Madani govt’s policies to drive job creation, income growth, say industry experts - MIDA | Malaysian Investment Development Authority
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Madani govt’s policies to drive job creation, income growth, say industry experts

Madani govt’s policies to drive job creation, income growth, say industry experts

20 May 2024

The Madani government’s success in attracting investments last year, which rose 23 per cent to a historic high of RM329.5 billion, will create thousands of new jobs, including high-skilled jobs, for the people and raise their per capita income in the process.

This is based on 5,101 projects approved in 2023, which would generate a staggering 127,000 much-needed new jobs, especially for youths coming out of schools, colleges, and universities.

An encouraging factor is that 57.2 per cent or more than half of the investments constitute foreign direct investments, clearly proving that Malaysia continues to be an attractive destination despite stiff regional competition, thanks to well-tailored investment policies.

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai lauded the government’s economic management measures, which enabled Malaysia to lure significant foreign direct investments (FDIs) into the manufacturing sector.

These included investments from renowned multinational companies in high-technology industries with established manufacturing plants here, as well as those companies expanding their operations in the country, creating numerous job opportunities for locals.

“Government policies and development plans targeting to transform Malaysia into a high-income economy identified the manufacturing sector as a key game changer for growth leading to various initiatives to lure investments and boost job creation in the sector,” he told Bernama.

For 2024, the government expects a minimum eight to 10 per cent growth in approved investments from last year.

So far this year, Malaysia has secured US$2.2 billion (RM10.5 billion) in investments from American multinational technology giant Microsoft, which has committed to empowering the country’s technology with cloud and artificial intelligence (AI).

The zest to continue creating jobs is evidenced by the Madani government ramping up efforts to this end with the New Industrial Master Plan 2030 (NIMP 2030) and the National Energy Transition Roadmap (NETR).

Under the seven-year plan until 2030, NIMP would provide employment for 3.3 million people by creating high-skilled jobs as the country advances towards higher value-added activities and improvements in automation as well as technological advancements.

As for the NETR, its flagship catalyst projects covering six energy transition levers — energy efficiency (EE), renewable energy (RE), hydrogen, bioenergy, green mobility, and carbon capture, utilisation and storage (CCUS) — are expected to attract investments of more than RM25 billion.

In the process, it would create 23,000 job opportunities and reduce greenhouse gas emissions by more than 10,000 gigagrams of carbon dioxide equivalent annually.

FMM’s Soh said the manufacturing sector’s job creation has evolved significantly over the years due to a combination of factors, including technological advancements, shifts in global trade dynamics and business-friendly government policies.

Manufacturing companies in Malaysia also play an integral role in global supply chains, which, again, has led to job growth as manufacturers supply components and parts to major global players.

Malaysian Economic Association deputy president Professor Dr Yeah Kim Leng said Malaysia’s share of skilled jobs should be increased to 30 per cent or higher by 2030 from the current 25.1 per cent, as the greater the proportion of a skilled workforce, the more prosperous the economy.

He reckoned that a quicker increase in skilled jobs would reflect a quicker pace of structural upgrading and a shift to higher-value-added activities, which would have greater spillovers to the economy through increased consumption and investment spending.

He said that with Malaysia’s GDP growth projected at four to five per cent per annum over the medium term and population increases estimated at around one per cent, the real income per capita growth is forecast at three to four per cent annually.

“However, Malaysia should aim for a ‘high case’ scenario of 5.5-6.5 per cent GDP growth for the remaining period to 2030.

“At this rate, the country will be able to attain high-income status before the end of the period and achieve a majority of the United Nations 2030 Sustainable Development Goals,” he said.

Yeah, said the nation saw a reduction in low-skilled jobs by four per cent to 1.11 million in the first quarter of 2024 from the same quarter in the previous year, which augurs well for the economy to move to higher-skilled jobs.

Putra Business School economic analyst associate professor Dr Ahmed Razman Abdul Latiff said that while automation and AI have the potential to improve efficiency and productivity, they also raise concerns about job displacement.

“Certain jobs may become obsolete due to automation, requiring workers to upskill or reskill to remain employable.

However, automation can also create new job roles, particularly in areas that require human creativity, empathy, and problem-solving skills,” he said.

Ahmed Razman said job creation and income per capita are closely linked; as more jobs are created, the overall income per capita tends to increase, reflecting a higher standard of living.

“However, the quality of jobs created, including wages and benefits, also impacts income per capita. Low-paying or unstable jobs may not contribute significantly to income growth.

“Initiatives by the government to increase the minimum wage as well as introducing progressive wages are indicative of the government’s seriousness in ensuring the continuous increment of average salaries as well as the quality of life of the workers,” he said.

Source: Bernama