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Creating an additional two million high-quality jobs for high-income Malaysia

Creating an additional two million high-quality jobs for high-income Malaysia

02 May 2021

Access to high-quality jobs is key for the economic well-being of Malaysians. In the country’s transition to a high-income economy, Malaysia needs to create about two million additional high-quality jobs for workers of all background and skills levels to be at par with other countries that have successfully managed this transition.

Malaysia is expected to reach high-income status between 2024 and 2028, according to World Bank projections. For the transition to be meaningful for its citizens, Malaysia needs to tackle the challenge of creating high-quality jobs, that is, jobs that are highly productive and covered by social insurance. This challenge is becoming more complex because of the rapid technological progress and the associated changing nature of work due to the Covid-19 pandemic.

According to the recently launched report, “Aiming High: Navigating the Next Stage of Malaysia’s Development”, creating more high-quality jobs will require proactive policies both on the demand and the supply sides. On the demand side, bottlenecks to productivity and competitiveness need to be addressed.

On the supply side, proactive policies are required in three broad areas:

First, build foundational human capital. Good foundational human capital is integral to enabling all Malaysians to realise their full potential as productive members of society. According to the World Bank’s Human Capital Index, with a value of 0.61 (on a scale of zero to one), Malaysia’s foundational human capital, as measured by health and education outcomes, is lower than the average value of 0.70 in countries that have successfully transitioned to high-income country status.

Malaysia’s health system is running up against its limits, with a primary health care system that is not well equipped to manage the increasing burden of non-communicable diseases such as high blood pressure and diabetes. Better management of non-communicable diseases will result in a healthier workforce but will require better payment mechanisms, better staffing of doctors, nurses and care coordinators, and better training in the management of these diseases.

In terms of learning outcomes, Malaysia’s performance in internationally comparable examinations, such as Trends in International Mathematics and Science Study and the Programme for International Student Assessment, is below the government’s target scores, as well as the average scores of aspirational high-income countries. Addressing these gaps through a transition from teacher-centered teaching to student-centered learning will be a critical foundation to develop a high-skilled workforce, and to support future growth.

Second, upskill and reskill the workforce, with an increasing focus on digital, socio-emotional and advanced cognitive skills. Already today, about half of online job postings for high-skilled jobs in Malaysia require digital skills – ranging from basic digital productivity tools such as Microsoft Office, to more advanced digital skills, such as programming. In parallel, jobs involving manual skills are gradually being replaced by those requiring advanced cognitive and socio-emotional skills such as problem-solving, teamwork, and perseverance.

Third, mobilise underutilised sources of labour supply, particularly women and youth. Policy directions include fostering the school-to-work transition of youth through a unified governance structure for vocational education and enabling more women to participate in the labour market through legal reforms to improve support for parents and better provision of child and elderly care.

Creating enough high-quality jobs for workers of all skills levels is becoming an increasingly complex challenge as the nature of work is changing and Malaysia is moving toward high-income status. If this aspiration can be realised, this will put a big tick in the country’s checklist as it takes its place to be benchmarked among leading economies in the world.

This article was contributed by World Bank practice leader for human development Dr Achim Schmillen and World Bank economist in the social protection and jobs global practice Dr Amanina Abdur Rahman.  

Source: The Sun Daily