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PETALING JAYA: Malaysia needs to create more high-skilled jobs if it wants to stop the country’s potential economic growth from slowing down further.

At the moment, Malaysia has a “very low” share of high-skilled jobs compared to Singapore and other advanced economies, according to Socio-Economic Research Centre (SERC) executive director Lee Heng Guie.


“Based on the numbers I tabulated, the share of high-skilled jobs for Malaysia is only 24.7% while 62% are semi-skilled and 13.1% are low skilled. This is as of the second quarter of 2021.

“If you compare that to other countries, their high-skilled job percentages over the total labour force are much higher, close to 60%.

“In the case of Singapore, the share is about 54.7%, Switzerland 51.3% and the United States 42.2%. That’s a long way to go for us to increase the percentage of skilled workforce,” he said during SERC’s quarterly economy tracker media briefing yesterday.

Lee warned that Malaysia’s potential economic output growth has hit a speed bump, with the rate moderating to 3.3% in 2020.

In comparison, the average potential output growth rate between 2011 and 2019 was 4.9%.

Potential output is the maximum amount of goods and services an economy can turn out when it is most efficient – that is, at full capacity.

Apart from the lack of skilled jobs domestically, Lee said Malaysia’s potential output growth has been moderating due to the slowing labour productivity growth.

He pointed out that labour productivity in Malaysia has only grown by 1.1% between 2016 and 2020, as a result of lower utilisation of productive capital stock and ineffective mobilisation of resources.

“We still need high-quality investments in technology-intensive industries to increase our productive capital stock, and at the same time, we need to encourage more companies to adopt technology and digitalisation, especially among the small and medium enterprises,” Lee said.

On the economic performance for 2022, Lee expects a stronger growth for Malaysia compared to last year, although his projection is below the government’s official guidance.

Lee forecast the country’s gross domestic product (GDP) to grow by 5.2% in 2022, from a projected 3.4% in 2021.

The Finance Ministry, on the other hand, forecast a growth of 5.5% to 6.5% this year.

Lee said that Malaysia’s recovery path is contingent on sustained revival in domestic demand, uninterrupted transition towards reopening, no major drag from exports and timely implementation of fiscal measures.

“Turning to the latest tracker on Google Mobility, since the economic reopening, the general sentiment and confidence of businesses and consumers have improved and turned more positive.


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