Achieving a System of Competitive Cities in Malaysia


Malaysia faces four main constraints to the economic competitiveness of its cities.

  • Low economic density, for example the employment density of Seoul, Singapore and Hong Kong is 2.5, 5 and 10 times that if Kuala Lumpur. 
  • Malaysia’s urban sprawl has led to higher transport costs than other East Asian cities as well as negative environmental impacts. For example, the share of transport costs for households are 50% higher in Kuala Lumpur than Hong Kong and Tokyo.
  • Insufficiently integrated institutions and policies have affected urban planning and implementation. 
  • Moreover, Malaysia’s cities are undermined by high levels of centralization, problems with urban and spatial planning, and financial and technical constraints. At risk-youth in urban areas are especially vulnerable to social exclusion economically, politically, socio-culturally and spatially.

As Malaysia sets its sights further on high-income status, it will be essential to improve the competitiveness of its major cities. The study highlights the following policy recommendations:  

  • Foster economic growth by strengthening institutions for managing land markets and developing land policies, as well as targeting interventions that improves the efficiency system of cities. 
  • Ensure environmental sustainability by encouraging use of public transport and incorporating climate change resilient infrastructure planning.  
  • Strengthen the institutions for city competitiveness by localizing the delivery of selected urban services and increasing the capacity of local authorities.
  • Foster social inclusion by strengthening programs for at-risk urban youth, keeping children in schools, scale-up programs for vulnerable youth, invest in safe neighborhood programs, and improve coordination, design and implementation of programs.  
  • Promote innovation through information, such as deepening open data policies.
  • Achieving a system of competitive cities in Malaysia will require sustained effort from the government to put in place the necessary conditions, and through the implementation of key reforms.