Madani Economy to lead Malaysia to sustainable prosperity - Think tanks

30 Jul 2023 10:04am
Image for illustrative purposes only. – FILE PIX
Image for illustrative purposes only. – FILE PIX

KUALA LUMPUR - Malaysian think tanks have given their big "yay” to Prime Minister Datuk Seri Anwar Ibrahim’s Madani Economy policy framework to prosper Malaysia sustainably and to further safeguard the people's wellbeing.

They are also hopeful that almost all its seven targets are achievable in the next decade, including being ranked among the top 30 largest economies in the world and one of the top 12 in the Global Competitiveness Index.

They also believe that fiscal sustainability is within reach with the country achieving a fiscal deficit of three per cent or lower.

On Thursday, Anwar introduced the Madani Economy platform to restructure the economy to elevate the country to make Malaysia a leader in the Southeast Asian region.

This, he said, would benefit the people ultimately by giving them a better quality of life.

The framework would also serve as the foundation for several other specific policies to be announced later, including the National Energy Transition Roadmap, the New Industrial Masterplan 2030, and the Mid-Term Review of the 12th Malaysia Plan.

Lead researcher at INCEIF University (Centre of Excellence in Islamic Social Finance) Prof Dr Baharom Abdul Hamid said some good developments are being implemented currently, especially in the Klang Valley.

"For example, Elon Musk has voiced his decision to invest in Malaysia and I really hope that this time it could really happen, unlike 20 years ago when Bill Gates (co-founder of software giant Microsoft) said that he is coming here but that never happened,” he said on Bernama TV's "The Brief-Special” on Thursday.

It was reported recently that Tesla Inc will set up its headquarters this year in Selangor.

"It’s not really about (Tesla co-founder/CEO) Elon Musk, but the domino or trigger effect of such a move on other people - 'Hey! Elon Musk is heading to Kuala Lumpur. We want to be there as well.’ So this (move) will be an effective magnet.

"So Greater KL has the potential to be the capital of Asean if the cards are played well,” he said.

In his speech, Anwar noted that the Madani Economy framework aims to nurture Malaysia to be a leader among Asian economies and in order for this to happen, its economic structure needs a revamp.

Anwar urged his ministers, the public and the private sector to think globally and to internationalise the economy to generate prosperity.

"We need to establish greater economic integration with neighbouring countries, especially since the world is facing supply chain constraints. Therefore, we need to nurture more highly competitive local companies to penetrate the Asean regional market.

"Our efforts now need to go beyond Free Trade Agreements. For instance, trade diplomacy and strategic arrangements can enhance bilateral and multilateral market integration and facilitate the movement of goods, capital, skilled workforce, and technology sharing with neighbouring countries,” Anwar said on Thursday.

Universiti Malaya's Business and Economics Faculty (Economics department) senior lecturer Dr Elya Nabila Abdul Bahri opined that in a good environment, ease of doing business and proper market conditions, Malaysia will be able to attract foreign (FDIs) and domestic direct investments (DDIs).

"In terms of consumer behaviour, we have better market penetration because our people love to spend. In terms of purchasing power, although we are currently facing a high cost of living, the purchasing power is quite stable.

"Therefore, there is a potential market for DDI and FDI to ensure their multiply effect,” Elya Nabila, the second speaker on "The Brief-Special” said.

Elya Nabila also welcomed the government’s aspiration to internationalise local startups and small and medium enterprises (SMEs) as this will support 79 per cent of micro, small and medium enterprises (MSMEs).

The National Chamber of Commerce and Industry of Malaysia (NCCIM) council member Datuk AT Kumararajah concurred with Elya Nabila that the Madani Economy framework does not exclude MSMEs.

"The government intends to make DDIs a key performance indicator (KPI). This is important because we do not want to continue to depend on FDIs. Malaysia strongly encourages FDIs but at the same time we cannot ignore DDIs,” he said on Bernama TV's "Apa Khabar Malaysia - Khas".

Kumararajah is of the view that Anwar's Madani Economy narrative is strong and transparent with no room for misinterpretation.

He, however, stressed the importance of five areas the government needs to put into practice, namely, acceptance, understanding, planning, implementation and stakeholders involvement to realise the narrative.

The Madani Economy framework urged government-linked companies (GLCs) and government-linked investment companies (GLICs) to continue to drive DDIs investment and to support the development of local vendors in strategic sectors, such as electrical and electronics, the digital economy and aerospace.

At the same time, it also wants to boost export growth, including through the Mid-Tier Companies Development Programme (MTCDP) as well as the Market Development Grant (MDG) by government agency Malaysia External Trade Development Corporation.

The government and GLICs will invest RM1 billion to match private funds to support local startups and technopreneurs. For MSMEs, a matching grant for digitalisation will be increased by RM100 million to accelerate their shift to a more digital business model.

Despite the euphoric assessment of the Madani Economy, several analysts voiced concerns about the sixth target, which is to improve Malaysia’s position to be among the Top 25 in the Corruption Perceptions Index (CPI).

According to the 2022 CPI report, Malaysia secured 47 out of 100 points - among its worst performance in a decade. (0 is perceived as highly corrupted and 100 is very clean).

This resulted in it being ranked 61 out of 180 countries, one level up from 62 in 2021 when it scored 48 points.

Only with strict execution and governance, will the government be able to meet all its said targets. Otherwise, it will just be rhetoric, they concurred. - BERNAMA