Sin Chew Daily

The World Bank has projected that Malaysia will make it to the league of high-income countries between 2024 and 2028.

According to the WB definition, countries with per capita GNI (gross national income) exceeding a certain threshold will be considered a high-income economy. Currently 81 countries have crossed the threshold which in 2019 was US$12,535. Malaysia's per capita GNI in that year was US$11,200, only $1,335 shy of the barrier.

WB lead economist Richard Record said upon the basis of US$1 to RM4.0, Malaysia should be able to become a high-income country by 2025. Hoover, he also cautioned that Malaysia must implement some structural reforms as follows:

1. Provide excellent and fair education environment to the people;

2. Create fair job opportunities to retain talents;

3. Increase investments in industrial innovation, R&D and automation to boost the country's international competitiveness;

4. Enhance transparency, efficiency and supervisory mechanism in government agencies and GLCs;

5. Expand government revenue and more efficient fund utilization;

6. Improve on existing foreign investment policies to boost FDIs.

Finance minister Tengku Zafrul has said the government needs to reconsider the policy-making model and enhance the role played by the government in order to promote economic growth.

We must also come to terms with the fact that being a high-income country does not mean we are already a developed country, or what we call post-industrial economy.

There are actually vast distinctions between the two. For instance, while we are only $1,335 shy of the high-income threshold, to be a developed country we need to effectuate a dramatic change in our industrial development. To do so, we will need to jump onto the IR4.0 (fourth industrial revolution) bandwagon.

A developed country must possess the following characteristics: very high human development index, per capita income, high level of industrial automation and quality of living among its people. These are the goals that we should pursue. A high-income economy is only the most fundamental requirement for a nation to make it to the ranks of developed countries.

A developed country must have a per capita GDP in excess of $30,000, superior capabilities in industrialization, automation and R&D, high manpower quality and social development. Additionally, a developed country should also boast of a relative comprehensive social welfare system and very high overall quality of living of its people.

So far Malaysia has not met any of these requirements yet.

Four Asian countries are fully developed now: Singapore, Japan, South Korea and Israel. Even South Korea with the lowest per capita GDP among the four countries reached US$30,644 last year, or 2.7 times that of Malaysia.