MALAYSIA is a success story, even if the opposition wishes it were not so. An article in the The Australian titled “Malaysian Prime Minister (Datuk Seri) Najib Razak’s reforms drive growth” written by former Australian high commissioner to the country John Dauth speaks of a half century of economic achievements being continued under the Barisan Nasional government led by Najib. Writing that the transformation being carried out was contributing further to a nation that had grown by leaps and bounds and fast making the transition to high income development growth, it pointed out that living standards had been transformed with household income undergoing a 20-fold increase since 1970; a single example in a litany of achievements. Under Najib, one target, the B40 group of low-income households totalling some 40 per cent, had doubled its income by 50 per cent. Additionally, the introduction of the minimum wage had lifted 2.9 million out of poverty.
A basket of people-friendly policies, too, had cushioned the poor from the pressures caused by weak global economic sentiments. Indeed, only sound economic fundamentals could have accomplished this. That Malaysia is still holding up despite the weak commodity prices and a tumbling oil market (yet to recover), is witness to the adept economic management by the leadership in the face of unfounded, below the belt accusations complaining about the depreciating ringgit, a fait accompli shared by many other countries due to the strengthening US dollar. But, Malaysia, unlike many others, has the benefit of a business-friendly environment accompanied by political stability, and this has kept the economy, in the words of the International Monetary Fund (IMF) chief Christine Lagarde, “vibrant”. If at all, challenges ahead are due to external pressures, like the slowing growth in China, although, as the IMF chief reminds the interviewer from this newspaper, a 6.5 per cent growth is not to be dismissed.
China is Malaysia’s leading trading partner and special bilateral relations exist between the two countries. This will in all likelihood guarantee the former’s continuing position as the premier market for Malaysian exports. However, given the change in emphasis in China from an investment-driven growth to one propelled by consumption, to remain competitive, Malaysia must feed into its needs. Even in this respect, the country has progressed appropriately from an agriculture-based economy to one where manufacturing and service sectors account for 76.5 per cent of gross domestic product (GDP).
Ranked number 1 in Asean as the most promising emerging market nation by Bloomberg and sharing 5th place with Chile in the world, Malaysia’s flexible exchange rate, credible monetary policy and fiscal consolidation will hold it in good stead despite its open economy. Quoting the ambassador, “The Malaysian model combining social inclusivity and pro-market economic policies have delivered one of the most impressive growth record in southeast (sic) Asia, one of the most dynamic regions in the world”. And, that impressive record continues with the announcement yesterday of a 4.7 per cent GDP growth for the third quarter of 2015, external pressures notwithstanding.