GROUP ASSIGNMENT

1. Mark: 10% + 40%

2. Submission date: 20.12.2023, email to me at limhlbtcutm@gmail.com & cc to

BestPartner at ooichinhoe@yahoo.com. To be emailed by group leader.

3. Group members: Maximum 5 persons per group or by individual.

TASK 1: GROUP PRESENTATION (10%)

 Refer to the ATLAS of Sustainable Development Goals 2023 by the World

Bank available at https://datatopics.worldbank.org/sdgatlas/?lang=en
 Select any ONE (1) sustainable development goals (SDGs) and any ONE (1)
country of interest.
 Describe the selected SDG’s stories and compare with your selected country.
 Conduct an oral presentation in NOT more than 10 PowerPoint slides in the class
on Day 2.
 ALL group members are required to do the presentation.
 Maximum time allocated for presentation: 8 minutes per group + 2 minutes (Q &
A).
 Soft copy of the PowerPoint slides to be submitted before the presentation.
 Grading criteria:
o Clarity and conciseness – 4 marks
o Engagement and attractiveness – 4 marks
o Time management – 2 marks
--------------
10 marks
========

PAGE \* MERGEFORMAT 2
TASK 2: ANALYSIS REPORT (40%)

 Complete the required tasks based on the following economic reports given to
you:
1. Bank Negara Malaysia (2023). BNM Quarterly Bulletin, Vol. 38 No. 3,
Third Quarter 2023.
2. World Bank Group (2023). Raising the Tide, Lifting All Boats. Malaysia
Economic Monitor, October 2023.
3. You may refer to the official websites of Bank Negara Malaysia and The
World Bank for more details, information, and data.
4. You may also want to refer to other valid sources not more than 5 years
old.

Required tasks:
1. Write an analysis of the Malaysian economy.
2. Examine the income inequality issue in Malaysia.
3. Provide THREE (3) policy recommendations to the Malaysian government.

TUGAS 1: PEMBENTANGAN KUMPULAN (10%)

 Rujuk kepada ATLAS of Sustainable Development Goals 2023 yang diterbit

oleh Bank Dunia (The World Bank) di pautan berikut
https://datatopics.worldbank.org/sdgatlas/?lang=en

ii
 Pilih salah SATU (1) matlamat pembangunan mampan atau sustainable
development goals (SDG) dan salah SATU (1) negara yang diminati.
 Huraikan cerita SDG yang dipilih dan bandingkannya dengan negara pilihan anda.
 Buat satu pembentangan lisan dengan TIDAK melebihi 10 slaid PowerPoint
dalam kelas pada hari ke-2.
 SEMUA ahli kumpulan dikehendaki membuat pembentangan.
 Masa maksimum pembentangan yang diperuntukkan: 8 minit setiap kumpulan + 2
minit (Q & A).
 Salinan lembut slaid PowerPoint mesti dihantar sebelum pembentangan.
 Kriteria penilaian:
o Kejelasan dan keringkasan – 4 markah
o Penglibatan dan dayatarikan – 4 markah
o Pengurusan masa – 2 markah
----------------
10 markah
=========
TUGAS 2: LAPORAN ANALISIS (40%)

 Selesaikan tugas-tugas yang dikehendaki berdasarkan laporan ekonomi berikut

yang telah diberikan kepada anda:
1. Bank Negara Malaysia (2023). BNM Quarterly Bulletin, Vol. 38 No. 3,
Third Quarter 2023.
2. World Bank Group (2023). Raising the Tide, Lifting All Boats. Malaysia
Economic Monitor, October 2023.
3. Anda boleh merujuk kepada laman web rasmi Bank Negara Malaysia dan
Bank Dunia untuk butiran lanjut , maklumat dan data selanjutnya.
4. Anda juga boleh merujuk kepada sumber-sumber sah lain yang tidak
melebihi 5 tahun.

Tugas yang dikehendaki:

1. Tulis sebuah analisis ekonomi Malaysia.
2. Kajikan isu ketidaksamaan pendapatan di Malaysia.

PAGE \* MERGEFORMAT 2
3. Berikan TIGA (3) cadangan dasar kepada kerajaan Malaysia.

Requirements:
 The length of this analysis report should be about 10 – 12 pages (A4 size,
excluding cover page, table of contents, reference list, appendix, and Plagiarism
Declaration Statement).
 The analysis report must be typed written in Times New Roman font, sized 12,
1.5 line spacing, and 1 inch (2.5 cm) margin for all slides.
 Every page must be paginated commencing from the first page of content and in
numeric.
 Page numbering to be placed on the bottom centre of the page.
 Mode of Referencing: APA or Harvard referencing system.
 Refer to:
 https://apastyle.apa.org/style-grammar-guidelines/references/examples
 https://dkit.ie.libguides.com/harvard/citing-referencing
 https://www.citethisforme.com/guides
 Plagiarism involves copying materials from other sources without
acknowledging the original authors.
 Plagiarism is a serious offence and is strictly NOT acceptable.
 The Plagiarism Declaration Statement must be duly signed by all team members
and attached to the submitted analysis report.
 You are required to prepare a front cover for your assignment, with name
and student ID (in CAPITAL LETTER).
 Those who do NOT submit ON TIME will be considered as late submission and
mark will be deducted.

iv
 Task 2 Analysis Report Assessment Criteria
Grading Poor Average Good Excellent Total
Criteria (1-3 marks) (4-6 marks) (7-8 marks) (9-10 marks)

Analysis of the Vague; main Main idea is Main idea Very clear main
Malaysian idea is not not clear or not mostly clear; idea; with all
economy present; no specifically important important details;
understanding stated; some details are accurate analysis;
on data; critical included but write in own
contains only information some might be words to create
some details; do missing; not missing; use great synthesis
not use own enough of own own words to and word choice.
words to write. words. write.

Examination Ideas are hard Some ideas are Most ideas are Clear, concise,
of income to follow. clearly clearly and properly
inequality References are presented. presented and referenced.
issue not used. References are references are Demonstrates
Seriously lacks sporadic or not used. Shows critical thinking
originality and used. Lacks critical and high
own critical thinking and originality.
interpretation. thinking and originality but
originality. could be better
interpreted.

Three policy Confusing and Somewhat Some Fully understand

recommenda- irrelevant; fails incomplete and understanding the concepts;
tions to to meet unclear with accurate accurate and
government requirements; explanations; exposition; relevant; achieve
ideas are lack of clear synthesis; good
unclear; no justification in justification and clear
originality at discussion; with somewhat justification with
all. without or low relevant and precise and
originality. original excellent original
thoughts. thoughts.

Written Poor writing Structured Coherent Good clarity of

presentation presentation, with structure in justification,
and structure unstructured satisfactory quality of excellent in
framework; presentation of works, proper framework
lack of information; presentation of through clear
neatness; somehow easy information structure and
inconsistency to read but with clear highly consistent
of format; some parts are framework. format.

PAGE \* MERGEFORMAT 2
 messy flow. inconsistent.

Grand Total
40

Plagiarism Declaration Statement

(This statement is to be submitted together with your written assignment)

Read, complete and sign this statement.

We confirm that the submitted work are all our own work and are in our own words.

We declare that this assignment is free from all forms of plagiarism.

We fully understand and agree that any plagiarized work will be given ZERO (0)
mark.

Name Student ID No. Signature

1.YAN’NIZA BINTI KAMISAN TX231605MEG634
2. NORAZIAH BINTI ABD AZIZ TX231709MEG634
3. B.SUBRA MANI A/L BATUMALAI TX231455MEG634

4. THIRU MOLI A/P PALANIVEL TX231453MEG634

5. SUJATHA A/P RAVINDHRAN TX231526MEG634 Sujatha

vi
 Date: 20.12.2023

BESTPARTNER SDN. BHD.

Subject: ECONOMICS

Lecturer’s Name: Dr. Lim Hui Ling

Prepared By:
NAME MATRIX NO.
1. THIRU MOLI A/P PALANIVEL TX231453MEG634
2. SUJATHA A/P RAVINDHRAN TX231526MEG634
3. NORAZIAH BINTI ABD AZIZ TX231709MEG634
4. B. SUBRA MANI A/L BATUMALAI TX231455MEG634
5. YAN’NIZA BINTI KAMISAN (LEADER)
TX231605MEG634

Submission Date: 20.12.2023

PAGE \* MERGEFORMAT 2
TASK 2

1. Write an analysis of the Malaysian economy.

Recent reports on the Malaysian economy have been released by the World
Bank Group (WBG) and Bank Negara Malaysia (BNM). We shall discuss the
Malaysian economy in this study. and contrast the most important findings from the
two reports.

The performance of the Malaysian economy in Q3 2023 is the main topic of

the BNM report. The analysis shows that, despite the COVID-19 pandemic,
Malaysia's economy has been recovering, with real GDP growth of 4.5% in Q3 2023.
Net exports and domestic demand, notably private spending and investment, were the
main drivers of this expansion.

The inflation has stayed below the desired range of two to three percent, there
are still upside risks because of disruptions in the world's supply chains and rising
commodity prices. In order to mitigate these risks, the central bank could need to
change its monetary policy position.

The threats to financial stability as well, emphasizing that household debt is

still high and could become so if interest rates suddenly increase. The bank should
take a more cautious approach to lending and that households should keep controlling
their debt levels.

Malaysia has comparatively high income inequality when compared to other

nations in the region, with the richest 10% of households earning nearly four times as
much as the poorest 40%.

viii
 Inclusive growth methods can aid in reducing income inequality by creating
chances for all societal groups to participate in the economy. Malaysia should enforce
policies that include funding education and skill development, encouraging small
business development and entrepreneurship, and facilitating better access to financing
for low-income households.

Policies promoting private investment and consumption have the potential to

accelerate Malaysia's economic expansion. Nonetheless, there may be dangers
connected to high amounts of household debt.

2. Examine the income inequality issue in Malaysia.

Income inequality in Malaysia is a complex and multifaceted issue with a long

history. Despite economic growth, the gap between the rich and poor remains
significant, posing social and political challenges. This examination will explore the
issue through the lens of various studies and data sources.

The Gini Index, a measure of inequality, shows a decline from 56 points in

1976 to 40 points in 2014 (Fig 2.1) However, since then, the decline has stalled and
slightly risen to 41 points in 2019. Malaysia's Gini Index is higher than most ASEAN
countries, recently transitioning high-income countries, and OECD countries (Fig 2.2)
The COVID-19 pandemic has exacerbated these inequalities, particularly for
vulnerable groups such as women and youth.

PAGE \* MERGEFORMAT 2
 According to the World Bank's report (World Bank 2019) "Aiming High:
Navigating the Next Stage of Malaysian Development," perceptions of income
inequality are a major concern among Malaysians, with 95% of people considering
the gap between the rich and poor as a significant issue. Despite a decline in relative
inequality as indicated by the Gini Index, there has been an increase in absolute
inequality, contributing to this view. Income inequality had already begun increasing
even before the COVID-19 pandemic, disproportionately affecting vulnerable
Malaysians, particularly low-skilled workers, informal workers, and lower earners.
(Hendren, N., & Jones, M. (2020)) The pandemic has further exacerbated these
inequalities, with short-term shocks likely to drive longer-term inequality higher.

Regional disparities in income and human capital outcomes also contribute to

income inequality in Malaysia. While ethnic income gaps have been shrinking, there
are significant disparities between states. Kuala Lumpur, Pulau Pinang, and Selangor
have higher average incomes, while other states, especially those in East Malaysia,
have significantly lower income levels. Education outcomes also vary, with children
in Sabah and Sarawak achieving only around 55% of their full educational potential
compared to those in Kuala Lumpur and Putrajaya.

To address income inequality, fiscal reforms in Malaysia can focus on

increasing indirect taxes and broadening the personal income tax (PIT) base.
Strengthening the delivery of social assistance and reevaluating subsidies can also
contribute to reducing inequality. The current fiscal system in Malaysia reduces
poverty and inequality to some extent, but there is room for improvement in terms of
revenue generation and expenditure effectiveness.

A box article titled "Malaysia's Economic Resilience: A Post-pandemic

Analysis" in the BNM Quarterly Bulletin claims that the pandemic caused substantial

x
income losses and decreased spending by both households and businesses.
Nonetheless, the labor market's improvement brought prospects for employment and
income, particularly for the most disadvantaged groups. The article also emphasizes
how the income of those with formal jobs recovered well from the epidemic and
began to approach its long-term average.

In Malaysia, the government has implemented policies such as the Wage

Subsidy Program and the Employment Retention Program to assist businesses and
employees in addressing inequality in income. These programs aim to retain
employment and provide financial assistance during challenging times. Furthermore,
improving access to high-quality education and skill-building programs can assist
those from underprivileged backgrounds in gaining better employment possibilities
and greater pay. Targeted support for industries with high potential for job creation,
such as the digital economy and green sectors, can also help address income
inequality.

Tackling income inequality is crucial for social stability and economic

prosperity. By implementing comprehensive and sustained reforms that focus on both
short-term relief and long-term structural changes, Malaysia can create a more
equitable society and ensure shared prosperity for all its citizens.

3. Provide THREE (3) policy recommendations to the Malaysian government.

3.1 Utilizing public goods and common resources by implementing

sustainable policies.

Malaysia is a country rich in public goods and common resources, such as its
beautiful and picturesque nature, and abundant natural mineral resources, including
oil and gas, fish, flora and fauna, and mining resources. By optimally utilizing these

PAGE \* MERGEFORMAT 2
resources, Malaysia can significantly contribute to economic growth. However,
uncontrolled use of these resources can lead to their depletion, causing an imbalance
in supply and demand as the supply dwindles while demand increases. This, in turn,
indirectly affects Malaysia’s economy, potentially leading to a retreat of investor
interest.

To address this issue, the Malaysian government can implement policies that
promote sustainable development and environmental protection. Malaysia's
government can leverage its natural resources to boost the economy by continuing to
explore and develop new oil and gas reserves while ensuring responsible and
sustainable extraction practices. A key component of this strategy is investing in
technology and research in the downstream department of oil and gas companies,
diversifying the economy, creating more jobs in petrochemicals and producing
valuable products from research findings.

Malaysia is also renowned for its high-quality timber and abundant flora and
fauna. Many rare and nearly extinct flora and fauna are found in Malaysian forests.
Through sustainable programs, Malaysia can ensure the forest and well-preserved,
maintaining a long-term supply of timber. The government can introduce more local
products derived from its own timber, creating additional job opportunities and
improving the domestic economy. By targeting the tourism industry and promoting
Malaysia’s serene and picturesque nature, complete with facilities, the government
can attract more tourists from other countries, injecting money into Malaysia's
economy and bolstering local household income.

Malaysia needs to enhance its water resources management by efficiently

managing water for agriculture, urban and industry use. To achieve this improvement,
Malaysia should invest in research and technology to address the impact to climate
change on future water supply. Improving infrastructure in water management is also
crucial to meet rising demands. In agriculture, Malaysia is a major palm oil supplier.
Investing in research and development to enhance productivity, sustainability, and
value addition in palm oil can position Malaysia as a trusted top brand globally.

xii
Addressing environmental concerns through sustainable practices will help counter
accusations of deforestation and forced labor often directed at this industry.

Regarding renewable energy, Malaysia possesses wind and solar resources.

Exploring these renewable energy sources can diversify the energy mix and reduce
the reliance on non-renewable resources. This can attract investors looking to
capitalize on unlimited and free energy sources, contributing to economic growth and
environmental sustainability.

In summary, Malaysia government must balance natural resource exploitation

with the serious implementation of sustainable and responsible practices to ensure
long-term economic benefits without compromising the environment. Malaysia can
diversify the economy beyond the natural resources is important to build resilience
against commodity price fluctuations and global economic uncertainties.

3.2 Recommendations for Major Investment Projects in Malaysia's Private and

Public Sectors.

Would recommendations for major investment projects in both the private and
public sectors to further stimulate economic growth and enhance Malaysia's global
competitiveness. These projects are envisioned to contribute significantly to various
industries, create job opportunities, and foster innovation. The proposed initiatives
align with Malaysia's economic goals and vision for sustainable development.

PAGE \* MERGEFORMAT 2
 Figure 1.1: First Half 2022 Malaysian Investment Performance, Source of
MIDA.

3.2.1 Private Sector Investment Recommendations

 Technology and Innovation Hubs

Establish technology and innovation hubs to attract global tech companies, startups,
and research institutions. Incentivize investments in cutting-edge technologies, such
as artificial intelligence, biotechnology, and sustainable energy.

 Logistics and Transportation Infrastructure

Invest in enhancing logistics and transportation infrastructure, including the

expansion and modernization of ports, airports, and highways. This will strengthen
Malaysia's position as a regional trade and logistics hub.

xiv
  Renewable Energy Projects

Encourage investments in renewable energy projects, such as solar and wind farms.
Incentivize private companies to adopt sustainable practices and contribute to
Malaysia's commitment to reducing carbon emissions.

 Tourism and Hospitality Developments

Support major tourism and hospitality projects to capitalize on Malaysia's natural

beauty and cultural attractions. Develop eco-friendly resorts, recreational facilities,
and infrastructure to boost the tourism sector.

3.2.2 Public Sector Investment Recommendations

 Education and Skills Development

Invest in upgrading educational institutions and vocational training centers to ensure

a skilled and adaptable workforce. Foster partnerships between the government and
industry to align education with the needs of the job market.

 Smart Cities Initiatives

Implement smart city projects to enhance urban living, improve efficiency, and
promote sustainability. Investments in smart infrastructure, public transportation, and
digital connectivity will contribute to long-term urban development.

2.3 Healthcare Infrastructure and Innovation

Upgrade and expand healthcare infrastructure to meet growing demands. Invest in

medical research and technology to position Malaysia as a regional healthcare
destination and to enhance the overall well-being of the population.

PAGE \* MERGEFORMAT 2
2.4 Environmental Conservation and Sustainability

Allocate funds for environmental conservation projects, including reforestation, waste

management, and clean energy initiatives. Prioritize sustainability to ensure the long-
term health of Malaysia's ecosystems.

These recommendations aim to create a balanced approach to economic development,

combining private sector dynamism with public sector initiatives for sustainable
growth. Implementation of these projects can not only spur economic activity but also
contribute to Malaysia's global reputation as an investment-friendly and forward-
thinking nation. Forward to the government's leadership in driving these initiatives
and are available for further discussions to provide detailed plans and feasibility
studies for each proposed investment project.

3.3 Recommendations National Affordable housing policy.

Housing is a basic need for every individual in addition to other basic needs
such as food, clothing, education and medicine. A comfortable home is part of the
guarantee of a prosperous, happy and productive life. Everyone's needs are different
and it starts with basic needs (basic needs) called daruriyyat, followed by urgent needs
(hajiyyat) and tahsiniyyat needs which are luxury needs. Likewise with the type and
size of the house, it varies according to economic progress, technology and a person's
standard of living.

The Ministry of Housing and Local Government (KPKT) through the National
Housing Department (JPN) plays an important role in ensuring the development of the
perfect, quality and more orderly housing sector to be enjoyed by various layers of
society. One of the main roles of this ministry is to be responsible for formulating
policies, laws and procedures for the development of housing and real estate in a more
sustainable and inclusive direction as well as implementing Government policies at
the Federal level and subsequently used throughout the state according to the

xvi
application at the state housing policy level respectively. State Authorities (PBN),
Local Authorities (PBT), private developers and agencies involved in the housing
sector will further implement the Federal Government's policies in ensuring a
sustainable and inclusive housing market.

Inability to Buy a Home According to the Market Price Malaysia's Median

multiple is around 4.0 and 5.0 from 2002 to 2016, exceeding the threshold level of 3.0
for the ability to own a house based on the international measurement standard which
is the median multiple (median multiple)5. Based on this measurement standard, the
maximum affordable house in Malaysia is estimated at RM188,208 (median multiple
of 3.0) because the national median household income is only RM5,228. However,
the actual median house price (Q3 2018) is RM293,000 and this is beyond the income
of most households in Malaysia. The inability to buy a house according to the market
price is due to the income growth rate of Malaysians not keeping pace with the rate of
increase in house prices. Between 2007 - 2016, house prices increased by 9.8%, while
household income increased by 8.3%6. In addition, it arises due to the insufficient
disposable income of Malaysians to support housing financing.

3.3.1 Mismatch Between Home Supply and Demand by Location

Challenges in the development of affordable housing also show the imbalance

between supply and demand for housing in Malaysia. Since 2012, the supply of new
homes has consistently been less than the increase in household demand. During the
years 2014 – 2016, the average supply of new houses of 114,000 units was much
lower than the 154,000 increase in new households. The trend of new house launches
is increasingly towards the unaffordable price category. From 2016 - 2017, as many as
35% of Malaysian households could afford a house up to the price of RM250,000.
However, only 24% of new housing launches cost less than RM250,000. This
indicates a lack of supply of affordable housing. Based on the housing turnover
pattern in Malaysia, it was found that house transactions priced below RM500,000
and RM250,000 were at a rate of 98% and 91% in 2002. However, this rate has
decreased to 84.3% and 58.2% in the quarter fourth 2016. The Government's limited

PAGE \* MERGEFORMAT 2
financial resources cause a lack of new house construction, upgrading and
maintenance of public buildings.

3.3.2 Lack of Centralization Coordination of affordable housing.

The center for the coordination of affordable housing has not been fully
established to lead affordable housing among various Government agencies and
private parties. The allocation of affordable housing is currently not integrated and not
coordinated throughout the country. More than 20 Federal and state agencies are
involved in providing affordable housing. This institutional factor makes policy
coordination a challenge, thereby limiting progress to achieve the government's target
of providing 1 million affordable homes. KPKT through JPN has succeeded in
centralizing the coordination of the provision of affordable housing through the
transfer of Perbadanan PR1MA Malaysia, SPNB and the Civil Servant Housing
Program under KPKT, but there are still other ministries leading the provision of
affordable housing.

3.3.3 Failure to Obtain Affordable Housing Financing

With limited purchasing power due to low disposable income as a result of an

increase in income that does not keep pace with the increase in house prices, the
opportunity to get housing financing is getting lower and further makes the main
factor in the failure of an individual to own a house that meets the needs and wants
such as the location of the house that is close to workplace, school and other basic
needs. Most young buyers tend to have debt problems with existing debt obligations
(car loans and credit card arrears) reflecting a small amount of disposable income that
can be allocated to a home loan. Apart from the level of financial literacy among
Malaysian households who do not have financial preparation with debt burden
commitments that exceed the ratio (debt service ratio) as well as the lack of a financial
track record (track record) especially for the self-employed group, making them have
housing financing loan opportunities limited.

xviii
Reference

Chetty, R., Friedman, J. N., Hendren, N., & Jones, M. (2020). The economic impact
of COVID-19: Evidence from a new real-time economic tracker. National Bureau of
Economic Research Working Paper 27431.
The Star. (2023, August 15). Broader tax base among possible ways to address
income inequality.
UKM Journal of Quantitative Management. (2023). Measuring income inequality in
Malaysia based on household income surveys.
World Bank (2021). Aiming High: Navigating the Next Stage of Malaysian
Development.

Daud, S. N. M., Marzuki, A., Ahmad, N., & Kefeli, Z. (2019). Financial vulnerability
and its determinants: Survey evidence from Malaysian households. Emerging
Markets Finance and Trade, 55(9), 1991-2003.

Banna, H., Masud, M. M., & Rodrigo, S. K. (2020). How does economic growth
impact on income inequality across ethnic groups in Malaysia?. Poverty & Public
Policy, 12(4), 397-420.

Nurgazina, Z., Ullah, A., Ali, U., Koondhar, M. A., & Lu, Q. (2021). The impact of
economic growth, energy consumption, trade openness, and financial development on
carbon emissions: empirical evidence from Malaysia. Environmental Science and
Pollution Research, 28(42), 60195-60208.

PAGE \* MERGEFORMAT 2