KUALA LUMPUR: The World Bank has upgraded its 2010 growth forecast for the Malaysian economy to 5.7 per cent, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said yesterday.He said the upgrade reflected growing investor confidence and improving business sentiment towards the Malaysian economy.
“It is higher than what Bank Negara Malaysia has forecast,” he told reporters after launching the second edition of the World Bank’s Malaysian Economic Monitor, ‘Growth through Innovation’, here.
He said that while growth in developed economies remained uncertain, Malaysia would benefit from the better prospects of Asia leading the global recovery.
He said Malaysia was confident that the strong growth of 4.5 per cent in the fourth quarter of 2009 would further improve this year.
“Underpinning this improvement will be stronger domestic demand as well as external sector performance,” he added.
He said that to attain developed country status in 2020, Malaysia needed to record an average growth of between 5.5 and six per cent.
“May be, under the 10th Malaysia Plan that will be tabled on June 10 in Parliament, we will issue a forecast from the Economic Planning Unit,” he said.
“Under the 10th Malaysia Plan that will be tabled soon, we are facing a challenge to ensure we have specific measures and to implement certain policies that symbolise the reform philosophies announced by Prime Minister Datuk Seri Najib Tun Razak,” he said.
Earlier in his keynote address, Nor Mohamed said that as Malaysia transited to a high growth path and high income nation, there was a need to put in place an enabling environment where productivity and competitiveness as well as innovation would drive the creation of high value-add activities in the economy.
He pointed out that a key driver of productivity and competitiveness was the nation’s capacity to foster innovation as well as greater utilisation of state-of-the-art technologies.
The ability to leverage on leading edge technologies will have to be at the forefront of innovation-led growth strategy.
The transition into an innovation driven economy requires skills, competencies and capabilities to meet the needs of knowledge-intensive and skills based industries.
He said concerted efforts at enhancing human capital to strengthen technological capacity and capacity require greater investments in skills and innovation capabilities.
“A strategic focus in developing our human capital has been on upskilling and deepening the skills of our workforce.
There has also been greater collaboration between training institutions, institutions of higher education and industries to ensure better response to industry’s requirements for skilled sets.
Apart from ensuring adequacy of skill sets, he said, there was a need to strengthen Malaysia’s capabilities in research and development (R&D).
“While government investment in R&D has seen significant increases, our gross R&D expenditure remains relatively low at 0.64 per cent of GDP, compared with those of developed nations of between three to four per cent,” he said.
“In addition, the low number of R&D personnel remains a major challenge in efforts to enhance knowledge generation and innovation capability.
“In this respect, we need to put in place a conducive environment to attract knowledgeable human capital for research and innovation activities,” he added. — Bernama