--- title: "Why Malaysia Economy is So Behind And What We Can Do About It" description: "Explore the three key challenges hindering Malaysia economy's growth - lack of FDI & DDI, untapped resources, and complacency." url: "https://www.mrmoneytv.com/articles/why-malaysia-economy-is-so-behind-and-what-we-can-do-about-it/" category: "Financial News" author: "Finlit" published: 2023-08-04 source: "Mr Money TV" --- # Why Malaysia Economy is So Behind And What We Can Do About It Explore the three key challenges hindering Malaysia economy's growth - lack of FDI & DDI, untapped resources, and complacency. ## Key takeaways - Mr Money TV, drawing on a talk with YB Liew Chin Tong (Deputy Minister of MITI), pins Malaysia's stalled economy on three problems: a shortage of foreign and domestic investment (FDI and DDI), untapped natural resources, and complacency. - Too few investable opportunities has left Malaysia with low wages, job mismatch where professionals take work below their qualifications, and a lacklustre business environment. - The fix for weak investment: offer resources at competitive prices to join global supply chains, improve infrastructure, streamline regulations for foreign investors, and market Malaysia as an investment-friendly destination. - Solar power is flagged as Malaysia's clearest underexploited resource, and the suggested nudge is supportive initiatives like the EV tax benefits that "push the agenda" toward renewable energy. - Settling into low-cost manufacturing has cost Malaysia an influx of unskilled foreign labour, a brain drain among locals, and a lack of investment in research and development. - Breaking the complacency means competing on higher wages, rigorous training, more R&D spending, entrepreneurship and startups, and policies that retain local talent. Recently, we got the chance to speak to YB Liew Chin Tong, Deputy Minister of MITI. In our discussion, we always came back to one thing: despite Malaysia’s abundant natural resources and strategic location, our economy has not flourished as we may expect it to. So, in this article, we delve into three major issues impeding Malaysia's progress and outline potential solutions to stimulate economic growth. ## Issue [#1](https://www.mrmoneytv.com/articles/hashtags/1): Shortage of FDI and DDI The first and foremost challenge is the **limited availability of investable opportunities** for both foreign and domestic investors. This scarcity has led to several problems like low wages, job mismatch (where professionals are forced to take up jobs below their qualifications), a lacklustre business environment, as well as slow economic development. ## The Solution: Active Participation in Global Supply Chains Malaysia needs to **offer resources at competitive prices** to attract foreign investors and become part of the larger global supply chains. Engaging in these supply chains can elevate living standards by creating high-quality jobs and promoting economic development. Steps to achieve this could involve: - Improving the **infrastructure** for businesses - Streamlining **regulations** for foreign investments - Marketing Malaysia as an **investment-friendly destination** ## Issue [#2](https://www.mrmoneytv.com/articles/hashtags/2): Untapped Potential in Natural Resources Malaysia is rich in natural resources, but our country has not fully harnessed this wealth. For instance, **renewable energy**, particularly solar power, remains an underexploited sector. ## The Solution: Introducing Supportive Initiatives One of the fastest ways to ensure we harness the potential of our natural resources is to provide initiatives and in a way, “push an agenda”. For example, recently, we’ve seen a lot of tax benefits to buying an EV. This “pushes the agenda” for Malaysians to be more eco-friendly and to turn towards renewable energy. ## Issue [#3](https://www.mrmoneytv.com/articles/hashtags/3): Complacency in Improving Malaysia Economy Despite its potential, we have settled into a comfort zone of **low-cost manufacturing**. This complacency has led to an influx of unskilled foreign labour, a brain drain among Malaysians, and a lack of investment in research and development. ## The Solution: Foster a Competitive Environment To break free from complacency, Malaysia needs to create an environment that inspires competition. By offering higher wages, rigorous training, and more opportunities, the country can stimulate economic growth. Key strategies might include: - Enhancing investment in **research and development** - Promoting **entrepreneurship and startups** - Implementing **policies** to retain local talent Currently, we see Malaysia taking steps to address these issues and we can only hope that it goes uphill from here. In our latest video, we talked about this issue in further detail. If you're interested, you can watch the video [here](https://youtu.be/IEAYS_UyO60). ## Frequently asked questions ### Why is Malaysia's economy so behind? Mr Money TV, drawing on a talk with YB Liew Chin Tong of MITI, points to three problems. First, too few investable opportunities for foreign and domestic investors, which drags down wages and jobs. Second, natural resources like solar power sit underexploited. Third, complacency: Malaysia has settled into low-cost manufacturing instead of pushing for higher wages, training and R&D. ### How can Malaysia attract more foreign investment? The article suggests offering resources at competitive prices so Malaysia can join global supply chains, which creates higher-quality jobs. Three practical steps back this up: improve the infrastructure businesses need, streamline regulations for foreign investment, and market Malaysia as an investment-friendly destination. Together these aim to draw in more foreign and domestic investors and lift living standards.