The dream of an “Asean car” was first floated, in broad terms, by former prime minister of Malaysia, Mahathir Mohamad, when he spearheaded the creation of Proton in the 1980s. The idea was to form a national Malaysian car company that could be exported to Southeast Asia and beyond.
That didn’t quite work. Proton failed to gain traction much beyond its home market of Malaysia, although it did see some success as a low-priced, competently engineered vehicle in Britain for a time, thanks to the provision of engines by Mitsubishi of Japan.
Now, the idea has resurfaced. Najib Razak, current Malaysian prime minister, has announced that Malaysia and Indonesia plan jointly to develop an “Asean car”. Continue reading »
Critics who slam Malaysia for spending beyond its means in racking up a level of household indebtedness that surpasses the US are misjudging the country’s economic resilience, a senior official said.
Abdul Wahid Omar, a minister in the prime minister’s department, told the Financial Times that Malaysia “deserves better” than the negative outlook on its sovereign debt rating that was reaffirmed last month by Fitch, the rating agency.
“We believe we deserve better,” said Wahid Omar, who heads the country’s Economic Planning Unit. “We have demonstrated our ability to manage government finances better (and) we are taking measures to reduce subsidies and introduce the GST (Goods and Services Tax).” Continue reading »
By Jennifer Hughes
Malaysia Airlines was struggling long before its two disasters this year. Higher costs and tougher competition in its own backyard from Tony Fernandes’s AirAsia had already inflicted financial damage in spite of it’s having tapped the markets for $2bn of equity and debt since 2005. Continue reading »
Indonesia may have surprised analysts with a 50 basis point rate hike, but no such drama from the central bank of Malaysia, which has held steady at 3 per cent. It follows Thailand’s similar hold earlier this week. Continue reading »
Central banks, we are often told, missed the warning signs that led to the “Great Recession” in 2008: an excessive build-up of household and mortgage debt.
But Malaysia’s central bank, Bank Negara, is showing that you can get ahead of the curve and prevent trouble before it starts to build up to critical levels. That’s the hope, at least. Continue reading »
Fresh from an election victory, Malaysian prime minister Najib Razak (pictured) was full of new-term enthusiasm when he visited the Financial Times this week, speaking of his plans to push his country into the ranks of the developed world by 2020.
He didn’t say it would be easy but it may be harder than he expects, given the slowdown in the world economy: trade figures published on Friday showed a 5.8 per cent drop exports in May, nearly double forecasts of around 3.0 per cent and April’s 3.3 per cent decline. Continue reading »
A China slowdown, plunging commodity prices and the looming end of QE. A perfect storm, you might think, for Malaysia – a commodity-producing country that exports to China and benefited handsomely from QE-fuelled cash that washed through emerging markets.
But that’s not the view of prime minister Najib Razak, who plays down the threats to growth coming from the world economy. As a leader fresh from an election victory, his confidence is understandable. But is it misplaced? Continue reading »
By Christian Lewis and Shaun Levine of Eurasia Group
Malaysia’s general elections earlier this month shed light on what sort of economic reform policies will be possible for the ruling party, United Malay National Organization (UMNO), in both the short and long terms. Malaysia’s economic growth accelerated to 5.6 per cent in 2012, and will only moderate slightly to 5.3 per cent this year in the absence of pre-election public spending programmes. Continue reading »
Malaysia’s ruling Barisan Nasional (national front) coalition that was returned to power in this month’s election faces some serious economic problems, notably the country’s poor export performance.
Exports have shrunk in the last two months in response to weakening global demand that has also hit other Asian exporters. But unlike its rivals, Malaysia faces a more deep-rooted export challenge – a serious decline in the export role of its manufacturers that has been partly masked by increases in commodity exports. Chart of the week takes a look. Continue reading »
Election give-aways are the oldest political trick in the book.
But in Malaysia the prime minister, Najib Razak, is taking them to a new level with the distribution of cash handouts to low-income workers as he prepares to fight a tight election with the country’s opposition.
With the opposition making its own splurge pledges, the voters face some tempting offers. But investors may be less enthralled by the potential pressure on future budgets. Continue reading »
Bose, the US maker of speakers and home entertainment systems, has chosen what to some might seem an unexpected location for its first manufacturing plant in Asia: Penang, on Malaysia’s western coast.
The plant will be the sixth for Bose worldwide, allowing it to supply markets in Asia more easily than from places such as Mexico, where it already has a plant. Continue reading »
By Christian Lewis and Shaun Levine of Eurasia
The government is unlikely to be unseated in Malaysia’s upcoming parliamentary election, which is good news for the business environment. A win by the ruling Barisan Nasional (BN) coalition will eliminate most investors’ concerns about instability that have recently contributed to market volatility.
That said, given the complexities of Malaysian politics, a reduced margin of victory for the incumbent could still impact the speed with which BN’s ambitious reforms are introduced. Continue reading »
Promoting investment into places like Sabah, on the eastern tip of Malaysia’s bit of Borneo, isn’t easy at the best of times. It is a remote part of Southeast Asia known mostly for spectacular diving and eco-tourism in lush rain forests.
But with the launch on Tuesday of air and ground assaults against Filipino insurgents in eastern Sabah, a few brave souls from the Sabah Economic Development and Investment Authority appeared at a Singapore hotel at an exhibition showcasing investing in Malaysia. Continue reading »
While much of the rest of the world is sneezing, Malaysia is successfully fending off a cold. The economy exceeded expectations on Friday – not for the first time in recent months – with year-on-year GDP growth of 5.2 per cent in the third quarter. Continue reading »
Investors haven’t loved Malaysia this year, but they’ve liked it enough. The ringgit is one of the better performing currencies in the region, while bankers have been able to get away a number of big ticket IPOs – albeit with some help from the country’s pension funds.
But, with an election a maximum of six months away, is the market showing complacency? Continue reading »