Workers’ health risks could undermine Malaysia’s economic growth – MPC

KUALA LUMPUR: Malaysia risks fragile and low-quality economic growth if workers’ health issues are not addressed comprehensively over the next five to 10 years.

Malaysia Productivity Corporation (MPC) deputy director-general Dr Mohamad Norjayadi Tamam said the country has the potential to strengthen economic growth and productivity if workers’ health issues, together with skills, technology and work design, are addressed in an integrated manner.

He said Malaysia may continue to record economic growth, but not at a level sufficient to support a stronger shift towards a high value-added economy.

“From the MPC perspective, the biggest risk is when Malaysia’s labour productivity improves moderately, but the foundations supporting that productivity weaken.

“If workers’ physical and mental health continue to deteriorate, work design remains inefficient, skills gaps are not addressed and firms continue delaying investments in technology and talent development, productivity gains achieved may not be stable or sustainable,” he told BH.

He said companies may be able to maintain output through work intensification or short-term cost-cutting measures, but this would place significant pressure on the workforce in the medium and long term.

He said a combination of structural pressures is expected to become more apparent over the next five to 10 years, including rising chronic diseases, extreme fatigue, work stress and mental well-being issues.

“In addition, an ageing population that changes workforce composition, rapid technological changes and skills mismatches are expected to place significant pressure on the national economy.

“This may also increase operating costs without corresponding gains in value-added, slow innovation rates and lead to more cautious investments as firms face uncertainties related to talent and workforce performance,” he said.

Norjayadi said the situation risks creating conditions where only certain firms and sectors are able to move forward, while many others remain trapped in business models dependent on low costs, low-value jobs and limited productivity.

He said the benefits of economic growth would become increasingly uneven if productivity gains are concentrated among specific groups of firms.

The risk is also relevant to the country’s competitiveness, as Malaysia currently ranks 23rd in the IMD World Competitiveness Ranking 2025.

“The achievement is encouraging, but it needs to be strengthened through more comprehensive reforms involving the workforce and firms.

“Future competitiveness will no longer be determined solely by low labour costs, but by the country’s ability to develop a healthy, skilled and resilient workforce capable of adapting to workplace transformation.

“If workers’ health, technology and talent issues are not addressed in an integrated manner, Malaysia risks increasingly narrow value-added growth and a more uneven distribution of benefits.

“In summary, the main risk over the next five to 10 years is growth that is not productive enough, not inclusive enough and not resilient enough to support Malaysia’s transition into a high value-added economy,” he said.

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المصدر: New Straits Times