In its Turmoil to Transformation: 20 Years after the Asian Financial Crisis report, the World Bank said Malaysia need to improve the well-being of the population categorised as the below 40% or B40.
The B40 means there are at least 6.25 million Malaysians classified as those living who are not within the middle-income group. Malasia has a population of 31.2 million.
In order to improve the well-being of the B40, attention will need to be paid to both incomes and the cost of living, said the WB.
Income growth among the B40 continues to be constrained by skills deficits, with many workers not qualified to take up more remunerative employment.
It is also constrained by skill mismatches, with workers taking sub-optimal jobs because of weak labor demand in their field (e.g., oil and gas).
While initiatives such as TalentCorp’s Critical Occupations List help to identify skill needs, given the anticipated dynamism in the nature of work, there is also a pressing need to expand training, including through measures to improve skills in less job-specific areas such as problem solving, critical thinking, non-cognitive and soft skills.
The introduction of employment insurance, if adequately funded, also has the potential to improve the functioning of labor markets and to increase employment earnings, especially during job transitions.
To address issues related to the cost of living, the ongoing removal or reduction of costly blanket subsidies provides space for the Government to implement more targeted and progressive subsidies and transfers.
The Government should consider implementing further measures to address the structural shortage of affordable housing to ensure real income gains among the B40, it said.