Economy Ministry outlines key hurdles like slow productivity and low innovation, with a focus on high-value sectors and wage reforms to achieve high-income status by 2030.

KUALA LUMPUR: The Economy Ministry has stated that Malaysia must address several persistent structural challenges to escape the middle-income trap.

These include slow productivity growth, insufficient innovation and technology investment, regional development disparities, and limited government fiscal space.

The ministry emphasised that tackling these issues in a consistent and integrated manner is a crucial prerequisite for sustainable and inclusive economic transformation.

This was outlined in a written parliamentary reply to a question from Senator Datuk Rosni Sohar regarding structural changes needed as regional peers advance.

The ministry pointed to the MADANI Economy framework and the 13th Malaysia Plan as providing a comprehensive approach to overcome these challenges.

This strategy focuses on boosting productivity and diversifying the economy through high-value, complex “Made by Malaysia” products.

Key sectors targeted for growth include artificial intelligence, semiconductor reform, and the clean energy transition.

Labour market reforms are also central, involving periodic minimum wage reviews and the Progressive Wage Policy.

These steps aim to ensure workers receive fair compensation that keeps pace with the cost of living and national income growth.

Concurrently, human capital development is being strengthened through improved technical education and digital skills training.

Increasing labour productivity is described as central to accelerating Malaysia’s transition to a high-income nation.

Malaysia’s gross national income per capita was RM57,070 as of 2026, placing it in the World Bank’s upper middle-income category.

The current high-income threshold is over US$13,935, approximately RM60,000, with the 2025 benchmark to be set in July 2026.

Malaysia shares its income category with Indonesia and Thailand, while most other ASEAN nations, except Singapore and Brunei, are lower middle-income.

The Economy Ministry projects that with successful implementation of the 13MP, GNI per capita could reach RM77,200 by 2030.

This achievement is contingent on maintaining economic growth between 4.5% and 5.5% annually, a stronger currency, and favourable investment prospects.

 The Sun Malaysia