KUALA LUMPUR, Nov 6 –  The commodity sector has continued to play an essential role in the economy through inter-sectoral linkages, particularly in terms of forward linkages.

This is mainly due to the emphasis on enhancing resource-based downstream activities, the Finance Ministry (MoF) said in its Economic Outlook 2021 report released today.

It said the oil palm and oil and gas industries’ contribution to the gross domestic product (GDP) is higher compared with electronics and basic chemicals industries.

“Therefore, research and development collaborations between the industry and research institutes need to be enhanced to produce more high value-added products,” said the MoF.

In line with the Fourth Industrial Revolution (IR 4.0), adoption of technologies such as robotics, sensors and the Internet of Things (IoT) will increase productivity and ensure the sector’s sustainability.

Back in the 1970s, the commodity sector accounted for 54.9 per cent of gross domestic product or RM43.2 billion, the ministry said. 

Although the commodity sector’s value had increased to RM203 billion in 2019, its share of the GDP has reduced to 14.3 per cent due to the rapid growth of manufacturing sector during the industrialisation phase of the mid-1980s.

“Despite accounting for a smaller percentage of GDP, the sector has cushioned the economy from external shocks, especially during the financial crises in 1998, 2009 and the COVID-19 pandemic,” it said.

-- BERNAMA