PETALING JAYA: Language, culture and stability alone will not be enough to convince foreign investors to flock to Malaysia, say business leaders and economists.
Instead, they believe the government needs to do more to make the country more business-friendly.
While praising Prime Minister Datuk Seri Anwar Ibrahim’s desire to use the three selling points to woo investors, they also want the government to focus on the high cost of living, introduce structural economic reforms, and raise the income of the people.
Malaysia University of Science and Technology economics professor Geoffrey Williams said it was always the right move to prioritise the economy because it provides the resources for other policy aims.
“So, 2024 will be a good year to target structural economic reforms as the foundation for stronger long-term growth and development,” he said yesterday.
Anwar had said the country’s many languages, cultures and security would be the main draws for investments by local and foreign investors.
Williams said inflation was likely to stay low this year at around 2.1%, indicating that interest rates would be stable at around 3%.
“Economic growth is likely to be around 3.5%, which is lower than official projections.
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“This gives us a stable environment, which is the right time to focus on reforms. We need to see policies to raise incomes, address the higher cost of living, free up the labour market, rebuild pensions, and help businesses invest and grow through less regulation and a more competitive business environment,” he said.
Other areas of focus should be raising incomes and rebuilding pensions, said Williams.
Education, he said, has enough funding, but reforms are needed to improve outcomes and quality. The PTPTN scheme, too, must be reformed, he said.
“The same is true for healthcare. There is enough money in public and private healthcare, but it is very badly managed.”
Centre for Market Education (CME) chief executive officer Dr Carmelo Ferlito was more direct. He said that while the three points touched on by the PM were important, they were not the primary focus for investors.
“For 2024, I would like to see a commitment to a pro-market reformist agenda and a reduction of the role of government in the economy.
“Only a market economy can drive sustainable economic development. A government-driven economy generates distortions, corruption, debt and inflation,” he said.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said Malaysia needs better human capital.
“This can support the inflow of foreign direct investment (FDI). We also need a transparent, competent and stable government,” he said.
Malaysia, he pointed out, had been losing out to its neighbours due to a lack of a human capital pool and political instability for the last five years.
Nivas also said that while FDIs and domestic direct investment (DDI) have surged since last year, the results should be translated into something that can be enjoyed by all Malaysians in the form of quality jobs, better supply chains and vendor management systems.
Malay Economic Action Council’s (MTEM) Ahmad Yazid Othman also said the government should also ensure it can stabilise the currency and cost of doing business.
“Diversity has been our strength for decades. The business community also needs a stable currency, which affects investors too,” he said. The rakyat should also focus on being more productive, knowing that the future is positive for the country,” he added.
Universiti Sains Malaysia’s political science expert Prof Dr Sivamurugan Pandian said stability was needed for the country to remain competitive regionally and globally.
“The government must also address concerns about unity, cost of living, and the economy. Intra-ethnic and inter-ethnic issues can divert the focus,” he added.