Can Malaysia become a high-income country by 2030? Experts’ Opinions

ByCatalina Russu

Can Malaysia become a high-income country by 2030? Experts’ Opinions

According to the World Bank, Malaysia has the potential to become a high-income nation within 10 years. However, the country would need to undertake some major reforms including the creation of well-paid employment and having more women join the workforce. Could Malaysia play an important role on the stage of high-income countries? Let’s see what several experts have to say. 

Can Malaysia really become a high-income nation by 2030? 

Miroslav Lesjak, International consultant and sustainable energy expert

“Malaysia’s economy has been growing steadily over the last decades transitioning from the booming growth rates of a developing economy to moderate growth rates as it approaches a high-income status. While the COVID pandemic has disturbed global markets and exposed the limitations of fossil fuel-dependent economies, it has also presented an opportunity for Malaysia to take regional leadership in energy transition from dependence on imports and exports of fossil fuels to a sustainable-energy driven economy, predominantly in the transport sector, renewable (solar) power production and demand-side energy efficiency.”

 

 

Hafiz Choudhury, Experienced consultant in international tax, tax policy and tax administration

“Malaysia is well on its way to being a high-income nation. In PPP terms, the 2019 GDP per capita was $29,619.7 according to the World Bank, not far off the OECD average of around $46,500. Achieving that milestone by 2030 seems to be well within the realms of possibility. The recent elections, where the will of the people prevailed and the country seemed to be move beyond the straitjacket of ethnicity-based policies, was a step in that direction.”

 

 

 

Fandi Achmad, International Trade Expert

“It took only ten years for Malaysia to raise its GNI per capita from USD 7,600 in 2009 to USD 11,230 in 2019. Given this trend, despite the COVID-19 crisis, there is no doubt that Malaysia will transition to a high-income economy of GNI per capita above USD 12,535 before 2030.”

 

 

 

What must Malaysia do to become a high-income nation? 

Miroslav Lesjak, International consultant and sustainable energy expert

“For that to happen, Malaysia needs strong political impetus backed by robust legislation providing a framework for corresponding financial instruments to scale-up private investments in the clean energy sectors. Taking this approach, Malaysia has all the prospects of becoming a high-income, clean energy-driven economy by 2030.”

 

 

 

 

Hafiz Choudhury, Experienced consultant in international tax, tax policy and tax administration

“A matching mental shift in policymaking in bureaucracy, along with proactive steps to build on Malaysia’s considerable strengths is necessary. In many ways, economic policymaking is still shaped by the industrial policy mindset of the 1980s; e.g. Malaysia still provides incentives for labor-intensive industries while simultaneously importing labor from poorer countries. Policy should shift towards the knowledge and service sectors, both to attract outside investors and to foster local entrepreneurship in these areas. The country should also leverage its unique ethnic diversity of Indian, Chinese and Malay cultures – the three largest ethnic groups of the world’s most populous continent – and its strengths in manufacturing and finance to create brands that are attractive to an Asia wide demographic.”

 

 

Alex George, Public Finance Management Specialist

“Malaysia, an ASEAN member, is blessed with plentiful natural resources, a skilled workforce, and an excellent infrastructure. The country started on its ‘high-income ‘journey in 1991 with its Vision 2020 project but it has stumbled. To regain traction, some critical issues need to be addressed: a) Improved governance and reduced corruption by effective independent assessment of ministerial performance and outcomes; b) Avoid culling incomplete projects due to government and portfolio changes by engaged pre-evaluation involving broader political, professional and civil society participation whereby the government incorporates recommendations in its budget and medium term plans enabling continuity; c) Encourage and pivot reputable, high caliber professionals into politics; d) Incentivize entrepreneurship by providing a suitable environment for all segments of society to participate and benefit from expansion of the private sector; e) While aiming for growth and high income, make provisions and support for the less fortunate and less able avoiding a painful and unconscionable inequality gap resulting in a caring society.”

 

Bruce Turner, MBA AACI P App |President Heuristic Consulting Associates BC Ltd 

“Despite (or perhaps because of) the 2020 COVID pandemic, Malaysia has great potential to become a high-income nation as defined by the World Bank. A first priority should be to support Malaysians in weathering the impacts of pandemic-related economic hardships closely followed by a critical focus on identifying the economic sectors showing mid- to long-term potential for growth.”

 

 

 

How do you see the future role of Malaysia in international development? 

Hafiz Choudhury, Experienced consultant in international tax, tax policy and tax administration

“Malaysia is already the global leader in Islamic finance and there is immense potential for innovative financial services for more than one billion Muslims worldwide. In achieving this, Malaysia can demonstrate to other developing countries that there is strength in diversity and that development can be achieved without sacrificing cultural integrity.”

 

 

 

 

Bruce Turner, MBA AACI P App |President Heuristic Consulting Associates BC Ltd 

“Malaysia is in good position to take advantage of changing world trade patterns, particularly in light of the recent sanctions/tariffs introduced between China and the USA. The strategy might include leveraging Malaysia’s existing exports to China – low-hanging fruit. Perhaps there is also potential to shift certain manufacturing – where Malaysia has a competitive advantage –  from China to Malaysia to expand capacity and increase exports. But, to maximize economic recovery opportunities and encourage investment, Malaysia needs to address key policy areas and improve its investment climate. Investors do not respond well to indications of corruption.”

 

 

Fandi Achmad, International Trade Expert

“Malaysia has provided billions of USD of customized packaged incentives to date for inviting quality investments in high technologies to promote long-term productivity. Malaysia can, moreover, intensify technology adoption across all sectors of the economy, including in the manufacture of medical products, noting the fact that Malaysia played a critical role in exporting key COVID-19 products to the world in 2020.”

 

 

 

Check out more than 50 job opportunities in Malaysia here.