Decentralise Economic Development to Nationwide Growth, Govt Told
Unequal Resource Concentration
Economic growth in Selangor and Kuala Lumpur has always exceeded that of the other states, despite labour productivity being almost uniform across the country.
Yusof Saari, a Malaysian economist, attributed the disparity to the unequal concentration of resources between Peninsular Malaysia’s central region and other parts of the country.
“This suggests that resource allocation, investment, and economic opportunities are disproportionately concentrated in the most developed states,” he said.
Centralised Approach
Yusof said Malaysia’s approach to economic development has been predominantly centralised at the federal level, resulting in the concentration of resources, investment, and economic opportunities in the most developed states.
He said this approach overlooks the unique characteristics and resource endowments of individual states, resulting in suboptimal growth outcomes.
Same Productivity Levels Nationwide
However, while Selangor and Kuala Lumpur have consistently benefited from more resources, productivity has remained at the same level as that of the other states, according to Yusof.
He said data produced by the statistics department for 2006 to 2023 shows that labour productivity, expressed as GDP per worker, has risen or declined at the same rate in all states.
Decentralised Approach
Yusof said the concentration of resource allocation, including investment and infrastructure, as well as industries, in Selangor and Kuala Lumpur has helped to amplify their economic output despite comparable productivity levels in the rest of the country.
“Developed states like Selangor and Kuala Lumpur often attract higher levels of investment, infrastructure development, and skilled labour due to their established economic ecosystems,” he said.
Conclusion
In conclusion, Yusof emphasized the need for a decentralised economic model to promote nationwide growth and equity. He suggested that the government should adopt a state-empowered approach, recognising and leveraging the strengths of each state.
Frequently Asked Questions
Q: What is the main reason for the disparity in economic growth between Selangor and Kuala Lumpur and other states?
A: The unequal concentration of resources between Peninsular Malaysia’s central region and other parts of the country.
Q: What is the current approach to economic development in Malaysia?
A: The current approach is predominantly centralised at the federal level.
Q: What are the potential growth areas for Johor?
A: Investments in high-value manufacturing, technology, and services sectors, as well as its proximity to Singapore, making it attractive for high-tech industries and logistics.
Q: What is the proposed solution?
A: A decentralised approach, state-empowered model that recognises and leverages on the strengths of each state, allowing for more effective and targeted policies.