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Malaysia

Once Southeast Asia’s trading hub, Melaka strengthens urban planning for a sustainable future in Malaysia

Adeline Choy's picture
In the 15th century, few places in Southeast Asia rivalled Melaka as a trading hub – a strategic conduit for the bustling spice trade. As traders from the region settled in the area and contributed to a melting pot of cultures, Melaka transformed into a hub known for its diversity, resilience, and innovation.
 
Christ Church Melaka
Creative Commons Christ Church Melaka by Martin Pilát is licensed under CC BY-NC-ND 2.0


Melaka retains its reputation for openness, and is extending it beyond cultural heritage into development solutions. The Malaysian state is host to the country’s first solar farm and a large new port, and the Melaka City’s riverfront is being transformed into a picturesque tourist attraction.

The city’s recent launch of the first Sustainable City Development project in Malaysia  enhances this transformation.
 
In addition to being the first of its kind in Malaysia, this is also the first city-led project for the Global Partnership for Sustainable Cities, or GPSC, which strives to integrate sustainability into urban planning.

Three things to know about migrant workers and remittances in Malaysia

Isaku Endo's picture


Migrants represent 15% of Malaysia’s workforce, making the country home to the fourth largest number of migrants in the East Asia Pacific region. The migrant population is diverse, made up of workers from Indonesia, Bangladesh, Nepal, Myanmar, Vietnam, China and India, among many other countries.

Should a country limit unskilled immigrant workers to safeguard national productivity growth?

Sharmila Devadas's picture

There are about 245 million migrants worldwide – around 3% of the world population. Roughly one-fifth are tertiary educated. Middle-income countries have a smaller proportion of immigrants than high-income countries (about 1% versus 12%). But for a number of middle-income countries with more immigrants than others, there is uneasiness about relying on unskilled foreigners as they strive to leap from low-wage labor and imitation to high-skilled labor and innovation. There are palpable concerns in Malaysia, for example, with some 2.1 million registered immigrants – about 7% of its population - and likely over 1 million undocumented immigrants. Things reached a crescendo early last year when all new hiring of unskilled foreign workers was suspended as the Malaysian government re-evaluated the management and need for foreign workers. The freeze was subsequently lifted for select sectors amid complaints of labor shortages.

India, Malaysia share experiences how to support start-up SMEs

Mihasonirina Andrianaivo's picture



Both Malaysia and India are countries steeped in innovation with a strong desire to foster new, innovative start-up enterprises. 
 
With a global focus on providing more support to Small and Medium Scale Enterprises (SMEs) – and recognizing that start-ups play a crucial role in creating jobs, growth, exports and innovation within most economies – Asian countries are keen to learn from each other’s experiences. These efforts have taken on a greater priority in India under the leadership of Prime Minister Modi and his “Make in India” and “Start-Up India” campaigns.
 
The World Bank has been supporting India for several years in the area of MSME finance, which is one of the most widely recognized impediments to SMEs, particularly for start-up enterprises.  Through the $500 million MSME Growth Innovation and Inclusive Finance Project, the World Bank supports MSMEs in the service and manufacturing sectors as well as start-up financing for early stage entrepreneurs.  The start-up support under this project ($150 million) is for early stage debt funding (venture debt) which isn’t well evolved. (Unlike India’s market for early stage equity which is considered to already be reasonably well developed.)
 
As part of this project, the World Bank and the Small Industries Development Bank of India (SIDBI), recently held a workshop in Mumbai to allow market participants to learn from one another, and particularly about Malaysia’s successful support for innovative start-up SMEs. The workshop’s participants included banks, venture capital companies, entrepreneurs, fintech companies, seed funders and representatives from the Malaysian Innovation Agency (Agensi Inovasi Malaysia – AIM).

Tapping into Islamic finance for infrastructure development

Aijaz Ahmad's picture



Islamic finance assets represent only around 1% of the global financial market,[1] so how can tapping into these funds help close the $452 billion annual infrastructure finance gap in Emerging Markets and Developing Economies?[2] The percentage may be small now, but the Islamic finance market is growing at an impressive pace—and not just in Muslim-majority countries.

Second-generation capacity development: A story of Malaysia-Laos knowledge exchange on reforming civil service

Jana Kunicova's picture

What do you imagine when you hear the words “capacity development”? Most development professionals associate capacity development with training, seminars and perhaps study tours.  Most of the countries the World Bank works in require a significant boost in their capability to implement policies, programs and projects, especially in countries supported by the Bank’s fund to the poorest, International Development Association (IDA).

For training to be sustainable and have high impact, it should be targeted to a particular public sector problem, and coupled with initiatives to improve organizational and institutional capacity. 

How do we achieve sustained growth? Through human capital, and East Asia and the Pacific proves it

Michael Crawford's picture
Students at Beijing Bayi High School in China. Photo: World Bank


In 1950, the average working-age person in the world had  almost three years of education, but in East Asia and Pacific (EAP), the  average person had less than half that amount. Around this time, countries in  the EAP  region put themselves on a path that focused on growth  driven by human capital. They made significant and steady investments in  schooling to close the educational attainment gap with the rest of the world. While  improving their school systems, they also put their human capital to work in  labor markets. As a result, economic growth has been stellar: for four decades  EAP has grown at roughly twice the pace of the global average. What is more, no  slowdown is in sight for rising prosperity.

High economic growth and strong human capital accumulation  are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore  the way skills and labor markets interact: Human capital is the central  determinant of economic growth and is the main—and very likely the only—means  to achieve shared growth when technology is changing quickly and raising the  demand for skills. Skills promote productivity and growth, but if there are not  enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and  average skill-levels keep rising, technological change can drive productivity  and growth without stoking inequality.

Looping in local suppliers rather than forcing out international firms

Anabel Gonzalez's picture



An instructor at the Savar EPZ training center in Dhaka, Bangladesh, helps young women being trained to make shirts. Photo Credit: © Dominic Chavez/The World Bank


Increasing economic prosperity for developing countries is related not only to rising trade, but also – and more important – to transforming the traditional composition of what they produce and export. In the world today, many developing countries strive to diversify away from exporting commodities toward higher-value-added goods and services.

The evolution of trade and investment flows over the last three decades shows that foreign direct investment (FDI) can be a powerful driver of exports, a creator of well-paid new jobs and a crucial source of financing. More important, FDI may become a very rapid and effective engine to promote the transfer of technology, know-how and new business practices, helping to raise productivity and setting a country on the course of convergence. This is particularly the case of efficiency-seeking FDI – that is, FDI that locates productive processes in a country seeking to enhance its ability to better compete in international markets-.
 
The benefits of FDI are further leveraged when local firms can catalyze the presence of foreign investors to connect to global and regional value chains (GVCs). As a result of new international firms investing in a host country, great new opportunities arise for local enterprises to supply the inputs – be it goods or services – that their international counterparts need.

This has been the experience of Bangladesh, where local suppliers have grown in tandem with foreign investors in the garment sector. It is through linkages with international investors that local firms can gradually be lured into producing new goods and services that, until then, were not produced in the host country.  This is how economic diversification and greater value added are generated.

Multinational enterprises (MNEs) and their key partners (Tier 1 suppliers) are generally keen to source locally if a competitive local supplier can be found. However, they are also reluctant to absorb high search-and-find costs, and they will typically not invest in assisting local suppliers with upgrading efforts. Likewise, local firms are generally keen to supply to foreign firms, but are often not ready to make the necessary investments in technology and in processes to meet strict quality standards without a clear line of sight on potential payoff for such investment.

Which region in the world has the smartest kids? According to the OECD, it’s East Asia

Harry A. Patrinos's picture
Students from Tran Dai Nghia High School near Can Tho, Vietnam (Photo: D7K_4030 by makzhou, used under CC BY-NC 4.0 / cropped from original)


With the release last month of the latest PISA (Program for International Student Assessment) results by the OECD (Organisation for Economic Co-operation and Development), it is apparent that many of the highest achieving students in the world are in East Asia.
 
Just as in the recently released TIMSS (Trends in International Mathematics and Science Study) results, Singapore leads the world in every subject in PISA, outperforming other economies and countries by a significant margin. Students in Singapore perform at a level that is up to two years ahead of their regional and OECD counterparts in science, mathematics and reading. Moreover, almost all Singaporean students have reached a basic level of proficiency or higher. And they just keep getting better, having significantly reduced performance below basic proficiency.
 
Japan also outperforms most participating economies in science, mathematics and reading. However, its score in reading has declined since the last round. Still, as in Singapore, 90% of students have reached a basic level of proficiency or above.


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