Malaysia must be strategic in acquiring and developing technology to be developed nations
13 Aug 2024
Malaysia needs to strategically acquire and develop its own technology to be counted among developed nations, said Deputy Investment, Trade and Industry Minister (Miti) Liew Chin Tong.
The deputy minister said that while foreign direct investment (FDI) is necessary, it is not an end in itself, and Malaysia needs to be strategic in its approach.
“Malaysia thinks that FDI is almost everything, and I think that mindset has to change,” he said.
He said in the Madani Economic Framework, Prime Minister Datuk Seri Anwar Ibrahim highlighted that for over 20 years, investment has constituted only about 20% of the gross domestic product (GDP).
“In contrast, during the early days of economic growth, it constituted around 40% of GDP. At one point in 1997, it rose to about 45%.
“While there were instances of overheating, the key takeaway is that investment is crucial and foreign investment is necessary, but we need to be strategic in our approach,” he said.
Liew said this in his keynote address at the National Consultation on Green Industrialisation in Malaysia: Integrated Policy Strategies for a Sustainable Future meeting organised by the United Nations Trade and Development (Unctad) intergovernmental organisation and Khazanah Research Institute (KRI) here on Tuesday.
He stressed that industrialisation cannot be just about exports; instead, it has to have some form of mission to solve societal problems.
“The New Industrial Master Plan 2030 [NIMP 2030] lists down four missions namely advance economic complexity; tech up for a digitally vibrant nation; push for Net Zero; safeguard economic security and inclusivity, which are all key to transforming Malaysia’s industry into one that is of high productivity, high skill, and most importantly, high wage,” he said.
Liew highlighted a comparison made by Seoul National University professor of economics, Prof Keun Lee, on the semiconductor sectors in Taiwan, Shenzhen and Penang, where the sector in Penang is still mainly driven by foreign firms.
“In comparison, the sectors in Taiwan and Shenzhen have acquired much more technologies and innovations,” he said.
Meanwhile, Liew said he is glad to see government-linked investment companies (GLICs) paying more attention to the semiconductor industry in Malaysia.
“The semiconductor industry used to be treated as a private-driven investment. Now, the industry has been thrust into the spotlight amid the current geopolitical fight between China and the United States due to the growing necessity of having access to advanced chips to power everything from smartphones to electric vehicles.
“Clearly, the ability to think critically about the way to position and accelerate advancements in semiconductors will have significant implications for trade, investment and geopolitics in the years to come,” he said.
Liew said that it is also crucial to develop horizontal industrial linkages within Malaysia.
“For example, the mature semiconductor industry in Malaysia should form a basis for developing the automotive industry, including electric vehicles (EVs) and agritech,” he said.
Liew added that Malaysia is at the brink of a second economic takeoff built upon the development of a high productivity, high skills, and high wage model.
Recently, the Ministry of Finance announced that six GLICS, Khazanah being one of them, have pledged to invest RM120 billion in domestic direct investments (DDI) over the next five years in high-growth, high-value industries, including the energy transition sector and advanced manufacturing, particularly in semiconductors.
Source: Bernama
