For the people: Anwar and ministers launching the Madani Economy: Empowering the Rakyat initiative at the Securities Commission, Kuala Lumpur. — FAIHAN GHANI/The Star
KUALA LUMPUR: The initiatives under the Madani Economy has the potential to drive positive change for Malaysia by embracing a strategic and value-based approach, particularly during a time of domestic and global uncertainties, says the Malaysian Rating Corporation Bhd (MARC).
It said from the economic perspective, the Madani framework is timely in view of the upcoming Budget 2024, the New Industrial Master Plan and the expected tabling of the Fiscal Responsibility Act this year.
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As a signal of policy consistency, the theme "Empowering the People” maintains the government’s momentum towards human capital development in Malaysia.
"Human capital development is specifically embedded within the Madani narrative’s mission of inclusive growth, equal opportunities and a vibrant labour market,” MARC said in a statement Friday (July 28).
Commendably, measurable goals in this respect include being in the top 25 in the Human Development Index, increasing the labour share of income to over 40% and increasing the participation rate of the female labour force to 60%.
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"The government expects to continue strengthening basic education and promote lifelong learning, and developing human capital will further reinforce the government’s goal to improve the social safety net,” it said.
It added that human capital development and social well-being are essential to raise productivity, maintain sustainable gross domestic product (GDP) growth and raise the potential of GDP growth in Malaysia.
Madani Economy will spur SMEs
Meanwhile, the Small and Medium Enterprises Association of Malaysia (Samenta) opined that the Madani Economy Framework will spur the economy and drive greater growth of the industry, including small and medium enterprises (SMEs).
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National president Datuk William Ng said that the market has been lacklustre since the end of the pandemic, and the new economic framework will provide a much-needed direction for the economy.
"Samenta has been saying for a while that the biggest challenge for SMEs is not weak cash flow or the lack of business opportunity, but low margins as a result of lagging labour productivity.
"The government is right in trying to correct the labour mismatch and improve wages while mandating upskilling and encouraging lifelong learning; and when the labour productivity improves, businesses will be able to pay far higher, and everybody wins,” Ng said.
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Nevertheless, he said SMEs are wary of the planned progressive wage model and hope that a high-powered Future of Work Committee is established with representatives from the private and public sectors to unlock the economic dividend for more Malaysians.
Although he agreed that wages are too low, revising the wages cannot be done rashly and must be accompanied by improvement in labour productivity and profit margins.
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"Much of the reason for wage stagnation is structural in nature -- a declining learning culture, a general
mismatch in educational output and industry needs, a changed workforce that no longer values time-based compensation and intense regional competition for talent.
"These cannot be solved by simply forcing businesses to pay more”, Ng added.
On Thursday (July 27), Prime Minister Datuk Seri Anwar Ibrahim announced that the government will increase funding to drive export growth, including the Mid-tier Enterprise Development Programme as well as the Market Development Grant by Malaysia External Trade Development Corporation (MATRADE) with an additional allocation of RM20mil.
The government will also increase the allocations for micro-loans from agencies, including SME Corp, Tekun, MARA and Teraju, by RM400mil. - Bernama
