2020-03-01_Forbes_Asia

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MARCH 2020 FORBES ASIA

MALAYSIA’S 50 RICHEST

35. AZMAN HASHIM
    $410 MILLION
    AMMB HOLDINGS
    AGE: 80


36. MOHD ABDUL KARIM
    BIN ABDULLAH
    $405 MILLION
    SERBA DINAMIK HOLDINGS
    AGE: 54


37. ONG LEONG HUAT
    $365 MILLION
    OSK HOLDINGS
    AGE: 75


38. ABDUL KADIER SAHIB
    $360 MILLION
    SERBA DINAMIK HOLDINGS
    AGE: 71


39. LOH KIAN CHONG
    $355 MILLION
    ORIENTAL HOLDINGS
    AGE: 43


40. WONG THEAN SOON
    $340 MILLION
    MY E.G. SERVICES
    AGE: 48


41. TONY FERNANDES
    $335 MILLION
    AIRASIA
    AGE: 55


42. WEN CHIU CHI
    $325 MILLION
    SELANGOR PROPERTIES
    AGE: 63

CHANGE IN WEALTH KEY:

UP DOWN UNCHANGED

NEW TO THE LIST RETURNEE

cation to 41% from 8%, according to World

Bank data. However, educational quality is

more nuanced and uneven. According to

the OECD’s latest Program for Internation-

al Student Assessment, Malaysian students

of equivalent education levels perform only

about 85% as well as their OECD peers in

reading, 88% in math and 84% in science.

They score even lower relative to students

from urban China and Singapore, which

rank first and second, respectively.

OECD research found that Malaysia

also suffers a shortage of university gradu-

ates with the technical training required

to fill medium- and high-skilled occupa-

tions. And while countries everywhere face

a shortage of highly skilled workers, Ma-

laysia’s is especially severe: the OECD es-

timates that about a third of the country’s

jobs are filled by workers without the req-

uisite skills. This situation seriously hinders

productivity growth, making it tougher for

Malaysia to climb the value chain.

It’s better on the demand side, where pri-

vate consumption has withstood slowing

global trade and rising economic uncer-

tainty. In the first half of 2019, private con-

sumption grew by 7.7% year on year—not

far off 2018’s 8% growth—despite falling in-

vestment and slowing export growth. Con-

sumption’s resilience is testimony to how

Malaysia’s efforts to industrialize and devel-

op exports have produced a robust middle

Yuwa Hedrick-Wong is Chief Economics Commentator for Forbes Asia. He is also a visiting scholar at

the Lee Kuan Yew School of Public Policy, National University of Singapore. Having worked as an econo-

mist across the Asia-Pacific, Europe, the Middle East and Africa in the past 25 years, he regularly writes

columns about the global economy for Forbes Asia. Views expressed are his own. He can be reached at

[email protected].

class: private consumption now accounts

for more than half of Malaysian GDP, ac-

cording to central bank data, and has done

for the past decade.

Going forward, however, growing middle

class and household incomes will depend

on the service sector. Malaysia needs to

make labor productivity and growth in con-

sumption mutually reinforcing. To boost

labor productivity, it needs to improve both

the quality of workers and their market

mobility. A more productive labor force will

translate into higher household incomes,

which will further stimulate private con-

sumption. More consumption will encour-

age greater investment in services. And

stronger investment, especially in entrepre-

neurial startups, will make services a more

powerful engine of employment growth.

Unfortunately, Malaysia’s investment is

missing in action. Investment as a percent-

age of GDP has drifted lower in recent years,

to an estimated 23% in 2019 from around

26% in 2017, according to the central

bank—the opposite of what Malaysia needs.

In late February, the abrupt resignation of

Prime Minister Mahathir increased politi-

cal uncertainty, which will further dampen

investor confidence. If this trend continues,

it could jeopardize Malaysia’s becoming a

more developed economy.

Reviving investment in services would

come with a bonus: accelerating the evolu-

tion of Malaysia’s digital economy. Malay-

sia already has the conditions for its digital

economy to take off. More

than 80% of Malaysians, for

example, already regularly

use the internet. But Malay-

sian companies, according to

the Digital Adoption Index,

lag their regional peers in

adopting digital technology

to drive their own develop-

ment. Malaysia’s score in

the Digital Adoption Index

is 0.55, below Korea’s 0.62,

Japan’s 0.68 and Singapore’s

0.81. This is the new frontier

for Malaysia’s service sector.

Getting there will ready Ma-

laysia for the prime time.

Malaysia boasts one of the best-educated

populations in emerging Asia.

NICOLAS MCCOMBER/GETTY IMAGES