KUALA LUMPUR – Malaysia needs to transform into a global exporting player, grow its manufacturing capabilities and create its home-grown multinational companies (MNCs) to break out of the middle-income trap, said Prime Minister Tan Sri Muhyiddin Yassin.
The prime minister said historically, most countries grew rich by learning to produce new, higher-value products for export.
“Hence, entrepreneurs with global ambitions will be critical to drive growth,” he said in his opening remarks at the virtual Youth Economic Forum 2021, themed “A Brave New World”, today.
Speaking on the need to transform into a global exporting player in order to break out of the middle-income trap, Muhyiddin said, historically, most countries grew rich by learning to produce new, higher-value products for export.
“Hence, entrepreneurs with global ambitions will be critical to drive growth,” he said.
Malaysia also needs to grow its manufacturing capabilities to make increasingly complex and sophisticated products, he said.
“Based on the Economic Complexity Index, even a one standard deviation increase can elevate Malaysia’s GDP (gross domestic product) growth by between 0.7% and 1.6% a year.”
In terms of creating Malaysia’s home-grown MNCs, Muhyiddin said the move is important as the pay-off from this is very high in terms of economic growth.
“For example, it is reported that global giants Samsung and Hyundai collectively at one point drove a 30% growth in South Korea’s GDP,” he said.
Meanwhile, the prime minister also said Malaysia needs to pursue a “moonshot” approach to create competitive domestic firms in frontier technologies.
“The start-ups you build today could and should be the next Amazon, Apple or Tesla,” he added.
– Bernama
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