With the Covid-19 pandemic expected to result in an increase in global trade and demand for services, it said Malaysia must position itself to take advantage of these opportunities to optimise its growth trajectory.

Speaking at the launch of its report, “Uneven Recovery: East Asia and Pacific Economic Update”, the World Bank’s chief economist for East Asia and the Pacific, Aaditya Mattoo, said this was also an issue observed in countries like Thailand, the Philippines and Indonesia.

“Covid-19 is going to boost trade and services. That is a remarkable opportunity that coincides with a need for all these countries to reform their own services sector and develop greater skills,” he said.

Mattoo said that despite Malaysia’s efforts to attract foreign universities to the country, there was still a human capital deficit hampering these future growth drivers.

The government, he said, must have the “reform imagination” to make these strides and “conceive of a Malaysia that is not tied to old suspicions towards services openness, but embraces the opportunities of digitalism”.

The World Bank’s representative and country manager for Malaysia, Firas Raad, said although it remained optimistic about Malaysia’s growth this year, these could be hampered by virus mitigation efforts.

“These forecasts are not carved in stone, and are shaped by the choices of the government and the public,” he said.

He warned that should Malaysia see a resurgence in cases, as has occurred in parts of Europe and the world of late, new restrictions in response could slow economic recovery and flatten the country’s trajectory for 2021.

He noted Prime Minister Muhyiddin Yassin’s statement that blanket movement restrictions would no longer be implemented and said this was a positive step, as targeted measures would have less serious economic consequences.

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