☕️ HR Minister: The 3 Paradoxes of the Malaysian labour market

1. MARKET SUMMARY 📈

The US markets were closed in observance of Martin Luther King Jr. Day.

2. NUMBERS AT A GLANCE 🔢

Global corporate borrowing surged to a record of USD7.93 tril (RM35.6 tril) in 2024, up by more than a third from a year earlier as companies took advantage of increased investor demand and low borrowing costs. This beats the previous record set in 2021 before the Federal Reserve started to raise interest rates to tame inflation. Corporate bond issuance started to pick up in 2024 as the Fed and other global central banks changed course and started lowering interest rates.

At least 901 people were reportedly executed in Iran last year, including about 40 in a single week in December, according to the UN human rights chief. This is the highest total recorded in 9 years and marks an increase of 6% from 2023. Most of the executions were drug-related offences, but dissidents and people connected to the 2022 protests were also executed. Iran alone accounted for 74% of all recorded executions worldwide in 2023. However, these figures excluded China, which was thought to execute thousands of people each year but where data on death penalty is classified. Iran’s Human Rights Activists News Agency (HRANA) reported that it had documented the execution of 5 juvenile offenders. International law prohibits the use of capital punishment in all cases in which the accused was under 18 at the time of their alleged offences.

Tesla directors are to return up to USD919 mil (RM4.13 bil) to Tesla to settle claims they overpaid themselves in a 2020 lawsuit by the Police and Fire Retirement System of the City of Detroit that challenged director compensation from 2017 to 2020. The big winner here? The 3 law firms that brought the case to court on a contingency basis, where they would be paid if they won. They walked home with USD176 mil (RM790.7 mil) in fees and costs.

3. IN MALAYSIA 🇲🇾

All things ASEAN

• An ASEAN Cybercrime Task Force underway?

  Malaysia has called for the creation of an Interpol-esque ASEAN-wide Cybercrime Task Force to tackle the growing challenges of cross-border cybercrime. This initiative is designed to address issues like human trafficking, online scams, and other forms of digital fraud that threaten regional security. As we take on the ASEAN Chairmanship this year, the government aims to strengthen cooperation between member states and promote the enforcement of anti-trafficking and cybercrime laws. It’s a significant step towards a safer digital future for our region.
  Last year, Malaysia reported over RM1.22 bil in financial losses due to cybercrime.

• ASEAN Visa—will we finally have one?

  The government is taking the lead on a groundbreaking initiative to implement a unified ASEAN visa, making travel across the region more accessible and streamlined for tourists. The proposal, similar to the Schengen visa system in Europe, would allow travellers to visit multiple ASEAN countries with just one visa, significantly reducing administrative hurdles. Initially suggested by Thailand in 2024, the single visa aims to enhance regional integration and boost economic growth by making ASEAN an even more attractive destination for international travellers. Let’s hope this actually comes to fruition as it’s a fantastic idea.

The Three Paradoxes of our job market today
Malaysia’s labour market is grappling with three key paradoxes, according to Human Resource Minister Steven Sim.

The first is low wages despite low unemployment. Our unemployment rate remains low, but wages are stagnant. Typically, low unemployment would empower workers to negotiate higher salaries due to increased demand for labour. However, this expected wage growth is not materialising, indicating underlying issues in wage structure and labour market dynamics.

Secondly, skills mismatch galore. There’s a significant discrepancy between the qualifications of job seekers and the skills demanded by industries. While sectors like engineering and technology report shortages of skilled professionals, many graduates still struggle to find employment that matches their expertise. This mismatch contributes to a high underemployment rate of 36.8%, where individuals are employed below their skill levels.

And thirdly, there are insufficient high-skilled job opportunities. The economy is not generating enough high-skilled positions to accommodate the increasing number of graduates, particularly from technical and vocational education and training (TVET) and science, technology engineering, and mathematics (STEM) fields. This shortage forces many qualified individuals into roles that do not utilise their full potential, creating economic inefficiencies and personal dissatisfaction. How do we tackle these three paradoxes? Targeted policies to ensure a more efficient and equitable labour market. But that’s easier said than done.

Shorts

1. Malaysia’s trade hits record RM2.88 trillion in 2024
   Our trade performance reached new heights in 2024, with the total trade value hitting RM2.88 tril, a 9.2% increase from the previous year. This marks the fourth consecutive year of surpassing the RM2 tril mark, according to the Ministry of Investment, Trade and Industry (MITI). Exports grew by 5.7% to RM1.51 tril, while imports surged 13.2% to RM1.37 tril. The trade surplus remained solid at RM136.88 bil, extending Malaysia’s streak of surpluses to 27 years.

2. Abolish auto-accept system, TPAD urges
   The Association for Land Public Transport Transformation (TPAD) has called for the abolition of the auto-accept system in e-hailing services, arguing that it unfairly disadvantages drivers as it restricts drivers’ freedom to select rides according to their needs and comfort

3. KLIA Aerotrain is almost back in action
   Good news for travellers—KLIA’s aerotrain is gearing up to make a comeback after being out of service since March 2023. Safety checks are in full swing, and the train will undergo a test run before passengers can hop on again. Meanwhile, Transport Minister Anthony Loke is less than thrilled about the delays but sees the MAHB privatisation as a step toward improving accountability and speeding things up. In the meantime, you’ll still have to take the bus between terminals.

4. 7-Eleven (7E) rolls out cash recycling machines

   7E Malaysia is working to install 100 cash recycling machines (CRMs) across the country by 2026. These machines, which combine cash deposit and ATM services, are aimed at improving access to banking services, particularly in suburban areas. The first CRM has already launched in Rawang, with more planned for key locations including KL, Johor, and Sarawak. Keep in mind that cash transactions still remain pivotal for many - 48% of Malaysians still use cash daily, with usage reaching two-thirds in non-urban areas, said 7E Malaysia co-CEO Tan U-Ming.

4. AROUND THE WORLD 🌎

Welcome Back, Mr President

'Revolution of common sense'
President Donald Trump’s inaugural address called for a “revolution of common sense”, backed by his optimism and confidence that the US is at the “start of a thrilling new era”. This would also mark the “complete restoration of America”, as he looks to a series of executive orders as part of his first day in the White House.

Executive orders
Trump is expected to sign the executive orders as part of over 200 executive actions, with the promise that every “radical and foolish” executive order by the Biden administration will be repealed “within hours of when I take the oath of office”. Trump had promised to launch mass deportation programmes which were decried by the Pope, form a new government department, and eliminate diversity policies from the military, among other items.
Learn: What are executive orders? The powerful tool used by US Presidents 

Biden's last act
Meanwhile, for outgoing President Biden, some of his last signatures went towards pre-emptive pardons for people that Trump had targeted for retaliation, such as former Chairman of the Joint Chiefs of Staff Mark Milley and former White House chief medical advisor Anthony Fauci. The pardons also cover the lawmakers who were part of the committee that investigated the Jan 6, 2021 storming of the Capitol by Trump supporters.

TikTok was gone, TikTok is now back
Despite his efforts pushing for TikTok to be banned during his first term, Trump has made a turnaround with his announcement that he will be signing an executive order to delay the divest-or-ban law that was imposed on the social media platform, which stopped services over the weekend. However, TikTok was able to operate again shortly after Trump’s announcement, with the platform stating it was able to start restoring service on the strength of Trump’s promise alone. This is also being viewed as a major political victory for Trump. However, TikTok may not be safe yet, as Trump has also indicated he wanted the delay so he could make a deal with TikTok, stating on his social media platform Truth Social that he would like the US to have a 50% ownership position in a joint venture.

$TRUMP, then $MELANIA
First Lady Melania Trump launched her own cryptocurrency token on the eve of her husband’s inauguration, right after her husband announced $TRUMP. So far, both coins have seen volatile trade, though the trend is headed in an upward direction so far. This also marks a turnaround from Trump’s own take on cryptocurrency during his first term, with the president promising to create a strategic Bitcoin stockpile and appoint financial regulators more receptive to digital assets. Crypto is so optimistic about Trump, that the CEO of Circle, the issuer of the USDC stablecoin pegged to the US dollar, believes that Trump will issue executive orders that allow banks to trade crypto or offer crypto investments “imminently”.

Cars and Trains

• BYD to complete Indonesia plant by end-2025

  China’s EV darling BYD is looking to complete its plant in Indonesia, worth USD1 bil, by the end of 2025. The plant will have a production capacity of 150,000 EVs annually, but will also allow BYD to temporarily ship its EVs into Indonesia without import duties. A BYD official said the plant underscored BYD’s ambition to dominate the Indonesian market where Japanese automakers are popular. He also said that the plant’s long-term plan is to export the EVs it produces.

• India shifts to railways as infrastructure focus

  Sources shared that the nation will be pushing more towards modernising its railways in its upcoming federal budget, with road building only seeing a marginal increase in allocation. This could mark the decision by Indian PM Narendra Modi to shift focus away from upping the road network in his pursuit of economic growth since the pandemic. The allocation could reach up to USD34.7 bil from a previous USD29.5 bil, which would help fund the expansion of more than 68,000km of track and pay for 400 high-speed Vande Bharat trains by March 2027.

Tax and prison

• Thailand: One step closer to wealth tax implementation

  The Southeast Asian nation’s new membership in the international tax information exchange network is a crucial step towards that goal, according to Thailand’s Finance Permanent Secretary Lavaron Sangsnit. The network would allow the Thai Revenue Department to access the income data of citizens living abroad, and receive reports from foreign authorities on income earned. This mitigates the challenge of tracking assets parked overseas by making such assets visible and easier to track.

• Man behind doctor's rape, murder gets life sentence

  Sanjay Roy, who was convicted for the rape and murder of a junior doctor, has been sentenced to life in prison. The judge rejected demands for a death sentence, with the victim’s family “shocked” by the decision. Dozens of doctors protested outside the court after the sentencing as well, stating their dissatisfaction with the investigation and the sentence. Roy has claimed he is innocent and will be appealing the verdict in a higher court. Not sure why the judge decided on jail, but China did not have the same stance for that guy who killed dozens by driving his car into them.

Shorts

1. EU to propose ban on "forever chemicals" in consumer products

   The ban on “forever chemicals” or Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS) in consumer products is based on how the chemicals don’t break down in the environment, leading to concerns about the chemicals building up in ecosystems, drinking water, and the human body. As it stands, PFAS exposure is already raising litigation risks for companies.

2. UK teen pleads guilty to murder, terrorism charges

   Axel Rudakubana, 18, changed his plea to guilty for the murder of three young girls between the ages of 6 and 9. He also pled guilty to 10 charges of attempted murder, as well as for producing ricin and being in possession of an Al-Qaeda training manual. The presiding judge said a life jail term was inevitable.

5. FOR YOUR EYES 📺

1. A technique to handle angry people - reflect and diminish. Useful tip, for married men. Asking them to calm down will make them feel that you are against them.

2. You might have come across the term ‘path dependency’. The recent LA inferno will internalise the understanding of this term. Worth a watch. It also explains why questionable and unsound practices persist until today.

istokp

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