The Business Year

Anwar Ibrahim

MALAYSIA - Economy

Strong Fundamentals

Member of Parliament & Leader, Pakatan Harapan Coalition


Anwar Ibrahim is the president of the People’s Justice Party (PKR) and leader of the governing Pakatan Harapan coalition. Between 1983 and 1998, he held various ministerial positions, serving as Deputy Prime Minister from 1993 to 1998. After being jailed from 1999 to 2004, he returned to the political stage in 2008, leading the opposition against former Prime Minister Najib Razak until being jailed once again in 2015. He was released and granted a royal pardon days after the 2018 General Election and in October 2018 he won the Port Dickson by-election and returned to Parliament. He is expected to take over as Malaysia’s eighth Prime Minister in 2020.

The key to unlocking Malaysia's true potential is introducing structural and institutional reforms across the board to eventually make the country more competitive.

You have been advocating for “democratic accountability.” What institutional reforms are necessary for Malaysia to mature as a democracy?

Under Tun Mahathir, we are seeing a beginning of the reform of the judicial process, although it will take some time for all new judicial reforms to take place. While that process unfolds, judges have been asked to ensure that they adjudicate based on facts and law, and not on bribery or political influence, whatever may have happened in the past. For other institutions, such as the Anti-Corruption Commission and law enforcement agencies, we have given a clear signal that the bodies must operate professionally, effectively, and without political interference. There must be greater parliamentary oversight across the board as a check and balance on executive power. We must have a free media that can shine light on the excesses of business and government. I would also add that a critical aspect of the transition is adopting economic policies that are pro-growth and market based, while at the same time considering the welfare of the poor and marginalized who have been largely ignored. We would not be able to sustain progress toward a vibrant democracy if the country leaves the poor and marginalized behind in terms of education and distributive justice.

How should Malaysia deal with rising youth unemployment?

As a trading nation, Malaysia must attract high-value foreign investment. We must identify the obstacles companies face and develop a competitive and compelling argument for them to bring businesses into our country, particularly in the area of robotics, AI, and high-end technology. Regaining investor confidence requires the government to establish a clear, long-term policy agenda, deliver on the reforms that have been promised, and make investments in the country’s education, infrastructure, and regulatory environment. At the same time, our graduates face a skills gap when it comes to filling positions. We need to redouble efforts to train the workforce of the future and ensure that the graduates that are coming into the workforce have what it takes to be competitive in a global economy.

What main challenges and opportunities do you foresee for Malaysian manufacturers around the move toward Industry 4.0?

Malaysia was a trailblazer in technology adoption, particularly with Malaysia’s Multimedia Super Corridor (MSC), in the late 1990s. It is imperative that we accelerate the process and focus on promoting R&D and skills development. There are many in the SME sector who are hesitant to move into Industry 4.0, fearful of the costs they may incur and not yet convinced of the value. The government can play a role in increasing awareness and supporting the investment in capital and human resources necessary for companies to excel. We have to acknowledge that our economy can no longer be labor intensive. We should focus on high-end technology because we have the resources, and invest in skills training and development outside of the university system to ensure that all workers have an opportunity to participate in this new wave of innovation.

How should Malaysia regain investor confidence and make Malaysia attractive for FDI?

Malaysia’s fundamentals are strong, and we cannot deny that as far as ease of doing business is concerned we are competitive within ASEAN. The new government’s policies vis-í -vis corruption and transparency have sent a strong signal and our ranking has improved. Eliminating corrupt practices and shady deals will bring costs down for all parties. Furthermore, we can establish administrative bodies such as a Malaysian Arbitration Center to expedite the process of dispute resolution. Many of the problems foreign investors confront in Malaysia can be addressed with efficient administration, and I believe we must do everything we can to respond to their requests. We also need to make rapid improvements to our workforce to ensure workers can fill the jobs of the 21st century.



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