Third Business Cycle. This chapter is regarding about a

Third Thrust: Empowering Education, Skills and
Trainings, and Talent Development

The Budget 2018
speech by Datuk Seri Najib Tun Razak, Prime Minister, and Finance Minister, A
total of RM61.6 billion has been allocated to improve education training, skill,
and talent sector under the 2018 Budget. The strategy from Third Thrust “Empowering
Education, Skills, and Trainings, and Talent Development” is the government intends
to offer more learning opportunities to Malaysian citizen to increase Malaysian
education level, worker skills, and trainings as well as talent development,
from this strategy we can know that the Malaysia productivity will increase due
to average workers has higher human capital in the future.

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            This strategy can be link with BEC1044 Macroeconomics,
Chapter 3 – Production Growth and Business Cycle. This chapter is regarding
about a country’s productivity is depending on the factors of production, it includes
Physical capital, Human capital, Natural resources and Technological knowledge
available to workers. the important thing is a nation’s living standard is
determined by the productivity of its workers.

              In Budget 2018, the government invests RM61.6
billion to improve education training, skill, and talent sector. From this
viewpoint, we can predict that the government purpose is to expand and build
more school in the society so that more local people have an opportunity to
acquire new experience, skills, and technology. This tendency will raise the technological
knowledge and human capital per worker in Malaysia and this action will also bring
benefits to Malaysia’s productivity and GDP. Why? If you take a human capital
view of economic development, Malaysia’s economy will become more productive as
the educated workers arise, since educated workers are able to be more
efficiently carry out the tasks. We can also assume that educated workers
acquired technological knowledge through education, training, and experience. The
advance of technological knowledge has the ability to boost up a nation’s
economy as well as it will also help our society’s understanding of the best
ways to produce goods and services in a given period of time. Now we move to the
production function: Y = A F (L, K, H, N), this function is to describe the
relationship between the quantity of inputs used in production and the quantity
of output from production. For instance: The government can enhance the
standard of living by providing institution and encourage the Malaysian citizen
to take advantage of education. For a country’s long-run growth, education is
important as investment in physical capital. If Malaysian citizen have higher
human capital, physical capital and technological knowledge in the future,
which means this will affect H (Human capital), K (Physical capital) and A
(available production technology) increase at the same time, and this will lead
to increase Malaysia’s GDP (Y) and standard of living.

            The assumption for this strategy is education plays an
important role in developing a country’s economy. If most of the Malaysian
workers are educated, in this circumstance Malaysia’s economy will growth
rapidly in the world because higher educational attainment means more skilled
and productive workers. nonetheless, increase human capital are requires inputs
such as teachers, library, and school as we can see Malaysia government already
invested RM61.6 billion to improve education training, skill, and talent
sector. This is because students are viewed as “Worker” who have the important
job of producing human capital that will be used in future production. On the
other hand, if most of the Malaysian workers are uneducated, face challenges of
insufficient facilities, equipment, and teaching materials what consequences
will bring to Malaysia’s GDP, productivity, and living standards. These factors
will affect Malaysian citizen enjoy less income, low purchasing power in the
market, less market competitive advantage and less productivity. Thus, Malaysia’s
GDP, economic growth rate, productivity, and living standards are lower.