PUTRAJAYA – Malaysian Prime Minister Anwar Ibrahim is exploring how to boost wages for workers, as gloomy economic prospects pose headwinds to his fledgling administration.
Malaysia plans to set a wage growth target for all workers and formulate policies to support this, Economy Minister Rafizi Ramli told a press conference Wednesday. The National Economic Action Council will meet in March to discuss this in a meeting chaired by the Prime Minister, he added.
“The inflation problem still needs to be managed properly, while the people’s wages still haven’t reached the right levels,” said Mr Rafizi at the briefing in the administrative capital of Putrajaya. “It requires an integrated approach and we can no longer work in silos.”
How Malaysia handles an increasingly challenging economic outlook could be key for Datuk Seri Anwar’s survival amid looming tests of his staying power. His three-month-old unity government is set to face six state elections in 2023.
While the polls have no direct bearing on the composition of Parliament, they will be a gauge of his popularity among an electorate that has seen four prime ministers in as many years.
The local elections are set to coincide with an expected slowdown in Malaysia’s growth. The government sees the pace of expansion moderating to between 4 per cent and 5 per cent in 2023, after growing at its quickest pace in more than two decades in 2022 on pent-up demand.
Meanwhile, prices continue to climb, with the central bank expecting inflation to remain elevated in 2023. This is even as average salaries and wages in Malaysia are considered low, according to the Finance Ministry in its Economic Outlook 2023 report. Wages have grown at an average increment of about RM140 (S$43) a year between 2010 and 2019, the ministry said.
The public is assessing how well the government can address issues surrounding tepid economic growth and rising costs of living, said pollster Merdeka Center last Friday.
Mr Anwar’s approval rating stood at 68 per cent, just two months after November’s general election resulted in a hung Parliament, it said. That is slightly lower than how his predecessors fared during their first few months in office.
Mr Rafizi said on Wednesday: “The Economy Ministry will balance between restructuring the economy and the needs of the people in relation to living costs and better wages.”
Mr Anwar, who doubles as finance minister, is set to table the revised 2023 budget to Parliament on Feb 24, and has been preaching fiscal prudence as the nation stares down still-elevated debt levels in the wake of a pandemic-era spending drive. BLOOMBERG
