The country has had a steady process of deindustrialisation since the manufacturing industry reached its peak in 2000, said economist Jomo Kwame Sundaram.

Calling the deindustrialisation as premature, he said the manufacturing industry was so important that at the peak, it contributed 30.9 percent from Malaysia's total gross domestic product (GDP) output.

The employment rate brought by the sector, he added, was at 23.5 percent that year.

"You can see how important manufacturing has become. But what has happened since 2000? We had a steady process of deindustrialisation.

"I would insist that this is premature deindustrialisation. It is not as if we have exhausted the potential of the industry, we have deindustrialised prematurely," he told an audience during a Perdana Leadership Series forum at the Securities Commission in Bukit Kiara last night.

Jomo, who is a former member of the Council of Eminent Persons (CEP), said it was a matter of choice for the government whether to continue industrialisation of the country or to deindustrialise it.

He said this was the difference between the previous and current administration, at least "at the prime minister level".

"The last prime minister was celebrating deindustrialisation. He said we have now moved from the secondary stage, and reached the tertiary stage, which is services. (But) what he did not mention is that, unfortunately, most of the services and jobs that were created were actually in traditional services.

"And the so-called modern services are government services, by and large. Because in fact, financial services had actually shrunk over the decades. So the growth of employment in services is nothing to be proud of," he said.

On the same topic, Jomo also told the audience that Malaysia has a situation where its workforce skills are "really not very adequate" for industrialisation.

He said the Malaysian society has the wrong attitude towards technical vocational education and training (TVET), which had been misconstrued as something only for "losers".