Malaysia’s commitment to implementing structural reforms to enhance Malaysia’s global competitiveness are crucial for positioning Malaysia favourably against other nations also striving to bolster growth potential, reduce fiscal deficits and improve resource efficiencies.
Finance Minister II Datuk Seri Amir Hamzah Azizan said these reforms are already underway, focusing on capitalising on new growth opportunities, fostering long-term development and fortifying resilience against future economic shocks while embracing emerging opportunities.
Among the key areas of reform are fiscal resilience, labour market strengthening, quality investment promotion, climate resilience, and good governance.
Key legislative measures such as the Public Finance and Fiscal Responsibility Act (FRA) and the Medium-Term Fiscal Framework (MTFF) were noted as pivotal for broadening and diversifying Malaysia’s revenue base, Amir Hamzah said in his keynote address at Bank Negara Malaysia’s Sasana Symposium in Kuala Lumpur today.
He added the Progressive Wage Model was highlighted as a crucial step towards promoting equal and inclusive opportunities for all Malaysians, aimed at elevating income levels and enhancing productivity across the board.
Acknowledging the complexity of these reforms, Amir Hamzah reiterated the government’s full commitment to collaborating with all stakeholders to ensure their successful implementation.
“The financial sector fraternity could play a pivotal role in this journey by harnessing their expertise, resources and influence to chart a more resilient, inclusive, and sustainable economic future for Malaysia,” he said, adding, “Only by working together, can we make structural reforms a reality.”
“First, to raise the floor by creating more fiscal space and making the economic pie bigger for higher participation. Second, to raise the ceiling by enhancing social protection, and third, to establish good governance,” he said.
Meanwhile, he said, the economy is expected to grow by between 4 and 5 per cent this year, supported by export recovery and resilient domestic demand. Trade recovery will be underpinned by the global technology upcycle and further recovery in tourism activity.
“Household spending will be underpinned by improving income and employment. Investment activity will be driven by further progress of multi-year investment projects by both the public and private sectors,” he said.
He added the implementation of catalytic initiatives under various master plans, such as the National Energy Transition Roadmap, New Industrial Master Plan 2030 and the 12th Malaysia Plan will further boost investment.
Amir Hamzah said the government is committed to delivering meaningful structural reforms as it is necessary to build a more prosperous and inclusive Malaysia.
Bank Negara Malaysia Governor Abdul Rasheed Ghaffour, in his address at the event, said: “The case for reforms is very clear. Our economic environment is constantly changing, and as we spot risks and weaknesses, our policies must evolve to match. Reforms, from fiscal responsibility to improved social safety nets and enhanced climate resilience, are crucial to our country’s sustainable growth, and to the welfare of the rakyat.
He said, drawing on lessons learnt over the years and emerging challenges, policymakers now have a clearer view of the path towards a more competitive and inclusive Malaysia.
The current period of relative macroeconomic stability provides us with a unique window of opportunity to pursue meaningful reforms and build a brighter future. For instance, the shift from blanket subsidies, including for diesel, towards support that is better targeted to those in need should be welcomed as a positive step towards more equitable, sustainable policies while building fiscal policy space.
“We cannot, nor should we, assume that this window will not soon close upon us. We need to come together to make reforms a reality for Malaysia,” he added.
But as Malaysia implements the critical reforms needed, Abdul Rasheed raised the areas for the participants to consider;
First, how can we make the best of emerging global trends, harnessing them for the benefit of Malaysia?
Second, how do we ensure that the necessary reforms yield sustainable, long-term gains while still addressing short-term issues? and;
Third, how can we build and promote more sustainable, socially conscious and fair finance for households and businesses?
