Recently, we got the chance to speak to YB Liew Chin Tong, Deputy Minister of MITI. In our discussion, we always came back to one thing: despite Malaysia’s abundant natural resources and strategic location, our economy has not flourished as we may expect it to.
So, in this article, we delve into three major issues impeding Malaysia's progress and outline potential solutions to stimulate economic growth.
Issue #1: Shortage of FDI and DDI
The first and foremost challenge is the limited availability of investable opportunities for both foreign and domestic investors.
This scarcity has led to several problems like low wages, job mismatch (where professionals are forced to take up jobs below their qualifications), a lacklustre business environment, as well as slow economic development.
The Solution: Active Participation in Global Supply Chains
Malaysia needs to offer resources at competitive prices to attract foreign investors and become part of the larger global supply chains.
Engaging in these supply chains can elevate living standards by creating high-quality jobs and promoting economic development.
Steps to achieve this could involve:
Improving the infrastructure for businesses
Streamlining regulations for foreign investments
Marketing Malaysia as an investment-friendly destination
Issue #2: Untapped Potential in Natural Resources
Malaysia is rich in natural resources, but our country has not fully harnessed this wealth. For instance, renewable energy, particularly solar power, remains an underexploited sector.
The Solution: Introducing Supportive Initiatives
One of the fastest ways to ensure we harness the potential of our natural resources is to provide initiatives and in a way, “push an agenda”.
For example, recently, we’ve seen a lot of tax benefits to buying an EV. This “pushes the agenda” for Malaysians to be more eco-friendly and to turn towards renewable energy.
Issue #3: Complacency in Improving Malaysia Economy
Despite its potential, we have settled into a comfort zone of low-cost manufacturing. This complacency has led to an influx of unskilled foreign labour, a brain drain among Malaysians, and a lack of investment in research and development.
The Solution: Foster a Competitive Environment
To break free from complacency, Malaysia needs to create an environment that inspires competition. By offering higher wages, rigorous training, and more opportunities, the country can stimulate economic growth.
Key strategies might include:
Enhancing investment in research and development
Promoting entrepreneurship and startups
Implementing policies to retain local talent
Currently, we see Malaysia taking steps to address these issues and we can only hope that it goes uphill from here.
In our latest video, we talked about this issue in further detail. If you're interested, you can watch the video here.