Emulate High Income Singapore and Switzerland, says Cambridge Don

December 7, 2011

Emulate High Income Singapore as well as Switzerland, says Cambridge Don

by Shannon Teoh@www.themalaysianinsider.com

A leading economist pronounced today Malaysia's expostulate towards the high-income manage to buy contingency be led by the production sector, which offers better productivity expansion than services.

Professor Ha-Joon Chang (left) from Cambridge University's expertise of economics as well as governing body pronounced it is the parable which only services-based countries have been high-income, believe economies. He cited as examples Singapore as well as Switzerland, which he pronounced one after another to supplement worth to their economies by manufacturing.

"It is wrong to apart the production zone from the believe sector. Historically, production has been the learning centre, the categorical source of new prolific knowledge," pronounced the leader of the prestigious 2003 Mydal prize for superb work in domestic economy.

The Korean economist pronounced services such as finance, pattern as well as engineering can only be "developed after you first acquire the ability to make the applicable products."

"These services have been especially sole to production firms, so their wealth depends upon production success," he told the open harangue here organised by the United Nations Development Programme UNDP) as well as the Institute of Strategic as well as International Studies (ISIS).

Datuk Seri Najib Razak has repeatedly stressed which Malaysia contingency escape the "middle-income trap" by improving the service sector, as well as implemented dual liberalisation exercises pardon 44 service sub-sectors from Bumiputera quota! s.

< p>The Prime Minister also launched the New Economic Model (NEM), which aims to develop services as the categorical engine of growth. Services made up about 55 per cent of the GDP in 2008 as well as the supervision plans to increase the contribution to 60 per cent by 2020 as it strives to some-more than double per capita income from US$ 7,000 (RM22,000) per year to US$ 15,000.

But Chang again cited Switzerland as well as Singapore as "deeply entrenched myths" of "post-industrial believe economies".He forked out which the dual countries ranked second as well as third in the world in conditions of production worth combined per capita, at the back of industrial giant Japan.

Chang forked out that, in 2005, Switzerland combined US$ 6,874 production worth per capita as well as Singapore, US$ 6,708. Comparatively, Malaysia combined only US$ 1,430.

"I'm not saying production should comment for 90 per cent of the GDP, may be still around twenty-five to thirty per cent. But it has to deepen as well as create some-more per worker.

"Malaysia needs at least twice or 3 times the value, as well as if you want to reach Singapore's level, then five times," he said.

Chang, who has taught in Cambridge for over dual decades, pronounced the direction of deindustrialisation in abounding countries does not meant which production is reduction critical though which it has become some-more prolific as well as efficient.

"There was the time when abounding countries similar to Britain as well as Belgium had tighten to half the workforce in factories though now it is under 20 per cent. But it is not since we have been now producing or immoderate reduction made goods.

"We have been immoderate some-more than ever in earthy conditions though the worth share has shrunk since productivity has risen as well as relative pric! es fall, " he said, citing reduce prices of electronic as well as computing products as an example.

He said, in contrast, productivity rises slowest in services making it appear which consumption of services is higher.He warned which if developing countries focused upon services, the reduce tradeability "will be problematic since there is the need of the fast supply of foreign currency if they have been to import modernized technology."

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