Economy
From The Report: Malaysia 2016
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Resource rich and export-oriented, Malaysia’s economy has endured another major test in resilience, with a global slump in commodities and China’s slowdown reducing revenues from the key sectors of energy, palm oil and manufacturing. In 2015 the local currency, the ringgit, saw its biggest sell-off since the 1997 Asian financial crisis. Yet economic data continued to suggest business as usual. With a flexible currency regime, ample liquidity in domestic banks and alternative sources of growth, the country was able to absorb the external shocks. This chapter contains interviews with Abdul Wahid Omar, Minister in the Prime Minister’s Department; Zakri Abdul Hamid, Science Advisor to the Prime Minister and Joint-Chairman, Malaysian Industry-Government Group for High Technology; Ahmad Tajussin Ali, Chairman, UEM Group and Construction Industry Development Board and Joint-Chairman, Malaysian Industry-Government Group for High Technology; and Saw Choo Boon, President, Federation of Malaysian Manufacturers, and Co-Chair, Special Task Force to Facilitate Business.

Articles from this Chapter

Overview

Diversification gains: Flexible currency and strong financials provide a safety net
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Resource rich and export-oriented, Malaysia’s economy has endured another major test in resilience, with a global slump in commodities and China’s slowdown reducing revenues from the key sectors of energy, palm oil and manufacturing. In 2015 the local currency, the ringgit, saw the biggest sell-off since the 1997 Asian financial crisis. Yet economic data continued to suggest business as usual. With a flexible currency regime, ample liquidity in domestic banks and alternative sources of growth,…

Interview

Investment opportunities: OBG talks to Abdul Wahid Omar, Minister in the Prime Minister’s Department
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Interview:Abdul Wahid Omar What opportunities are arising for foreign investors as a consequence of the government’s plans to achieve developed-nation status? ADBUL WAHID OMAR: Within the manufacturing sector, industries are being targeted to shift towards more diverse and complex products in the subsectors of chemicals, electrical and electronic products, and machinery and equipment, as well as industries with high potential growth, such as medical devices and aerospace. These catalytic…

Analysis

New priorities: 11MP focused on human resource development
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The five-year development plan 11th Malaysia Plan (11MP), which runs from 2016 to 2020, was launched in 2015 and is considered to be the final and decisive step in Malaysia’s long journey to realise its aspirations of becoming an advanced economy. This will mean increasing its GDP per capita to surpass the critical threshold of $15,000. Malaysia boasts an impressive record of sticking to its plan when it comes to wealth creation. Household income per month has increased more than 20-fold from RM264…

Interview

Scientific minds: OBG talks to Zakri Abdul Hamid, Science Advisor to the Prime Minister; and Joint-Chairman, Malaysian Industry-Government Group for High Technology
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Interview:Zakri Abdul Hamid How is Malaysia positioning science as a key driver of the country’s economic prosperity? ZAKRI ABDUL HAMID: Malaysia is currently facing the middle-income trap and, while the economy is doing relatively well, by 2020 we should have ascended to developed status. Key to this goal is increasing investment in research and development (R&D). Japan and South Korea spend more than 3% of their GDP on R&D, while Malaysia currently spends about 1.07%, lagging…

Interview

Home-grown talent: OBG talks to Ahmad Tajuddin Ali, Chairman, UEM Group and Construction Industry Development Board; and Joint-Chairman, Malaysian Industry-Government Group for High Technology
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Interview:Ahmad Tajuddin Ali To what extent is Malaysia overly dependent on low-skilled foreign labour? AHMAD TAJUDDIN ALI: Due in part to the enormous strides our economy has made, market demand for labour has grown even more, and the construction sector has been instrumental in the progress we’ve made. One only has to look at the improvements in logistics infrastructure to understand where we are. We have built ports, airports, highways and mass rapid transit systems, but this growth…

Analysis

Fiscal drive: A thorough overhaul of sovereign finances takes place
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The year 2015 will be remembered as the moment when the Malaysian government embarked on an ambitious and uncharted course to replace oil revenues with a consumption tax known as the goods and services tax (GST), which is set at 6%. According to the 11th Malaysia Plan (11MP), the introduction of the GST is expected to bring in a revenue stream of RM30bn ($7.4bn), the equivalent of RM1000 ($248) for every person residing in Malaysia and amounting to some 13.7% of government revenue. Acknowledging…

Interview

On the right track: OBG talks to Saw Choo Boon, President, Federation of Malaysian Manufacturers; and Co-Chair, Special Task Force to Facilitate Business
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Interview: Saw Choo Boon How is Malaysia responding to global and domestic economic pressures? SAW CHOO BOON: As an exporting nation, we are subject to the vagaries of the global environment. The weak ringgit has caused imports to become expensive. Some of our exporters are affected as they are dependent on imports of intermediate and capital goods. The greatest impact is on manufacturers who produce for the local market. At the same time, some of our resource-based exporters in the rubber-based…