Country Economic Work for Malaysia - Islamic Development Bank

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Singapore which took 54% of Malaysia's graduate migrants, compared to just 20% in the 1990s. Some 15% went to Australia, 10% to the USA and 5% to Britain. These four countries accounted for over 80% of the entire Malaysian Diaspora. Young Malaysians going overseas for higher education, in many instances opt to remain in those countries, contributing to brain drain. Therefore, the Government of Malaysia is focusing on enhancing employment opportunities for people with higher education and research skills and reversing the brain drain. 18. Income inequality continues to remain a challenge. Since 1970, income inequality steadily fell for two decades as Gini-coefficient (a measure of income inequality, which ranges from zero to 1 with a higher number indicating greater income inequality) declined from 0.51 in 1970 to 0.46 in 1992, but more or less stagnated at this level. It is worth noting that Malaysia remained outside the efficient income inequality range of 0.25 – 0.40 throughout the period (Figure 1.8). The Gini-coefficient in Malaysia remained higher compared to other countries in the region such as India (0.37), Indonesia (0.37), Vietnam (0.38), China (0.42), and Philippines (0.44). Furthermore, the vast majority of the bottom 40% percentile of the society is Bumiputra (73% of the total) had 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Figure 1.8. Malaysia: Income Inequality (Gini-coefficent values) Source: Economic Planning Unit, Socio-Economic Statistics (April 2012) an average household income of MYR1,440. The Bumiputra generally have limited economic mobility and a weak ability to secure high-paying jobs in the private sector. Most of them are living in the rural areas with inadequate quality of education and health services, and limited access to quality utilities. 19. According to recent household income surveys, income growth has been strong for the top 20% of income earners while bottom 40% of households have experienced slow growth in average incomes. In order to reduce inequality, Malaysia needs to raise economywide income-earning opportunities by encouraging mobility of workers and improving labor market competition while reducing rigidities; promoting investment in human capital through enhancing basic education in under-served areas, improving vocational training system; strengthening employable and industry-led skills development. Reaching out to the vulnerable segment of the society, providing social protection for the poor by strengthening the poverty focus of social safety net programs, refining targeting mechanisms to reach the needy and moving towards a coordinated social protection system. 20. There is a challenge is to reduce regional disparities through balanced development in five Growth Corridors, which is one of the key objectives of the Tenth Malaysia Plan. Among various states, Kuala Lumpur has the highest per capita GDP of MYR51 thousand while 11
Kelantan with the lowest per capita GDP of MYR8 thousand in 2009. Nine out of 15 states are having the per capita GDP below the national average GDP per capita (Figure 1.9). During the 9 th Plan period, the Government embarked on a number of initiatives to promote balanced regional development and accelerate growth in less developed geographic areas. As a result, five Growth Corridors namely Iskandar Malaysia, Northern Corridor Economic 60 50 40 30 20 10 0 Figure 1.9. Malaysia: Inter-State Disparity, 2009 (GDP Per Capita by State, 000 RM) Source: Tenth Malaysia Plan, 2011-2015 National Average Region, East Coast Economic Region, Sarawak Corridor and Sabah Development Corridor, are identified with the key objective of reducing regional disparities during the 10 th Malaysia Plan (2011-2015). IV. DIAGNOSTIC ANALYSIS OF BINDING CONSTRAINTS TO SUSTAINABLE ECONOMIC GROWTH 21. Compared to its major competing Asian countries, Malaysia’s economy experienced strong economic growth during 1990s but it slowed during 2000s. Malaysia had achieved an annual average growth of 7.4% during 1990s (Figure 1.10). However, this strong growth momentum could not be sustained and the growth rate slowed to 4.7% per annum during 2000s (Figure 1.11). The economy was expected to grow by 6% per annum during the 9 th Plan period China Singapore Malaysia Vietnam Korea Taiwan India Thailand Indonesia Hong Kong Philippines Figure 1.10. Real GDP Growth in Selected Asian Countries (average 1990-2000) 2.9 7.5 7.4 7.3 6.9 6.3 5.6 5.2 4.4 4.0 0.0 2.0 4.0 6.0 8.0 10.0 9.8 China India Vietnam Singapore Indonesia Philippines Malaysia Thailand Korea Hong Kong Taiwan Figure 1.11. Real GDP Growth in Selected Asian Countries (average 2001-2010) 5.7 5.2 4.8 4.7 4.4 4.2 4.1 3.9 7.4 7.3 10.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 IMF, World Economic Outlook Database, September 2011 12
Page 4: Acknowledgements Appreciation for s
Page 7 and 8: ISRA : International Shari’ah Res
Page 9 and 10: (v) Foreign Direct Investment……
Page 11 and 12: (2005)), key insights emerged in tw
Page 13 and 14: drain. Further, the Government need
Page 15 and 16: macroeconomic indicators are given
Page 17 and 18: SMEs are concentrated in the servic
Page 19: easy technology adoption, pro-busin
Page 23 and 24: Figure 1.12. General Growth Diagnos
Page 25 and 26: that the Government’s Economic Tr
Page 27 and 28: (ii) Low Returns to Investments app
Page 29 and 30: Figure 1.22. Malaysia's Exports by
Page 31 and 32: 43. Malaysia’s private firms are
Page 33 and 34: over the medium-term. Several initi
Page 35 and 36: growth software compared to its maj
Page 37 and 38: esearchers and technicians in R&D p
Page 39 and 40: 59. Malaysia can further enhance it
Page 41 and 42: Annex Table 1.2. Malaysia: MDGs Ach
Page 43 and 44: 64. The Malaysian experience has al
Page 45 and 46: economic growth. The ETP is expecte
Page 47 and 48: 77. According to the Global Competi
Page 49 and 50: development of infrastructure throu
Page 51 and 52: a. Northern Corridor Economic Regio
Page 53 and 54: The challenge is for financial inst
Page 55 and 56: Original Equipment Manufacturing (O
Page 57 and 58: Intensify formalisation to promote
Page 59 and 60: Sukuk market has experienced unprec
Page 61 and 62: For innovation to become an importa
Page 63 and 64: y the United States (MYR2.3 billion
Page 65 and 66: (vi) (vii) Sharing Eexperience and
Page 67 and 68: institutions as well as Islamic pro
Page 69 and 70: Liberal Foreign Exchange Administra
Page 71 and 72:
Issues/Challenges Facing the Islami
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Funding from Government of Malaysia
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programmes in the country. Initiati
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labeling and branding of Halal prod
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to over 200 industrial estates or p
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member countries can be provided te
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Figure 6.5: MATRADE Business Strate
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offered by the 35 MTCP training ins
Page 87 and 88:
case of the economies in transition
Page 89 and 90:
Key Challenges Facing the MTCP
Page 91:
iii. Conclusion 185. Above diagnost
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Country Economic Work for Malaysia - Islamic Development Bank

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