by AFIQ AZIZ
MALAYSIANS would be able to break the middle income trap with the creation of home-grown multinational companies (MNCs) in exploring the global market.
Prime Minister Tan Sri Muhyiddin Yassin said it is pivotal for local entrepreneurs to embark into a global exporting player and grow their manufacturing capabilities to become successful MNCs players.
According to Muhyiddin, most countries in the globe grew rich by being innovative in producing higher value products which are attractive for the export market.
“Based on the Economic Complexity Index, even a one standard deviation increase can elevate Malaysia’s GDP (gross domestic product) growth by between 0.7% and 1.6% a year.”
“Hence, entrepreneurs with global ambitions will be critical to drive growth,” Muhyiddin said in his opening remarks at the virtual Youth Economic Forum 2021, themed “A Brave New World”, yesterday.
In 2019, Malaysia’s exports amounted to RM986.4 billion with a decline of 1.7% as compared to the year before – attributed to lower exports to Hong Kong which -RM8.3 billion, according to the statistics department.
Exports of small and medium enterprises (SMEs) registered a growth of 2.6% to RM176.3 billion as compared to 3.4% growth in 2018. The manufacturing sector grew 2% and contributed 48% of the total SME exports in 2019.
Citing how global giants Samsung and Hyundai which collectively drove 30% of the South Korea GDP at one point, Muhyiddin said Malaysia home-grown MNC is pivotal to stimulate the country’s economy.
Muhyiddin added that Malaysia needs to pursue a “moonshot” approach to create competitive domestic firms in frontier technologies.
“The start-ups you build today could and should be the next Amazon, Apple or Tesla,” he said.
The prime minister said Malaysians annual per-capita income has stalled at about USD10,000 for nearly a decade due to the stagnant productivity growth that has caused the country to be snared in the middle-income trap.
“In the decade before the Asean Financial Crisis (in 1997), Malaysia’s cumulative annual GDP growth was 8.4% annually, and this has fallen to 4.6% in the following two decades since then,” he said.