Malaysia’s Labour Market and Job Creation under the Economic Transformation Programme (2011-2015)

The paper reviews the key targets of the Economic Transformation Programme (ETP), underlying salient issues such as:

  1. The kinds and numbers of jobs created since the programme’s launch
  2. The impact of the programme on labour force, youth unemployment and wage growth
  3. To what extent the ETP has actually helped to improve job creation in the labour market

The ETP was first announced as an ambitious program by PEMANDU (a unit under the Prime Minister’s Department) to create 3.3 million jobs in the country by 2020. The ETP aspired to generate better quality jobs and reduce numbers of low quality jobs, as part of a large process to steer Malaysia towards becoming a knowledge intensive, high-income country.

Almost six years after its launch, the ETP appears to have diverted from achieving its goals. While significant job creation has been achieved, there is a skewing towards jobs at the lower end of the economic scale. This imbalance has led to a worrying shortage of high skilled jobs required to meet the increasing supply of qualified graduates.

Meanwhile, the labour market is also grappling with underlying challenges such as youth underemployment, increasing informal and vulnerable employment. The report therefore raises several recommendations to help address these problems, which include:

  1. Reducing reliance on foreign labour which, in the long run, exerts downward pressure on wages and deprives many Malaysians of jobs.
  2. Rewarding companies that plough efforts into R&D and technological upgrades.
  3. Ensuring greater industry-college linkages, especially for TVET institutions, which is one of the key areas of emphasis under the Malaysian National Education Blueprint (2013-2015)
  4. Have more direct intervention in the education system, with the aim to improve fluency in English, numerical and other soft skills.

Press Statement - Jobs and the Labour Market under the ETP

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