Table of Contents

Handbook on Trade and Development

Handbook on Trade and Development

Edited by Oliver Morrissey, Ricardo Lopez and Kishor Sharma

This Handbook comprehensively explores the complex relationships between trade and economic performance in developing countries. Insightful chapters cover issues such as trade, growth and poverty reduction; trade costs, facilitation and preferences; sub-Saharan Africa’s reliance on trade in primary commodities, informal cross-border trade, agglomeration and firm exporting; imported technology, exchange rates and the impact of firm exporting; the increasing importance of China in world trade and links between FDI and trade. This Handbook provides an essential overview of trade issues facing developing countries.

Chapter 22: Trade, environment and the labour market in Malaysia

Gamini Herath and Gareth Leeves

Subjects: development studies, development economics, economics and finance, development economics, international economics


Liberalization of trade and payment regimes, together with well-developed physical infrastructure and good governance, has led to rapid economic growth in Malaysia over the past three decades. As the country continues to grow, the concern about adverse environmental consequences associated with rapid economic growth is rising. Depleting forest resources, water scarcity, air and water pollution, land degradation and climate change are some of the salient features of this phenomenon. One of the major policy challenges of the decade is to promote growth while protecting the environment and preserving natural resources. Allied to this is the impact of rapid economic growth on the labour market. As Malaysia continues to grow there is a growing imbalance between the skills required in more advanced sectors of the economy and the skills of Malaysian workers. Observers have already noted that the problem of skills shortages and mismatches exists in Malaysia (World Bank, 2005) and this can have significant consequences for growth and development in the country. While currently Malaysia is relying heavily on migrant workers, there is no guarantee that it will continue to attract such workers as skill requirements in the country change. Policy makers in Malaysia are therefore facing the problem of sustainability in both the environment and the labour market. These issues are addressed in section 22.2 in terms of trade and the environment and section 22.3 for trade and labour markets. The policy responses are addressed in section 22.4 and section 22.5 concludes.

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