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Malaysia among the most competitive nations in Southeast Asia

Malaysia’s on-going development has been the result of four economic forces: its ready access to natural resources, its strategic position as gateway to Asia, a long history of foreign investment, and effective human resource development. It has historically been able to capitalize on all four, growing 5.4% on average every year since the 1970s.

Such stellar and consistent growth has enabled the country to transform from a largely agrarian and commodity-based economy to a high-tech manufacturing and high-value services economy. And its vast network of Asian and world trade links continues to serve Malaysia well as the rest of Asia rebounds, with world-leading growth, from the challenges that the COVID-19 pandemic brought to global markets. Despite COVID-19’s economic wrecking ball, Malaysia is predicted to record 7.8% growth in 2021 – the fastest rate among the ASEAN-5 countries. Well-established inter-regional trade links are inherently responsible for much of these gains, and will see Malaysia stay the course in lock-step with Asia’s record growth.

If you’re a regional business looking to set up in Malaysia, then most of the world’s markets are within your reach: Malaysia trades with nearly 90% of the globe – far more than most of its neighbors. This, along with Malaysia’s focus on developing business centers of excellence, business-friendly regulatory and tax frameworks, and digitizing its economy, has propelled the country to be ranked 1st as best country to invest in.

An investment-friendly and pro-business environment is also attracting MNCs to set up shop in the country.

Greater KL, for instance, facilitated by InvestKL, is securing about RM2 billion a year, and more than 100 leading global companies have relocated there since 2011, setting up regional HQs, global business services, centers of excellence or shared service centers. These include many high-value Fortune 500 and Forbes 2000 companies such as GE, Allianz, Electrolux, Toshiba, AstraZeneca, Accenture, and Honeywell.

Its ability to continue to attract foreign investment will help ensure the longevity of Malaysia’s economic transformation: Malaysia has come a long way since independence in 1957 but its transformation is a work in progress and the best is yet to come. The World Bank, for instance, projects the country’s likely transition from its current upper-middle-income economy to a high-income economy between 2024 and 2028, opening up even more opportunities for the population and for companies looking to do business in Asia.

Through successive policy initiatives such as the Shared Prosperity Vision 2030, and the National Investment Aspiration (NIA), the government has ensured that Malaysia’s natural, historic, strategic advantage is met with a sustainable and inclusive economic development framework for continued growth and prosperity well into the future.

First published and written by Time Magazine, 2021
Edited by InvestKL, 2022