Prime Minister Datuk Seri Anwar Ibrahim's initiatives to attract high-value sectors such as semiconductor fabrication and digital technology, expedite foreign direct investment (FDI) approvals, and improve the ease of doing business are making significant impacts on both Malaysia and the broader Asian region, Forbes Magazine reported.
The report highlighted substantial investments drawn to these high-value sectors, emphasizing Malaysia's focus on sectors with high growth potential and technological advancement to ascend the global value chain and foster a more dynamic and competitive economy.
In a commentary published on Forbes' website, Benjamin Laker praised Malaysia's strategy to boost investment quality by improving labor productivity through automation and increased spending on research and development. These initiatives are designed to create an innovation-driven economy, reducing reliance on low-skilled labor and enhancing overall productivity.
Laker also commended Anwar's measures to optimise costs, particularly the rationalization of subsidies and the management of civil service expenses. He noted the significant step of transitioning new civil servants to the Employees Provident Fund scheme, projected to reduce long-term pension costs and shift future pension liabilities to a more sustainable model.
The enactment of the Public Finance and Fiscal Responsibility Act, which institutionalises prudent fiscal management with targets for a three percent fiscal deficit and a 60 percent debt-to-GDP ratio, was also highlighted. This legislative framework aims to ensure Malaysia's fiscal policies remain sustainable in the long run, providing a stable economic environment conducive to growth.
However, challenges persist. Laker, a leadership professor at Henley Business School, University of Reading, noted potential setbacks, such as the attempt to retarget petrol subsidies and the high living costs linked to other recent subsidy cuts.
Malaysia's journey, Laker suggested, could set a precedent for other nations navigating similar post-pandemic recoveries and structural transformations.
