensured through the intensification of social protection and
balancing growth between rural and urban areas.

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Enact Prudent Policies to Sustain Resilient Growth
There is a need for continued structural reforms to strengthen economic buoyancy and
sustainable development. The structural reforms should be geared towards promoting
inclusiveness and productivity to facilitate sustainable progress in the long run. Furthermore, the
government should continually enact appropriate fiscal and monetary instruments to protect the
economy from global headwinds (Tulder, Strange, & Verbeke, 2014).

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Bibliography
Konov, J. I. (2015). Market Economy under Rapid Globalization and Rising Productivity.
Scholedge International Journal of Management & Development , 9-23.
Lee, J. (2014). Education hubs and talent development: policymaking and implementation
challenges. Higher Education (00181560) , 807-823.
Ogun, O. (2015). A Fundamental-based Approach to Productivity Growth. Atlantic Economic
Journal , 383-392.
Tulder, R. V., Strange, R., & Verbeke, A. (2014). International Business and Sustainable
Development. Bingley : Emerald Group Publishing Limited.