The bank said Malaysia had outperformed five other countries surveyed – Cambodia, Indonesia, Mongolia, Vietnam and the Philippines – at the macro level during this challenging period.
World Bank country manager for Malaysia Yasuhiko Matsuda noted that the impact of the Covid-19 shock led to declines in employment and household income.
“Sales shocks in Malaysia were more subdued, while work stoppages were moderate. However, the impact of the pandemic was uneven,” he said in his presentation at the report’s launch today.
“Within Malaysia, smaller companies and poorer, more vulnerable households suffered and they have less access to government assistance as well,” he noted.
Meanwhile, World Bank senior economist Ririn Salwa Purnamasari said Malaysia’s economy demonstrated stability and consistent growth, boasting a 5% annual growth rate and ranking as the wealthiest among the six countries before the onset of the pandemic.
Although there was significant progress, Malaysia still faced challenges in reducing poverty and inequality, with the Gini index continuing to register a relatively high level for a country aspiring to attain high-income status.
The Gini index is a measure of the distribution of income across a population.
“Governments should prioritise equitable recovery, leverage technological advancements and strengthen social safety nets to protect vulnerable groups,” she said.
Looking ahead, she emphasised the importance of improved targeting and consolidation of support mechanisms, given the constrained fiscal environment and ongoing economic challenges.
“Active labour market programmes, which include reskilling and upskilling to empower the people to help themselves, are also needed. These measures are more sustainable and beneficial over the longer term,” she added.
On the use of cash transfers, Matsuda said while the government managed to encompass a significant portion of the population, the allocated amount was relatively modest in comparison to other countries.
As a result, the effectiveness of cash transfers in Malaysia remains restricted.
“Some, who were on the receiving end, did not get quite enough to really make a difference,” he said, adding that reach and coverage are important.