Because of the pandemic, Malaysia wasn’t able to entice foreign direct investment, unlike before.
According to former PM Tun Dr Mahathir Mohamad, they missed the opportunity to become the largest maker of rubber products globally. The country makes motor vehicle tires but can only provide a small number.
Malaysia’s GDP measures the value brought about by all resident units embarking on the productive activity before the reduction of provisions for fixed capital consumption. It’s compiled by expenditure and production method.
Malaysia Should Go Big by Emphasising Exports
The former PM wants Malaysia to venture into huge industries. At the same time, the country should reign in the market or corporations which majority locally owned.
“We also produce palm oil, but largely we export the oil raw. It is time that we add value to our palm oil exports. “It is not necessary that we go big only when we have the raw materials. We can import the raw materials or the parts and components and re-export them as finished products,” he said.
Dr Mohamad added that Malaysia used to be among the first to quickly become industrialised through FDI as foreigners didn’t manipulate the Malaysian economy because of its policy. Because of this, several other countries followed the same.
Additionally, he suggested that Malaysia should find other means to establish its economy since other countries now offer inexpensive labour and better incentives. Developing countries such as China, Korea, and Japan likewise promoted FDI but are less reliant on it.
The said nations have plenty of low-cost labour, resulting in cheaper products. It’s also capable of competing with pricey imports and international markets.
These countries go into industries monopolised by developed countries because they benefit from it. One of the advantages is a large domestic market where the countries manage their imports to protect their domestic industry.
A Slump in Malaysian Exports
Malaysian exports declined in February, from 110725.30 MYR Million in January down to 102271.70 MYR Million.
One of the most significant factors that drive Malaysia’s gross domestic product (GDP) growth in recent years is the influx of foreign direct investments. The nation’s main exports include electrical and electronics products (36%), chemicals (7.1%), petroleum products (7%), liquefied natural gas (8%), and palm oil (5.1%).
The country’s main export partners include Singapore (14%), China (13%), European Union (10%), Japan (9.5%), the United States (9.4%), and Thailand (6%).
Pineapple Export Saves the Day
The agriculture sector seems to have a promising future as pineapple exports displayed an upward drift from 2016 to 2020. China and the Middle East are the leading importers of MD2, N26, and Josapine pineapple varieties.
According to Minister of Agriculture and Food Industries Datuk Seri Ronald Kiandee, China is a high-potential export haven with a huge demand for supreme pineapples like the MD2.
“The pineapple cultivation area is concentrated in the south of Peninsular Malaysia while Sabah is the third major pineapple producer state and contributed to 6.1 per cent of pineapple cultivation acreage in Malaysia,” he said.
The minister said that in 2020, the areas for pineapple cultivation equalled 17,228 hectares, equivalent to 9.5% of the country’s total fruit cultivation areas.
Image Source: goosyphoto/Pixabay
