PETALING JAYA: Economic competitiveness and inclusion as well as social cohesion are some of the issues that Malaysian policymakers must continue to tackle in the years to come.
Economists said the challenges for Malaysia, which celebrates its 60th National Day today, would remain formidable, pointing out that changes in technology, a volatile geopolitical arena and threats to global trade from economic nationalists were just some of the macro factors affecting the country’s economy.
They said Malaysia has made progress in numerous measures of well-being, escaping the middle-income trap while living standards have risen. The economy has also diversified, from a largely agriculture base to one dominated by the services and manufacturing sectors.
Socio Economic Research Centre executive director Lee Heng Guie said in a written comment to StarBiz that policymakers needed to be forward-looking and responsive to enhance growth prospects.
“If we desire to make Malaysia a strong and competitive economy, the private sector and entrepreneurs must move fast to embrace and adapt the age of innovation and techno-digital evolution,” he said.
Lee pointed out that the Government must be an effective facilitator and not a disruptor. It must provide the correct setting, market-based affirmative action policy, the removal of “unjustified” and opaque regulations, the needed incentives and ecosystem, software and hardware infrastructure.
But Lee noted that the education system, talent and skill sets were straining to keep up with the rapid pace of technological changes.
United Overseas Bank (M) Bhd economist Julia Goh said much of Malaysia’s early transformation could be attributed to strategic vision, bold policy decisions and ability to mobilise support from both public and private sectors.
“This involved experimental economic policy making and industrial promotion,” she added.
Goh said in a report that the country’s ability to face up to unpredictability lied in pursuing forward-looking adjustments that ensured sound macroeconomic management, market openness and liberalisation.
These adjustments and policies include driving new opportunities for growth, focus on innovation and technology, greater transparency and governance, fiscal and debt sustainability, human capital development, economic inclusion and social cohesion.
Among the initiatives, Goh said the Transformasi Nasional 2050 (TN50) aimed to make Malaysia the 20th ranked country in terms of economic development, social advancement and innovation.
“TN50 formulates the post-2020 vision based on a bottom-up approach and shaped by citizen engagements,” she said.
However, Lee said while the goods and services tax and the abolition of subsidies had helped to rebuild the fiscal balance sheet, the fiscal agenda – plugging leakages, cutting down unproductive spending, as well as containing both direct and contingent liabilities within the bounds of prudence – remained unfinished.
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