KUALA LUMPUR: Malaysia needs to relook at balancing its economy through new sectors that can increase foreign direct investments (FDIs), provide jobs, boost sustainability and improve productivity, says Economic Affairs Minister Datuk Seri Mohamed Azmin Ali.
He said there is also a need to revisit the electrical and electronics (E&E) sector which is facing a decline in exports compared to commodities.
“We do not need short-term capital inflows that will encourage the stock market but they are not sustainable.
“What we need is new long-term FDIs that are sustainable for the country, and high technology is the way forward,” he told reporters after delivering his keynote address at the Khazanah Megatrends Forum 2018 themed ‘On Balance: Recalibrating Markets, Firms, Society and People’ here today.
Earlier in his speech, he said the E&E sector went from a peak share of 60 per cent of total exports in the early 2000s to about 40 per cent as of 2017 while commodities rose from about 13 per cent of exports to about 20 per cent in 2017.
He also said that Malaysia holds the position that real economic growth must also mean enhancement of the purchasing power of the people.
Hence, growth in terms of gross domestic product (GDP) alone cannot be considered successful unless translated into real benefits for the people, he stressed.
“We must address the disparity of growth across the states and income inequities, particularly the Bottom 40 (B40) income group, high youth unemployment and the rising cost of living,” he said.
Mohamed Azmin added the government remains firm that it must continue to grow and break out of the middle-income trap in order to become an advanced high-income economy.
“Malaysia remains stuck in the middle-income trap as we have not yet been able to transition towards becoming a high-income nation.
“Indeed, as of 2017, GDP per capita as measured in terms of nominal US dollars has fallen to 9,944 from a peak of 11,183 in 2014,” he said. – Bernama