The challenge is in identifying new growth drivers

MALAYSIA has had quite a fair share of international attention, with some negative undertones. When a country like ours wants to assert our international and independent views on topics such as capital control, much of which is principle-based, we risk inciting the wrath of a few.

What we are going through now is unprecedented, with the added element of a public health threat in addition to economic woes.

Malaysia has a stable currency backed by foreign reserves amounting to over eight months of retained imports, and we have had trade surpluses for many years. Theoretically, we can easily pay for our imports for eight months.

Malaysia also does not experience a twin deficit, unlike many developed economies.

A recent international view proposing that Malaysia is a failed state amid the rising Covid19 cases and a depressed internal economy is misplaced.

Which country is not facing these two challenges at the same time, at this very moment?

On the matter of curbing the spread of the Covid-19 infection, we are now able to vaccinate more than 400,000 people daily, which will enable us to reach herd immunity earlier than predicted.

If the international community had been more dynamic and coordinated in addressing this calamity, and if Malaysia had invested earlier in medicine, pharmaceutical and vaccine-related ventures, including in reseach and development, we could have done much better by now.

Perhaps Covid-19 will make us reflect on the importance of investing in biomedicine and biotech-related industries in the immediate future, however challenging it may be.

Our Institute for Medical Research has already started studying vaccines last year.

As a nation, one institution in the country must be identified and tasked with examining these matters and investing in these activities as a form of public good.

The social return may be higher, and private return should never be the criterion for evaluation.

Despite the trials and threats that we, as a nation, have faced, all our international and domestic commitments have been fully met.

We have been able to service our international and domestic debts at all times. Failed states could not have done this.

All of our commitments to the United Nations have also been delivered, including having our forces sent to war-torn zones,

This is not to mention our financial commitment to the International Monetary Fund and the World Bank.

At home, the federal government’s constitutional responsibilities to the component states and the local authorities have been discharged, and never a day late.

The government was also able to provide ample health and education subsidies to the poor and low-income households, in addition to incentives for industries in the form of tax holidays.

Of course, subsidies can be distortive in resource allocation, and need to be corrected to improve efficiency.

Certainly, these are not the attributes of a failed state nor a failed government. Thus, saying that Malaysia is a failed state appears grossly inaccurate.

The government has been able to pay salaries and pensions to public servants and pensioners, meet its debt obligations as prescribed in its annual budgetary responsibility and commitments, as well as “locked-in” expenditures which are legally and morally obligatory on the incumbent government.

The country is also accommodating a large number of foreign workers, in particular from Indonesia and the Philippines.

While they contribute to output, they also put pressure on social services such as health, education and housing.

They also remit home their incomes, and a sizeable amount is recorded as deficit in the balance of payments.

We could have achieved much better if we exercised greater integrity, accountability, and good economic and corporate governance to reduce leakages, corruption, and wastages.

That said, we must equally emphasise that all efforts will be made to ensure that the economy grows on a sustainable basis after this pandemic, and that social development will be accelerated on the basis of social inclusion and shared prosperity.

The economics of many industries, enterprises and the attendant supply chain will have changed post-pandemic.

As such, the need to identify new growth drivers is here and now, and it is a worthwhile exercise. Malaysia has to progress.