MALAYSIA remains optimistic about sustaining its growth momentum of between 4.5% and 5.5% next year despite concerns over the alleged protectionism policies of US President Donald J. Trump.
Second Finance Minister Senator Datuk Seri Amir Hamzah Azizan said the country's fiscal policy has a concept of “raising the ceiling” and “raising the floor” in a balanced Madani economic framework, which aims to ensure both growth and inclusivity.
"Our policies are to benefit stakeholders across the spectrum. The key here is to strike the right balance between creating a bigger economic cake, and protecting the rakyat while the pillars that support these two objectives are good governance," said the former Employees Provident Fund chief executive officer.
Trump in his campaign for re-election had continuously touched on increasing import tariffs and compelling US investors to reinvest in his theme of "America First," agenda.
Amir was addressing the Malaysia Market Outlook: Propelling Malaysia Forward conference at the Penang Marriott Hotel.
The conference was organised by Affin Bank Group here.
Its president and group executive officer Datuk Wan Razly Abdullah was present together with delegates from the finance sector.
The new fiscal framework in the country, which has elements of reforms and investment-friendly incentives, is now only about 15 months old but the country has witnessed an encouraging turnout in the economy, said Amir.
The ringgit has strengthened against the US Dollar and other currencies in the region, the approved investment for 2024 has shown a record number of RM330 billion, and the GDP has surpassed the estimation for the first half of 2024 at 5.1%.
"It is a testament that Malaysia is open for business."
The implementation of the new fiscal framework is supported by the rollout of strategies outlined in several policy documents, notably the Mid-Term Review of the Twelfth Malaysia Plan, 2021 – 2025, the National Energy Transition Roadmap (NETR) and the New Industrial Master Plan 2030 (NIMP).
Together, these policies form a cohesive action plan to boost Malaysia’s competitiveness and economic resilience to achieve sustainable and inclusive growth towards becoming a high-income nation, Amir told the audience.
"It is worth noting that these are the key factors that make Malaysia appealing to investors. We received encouraging responses from the investments as well as analysts abroad, particularly concerning our fiscal reform, Budget 2025, political stability, strong growth performance as well as national infrastructure and connectivity."
Budget 2025
Amir also touched on the Budget 2025, saying that it was aimed at transforming Malaysia into a competitive and world-class investment destination to drive sustainable economic growth.
By prioritising digital economy and innovation - led industries, the nation will be able to enhance productivity, foster technological advancement, and attract high-quality investments, he added.
Next year's growth engine is said to be supported by improved global trade and stronger demand for electronic and electric (E & E) goods, he said.
With Malaysia seen as strong in E&E, the country can leverage the country’s strategic position within the semiconductor supply chain, said Amir.
Focus is also given to strengthen the domestic direct investment (DDI) as per the Government-linked Enterprises Activation and Reform Programme (GEAR-uP) in which RM120 billion will be invested by government-linked investment companies (GLICs) and government-linked companies (GLCs) for five years.
The initiative will synergise efforts across government-linked entities to catalyse growth in high-growth sectors, encompassing energy transition, advanced manufacturing, food security, healthcare, Islamic finance and biopharmaceuticals.
Moving forward, Malaysian businesses should align their strategies with the economic Madani framework, such as:
• To invest in key sectors such as digital technology, green energy, and infrastructure and pursue value-added initiatives that deepen economic complexity, while supporting the Government's agenda for sustainable growth and innovation.
•To invest in job creation and talent development, by bridging private sector partnerships with educational institutions to develop industry-relevant programmes and prioritise investments in upskilling and reskilling to meet future industry demands.
• To support wage growth and inclusiveness, by aiming to provide wages above the minimum level to ensure dignified and sustainable living standards for employees, encouraging workforce diversity, including returning mothers, and supporting EPF contributions for foreign workers.
• To promote digital, sustainability, and green initiatives, by adopting Artificial Intelligence (AI), investing in technology and automation, renewable energy, and support the transition to green technologies.
"By playing our part, we can position Malaysia as a leading Asian Tiger, ensuring that both the country and rakyat benefit from a sustainable and prosperous economy," Amir said. - The Vibes, November 12, 2024.
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