Focus on right investments for M’sia to become economic powerhouse, say economists
13 Jan 2023
Malaysia has all it needs to become an economic powerhouse, provided the government is innovative and attracts the right kind of investments, said Universiti Utara Malaysia economics professor Dr K. Kuperan Viswanathan.
He said the government should focus on the region, India and China as the population in these areas are bigger than in the rest of the world and are growing fast, and by investing in the services sector such as finance and insurance, Malaysia could be an attractive place for investors to land.
“To ensure the nation benefits from economic growth, we should stop focusing on Selangor, Penang and Johor. The government should encourage investments in other parts of the country.
“This can be achieved by improving infrastructure nationwide.”
He said the government needs to promote research and development in future technologies such as clean energy, solar and wind power and technological developments that facilitate the move away from fossil fuels.
“This apart, we should also look at digital technology and how to benefit from 5G and 6G.
“There is also a need to turn our universities into centres of excellence by appointing the right people who have good regional knowledge. We can produce graduates who will be able to engage regionally and thus bring more trade and business into the country.
“It is very important for Malaysia to emphasise trade since by nature, we are a trading nation. The country’s trade is two times the size of the nation’s gross domestic product (GDP).”
He added that the country is well known as an education hub and therefore, it is important for the government and the private sector to continue promoting and pushing for further development in this sector.
Kuperan said medical tourism must also be emphasised as the country will be able to attract patients from the region by having top-class medical services.
He also said by taking such measures, there would be no stopping Malaysia from regaining its status as a top economic hub that welcomes investment while providing services that meet the region’s needs.
Prime Minister Datuk Seri Anwar Ibrahim earlier said the country’s GDP this year is very likely to exceed earlier projections of between 6.5% and 7%.
Universiti Tun Abdul Razak economist Dr Barjoyai Bardai said although Malaysia has all the makings of an economic powerhouse, it is not necessary for the government to pursue the idea of rapid growth.
He said from 1982 to 2021, Malaysia’s rate of economic growth was better than the average progress in Asia.
“Despite this, the downside is that 70% of the population currently live below the poverty line. It does not mean growth will equal better living standards.
“We need to change the approach to economic prosperity by concentrating on more equitable growth that better distributes wealth by improving household income.
“The poverty line is RM2,208 but 50% of the population earn below RM2,000.”
Barjoyai said it would be better to deal with the growing income disparity now before it is too late.
He said economic growth will not solve the problem as Malaysian companies only share 35% of their income with workers, whereas in developed nations it is 60%.
He added that the only way for employees to get a higher share of the revenue is through higher productivity.
Barjoyai said as the country moves from an underdeveloped to a developed nation, there was a huge migration from rural areas populated by retirees.
“Moving development centres to less developed parts of the nation might be a good idea but it might also fail as those who moved to urban settings might not want to return as they could be viewed as failures,” he said.
“Becoming an economic powerhouse comes with its pitfalls.”
Source: The Sun Daily