Malaysia’s new unity government, with a sense of political correctness, will provide a strong foundation for economic growth and stability this year despite fears of a recession among developing countries, economist Prof Marc Lim said today.

Lim, dean of Sunway Business School, based his optimism on the country’s strong macroeconomic fundamentals and reopening of Malaysia’s largest trading partner China with which it conducted 20 per cent of its trade in 2021.

There were also opportunities for higher exports into expanded markets due to 10 countries including Malaysia having ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), he told Bernama TV at ‘The Brief’ programme recently.

No less important was the government’s robust infrastructure spending on Light Rail Transit (LRT), Mass Rapid Transit (MRT) and Pan Borneo Highway coupled with the diversified economy comprising manufacturing, services, organic and reverse tourism as well as the push in education.

Malaysia should invest in improving its infrastructure, such as roads, airports, ports and telecommunications, to better connect the nation and facilitate trade and investment, he said,

To stimulate the country’s Gross Domestic Product (GDP), he said the government and  private sector should increase spending, which in the process would create jobs, stimulate demand and stimulate businesses.

He suggested reducing taxes and encouraging innovation and performance to stimulate growth in supply and putting more money into people’s pockets, which inevitably will raise demand as well as focus on developing new technologies and innovative products to improve productivity and create more high-value jobs.

There should also be support for micro, small and medium enterprises (MSMES) as they are the backbone of the economy, accounting for 97 per cent of total business establishments, generating close to 40 per cent of GDP.

However, he lamented that while there was much access to financing, many were complex and tedious.

Touching on the blue and green economies, Malaysia should also develop green energy sources and promote environmentally friendly practices to leverage on returns from the sea.

As for manufacturing and logistics, Malaysia should stress on developing its manufacturing sector to become a regional hub for production and supply chain management. 

“Promote internationalisation as increasing exports can help to stimulate economic growth by generating jobs and new markets for goods and services,” he said.

International education should also be promoted to make Malaysia the Australia, UK and US of the East, where international students can work during and after study as well as improving and investing in education and creating a more productive workforce, he said.

This article was first published in Business Today, The New Straits Times and Bernama, 30 January 2023.