He said labour-intensive jobs drew low salaries and, because of that, not much money was circulating in the country, thereby blunting Malaysia’s competitive edge.

Speaking to FMT, Santiago, who is an economist, said the key to moving the country into different sectors was the creation of a multi-skilled labour force that could move from one industry to another.

In order to have such a labour force, he added, the education system must be revamped.

“Universities need to focus on developing a labour force that can communicate in English, think creatively and develop new products and processes.”

He said the capacity and skills for new industries would develop through a more competent and innovative labour force.

He pointed out, however, that the process would be a slow one as there were still many challenges that needed to be addressed before this group of more innovative labourers could be developed.

One of these challenges, according to him, lies in the mismatch between a high demand for labourers and a small number of fresh graduates with the required skills. Another challenge comes from the historical development of the country’s labour industry. He said the industry was built in such a way as to give no encouragement for the growth of skills among workers.

“Since the wages for labourers are low, there is a lack of incentives to acquire new knowledge or skills,” he added.

He noted that in South Korea and some other countries, skilled technicians are the ones largely responsible for developing new products and processes and they get high wages as a result.

Asked what he thought Malaysia should move into, Santiago said the country needed more engineers focusing on energy efficiency and the use of renewable energy.

“Malaysia needs to move from a fossil fuel economy to renewable energy as well as be less dependent on oil as opposed to solar and wind energy,” he said.