MALAYSIA’S ECONOMIC

JOURNEY
1 NEW AND IMPORTANT
CHALLENGES
2 MALAYSIA’S ECONOMIC
VISION
3 NAVIGATING OUR DESIRED
PATH
4 5 RAISING THE CEILING
6
Our economy has made significant Despite our progress, Malaysia We need to leverage on our inherent Mission, Execution and Targets Rebuilding the Malaysian Home by regionalising our businesses, transforming our
progress since Independence still faces multiple challenges strengths and create new opportunities economy and increasing national competitiveness
1 Mission
Unique and deep-rooted strengths...
1 A Regional (ASEAN) Agenda 5 Strengthening Firms of All Sizes and Maturity
Malaysia has developed and Malaysians have 1 Deterioration in governance 2 Economy becoming more We will drive the following directional changes in our Mission
1 benefited from that development
domestically-driven
Malaysia has a small open economy. Hence, Regional Economic
Integration is key to create globally competitive firms
Support firms to spur innovation and competition
Corruption Perception Index Ranking Trade as a % of GDP
Our People Our Geography Our Industry
1998 2022 2000 2022 Diverse + Determined Centre of Asia Strong industry base Economic Fiscal Competitiveness and Improve Harness local talents Promote export Rejuvenate
CAGR 1960 - 1980: 1980 - 1998: 1998 - Today: 29 61 220% 141% (e.g. E&E and palm oil) growth sustainability regionalisation innovation and and attract talents to orientation for capital markets to
7.4% 6.4% 4.7% ...with an opportune timing to capitalise on Pursue trade diplomacy and
strategic arrangements
Facilitate movement of goods,
capital, people and knowledge
Support regional expansion of
Malaysian firms
venture
ecosystem
Malaysia MSMEs spur firm
transformation

3 Low labour share of income 4 Low median and mean wages

Boosting and Harnessing Economic Complexity
2022 2021 Inclusive Strengthening good Decent jobs & Equality of 2 to Reverse Premature Deindustrialisation 6 Micro / Local Businesses and the Informal Sector
Key Window of opportunity A Government committed growth governance fair wages opportunities
highlights Only 32.4% to leverage on Asian to work with the Rakyat to Significant number of Budget 2023 contains over 70 initiatives for micro and
= of income
accrues to
RM 2,250 RM 3,037 Renaissance rebuild Malaysia MSMEs with growth
potential
small businesses which focused mainly on financing, but
more must be done
• Commodity- • Formation of • Export-oriented • Rapid Share of labour MEDIAN MEAN
A key Government initiative will be the implementation of the
compensation in workers New Industrial Master Plan (NIMP)
based economy Petronas manufacturing diversification into wages wages
GDP Government Firms
• Transition from
agriculture,
• The advent of
FDI-based
economy
• ≥9% growth
services, leading
to premature 2 Execution Bumiputera vendor
development
planting the manufacturing every year deindustrialisation 79%
seeds of between 1988 5 Low female labour force 6 Accelerated accumulation Malaysia’s MSME Digital marketplace
participation rate of national debt Advance economic Shift focus from sectors to Domestic Direct Investment Inisiatif Pendapatan for MSMEs
Malaysia’s and 1996 complexity national missions (DDI) as a key KPI landscape consists of Rakyat to nurture
micro-enterprises (e.g,
industrialisation
Asian Financial
2021 Expenditure We need a new …with collective …to build a kedai runcit, hawker, etc.)
MSMEs Increased access to
financing
Crisis economic effort and better and
VS Public Sector Reform: All-of-Malaysia approach:
(AFC) vision… respect for sustainable Strengthen and expedite delivery of The success of Ekonomi MADANI:
55.5% 80.9% Revenue More than
60% of GDP
differing views... Malaysia MADANI priorities, through stronger
project monitoring and
Memperkasa Rakyat is incumbent on
the united effort of all parties - Rakyat,
3 Globally Competitive Investment Destination 7 Green Growth to Promote Climate Resilience
implementation Government & Industry Key Government initiatives include the implementation of the
Position Malaysia as a regional hub and promote the expansion of
Malaysian firms National Energy Policy and the National Energy Transition Roadmap
1957 1960 1970 1980 1998 Today 7 Decline in investments 8 Falling competitive edge Key pillars under the National Energy Transition Roadmap
as a % of GDP globally
Note: CAGR - Compounded Annual Growth Rate
IMD World Competitiveness Ranking 3 What We Aim to Achieve
Pre-1998 Post-1998
EKONOMI MADANI : MEMPERKASA RAKYAT Increase renewable Develop renewable Install solar panels Promote new green
Building a Better Malaysia Together Strengthen investment Revise incentives to Upgrade infrastructure and Reasserting leadership energy generation energy based on a on Government growth areas such as EV,
1997 2023
40% 20-25% promotion promote quality upskill human capital to in Islamic Finance capacity self-contained buildings hydrogen, CCUS
14 27 Raise the Ceiling
Leading Asian Economy To succeed requires
Raise the Floor investments meet investor needs innovation system
Quality & Just Life for All
an all-of-Malaysia approach
Post-AFC, there was a major change in • Competitive & World Class (Rakyat, Government & • Respectable Jobs & Decent Top 30 largest Top 12 in Top 25 on Increase labour Food Security - Ensuring Continuity of Supply for
Malaysia’s growth trajectory… Investment Destination Industry) Standard of Living economy global the Human share of income to 4 Digitalisation 8 Critical Items
competitiveness Development Index 45%
9 Persistent and unequally distributed poverty • Digital & Innovation-led Industry In the spirit of unity • Equality & Inclusive Opportunities
Global food supply chain is Hence, we must bolster our food security
•Malaysia lacked new growth engines • Global Leader in Islamic • Universal Access to Quality
Enhancing digital adoption across State, Firms and Society at risk due to… nationally via a combination of three methods:
Finance Good governance Education & Healthcare Services
•We saw greater divergence between 2019 • MSMEs as Regional Champions
(rooting out corruption)
• World-Class Basic Infrastructure
Geopolitical
Over 400,000 Tensions
household income and economic growth • Security & Sustainability of Agile & collaborative & Public Services
Several states with households
public delivery system • Social Protection for All
•Malaysia is caught in a vicious cycle of low cost, double-digit poverty living in poverty Economy Climate Change
Employ Establish win-win Optimise
low wage, low profits, leading to a loss of levels Improve Malaysia’s Towards fiscal Increase Female Labour Promote digital adoption by Digital ID to accelerate digital 5G dual-network rollout,
industry-led to drive … thereby causing food agro-technology free trade unutilised land
competitiveness Ma la ysia Anchored on MADANI Va lues position in the Corruption sustainability, targeting Force Participation companies through matching applications
enterprise solutions prices to increase to increase local arrangements
[ Sustainability, Care & Compassion, Respect, Innovation, Prosperity & Trust] Perception Index to Top 25 deficit of 3%, or better Rate to 60% grants productivity
significantly
Ensuring ethical underpinnings in pursuit of progress, institutional reform and societal cohesion

• Malaysia has achieved remarkable economic growth in its history, and
Malaysians have benefited from that development.
• This goes beyond just GDP numbers, but also other important measures of
development such as reduction in infant mortality, increase in life
expectancy, increase in literacy and schooling, and structural transformation
from agriculture to manufacturing to services.
• However, post Asian Financial Crisis in 1998, our growth trajectory declined,
and continues to decline, leading to a stagnant development path.
• Despite our progress, many challenges remain. We face stagnating growth,
decline in investments, a loss in international presence, inequality and
poverty, among others.
• We cannot continue on this downward trajectory - not only do we have to do
things better, but we also have to do better things. What worked in our past
may no longer work today.
• We have to do things differently. We have to do difficult things. We need a
new economic vision.
• Ekonomi MADANI: Memperkasa Rakyat provides a framework for us to build
a better Malaysia for us and our children.
• This includes to 'Raise the Ceiling' in terms of restructuring the economy in
order to grow the wealth of the nation. At the same time, to 'Raise the Floor',
social justice will be championed to ensure that the enlarged wealth is
benefitted equitably by the Rakyat.
• These strategies will be built on the MADANI values as a foundation and
requires an all-of-Malaysia approach to succeed. The Rakyat, Government &
Industry will need to work together embracing a spirit of unity, practising good
governance and facilitated by an agile and collaborative public delivery
system.
• To achieve the vision of building a Better Malaysia, our Mission requires a
focus on - economic growth, fiscal sustainability, competitiveness and
regionalisation, good governance, inclusive growth, quality jobs with higher
wages, and equality of opportunities.
• Success requires an all-of-Malaysia approach bringing together Rakyat,
Government and Industry, supported by Public Sector Reforms focused on
speed and effectiveness of delivery and implementation, with enhanced
program monitoring.
• Ekonomi MADANI encapsulates ambitious targets in the medium term across
different aspects anchored on global benchmarks for the economy and
competitiveness, quality of life, labour inclusiveness, corruption and fiscal
sustainability.
• ‘Raising the Ceiling’ aims to restructure and elevate the Malaysian economy,
through a focus on greater regionalisation and competitiveness, prioritising
economic complexity and moving up the value chain.
• Strong rates of growth are crucial for the economy, particularly to promote
inclusiveness and greater financial sustainability. Expanding the Malaysian
economy requires expanding firms' available markets through greater
integration with the ASEAN, India and China markets.
• Our message to the world is that Malaysia is open for business and the
Government will focus on ensuring competitiveness and ease of doing business
for both FDI and DDI. A holistic digitalisation agenda is required to upgrade
domestic firms in addition to enhancing the public service delivery system.
• National economic strategies must cascade to firms of all sizes and maturity.
The Government will support the transformation of local MSMEs, in embracing
innovation and focusing on exports. Support for micro enterprises will
concentrate on providing access to financing and supporting digitalisation.
• Promoting green growth will strengthen climate resilience and open new
business and employment opportunities. The National Energy Transition
Roadmap will spur a greater shift towards renewable energy generation and drive
new growth areas, namely EV and CCUS, with new incentives and policies.
• Enhancing food security will focus on optimising on existing land, by improving
productivity through adoption of agro-technology in addition to diversifying
sources of supply for critical food items.