(MENAFN- The Journal Of Turkish Weekly) Bank adds that risk of lower growth numbers, however, are high, given the possibility of new declines in commodity prices and volatile capital flows
Malaysia's economy is projected to expand by 4.7 percent this year and 5 percent in 2016 thanks to the country's strong domestic economy amid ongoing fiscal consolidation, lower commodity prices and weak global trade.
The World Bank said in a statement to accompany the launch of its Malaysia Economic Monitor on Tuesday that the risk of lower growth numbers, however, are high, given the possibility of new declines in commodity prices and volatile capital flows.
Enhancing resilience to external shocks and maintaining the pace of growth requires continued structural reforms to unlock productivity gains, it added.
The report concluded that improved urban transportation is essential to reduce the high costs of traffic congestion and to ensure urbanization remains a positive force in Malaysia's transformation into a high-income, inclusive and sustainable economy.
"Urbanization has given more Malaysians economic opportunities and has helped generate good jobs, raise incomes, and reduce poverty. Yet, urbanization has also brought urban sprawl and congestion and people lose time and businesses lose money from delays.
"Malaysia can now invest in smart urban transport solutions, which will make cities more productive and liveable across the country," the World Bank Country Director for Malaysia, Ulrich Zachau, said.
Zachau said that Malaysia may consider establishing lead transport agencies at the metropolitan level to spearhead integrated approaches towards the planning and delivery of both public and private urban transport, in order to transform the planning and delivery of urban transport.
The government should also identify and implement sustainable financing mechanisms and align public transport with incentives to discourage the use of private transport in congested areas, he added
"Cities like London, Singapore and other major world cities have done it successfully. Introducing congestion charges, user fees and gasoline taxes would not only result in environmental gains but could also trim the fiscal deficit by as much as RM19 billion.
"The recent move to scrap fuel subsidies was a win for equity, the environment, and the budget, with the savings helping the Government remain on the path of fiscal consolidation" Senior Country Economist for Malaysia, Frederico Gil Sander said.
He said Malaysia could now take the next step and explore additional revenue sources such as gasoline taxes that can also promote and finance public transport and a cleaner environment.
"Efforts are underway to improve urban mobility, with projects such as the Mass Rapid Transit (MRT) construction, and the establishment of the Land Public Transport Commission (SPAD), which has developed into a capable, multi-disciplinary planning and regulatory agency.
"Institutional challenges remain, however, further policy steps can ensure that urban transport planning is integrated across modes and administrative boundaries at the metropolitan level," he underlined.
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