By: Datuk Dr Pamela Yong
The Institute of Strategic Analysis and Policy Research lauds Malaysia-China as strong trade partners with the potential of bringing in investments totalling RM13.2 billion.
While commending on the administration for facilitating these agreements, which highlight the importance of the multilateral trade system and the mutual interdependence between Malaysia and China, the institute sayd not many Malaysians may share the same level of enthusiasm about these achievements. INSAP says this is not a reflection of the insignificance of China but rather a result of the challenging domestic issues that Malaysians are currently facing. Despite the promising headlines from these agreements, many ordinary Malaysians continue to grapple with significant economic challenges, particularly the rising cost of living.
The institute points to evidence from the ground, such as a survey by the UCSI Poll Research Centre earlier this year, which indicated that close to 90% of Malaysians are deeply troubled by the current uptrend in living costs. Essentials such as food and healthcare have seen worrying price hikes, significantly impacting the purchasing power of Malaysians. Factors such as the rationalisation of fuel subsidies, the expansion of tax structures, and surges in utility tariffs have further eroded this purchasing power.
INSAP said recognises the necessity of alleviating fiscal pressure and stimulating economic growth, but current policies often appear to prioritise enhancing economic indicators over the well-being of the rakyat. The institute suggests that a phased and targeted implementation approach, rather than a one-size-fits-all strategy, would be more beneficial. For instance, reintroducing a comprehensive tax system like GST based on consumption could be more effective than introducing new taxes and increasing existing tax rates to cover SST shortcomings.
The administration’s approach should focus not only on presenting favourable statistics but also on ensuring that the rakyat truly benefits from economic growth. INSAP raises concerns about whether the administration is considering these issues or if optimistic projections and reassuring rhetoric will continue to obscure the harsh reality faced by many Malaysians, especially the younger generation.
International benchmarks underscore INSAP’s concerns. Malaysia’s PISA scores have seen a significant decline, the steepest in ASEAN, now placing the country below the OECD average in Mathematics, Science, and Reading Literacy. Moreover, the Madani economic framework’s ambition to enhance global competitiveness seems increasingly elusive, as reflected in a seven-spot drop in this year’s IMD rankings, putting Malaysia behind Indonesia and Thailand for the first time.
INSAP believes that strengthening domestic economic resilience is essential before looking across borders to secure a stable foundation for international partnerships and foreign investments. This should positively impact the lives of the rakyat, rather than just producing good statistics. Addressing immediate economic challenges with targeted and well-thought-out policies is key to ensuring that economic growth translates into tangible benefits for all Malaysians. This focus is crucial for fostering both domestic and international economic success.
The author is the chairman of the Institute Of Strategic Analysis and Policy Research (INSAP)
