Change in Malaysia's Economy

Last Monday, Malaysian Prime Minister Datuk Seri Najib announced that the cap for foreign equity in 26 sectors (such as Islamic & investment banks, insurance companies etc) in a move to liberalize Malaysia's economy. He said that this plan will last from 2009-2012 in order to attract more foreign investments & to diversify sources of growth, which is essential during the current global financial crisis.

I'm not an economic student but I'll share what I think Malaysia needs ATM:

Malaysia depends heavily on 3 main sectors: oil & gas, palm oil, & electronics. Together, the holy trinity comprised 63% of Malaysian exports in 2007. The recent economic dilemma is hitting hard on the prices of these commodities, & cracks are beginning to show in Malaysia's economy. Diversification is important to buffer the effect of external factors on the holy trinity, hence reducing the effects on Malaysian economy. Diversification will lead to a more independent Malaysia & provides more job opportunities, which is something we need to weather the storm.

We need diversification
Less dependence
Since low-cost ventures is practically a religion here, we rely heavily on cheap labor, mainly foreign workers. Foreign workers make up 20% of the overall Malaysian workforce in 2007. Not only does this present a problem of heavy capital outflow due to remittances, but it also takes a toll on Malaysian society. Reports of abuse & increased social problems come hand-in-hand with this situation. 

Rein in more local workers
Improved quality
The Made in Malaysia tag is no longer viable today. The world is looking at China & Vietnam as sources of low-cost, good-quality products. Malaysia needs to up its ante & remove the illusion that saying "Made in Malaysia" is good enough to change the current status quo. A wake-up call is necessary to find the flaws in Malaysia's manufacturing & troubleshoot the problems to make Malaysia more competitive in the global market. Najib's idea to change the tag from "Made in Malaysia" to "Designed in Malaysia" is a welcome move. We already have the talent & the brains to succeed - take Jimmy Choo. We just need the focus & the capital to develop it.

Malaysia's economy is on a downhill
The NEP was meant to help the poor (mainly Bumiputeras) to be able to contribute to Malaysia's economy. Today the NEP is nothing but a tool to help the rich get richer & the poor get poorer. The ethnic selectivity of NEP is no longer relevant today as the poor also includes Chinese, Indians & other ethnic group. To build solidarity among the races & to attract foreign investments, we have to abolish racist mentalities that are unattractive & liberalization is a good way to go. With liberalization, there can be better harmony among the different races which is crucial for a multi-racial country like Malaysia. Liberal economic practices attract foreign investors which is needed to boost our economy.

Mutual support
The recent boom in Malaysian stocks was primarily due to the good-feel spirit of Malaysian brokers & shareholders. It's important for traders to maintain their prices & for consumers to give continuous support to the economy. Don't hide your money under or pillow or in the bank. Spend what is necessary for daily living & to help the economy. Mutual support is important & it's a 2 way street. Support SMEs & entrepreunership.

Support local shops
Again, I remind you that I'm not an economic student. This is how I best understand the situation in Malaysia & how we can take steps to overcome the economic crisis at our door. Malaysia needs to push aside old views that no longer work for new & improved ones for the benefit of the nation. Feel free to comment & share your views on this matter.


Anonymous said...

Malaysia still lacking certain criteria if they want to compete in the global market and change the current economy system. For example, take our national cars, Proton, Kancil and Naza. These are Made in Malaysia cars, but they did not adhere to TQM (Total Quality Management). There are still weaknesses we cannot see on the surface but we need to see in different aspects and angles especially in the manufacturing sector. By changing 'Designed in Malaysia' but no TQM, things will be the same. It will not be going to change we Malaysians to support local products but continue critising it. Our attitudes and thinking need to be changed.

Back then, the government was going to implement 70,000 foreign workers's working visa in the country while retrenchment was imminent. This nonetheless angered the citizens, but luckily the move was cancelled. Our dependency level are far to high, one reason is because we are 'Choosy'. In these retrenchment, if we are thrown out from work, next move is to seek a secure job, but we are too far proud of ourselves. When one is on high position in an corporation, he/she could not accept the fact that he/she has to start from the bottom again if he/she was retrenched. In Malaysia, it is not one, it is millions of them outside. Everyone dare not take the hard way but want it the easy way round. If there is a stable income every month, no matter what is the amount, we sure able to feed ourselves and our family. We should be thinking that way. Not because we are highly-educated, we deserve to be better, but we need to use our intelligence and be hardworking to earn something.

When the economy is bad, everyone is having a bad time. We need to cost save in everything. We need to think wisely every cent we spend. The government agencies, large corporations, SMEs, and every one in Malaysia, we need to change our mentality. We always talk about other countries' working quality, product quality and etc, but we ourselves are NATO (No Action Talk Only), if we want to become a powerful nation in economy wise, we have a lot to change, starting with our way of thinking, way of doing work, implement TQM, ensure work satisfaction (Not tidak apa attitude - worst of all), and many more. If not, we should be shame of ourselves. We shall be known as pariah nation if we are failure of ourselves.

Rwi Hau said...

i just think if the gov is seriously thinking 'bout liberalization, it should include ALL SECTORS!!!!!! 'HE' thinks 'HE' could buy NON-MALAYS VOTES just by liberalizing a meager portion of the business sector. yeah rite, in his dreams. obviously, 'HE' is just too naive.

Rowan said...

@Anonymous: I love your reply, there r so many things I didn't know about. Thank you for your input. I agree that if Malaysians don't change their mindset, nothing else really changes.

@Rwi: Heya! I wonder if "his" decision to focus on certain sectors is to tentatively introduce liberalization 1st to Malaysians.

Rwi Hau said...

is it me or that many malaysians are falling for such buy-off? i don't understand the hype among all the pahang residents. i will never understand it. so what if we have someone who's a pahang native taking the PM post now? like it's raining gold out there? i'm totally sick of it.

on that 'liberalization' issue, i wonder if it will ever be broadened. my bet is it will never be unless the gov scrap and stave off the whole 'bumiputra special rights' stuff. ok, maybe it will be, but how long will it take? another 5 decades or probably a century to protect certain quarter's interests? if the gov is dead serious about it, just be critical about it. if it continues on with the 'malay supremacy' stuff, i don't think malaysia is the right place for me to stay in.

Rowan said...

In the end the real reason that our buddies from FKEE & FKM are moving to PEKAN is coz "he" is from there :/

I agree with you on the liberalization thing. Malaysia has been an ignorant country & if they don't get critical (as you say) now, they it'll never progress.