Wan Saiful Wan Jan, the CEO of the Malaysian Institute for Democracy and Economic Affairs (IDEAS) talks about Malaysia’s economic opportunities and challenges
Interview by Joana Maria Tacken
How can Malaysia compete with Indonesia in promoting and selling Islamic goods and services?
If we take Islamic banking and finance as an example, Malaysia plays a leading role globally in this field. Kuala Lumpur dominates the Islamic sukuk market with a share of 63%, and it remains at the forefront of Islamic financial services. There is a clear lead here and I think Indonesia can serve as an important future market for Malaysia, especially because of the size of its population. Of course Islamic goods and services are much wider than simply the banking and finance industry. Malaysia can do well if we are consistent in liberalising our economy, attracting foreign investors, and doing more to become a regional economic powerhouse.
Which industries will be Malaysia’s main engines of development in the years ahead?
This is impossible to predict. The Malaysian government has chosen 12 national key economic areas, ranging from the oil and gas industry to agriculture. I’m rather sceptical about the ability of central planners to predict the future, however I’m keen to see how the 12 industries selected by the government progress. Personally, I would prefer that the industries were allowed to grow organically rather than having the government pick and choose.
Is Malaysia prepared to join the AEC at the end of 2015 and will the country benefit from joining it?
Certainly the AEC will benefit Malaysia if we are willing to fully utilise it and if we can make the necessary reforms to open up our economy. We should look at this question from the perspectives of consumers and companies. Malaysian consumers can expect to benefit from the AEC. By 2015, customs duties for 97.3% of goods in the region will be duty free. The reduction of barriers to trade and the freeing up of markets will see higher-quality goods become available at cheaper prices. This is good for consumers. Companies will also benefit from the AEC because they will have access to a wider market and bigger talent pool for their manpower. But frankly, more needs to be done to raise people’s awareness and interest in the AEC.
Malaysia is negotiating to be part of the Trans-Pacific Partnership (TPP). Are there any stumbling blocks and do you think Malaysia stands to benefit from the partnership?
The TPP will give Malaysia access to bigger markets, but to me that is of secondary importance. I think the transformational potential of the TPP is much more important for the country, as it will provide a very firm nudge towards making our economy more liberalised and rules-based. The major stumbling blocks are in the areas of state-owned enterprises and government procurement. The government is finding it difficult to comply with international standards in these two areas, so the TPP is a test of how committed the government is to reform the structure of our economy.https://southeastasiaglobe.com/wp-admin/post.php?post=13836&action=edit&message=1