Economy
From The Report: Malaysia 2012
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Malaysia continued to post reasonably strong growth in 2012 despite its high exposure to trade amidst a soft global economic climate. The Economic Transformation Programme (ETP) championed by Prime Minister Najib Razak is taking hold, bringing increased expenditures on infrastructure and a growth in private sector investment. The ETP’s goal is to help Malaysia escape the “middle-income trap” and become an economy driven by advanced manufacturing, technology and financial services. Challenges to this project include a low level of talent and skills, rising cost of living and worrying increases in the national debt.
This chapter includes interviews with Nor Mohamed Yakcop, Minister in the Prime Minister’s Department, Economic Planning Unit; Lord Powell, Chairman, Asia Task Force (ATF); and Jim O’Neill, Chairman, Goldman Sachs Asset Management.
Articles from this Chapter
Work in progress: The development blueprint embraces private sector involvement
OBG talks to Nor Mohamed Yakcop, Minister in the Prime Minister’s Department, Economic Planning UnitOBGplus
Interview: Nor Mohamed Yakcop Is economic weakness in the EU and the US affecting Malaysia’s ability to achieve the goals set by the Economic Transformation Programme (ETP)? NOR MOHAMED YAKCOP: Our open and trade-oriented economy is not immune to external weaknesses, but overall the ETP has contributed to healthy growth rates in 2012, with a noticeable rise in private sector investment. This is a confirmation that the public-private partnership (PPP) model is working. The PPP Unit of the Prime…
OBG talks to Lord Powell, Chairman, Asia Task Force (ATF)OBGplus
Interview: Lord Powell Which sectors of the British economy can benefit most from increased trade with South-east Asia? LORD POWELL: Education features heavily in our efforts in Asia. We have 100,000 Chinese students at our universities, and about 40,000 Malaysians. But we do not just do education – services are also very important, especially given Britain’s strength in the financial sector. Our other main goal is attracting inward investment. In Margaret Thatcher’s time, we aimed for the…
Transformers: The government’s development programme is starting to bear fruitOBGplus
Politically driven yet focused on private sector growth, the Economic Transformation Programme (ETP), launched in 2010, is beginning to have a tangible impact on Malaysia’s economic and social development. Foreign investors are advised to pay close attention to the entry point projects (EPPs), which have become the main platform for new private sector participants in various key sectors. In 2011 some 110 projects were launched under the plan, resulting in a total investment commitment of $58bn.…
OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset ManagementOBGplus
Interview: Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for these economies? JIM O’NEILL: We’ve started to see evidence of things slowing in many places. We’ve also recently had disappointing job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But I wonder whether there are bigger challenges ahead for some countries – and I don’t just mean the BRICs and emerging…
OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset ManagementOBGplus
Interview: Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for these economies? JIM O’NEILL: We’ve started to see evidence of things slowing in many places. We’ve also recently had disappointing job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But I wonder whether there are bigger challenges ahead for some countries – and I don’t just mean the BRICs and emerging…
Ducks in a row: Hammering out the details for the ASEAN Economic CommunityOBGplus
ASEAN is preparing to become a common market at the end of 2015, in a move that will create opportunities for investors in a region that has some of the world’s fastest-growing economies and a rapidly expanding middle class. “ASEAN and South-east Asia are among the few bright spots in the world economy,” Teoh Kok Lin, the founder of Singular Asset Management in Kuala Lumpur (KL), told OBG. In the past decade, the emerging economies of Asia have expanded over 7.5% a year, according to the…
Ins and outs: The global downturn is continuing to have an effect on tradeOBGplus
With its location on the Straits of Melaka and at the entrance to the South China and Java Seas historically a major reason for its wealth and international standing, Malaysia has long been a trading nation. Today it remains one of the region’s top traders, with China, Japan, the US and Europe major partners, as well as the member states of ASEAN. Yet this international exposure has presented Malaysia’s exporters with some important challenges in recent times, as global and regional economic…
Up the value chain: Manufacturing and services fill the gap left by declining commoditiesOBGplus
Along with its neighbours, Malaysia has remained a beacon of economic optimism, maintaining a positive trajectory as Western economies have faltered in recent years. While the country’s GDP growth has been sustained over the last few decades, the engines of growth continue to be expanded, improved and reinvented to adapt to a changing global marketplace. Initially dominated by a primary commodity- and agriculture-based economy, concerted efforts by policymakers have shifted Malaysia up the…
Opening the gate: The country is poised to profit from the regional common marketOBGplus
As ASEAN moves closer to its goal of implementing a common market by 2015, Malaysia has been finding its place in this new regional alignment. The country has a unique role to play, with its longstanding status as a trading nation likely to benefit greatly from further integration. Meanwhile, particular industries will have to strategically position themselves if they are to reap the greatest rewards. For foreign investors too, Malaysia can be a welcoming gateway to the wider ASEAN marketplace,…
Bucking the trend: Foreign direct investment is on the up once againOBGplus
After dropping 83% between 2007 and 2009, foreign direct investment (FDI) into Malaysia staged an impressive comeback. By 2010 the 2007 mark was broken. The next year, FDI was up another 12.2%. What transpired has no single explanation. In part, the remarkable rebound was just a recognition that the pullback was an overreaction – to a great extent it was a straightforward return to the trend. But what happened was more than a just case of money rushing back. The rapid rise in FDI since the…
Cruel to be kind: Though unpopular, there is a pressing need to cut subsidiesOBGplus
To hit its target of becoming a high-income nation by 2020, Malaysia will need to reduce subsidy programmes, which are set to increase in cost by 27% in 2012, beyond forecast levels. However, the country has one of the highest income disparities in South-east Asia, and subsidies are critical in assisting vulnerable groups. CUTTING DOWN: The fate of subsidies on everyday items like sugar, cooking oil and fuel largely depends on whether politicians are more worried about the high cost of living…
