Malaysia can achieve target of being high-income nation by 2020, says World Bank

KUALA LUMPUR: Malaysia will be able to achieve its target to become a high-income nation by 2020, said World Bank country director for South-East Asia, East Asia and Pacific Region, Ulrich Zachau.

Zachau said the country has used its rich natural resources and high economic growth to lift millions of households out of absolute poverty.

"It now has the opportunity to transform from a middle-income country to a middle class society, fulfilling the aspirations of lower-income families and workers to join a dynamic, better-educated, higher-earning middle class that is already becoming the engine of Malaysia's economic growth," he said.

Ulrich said this at the launch of World Bank's 11th Edition of the Malaysia Economic Monitor, December 2014: Towards a Middle Class Society' here today.

Minister in the Prime Minister's Department, Datuk Seri Abdul Wahid Omar, launched the report.

The Malaysia Economic Monitor supports enlarging the middle class as critical to reducing income inequality and promoting shared prosperity in Malaysia.

According to the report, Malaysia has in many ways become a success story in shared prosperity.

In the past 40 years, the country drew on its natural resources to nearly eradicate absolute poverty to 1% in 2014 from 49% in 1970, it said.

The report said Malaysia now needed to take on the challenge of moving 'aspirational' households, now the largest group in society, to the middle class.

"The aspirational group is largely urban and has smaller families than poor or vulnerable families, but most lack post-secondary education," it said.

Nevertheless, it said, the group has relatively stable jobs and enjoyed good material conditions.

It said Malaysia could also make fuller use of tax and transfers to reduce inequality.

"Malaysia's tax system has progressive features and government transfers help reduce poverty -- thanks to transfers, almost 50,000 households have been lifted from absolute poverty in 2014," it said. – Bernama