KUALA LUMPUR: The Malaysian Institute of Economic Research (MIEA) said that Malaysia should catch up in the export of semiconductor chips in order to benefit from global developments.
It said that Malaysia is well-positioned to be a hub for the production and export of chips given its long and significant presence in the global semiconductor space, especially with the outflow of investments from China. "Malaysia should develop its capacity in this respect. Malaysia also has to build more resilient global supply chains," it said in a statement.
It was discussed at the most recent MIEA-hosted National Economic Outlook Conference that, in order for the economy to grow, it is necessary to recognise the economic impact of technology and the outside world.
Given Malaysia's reliance on food imports, MIER proposed that the food supply chain network needs to be improved.
Furthermore, the conclusion of the discussions about digitisation showed how important it is for SMEs to be future-proofed in order to thrive in this field.
"The SMEs need help because they are competing in an industry with huge telecommunications companies. Malaysia has to build an integrated ecosystem and improve country-to-country connectivity," it said.
MIER said there is no doubt that artificial intelligence (AI) is a game-changing trend that Malaysia has to fully embrace.
It said that in order to reset the Malaysian economy, it is suggested that AI be pursued aggressively, with a focus on moving beyond conventional policies to create an agile framework.
"The development of the economy depends upon how successful the government is in creating a safe and secure environment for all citizens. It cannot be overemphasised that social protection must be framed not just as a policy but as a comprehensive framework," it said.
It added that there is an urgent need for the government to introduce a life-cycle-based social protection system, providing adequate coverage from "womb to tomb."
MIER also suggests that there be a transition from social assistance to social insurance and a three-layered ecosystem involving private institutions, social insurance, and social assistance.
"We emphasise the importance of a comprehensive, integrated social protection system with the appropriate use of technology (digitisation) and inflation hedging," it said.