Silent successes: Shouting out Malaysia's economic triumphs

Social Media Sees and Speaks

Recently, X (formerly Twitter) user “mhmgeorgie” posted, “There has been a lot of positive momentum (when it comes to markets and investments) that is being underutilised (by government) from a comms strategy perspective.”

He refers to a unique period for the Malaysian economy with significant positive news.

These include a 5.8 per cent GDP forecast growth (exceeding analysts' estimates), an upgrade of Malaysia’s equity market by JP Morgan (the first in six years), and Bursa Malaysia recorded market capitalisation of RM2 trillion (for the first time ever).

And just last week, Bloomberg reported that the Ringgit is on its best run in 14 years.

It is thebest-performing currency in Asia this year with a 2.7 per cent strengthening against the US dollar.

Comparatively, the currencies of Japan, Indonesia, South Korea, and the Philippines saw depreciation in the same period.

Additionally, Malaysia has seen a 9 per cent increase in median monthly wages in the formal nsector in March and the lowering unemployment rate at 3.3 per cent (back to pre-pandemic levels).

An Investor's Perspective

Curious, I reached out to mhmgeorgie to get his views.

An investment banker with a global firm (he requested to remain anonymous), he replied, “It is a rare series of positive economic/capital market outcomes for us (investors).”

“Much of the positives have come as a result of our government’s policies in support of tech investment and a business-friendly approach to Foreign and Domestic Direct Investment (FDI and DDI). More of these policies are needed to keep the momentum going”.

He acknowledges the potential for reversal and that risks remain due to possible US interest rate hikes and other externalities but credits the Madani government’s policies for the current positive trends.

Sharing the Good News

Malaysia’s strides in semiconductor, artificial intelligence and data centres, among others,have made global headlines, and are even the envy of our neighbours.

Besides Tesla, Malaysia has attained investment commitments from NVIDIA and Microsoft in AI and data-centre related projects which are estimated to be worth over US$7bil,creating thousands of jobs in the years to come.

And as the world’s sixth largest semiconductor player, the recently launched National Semiconductor Strategy has set an ambitious target of attracting over US$100bil in global investments -- surpassing targets set by the EU, China, and US.

To this end, the government has earmarked RM25bil in incentives and plans to train 60,000 engineers to meet industry demand.

Prime Minister Datuk Seri Anwar Ibrahim highlighted, “These investments demonstrate our commitment to becoming a global leader in technology and innovation.”

Of course, the good news is often macro. How does it translate to the ground level?

Mhmgeorgie explains that stock market performance directly correlates to people’s wealth creation and retirement fund performance (better-dividend payouts, etc).

Additionally, wage growth is evident, and vitally being pushed at policy levels such as Johor’s recent proposal for a minimum RM7,000 monthly salary in the tech sector.

Government targets to increase the percentage of wages from company incomes, bringing it in line with European standards, will also be vital in protecting workers interests and enhancing quality of life.

Addressing Malaysia’s drop in competitiveness from 27th to 34th in the IMD ranking, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, Investment, Trade, and Industry Minister, explained that this was primarily due to the ringgit's depreciation and a lower contribution from the Electrical and Electronics (E&E) exports in 2023.

However, he foresees a bounce back in 2024 based on the current upsides, with future rankings reflecting this.

Why Communications is Key

As we near Malaysia’s first anniversary of “Madani Economy,” these achievements show we’re on the right path.

Mhmgeorgie notes, “The Malaysian stock market was easily ignored over the past 2-3 years due to a lack of catalyst or excitement.

There appears to be a renewed interest in Malaysia as an investment destination for both capital market and direct investments.”

Taking care to communicate effectively will harness positive momentum and highlight the Government’s successful efforts.

It bodes well to keep in mind that effective communication isn't just about boosting perception among the Rakyat but also appealing to global and local companies and investors.

To capitalise on this momentum, narrative building must be empowered, government leaders must speak up more, and the talking points made mainstream.

Strong governance and transparent communication of future policies are crucial to avoid creating issues, as seen with fuel subsidy uncertainty and new tax proposals.

Additionally, this momentum shows that Prime Minister Datuk Seri Anwar Ibrahim’s courage and pragmatism in declaring Malaysia’s “active neutrality” when it comes to trade, while taking a firm stance on geopolitical conflicts such as the genocide in Gaza and the push for peaceful resolution towards a two-state solution, is the right approach.

In this interconnected, multipolar and complex world, Malaysia’s approach shows leadership when it is most needed.

On this, Finance Minister II Datuk Seri Amir Hamzah Azizan recently said, “To reclaim the Asian Tiger status is not a pipe dream. The government and I are very confident that we can achieve this.”

This author agrees.

Good things are happening within Malaysia’s economy and is impacting the people in real ways.

There will be ups and downs, but as long as everyone contributes sincerely, sustained success can be a reality.