The upcoming budget represents an opportunity to build resilience in the critical sectors that will form the backbone of the country’s future-facing economic ambitions. This however needs to be achieved in the context of managing the community sectors most impacted by COVID-19 over the past two years. The Keluarga Malaysia (Malaysian Family) approach, which is empathic and inclusive, is both timely and an appropriate approach to address those most impacted.
Policy stability, especially those policies directly impacting foreign investors, remains important for business continuity. At the same time, well-managed policy developments that have taken into consideration the views of all related stakeholders and the community are welcome as the country continues to mature on its journey as a leading democracy in the region. Recent announcements by the Prime Minister Datuk Seri Ismail Sabri Yaakob around Operational Safety and Health and Disaster Management are good examples, which have identified leakages upwards of 4 per cent of the Gross Domestic Product (GDP) that can be turned around over time given the required investment.
Critical supply chains of the future need to be identified to ensure that leading corporations and SMEs alike are profitable and crisis resilient. Investment promotions need to be geared towards areas where Malaysia can offer production advantages. Key areas that investors – local and international – will prioritise are those that demonstrate continuous talent supply beyond low-value labour and that can achieve productivity goals comparable with regional competitors.
Critical minerals and the advanced materials that will drive the energy equation of the green economy need to be identified to attract manufacturers looking to secure production through vertical integration in crisis resilient jurisdictions. This includes materials used in sustainable energy production, communications, and electronic vehicles.
As part of any future-facing production base, the vital area of logistics access to the Indian and Pacific Oceans coupled with land linkages by rail to regional growth markets in Asia, together with market access to the basket of countries that Malaysia has Free Trade Agreements (FTAs) with needs to be factored into the narrative. The recent crisis in the Suez Canal that sent shockwaves into global supply chains should be leveraged off.
Education geared to the future, with a recognition that the labour market has shifted and will continue to shift, should be more about talent management than “supply of labour”; a digital infrastructure nationwide needs to empower this.
Malaysia’s palm oil sector remains on the radar of the international media and various interest groups. As such, it needs to rapidly modernise in the context of meeting global Environmental, Social, and Governance (ESG) standards. Failure to do so will lead to internal and external crisis flashpoints that will be weaponised in the media. Broader investments and capacity building is needed to ensure that the sector remains resilient and compliant to the regulatory demands of global supply chains, especially to sophisticated destination markets.
Malaysia Global Business Forum