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Showing posts with label World Bank. Show all posts
Showing posts with label World Bank. Show all posts

Tuesday, July 29, 2025

Cut red tape, let business grow’, 13MP must clear the way for private sector growth, say economists

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KUALA LUMPUR: The government is planning to expedite the completion of the 13th Malaysia Plan (13MP) within just seven months, a significant reduction compared with the two-year preparation time for previous national plans.

Economy Minister Rafizi Ramli said the government is working towards presenting the draft of 13MP to Parliament by July 2025.

He said this ambitious timeline is driven by the need to ensure Malaysia's socio-economic blueprint for 2026-2030 is ready well ahead of schedule to address the nation's evolving challenges.

"We want to set a new record. In the past, preparing a Malaysia Plan would take up to two years.


13MP must clear the way for private sector growth, say economists

PETALING JAYA: The 13th Malaysia Plan (13MP) must help steer the country’s transition towards becoming a high income nation by 2030 with emphasis on greater private sector participation and less bureaucratic red tape, say economists.

Sunway University economics professor Dr Yeah Kim Leng is of the view that the 13MP must be in tune with the World Bank’s definition of a high-income nation.

“It is important to accelerate economic growth so that the income gap with other high-­income countries continues to narrow.

ALSO READ: MMA: Doctor shortage, healthcare reform must top agenda

“The plans must also include pressing ahead with the required educational, health, infrastructu­ral and environmental development that underpin a dynamic and resilient economy,” he said in an interview.

The 13MP, which is to be unveiled in Parliament on Thursday, will chart a strategic road map for the nation’s economy for the next five years.

The plan, said Dr Yeah, should also contain mechanisms and poli­cies to help Malaysia shift towards a value added tech­nology and innovation-driven economy where private sector participation is crucial.

“There is also a need for policies to increase revenue mobilisation to keep abreast of the need for higher government spending while simultaneously raising spending efficiency and service delivery effectiveness.

“This can be achieved through digitalisation and technology adoption, especially the use of artificial intelligence.”

The economic roadmap, he noted, must include the streamlining and restructuring of govern­ment linked companies and state-owned enterprises.

“This will help unlock the country’s full economic potential through stronger investment, entrepreneurship and private sector-led growth,” he added.

Economist Geoffrey Williams said the 13MP should focus on reducing the role and interference of government in existing business and commercial areas and leaving these to the private sector.

“The government should focus on areas that are the direct legitimate concern of government, including public health, education and social protection.

“Regulations should be slashed and focused only on minimum standards of health and safety, anti-corruption, good governance and anti-trust issues,” he said.

The 13MP, he added, must take into account social issues, with the creation of sustainable living income levels in the form of a Universal Basic Income and a Universal Basic Pension.

“These must support policies to raise incomes through meaningful work with a fair share of value created going to emplo­yees.

“Free higher education should be a priority through the reform of the higher education system and replacing National Higher Education Fund Corporation loans with a sustainable financial system,” said Williams.

The recent changes in the ­global economic landscape is also a factor that should be addressed under the MP13, he pointed out.

“The United States tariff issue has given us a lesson that protectionist policies come with reciprocal costs.

“So removing restrictions to market access should be a priority for 13MP,” he said.

Economist Prof Emeritus Barjoyai Bardai said over-­reliance on a purely capitalistic approach with regards to foreign direct investment has resulted in less than 200,000 companies controlling over 80% of the economy.

He said there should be a shift towards developing the nation’s micro-small and medium enterprises (MSMEs) which make up 65% of the nation’s manpower or some three-million workers.

The 13MP, he said, must also ensure the development of the nation’s semi-conductor industry, which currently ranks seventh globally.

Strategic Institute for Asia Pacific senior economic advisor Dr Anthony Dass said the 13MP must shift from the post Covid-19 recovery period to one of economic transformation to drive high-value growth, particularly in the digital and green economy.

This, he said, must be coupled by inclusive development and fiscal reform, adding that efforts must also be carried out to boost high-tech investment while accelerating upskilling and technical and vocational education and training.

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Friday, January 13, 2023

Global Economic Prospects report: Sharp, Long-lasting Slowdown to Hit Developing Countries Hard

 

 The World Bank Working for a World Free of Poverty

2023 global growth to slow to 1.7% from 3% expected six months ago

WASHINGTON, Jan. 10, 2023 — Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine, according to the World Bank’s latest Global Economic Prospects report.

Given fragile economic conditions, any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies.

Over the next two years, per-capita income growth in emerging market and developing economies is projected to average 2.8%—a full percentage point lower than the 2010-2019 average. In Sub-Saharan Africa—which accounts for about 60% of the world’s extreme poor—growth in per capita income over 2023-24 is expected to average just 1.2%, a rate that could cause poverty rates to rise, not fall.

“The crisis facing development is intensifying as the global growth outlook deteriorates,” said World Bank Group President David Malpass. “Emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates. Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty, and infrastructure and the increasing demands from climate change.”

Growth in advanced economies is projected to slow from 2.5% in 2022 to 0.5% in 2023. Over the past two decades, slowdowns of this scale have foreshadowed a global recession. In the United States, growth is forecast to fall to 0.5% in 2023—1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970. In 2023, euro-area growth is expected at zero percent—a downward revision of 1.9 percentage points. In China, growth is projected at 4.3% in 2023—0.9 percentage point below previous forecasts.

Excluding China, growth in emerging market and developing economies is expected to decelerate from 3.8% in 2022 to 2.7% in 2023, reflecting significantly weaker external demand compounded by high inflation, currency depreciation, tighter financing conditions, and other domestic headwinds.

By the end of 2024, GDP levels in emerging and developing economies will be roughly 6% below levels expected before the pandemic. Although global inflation is expected to moderate, it will remain above pre-pandemic levels.

The report offers the first comprehensive assessment of the medium-term outlook for investment growth in emerging market and developing economies. Over the 2022-2024 period, gross investment in these economies is likely to grow by about 3.5% on average—less than half the rate that prevailed in the previous two decades. The report lays out a menu of options for policy makers to accelerate investment growth.

“Subdued investment is a serious concern because it is associated with weak productivity and trade and dampens overall economic prospects. Without strong and sustained investment growth, it is simply impossible to make meaningful progress in achieving broader development and climate-related goals,” said Ayhan Kose, Director of the World Bank’s Prospects Group. “National policies to boost investment growth need to be tailored to country circumstances but they always start with establishing sound fiscal and monetary policy frameworks and undertaking comprehensive reforms in the investment climate.”

The report also sheds light on the dilemma of 37 small states—countries with a population of 1.5 million or less. These states suffered a sharper COVID-19 recession and a much weaker rebound than other economies, partly because of prolonged disruptions to tourism. In 2020, economic output in small states fell by more than 11%— seven times the decline in other emerging and developing economies. The report finds that small states often experience disaster-related losses that average roughly 5% of GDP per year. This creates severe obstacles to economic development.

Policymakers in small states can improve long-term growth prospects by bolstering resilience to climate change, fostering effective economic diversification, and improving government efficiency. The report calls upon the global community to assist small states by maintaining the flow of official assistance to support climate-change adaptation and help restore debt sustainability. 

Download Global Economic Prospects here.

Regional Outlooks:

East Asia and Pacific: Growth is expected to increase to 4.3% in 2023 and to 4.9% in 2024. For more, see regional overview.

Europe and Central Asia:  Growth is expected to slow to 0.1% in 2023 before increasing to 2.8% in 2024. For more, see regional overview.

Latin America and the Caribbean: Growth is projected to slow to 1.3% in 2023 before recovering to 2.4% in 2024. For more, see regional overview.

Middle East and North Africa: Growth is expected to slow to 3.5% in 2023 and 2.7% in 2024. For more, see regional overview.

South Asia: Growth is projected to slow to 5.5% in 2023 before picking up to 5.8% in 2024. For more, see regional overview.

Sub-Saharan Africa: Growth is expected to be at 3.6% in 2023 and rise to 3.9% in 2024. For more, see regional overview.

 

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