Anwar’s reform to attract investment to high-value sectors has significant impact on Malaysia and Asia – Forbes

KUALA LUMPUR (July 10): Prime Minister Datuk Seri Anwar Ibrahim’s moves to attract high-value sectors such as semiconductor manufacturing and digital technology, speed up approval of foreign direct investment (FDI) and improve the ease of doing business are of significant importance to both Malaysia and the broader Asian region. Forbes the magazine reports.

High-value sectors such as semiconductor manufacturing and digital technology have attracted significant investment, it said.

“By focusing on high-growth, technology-intensive sectors, Malaysia aims to climb the global value chain and foster a more dynamic and competitive economy,” said Benjamin Laker in a commentary published by the magazine on its website.

He added that measures to improve the quality of investment focus on labour productivity through automation and increased spending on research and development.

“These initiatives are aimed at creating a more innovation-oriented economy — reducing reliance on low-skilled labor and increasing overall productivity. These reforms have significant implications for both Malaysia and the broader Asian region,” he wrote.

Laker also praised Anwar’s efforts to optimise costs, particularly the rationalisation of subsidies and management of civil service costs.

“The move by new civil servants to the Employees Provident Fund scheme – designed to reduce long-term pension costs – was a significant step. The move was intended to ease the financial burden on the government by shifting future pension liabilities to a more sustainable model.”

Moreover, the adoption of the Public Finance and Fiscal Responsibility Act institutionalized prudent financial management, setting targets for a fiscal deficit of 3% and a debt-to-gross domestic product ratio of 60%.

The purpose of this framework, he said, is to ensure that Malaysia’s fiscal policy remains sustainable in the long term, creating a stable economic environment conducive to growth.

Still, challenges remain, said Laker, who is professor of leadership at Henley Business School, University of Reading. He saw potential setbacks, for example in trying to refocus petrol subsidies and the high cost of living associated with other recent subsidy cuts.

He added that Malaysia’s story could set a precedent for other countries going through similar economic recovery and structural transformations after the pandemic.