MALAYSIA STUDIES PROGRAMME
Malaysia in Transition Seminar Series
Wednesday, 12 December 2018 – The results of Malaysia’s 14th General Elections held in May this year were unexpected and transformative. As the new administration continues to try and deliver its campaign promises, it is now more important than ever to be mindful of the economic challenges that lie ahead. In order to shed light on some of these key problems facing the Mahathir government, the Malaysia Studies Programme at ISEAS organised a seminar featuring Dr Jayant Menon, Lead Economist at the Asian Development Bank.
Following the introductory remarks by Dr Cassey Lee, Senior Fellow at ISEAS, Dr Menon began his presentation by talking about premature deindustrialisation in Malaysia. Based on recent statistics, he mentioned that while the primary sector appears to be stabilising, the GDP share of the country’s manufacturing sector has been continuously falling. On investment slowdown, Dr Menon commented that, in Malaysia, neither private investment nor foreign direct investment (FDI) ever fully recovered from the Asian Financial Crisis (AFC). As a result, continued efforts need to be made to revive them.
Another hurdle facing the economy is youth unemployment. In Malaysia, youth unemployment is three times the global average – at more than 10%. The mismatch in the skills offered by young graduates and those sought after by employers can be attributed to the country’s education system, Dr Menon added. With regard to inequality, he said that Malaysia has been witnessing growing wage and wealth inequality; both leading to increase in social marginalisation and exclusion. Unless such disparities are addressed, political stability will be at risk.
Drawing the audience’s attention to the main reforms needed to overcome the abovementioned issues, Dr Menon emphasised the importance of good governance and institutional reform. In addition, he recommended that inefficiently run or loss-making GLCs that crowd out private enterprise in a sector with no public or social function should be reviewed. On a broader level, patronage politics should end, making way for meritocracy across all levels of the government.
The seminar was 90 minutes long, and was attended by an audience of 65 people, including research scholars, students, members of the media and the public. Dr Menon also answered their questions on an array of topics, including: the state of civil services in the country; the business relations between Singapore and Malaysia; the growing volatility of the ringgit; and the future direction of GLCs.