Malaysia Must Accelerate Productivity Growth To Keep Pace With Peers – Tengku Zafrul

By Abdul Hamid A Rahman

KUALA LUMPUR, Feb 20 (Bernama) -- Malaysia’s productivity has shown growth, but not at a fast enough pace, especially when compared to other economies that were once at a similar level, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He cited an example of Malaysia and South Korea, both of which transitioned from low-income to middle-income nations, each with aspirations for high-income status. In the 1970s, both countries were heavily dependent on agriculture and natural resources.

"Between 1996 and 2022, South Korea’s productivity level grew at an average annual rate of 2.9 per cent. Malaysia’s productivity increased at a more modest rate of 1.6 per cent per year," he said.

He said this in his speech prior to witnessing the signing of a memorandum of understanding (MoU) between Malaysia Productivity Corporation (MPC) and Siemens Malaysia Sdn Bhd. Tengku Zafrul later launched the Siemens Xcelerator Experience Centre here.

Tengku Zafrul said that while Malaysia’s steady growth must not be discounted, more can be done, particularly given the solid foundation built through industry reform initiatives under the New Industrial Master Plan 2030 (NIMP 2030) and other policy measures under his ministry.

"All these initiatives have attracted a steady inflow of high-quality foreign investment (FI), particularly in semiconductors, aerospace, and the digital economy.

"Through these FIs, we aim to ensure technology transfers in areas such as automation, robotics, and artificial intelligence (AI) to build a sustainable and resilient industrial base," he said.

Tengku Zafrul emphasised that Malaysia must act more swiftly, be more agile, and execute its industrial initiatives without delay, saying, “Time, tide, and technology will wait for no one.”

He further noted, “Policy alone is insufficient. It must be matched by disciplined execution and a whole-of-nation approach. One of South Korea’s key success factors is its investment in research and development (R&D).

South Korea’s R&D investments account for over 4.0 per cent of its gross domestic product (GDP), primarily driven by the private sector, while Malaysia’s R&D stands at just 1.0 per cent, mostly government-driven, he explained.

Meanwhile, MPC in a statement announced that its collaboration with Siemens aims to train 10,000 industrial talents over the next three years.

"By integrating the real and digital worlds, the Siemens Xcelerator Experience Centre will leverage advanced technologies such as digital twins, AI, and cloud computing. This will support industrial talent upskilling, sustainable workforce development, and the adoption of digital transformation across key sectors to enhance business productivity and competitiveness.

"Ultimately, these efforts aim to drive Malaysia’s industrial transformation and economic growth agenda, as outlined in the NIMP 2030," it said.

MPC added that the initiatives are also expected to contribute to boosting the national GDP by creating more opportunities for industries and promoting higher wages for local workers.

-- BERNAMA