This paper sheds light on key innovation patterns and constraints within a selected set of developing East Asian countries (Cambodia, China, Indonesia, the Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam).
... See More + It follows a comprehensive approach about national innovation systems while highlighting the supply and demand dimensions of innovation as well as the markets where firms make accumulation decisions for different forms of capital (knowledge capital, human capital. and physical capital). The paper presents a set of empirical exercises drawing from various data sets. The results corroborate the idea of the importance of adopting a broad view of innovation policy and investing in missing complementary factors. Although investment in research and development is key to boost innovation, it is also crucial to have business and regulatory environments that are conducive to overall firm performance and capital accumulation (not only knowledge capital), as they are expected to improve innovation returns. In addition, the results suggest that other innovation inputs aside from research and development matter for innovation activities, such as training for innovative activities, acquisition/licensing of technology, and managerial practices.
See Less -
Policy Research Working Paper WPS8706 JAN 17, 2019
Growing risks weigh on the economic outlook. On the external front, a slowing global economy, rising concerns regarding the impact of US-China trade tensions and increased volatility in financial and commodity markets all weigh on the prospects for Malaysia’s economy.
... See More + On the domestic side, increased reliance on oil-related revenue amid heightened uncertainty around the commodity price forecasts and relatively high levels of private and public debt pose risks to growth. Efforts to sustain growth in the near term have to be carefully balanced with the need to restore fiscal buffers. In the short term, fiscal consolidation efforts are expected to be driven primarily by measures to reduce expenditure. However, efforts to broaden the tax base, to diversify revenues away from unstable oil and gas revenues, and to introduce greater progressivity, will require a multi-year reform agenda. Restoring fiscal buffers will be necessary to ensure that Malaysia is better prepared to respond to future macroeconomic shocks. The Mid-term Review of the 11th Malaysia Plan and the 2019 budget outline the Pakatan Harapan government’s new priorities, with an emphasis on strengthening governance and improving accountability. The government has also expressed a commitment to reform the role of the state in business to level the playing field and to unlock future productivity growth. Reforms to increase the effectiveness of pro-inclusion expenditure programs have the potential to achieve greater impact with lesser public resources. The Malaysia Economic Monitor consists of two parts. In this edition, the focus of the special topic is on realizing human potential. Accelerating human capital development will be critical for enabling Malaysia’s successful transition to a high-income and developed nation. With the advent of digital and other disruptive technologies, there has been a significant changein the nature of jobs, with an increasing premium on higher-order cognitive skills, such as complex problem solving, socio-behavioral skills, reasoning and self-efficacy. Building these skills requires a transformation in the way that Malaysia nurtures, invests and protectsits human capital. According to the World Bank’s new Human Capital Index, Malaysia ranks 55th out of 157 countries. While Malaysia performs well in some components of the index, it does less well in others. To fully realize its human potential, Malaysia will need to make further advances in education, health and nutrition, and social protection outcomes. Key priority areas include enhancing the quality of schooling to improve learning outcomes, rethinking nutritional interventions to reduce childhood stunting, and providing adequate social welfare systems to enable households to invest in human capital formation.
See Less -
Economic Updates and Modeling 132903 DEC 13, 2018
Record,Richard James Lowden; Chong,Yew Keat; Teh Sharifuddin,Shakira Binti; Aturupane,Harsha; Teo,Hui Sin; Schmillen,Achim Daniel; Moroz,Harry EdmundDisclosed
Effective fiscal policy depends on the amount of budget resources available to raise spending or lower taxes without jeopardizing fiscal sustainability.
... See More + This resource availability is often called fiscal space. Since the global financial crisis, fiscal space in emerging market and developingeconomies has narrowed. This makes these economies more vulnerable to sudden spikes in financing costs and limits their ability to counteract adverse shocks.
See Less -
Sixteenth in a series of annual reports comparing business regulation in 190 economies, Doing Business 2019 covers 11 areas of business regulation.
... See More + Ten of these areas - starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency - are included in the ease of doing business score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. Doing Business provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. This economy profile presents indicators for Malaysia; for 2019 Malaysia ranks 15
See Less -
This paper documents the best practices and practical lessons learned from Malaysia’s largest mandatory public provident fund, the Employees Provident Fund (EPF).
... See More + The objective of this paper is to increase the knowledge base of efficient pension funds for developing countries, drawing from Malaysia’s experiences. Findings include key critical factors that contributed to the successof the EPF, from a small pension fund set up in 1949, to become one of the largest pension fund among developing countries and the 15th largest in the world. This paper summarizes the EPF’s key strategies in corporate governance, investment, and operational strategies, as well as policies deployed by the EPF in managing its assets. The lessons from the EPF come from three main factors. Firstly, the EPF has developed a strong governance structure which discourages external politicalmeddling and encourages transparency and accountability. Secondly, the EPF’s investments strategy, guided by its Strategic Asset Allocation, including diversifying to foreign markets and new asset classes, has enabled the Fund to produce enhanced returns. Thirdly, the EPF’s operational effectiveness which is driven by the professionalism of their employees and their continuous improvement for members’ benefit. Nonetheless, several challenges remain in the present and in the future. The first challenge involves demographic changes as Malaysia is ageing more rapidlythan other countries and even now a sizable number of workers do not have the recommended minimum savings level needed for retirement. A revamp of the current model is needed to ensure that members will be financially independent post-retirement. The second challenge is lack of coverage: only half of those in the labour force are contributing to the EPF, which leaves the other half without oldage pension coverage. A reform agenda needs to expand coverage particularly for the self-employed. The final challenges are maintaining public trust and staying relevant, especially in the age of the fourth industrial revolution and the emerging gig economy that has different needs and demands. This case study will hopefully be of benefit to both policy makers andpractitioners, particularly in the developing world. It could help play an important part in designing a successful provident fund to contribute to a comprehensive social safety net for citizens.
See Less -
Working Paper 131289 OCT 01, 2018
Price,William Joseph; Khalif,Muhammed Abdul; De Luna-Martinez,Jose; Zhang,Wei; Arshad,Ashraf BinDisclosed
This report is an inaugural issue in a new series that aims to offer a fresh look at how developing countries are overcoming persistent problems in public sector management.
... See More + Significant improvements in public sector performance are being evidenced across the developing world today, as government officials and political leaders find new and innovative ways to tackle long-standing challenges. Part I of this report demonstrates that public sector performance is being pursued diligently and successfully across a variety of country contexts, including in low-income environments. Through surveying its governance specialists from around the globe, the World Bank has assembled a collection of 15 cases that showcase how lessons from global experience are being adapted and applied in practice. The report also explores common success drivers that appear in each of the cases. Part II focuses on a special, cross-cutting topic that is critical to public sector performance -- policy and inter-agency coordination. As the responsibilities of government have grown in volume and complexity, policy and program coordination has become ever more challenging, and the stakes have never been higher. Enhancing coordination will depend not only on the adopted formal institutional mechanisms, but also on their interplay with the broader institutional environment and with other processes that influence coordination.
See Less -
The fifth edition of the Development Digest begins with an article on why it’s important to look beyond averages when it comes to the country’s development, followed by a look at the region’s success in the face of global uncertainty.
... See More + The Digest also touches on how inclusiveness can come about in a new Malaysia, the role of the digital economy as a new driver of development, and the future of work with automation on the horizon. Other articles include the issue of financial integration in the region, the use of Islamic finance toward sustainability, development financial institutions, budgeting for performance in Malaysia, and fighting HIV through harm reduction programs in the country.
See Less -
This report is an inaugural issue in a new series that aims to offer a fresh look at how developing countries are overcoming persistent problems in public sector management.
... See More + Significant improvements in public sector performance are being evidenced across the developing world today, as government officials and political leaders find new and innovative ways to tackle long-standing challenges. Part I of this report demonstrates that public sector performance is being pursued diligently and successfully across a variety of country contexts, including in low-income environments. Through surveying its governance specialists from around the globe, the World Bank has assembled a collection of 15 cases that showcase how lessons from global experience are being adapted and applied in practice. The report also explores common success drivers that appear in each of the cases. Part II focuses on a special, cross-cutting topic that is critical to public sector performance -- policy and inter-agency coordination. As the responsibilities of government have grown in volume and complexity, policy and program coordination has become ever more challenging, and the stakes have never been higher. Enhancing coordination will depend not only on the adopted formal institutional mechanisms, but also on their interplay with the broader institutional environment and with other processes that influence coordination.
See Less -
Malaysia’s remarkable transition from low-income to upper middle-income status has occurred in parallel to the microelectronics revolution. Most of Malaysia’s citizens are connected to the internet, and there is more than one mobile cellular subscription for each individual.
... See More + Malaysia needs to create a dynamic ecosystem for its digital economy that embodies changes to its infrastructure, regulations, skills, and public finance. This report examines three interrelated issues of digital connectivity, digital entrepreneurship, and taxation of digital platforms that are closely aligned with Malaysia’s goal of becoming the e-commerce hub of the region. Following an overview of the report in Chapter 1, Chapter 2 details digital adoption in Malaysia, with an emphasis on how businesses are using but failing to fully exploit digital technologies to communicate with customers, market goods, and meet other core business functions. Chapter 3 discusses the information and communications technology (ICT) infrastructure on which the digital economy is built, including persistent challenges related to the affordability and quality of fixed internet access that arise from high prices, market concentration, and an underperforming regulatory regime. Chapter 4 looks at the promise and challenges of digital entrepreneurship in Malaysia, highlighting the central role of government initiatives to date and what is required to fully empower the private sector. Chapter 5 explores options for taxing Malaysia’s digital economy, including the impact of recent reforms to international standards. Finally, Chapter 6 presents a summary of key policy recommendations. The report covers an important, but by no means exhaustive, set of issues that Malaysia will need to address in order to maximize the opportunities provided by the advent of digital technologies and should be seen as the starting point in these endeavors.
See Less -
Working Paper 129777 SEP 01, 2018
Record,Richard James Lowden; Larson,Bradley Robert; Teh Sharifuddin,Shakira Binti; Chong,Yew KeatDisclosed
The historic outcome of Malaysia's recent elections provides an unprecedented opportunity for change. The country's 14th General Elections which took place on May 9, 2018, in the context of widespread citizen concern regarding the degree to which the proceeds of economic growth have been shared across the Malaysian society and a call for increased government accountability, have resulted in the nation's first change in government since its independence in 1957.
... See More + The new government's emerging economic policy framework is strongly guided by its election manifesto Buku Harapan, which responds to these popular sentiments. Heightened uncertainty amid the political transition exacerbated the ongoing turbulence in the financial markets arising from external factors. In the period between the elections and end-May, Malaysia's 5- and 10-year sovereign spreads against US Treasuries increased by 24 and 27 basis points respectively, while the stock market fell by three percent. Meanwhile, RM19 billion of foreign capital was withdrawn from the domestic financial markets in May as post-election market turbulence coincided with heightened investor uncertainty about the emerging markets asset class. However, since then volatility in the financial markets has been largely driven by external factors amid increased global trade tensions, as the uncertainty surrounding the political transition has gradually reduced.
See Less -
Economic Updates and Modeling 127679 JUN 01, 2018
Record,Richard James Lowden; Chong,Yew Keat; Teh Sharifuddin,Shakira BintiDisclosed
As Malaysia continues to strive toward high-income status, accelerating productivity growth has become the country’s central economic policy challenge.
... See More + Productivity growth has become increasingly important as the country’s traditional economic engines have slowed. Declining oil and gas output, coupled with the slowing growth of the Malaysian mining sector, has reduced the pace of capital accumulation, while demographic trends are slowing the growth of the labor force. Demographic trends underscore the vital importance of productivity growth to the continued development of the Malaysian economy. Malaysia’s demographic transition is inhibiting the expansion of the labor supply, and female labor-force participation is low by the standards of comparable countries. Weakening external demand and intensifying global competition in Malaysia’s key export industries confirm the necessity of increasing productivity levels. The report presents an empirical analysis of the role of productivity in the Malaysian economy. It evaluates the country’s institutional and policy framework, and identifies key constraints to productivity growth. Using time-series data and cross-country comparisons, the report examines the ways in which infrastructure and institutional quality, market efficiency, innovation, and workforce skills influence productivity in Malaysia. This analysis is designed to inform a productivity-focused economic agenda, and the report concludes by presenting a set of policy recommendations and institutional reforms designed to bolster long-run productivity growth.
See Less -
The World Bank Group (WBG) is strengthening its partnerships with upper-middle-income countries and high-income countries to leverage private and public finance, and to create knowledge and new solutions based on the experiences of graduates for the benefit of clients.
... See More + Malaysia is a leading contributor to a stronger ecosystem of new research and knowledge, through the embedding of the Malaysia Experience in global discussions on development. This digest is widely disseminated to development practitioners and policy-makers in the East Asia and Pacific region and internally within WBG. The authors begin this issue with their experience with the Hub as they enter their second year, and how it is a pioneering example of how the Bank is leveraging knowledge for development finance. Then, the authors move into an update on the Bank’s involvement in the concluded World Urban Forum 9 in Kuala Lumpur. The authors also delve into topics like Malaysia’s lessons from the Asian Financial Crisis. Other articles include South-South exchanges on Malaysia’s Small and medium enterprise (SME) development, education, land administration reform, and a rich selection of pieces from the Development economics teams based in the Hub.
See Less -
Working Paper 125247 APR 01, 2018
Alawode,Abayomi A.; Ouazad,Amine; Arshad,Ashraf Bin; Ruggeri Laderchi,Caterina; Sitorus,Djauhari; Georgieva,Dorina Peteva; Mendez Ramos,Fabian; Govindasamy,Jeevakumar; De Luna-Martínez,José; Kelm,Kathrine M.; Sondergaard,Lars M.; Tan,Mei Ling; Amin,Mohammad; Loayza,Norman V.; Canuto,Otaviano; Record,Richard James Lowden; Ranciere,Romain; Wahba,Sameh; Schmukler,Sergio L.; Bell,Simon; Shetty,Sudhir; Kwakwa,VictoriaDisclosed
The reallocation of resources from low- to high-productivity firms can generate large aggregate productivity gains. The paper uses data from the Malaysian manufacturing census to measure the country's hypothetical productivity gains when moving toward the level of within-sector allocative efficiency in the United States to be between 13 and 36 percent.
... See More + Across three census periods in 2000, 2005, and 2010 (the most recent available), the productivity gaps appear to have somewhat widened. This suggests that the "catching-up" process remains a challenge and a potential opportunity, particularly if total factor productivity is expected to be the dominant source of future economic growth. The simulations, based on different magnitudes of the realization of hypothetical productivity gains, show that Malaysia's gross domestic product growth can potentially increase by 0.4 to 1.3 percentage points per year over five years. The analysis accounts only for resource misallocation within sectors. There may be other, possibly large, resource misallocation across sectors. If so, closing those gaps could boost total factor productivity and gross domestic product growth even further.
See Less -
Policy Research Working Paper WPS8368 MAR 19, 2018
Performance based budgeting (PBB) has been a popular reform among ministries of finance across the world, accompanied by high expectations for its ability to transform national budget processes.
... See More + PBB offers the hope of a more evidence-based rationale for making budget decisions across an array of competing policy and program areas. It offers a framework for linking medium-term national strategies with the annual budget process, while the program logic structure gives a more transparent view of the activities being undertaken than a traditional line item budget does. Ultimately, PBB holds out the allure of providing incentives for improved public service delivery. Despite significant time and effort devoted to PBB implementation, the experience of many countries is rather mixed. This report explores some of Malaysia’s successes and challenges in implementing PBB in recent years, the rationale for undertaking the reform, and how Malaysia’s experience with PBB compares with that of other countries.
See Less -
This report is part of the World Bank’s Malaysia development experience series that strives to document the country’s approach to improving public sector performance.
... See More + The report builds on the previous installment in the same series that focused on Malaysia’s experience with driving performance from the center of government through the Prime Minister’s Management Delivery Unit (PEMANDU). The more drastic overhaul of the sector was envisioned to come from the application of the DU approach to transforming sector performance. This report describes how the DU method worked in both the design and implementation stages of literacy and numeracy screening (LINUS). This includes the interface between Ministry of Education (MOE) and PEMANDU, as well as PEMANDU and Education Performance and Delivery Unit (PADU). The core of the document focuses on implementation details: the institutions, leadership, and incentives that contributed to the program’s success. It also describes how the implementation agencies worked together to implement LINUS.
See Less -
Securities Commission Malaysia (SC), together with the World Bank Group, convened a two-day conference on Islamic Finance and Public-Private Partnership (PPP) for Infrastructure Development from 8 to 9 May 2017 at SC in Bukit Kiara, Kuala Lumpur.
... See More + Conference discussed and deliberated the ways to deploy Islamic project finance in PPP delivery frameworks. The latitude of the discussion covered the ecosystem needed for Islamic capital market, PPP developments and, more importantly, the identification of relevant policy, legal, regulatory and institutional interventions to attract and expand Islamic financing for infrastructure development. Additionally, a set of case studies on PPPs employing Islamic finance instruments was presented at the Conference and discussed in this report. This report aims at synthesizing the essence of the discussions deliberated at the Conference.
See Less -
Working Paper 123425 JAN 01, 2018
Kamil,Wan Abdul Rahim; Bakhor, Syed Azhan Syed Mohd; De Luna-Martinez,Jose; Zhang,Wei - GFCPN; Abdul Aziz,Ahmad Hafiz Bin; Mahmud,Mohd Lukman; Fauzi, Hanif Mohsein Mohd; Ahmad,Aijaz - GTPPPDisclosed
In this edition of the Malaysia Economic Monitor, the focus of the special topic is macro-financial policy. This year marks 20 years since the onset of the Asian financial crisis (AFC), which caused a major shock to Malaysia's economy.
... See More + At the time, Malaysia's policy response was considered unorthodox. This response included the imposition of selective capital controls, counter-cyclical fiscal policies as well as bank and corporate restructuring. Yet with the passage of time, many of these policies have become part of the standard toolkit for policymakers in both developing and developed economies when faced with a crisis. Malaysia's experience, both during the crisis and in the years since, offers important insights for other countries. While sharing a common destination, not all East Asian countries took the same path towards a more resilient set of macro-financial policies. Clearly not all of Malaysia's experience is likely to be transferable to the specific contexts of other countries, but there are useful lessons for other highly open trading economies that are exposed to the risks associated with international capital flows.
See Less -
Economic Updates and Modeling 122007 DEC 01, 2017
Record,Richard James Lowden; Ping,Alan Lau Sie; Zaourak,Gabriel Roberto; Chong,Yew Keat; Zhang,Wei - GFM08Disclosed
Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it.
... See More + This economy profile presents the Doing Business indicators for Malaysia. Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 Malaysia ranks 24. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year's ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year's ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.
See Less -
This report is part of the series focusing on documenting the lessons from Malaysia for other developing countries in improving their public-sector management.
... See More + These lessons include those at the center of government, such as the delivery unit method applied to the implementation of the national priorities, or implementing the elements of performance-based budgeting, as well as deeper analysis of specific approaches in various sectors. Strategies for improving public sector performance will differ in education, health, public transport, or land administration. Yet at this sectoral juncture, public sector management has the most direct impact on service delivery and citizens’ outcomes. This report focuses on land policies and land administration services because they are key for good governance. They are fundamental for secure land rights, developing land markets and managing land resources in a manner that best contributes to economic growth, efficient public sector service delivery, environmental protection, and social cohesion and security. Land and buildings generally represent between half and three quarters of the national wealth in all countries. The importance of secure land rights and good land administration have been recognized in several international forums including the 2030 Sustainable Development Goals (SDGs), the United Nations Committee on Food Security and the World Bank and International Federation of Surveyors (FIG) Fit for Purpose Land Administration publication.
See Less -
Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it.
... See More + This economy profile presents the Doing Business indicators for Malaysia. Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 Malaysia ranks 24. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year’s ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.
See Less -
