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Seminar on "Re-energizing the Public Sector in Malaysia"

MALAYSIA STUDIES PROGRAMME SEMINAR

18 October 2019 - The ISEAS - Yusof Ishak Institute organised a seminar on “Re-Energizing the Public Sector in Malaysia”, which was delivered by Richard Record and Rajni Bajpai from the World Bank. Dr Record is a Lead Economist while Ms Bajpai is a public sector specialist working to enhance public sector performance. Richard and Rajni shared the findings from the latest edition of “Malaysia Economic Monitor” (MEM), a high-impact World Bank publication produced in close collaboration with the Malaysian government.

Dr Richard Record (left), Lead Economist, began the lecture with a summary of Malaysia’s economic performance over the past few years. Ms Rajni Bajpai (right), Lead Public Sector Specialist, delved into possible changes required in the public service. Dr Francis Hutchinson (middle) chaired the session. (Credit: ISEAS - Yusof Ishak Institute)

Following introductory remarks by Dr Hutchinson, Dr Record began the lecture with a summary of Malaysia’s economic performance over the past few years. Macro-economic data illustrated that growth was consistently strong and commendable, with low inflation and unemployment rates coupled with annual GDP growth of between 4 to 5%. Domestic private consumption has been the main driver for growth since 2017 while government spending and private investment has fluctuated within the past few years. Dr Record shared suggestions to further enhance Malaysia’s economic competitiveness. In the short term the government could expand Sales and Service Tax’s (SST) coverage to obtain higher tax revenue, while exempting necessities required among bottom forty percent (B40)  of the population. In the longer term, the government needs to correct the present mismatch between high educational spending and low returns/outputs. While optimistic about future growth prospects, Dr Record in his conclusion highlighted potential external and domestic risks to the Malaysian economy. Global commodity and financial markets remain volatile, while on the domestic front public and household debt remains high.   

Ms Bajpai began her presentation by clarifying the importance of public service in facilitating the transition towards high-income nation. Ms Bajpai felt that attention should instead be placed upon the quality of public service, instead of its size and wage bill as per current debates. Even though the effectiveness of Malaysian public service – measured through indicators such as Government Efficiency – is ahead of other East Asian states, Malaysia remains far below the OECD average and has recorded little progress in recent years. In addition, survey results show that “perception of equal access to public service” is low.

During the question and answer session, one participant inquired if certain segments in the public service may be downsized to reduce operation cost. Another participant asked if the responsibility of sales and consumption tax collection may be transferred to the state governments. Other questions raised include efforts to diversify the racial composition of the Malaysian civil service, as well as current priorities in the public sector, amongst others. The seminar drew 39 participants including academics, private sector, and members of the public.

The seminar drew 39 participants including academics, private sector, and members of the public. (Credit: ISEAS - Yusof Ishak Institute)