The OECD’s Economic Survey of Malaysia suggested the country is on track to meet its target of becoming a ‘high-income country’ by 2024.  The World Bank defines a country as having a ‘high income’ when it has a gross national income of $12,376 per capita.

The report, released last week, has predicted the economy will remain resilient but warned more must be done to “improve the quality of growth”.

OECD deputy secretary-general Masamichi Kono said: “Malaysia’s economy is doing well, but the march toward high-income status will require further reforms.

“The challenge facing policymakers today is not only to boost growth, but to improve the quality of growth. That will mean ensuring greater environmental protection and creating the conditions for the development of a more innovative and dynamic economy that promotes higher living standards for all.”

The report suggested fiscal policy reform, including increasing the currently low amount of tax revenue by getting rid of exemptions, increasing indirect tax revenue and broadening tax bases.

The OECD also emphasised the need to “further enhance integrity across the public sector” by increasing transparency and competition in public procurement processes.

Malaysia faces labour shortages in several medium and high-skilled occupations, as well as many low-skilled jobs, and developing human capital will be “key” to driving growth in the future and minimising the risks of automation and an ageing population, the OECD said. 

The report called on the government to do this partly by expanding education: currently only the first six years of primary education (beginning at six years old) are compulsory.

In a recent statement, minister of finance Lim Guan Eng emphasised the government’s commitment to prioritising growth, saying he would “even consider an expansionary budget” to meet that goal.