Malaysia’s economic growth model is on the brink of collapse

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From Shankaran Nambiar

Malaysia’s handling of the Covid-19 crisis and the resulting lockdown has come under severe criticism.

Adding to the injury is a crisis of political leadership, with frequent claims by opposition politicians that the current government does not command a parliamentary majority.

Still, a more critical and enduring salvo has come from foreign investors. More specifically, from the Japanese, Dutch and German trade associations that represent them.

The Japanese Chamber of Trade and Industry Malaysia, the Japan External Trade Organization, the Malaysian-German Chamber of Commerce and Industry, and the Malaysian Dutch Business Council have each written scathing letters to the Malaysian Prime Minister Muhyiddin Yassin pointing out flaws in his government’s Covid containment strategy, as well as its implementation.

These trade associations have a long list of complaints that focus mainly on poorly designed movement control orders, a lack of understanding of the needs of industry and inadequate implementation.

The bottom line is that their members, and the billions of dollars worth of business investment they represent, may want to move out of Malaysia.

This hits at the heart of the Malaysian development model, a model that depends on foreign direct investment.


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