Should Malaysia restructure its economy now, starting with the 12MP?

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Malaysia Should Pursue Economic Restructuring Beginning with the 12th Malaysia Plan

Malaysia should initiate economic restructuring, commencing with the 12th Malaysia Plan (12MP), to facilitate a transition from a low-level economy reliant on low production costs and foreign labour to a middle and higher economic tier. This strategic shift is particularly pertinent given the current public concern regarding the nation's economic trajectory.
Transitioning to Higher Economic Tiers

The current Malaysian economy is largely dependent on low production costs and a significant reliance on foreign labour. Economic restructuring is proposed as a mechanism to elevate the population into middle and higher economic levels. This involves enhancing the economic value chain by improving local production, fostering research and development, and cultivating local talent, mirroring the nation's success in attracting established companies.
Timing of Economic Restructuring

The imperative for economic restructuring is amplified by the present climate of public concern over the nation's economic performance. Implementing these changes now, when public attention is focused on economic matters, could lend greater momentum and support to the necessary reforms.
Budgetary Focus and Targeted Subsidies

Beyond the broader economic plan, the upcoming Budget 2023 should seriously consider the implementation of targeted subsidies. This approach would allow for more effective allocation of government funds, currently estimated between RM60 billion and RM80 billion annually on subsidies, towards initiatives that genuinely support the country's growth.
Economic Outlook and Inflationary Pressures

The weakening ringgit, influenced by rising interest rates from the US Federal Reserve, presents a potential concern for imported inflation in the coming year. Given Malaysia's significant reliance on food imports, which constitute over 50 per cent of the food supply chain, food security is anticipated to become a pressing issue. Consequently, economic growth is projected to decelerate to below 5.0 per cent for 2023, a moderation from the current year's improvement, though still considered positive growth relative to potential negative growth in other nations.

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Should Malaysia restructure its economy now, starting with the 12MP?

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