KUALA LUMPUR – The Kingsley Strategic Institute for Asia Pacific organised its annual Malaysia Economic & Strategic Outlook Forum (MESOF) with the purpose of gauging the economical, political, and business outlook for the nation and region for the coming year.
2020 is expected to be a year of uncertainty. Decrease of revenue from commodities, particularly palm oil, from cuts of imports to India will hamper Malaysia’s growth. A more proactive strategy is needed to attract greater commodity exports, or risk losing out to other countries in the region offering the same products. Yet, Malaysia’s fundamentals remain strong it is expected to post a GDP growth rate of 4.5-4.9% in 2020.
A majority of speakers have urged the government to be consistent with its policies to strengthen business confidence, as well as provide clear direction and plans to develop the country in order to spur growth. In particular, promises made in Pakatan Harapan manifesto need to be fulfilled, including crucial reforms such as the establishment of the IPCMC. The Shared Prosperity Vision 2030 has maintained the Bumiputera-focused affirmative action policy, despite such policies proving ineffective. Concerns were raised with the timing of transition for the Prime Minister’s post which typically lead to a reshuffling in Cabinet and in turn changes in policy, creating uncertainties in market.
Greater preparation in artificial intelligence and adapting 5G technology will give Malaysian an edge in region. For businesses to be compliant with IR.40, assistance is required in digitisation process via the training of skilled-labourers and the implantation of digital platforms, especially among SMEs.
Foreign investors need to be encouraged to recirculate their earnings back into the Malaysian economy instead of repatriating it their countries of origin. Such encouragements can come in the form of major infrastructure projects such as the ECRL and the KL-Singapore high-speed rail.
Businesses should spread their operations to other states and cities to ensure fair and equitable distribution through the creation of new job opportunities. The private sector requires government stimulus to the primary sector, such as continuing the MM2H programme to spur growth in the real estate sector. This can be encouraged by easing the rate of approvals.