PETALING JAYA: The implementation of the Progressive Wage Policy is critical to incentivise companies to raise wages voluntarily, said Ministry of Economy deputy secretary-general (Policy) Datuk Dr Zunika Mohamed.
Speaking at the National Economic Forum 2024, she said the ministry continues to work on reducing gaps within the national labour market to mitigate the wage compression effect.
Zunika noted that making the labour market lucrative is one of the structural pain points in Malaysia’s economy, especially for small and medium enterprises (SMEs).
“That is why initiatives like the Academy in Industry and Reverse Linkages are pivotal to elevating our workforce and ensuring there’s a sufficient fit for the demands of our SMEs,“ she said in her keynote address at the forum.
Zunika noted that the country’s stagnant wages have created a wage compression effect, particularly for those just entering the labour force.
“At the same time, when charting the future pathway of our economy, we also have to grasp the new growth verticals that are present,” she said, adding that careful planning in the form of the KL20 action plan and the National Energy Transition Roadmap (NETR) would bridge the gaps within the labour market.
Zunika highlighted KL20’s potential to provide Malaysian startups with access to capital, mentorship from international venture capital firms and the energy of a digital-savvy youth.
She also underscored industry players and market’s endorsement of the NETR, emphasising its potential to attract significant investment in green transformation.
“As we push for energy transition, our championing of six levers for green transformation will unlock up to RM1.85 trillion in investment opportunities.
“This will have a multiplier effect on the economy and serve as a new growth driver,“ said Zunika.
In addition to workforce development, she also highlighted other consolidation efforts, such as the Central Database Hub (PADU) and subsidy rationalisation.
She explained that PADU’s data collection exercise would facilitate data-driven policymaking and minimise errors in targeting subsidies.
Zunika also acknowledged the challenges posed by an ageing population, brain drain, and fiscal constraints, and emphasised the need for firm reforms and cross-sector partnerships to steer the economy in the right direction.
“It hinges on the dynamism and agility of the private sector to guide us on what is needed, how to get there, and what it will take.
“We are very open to start that dialogue and are keen to incorporate the frontier processes and mechanisms needed to ensure that our structural reforms take full effect,“ she added.
