MALAYSIA needs a clear policy and direction in facing an increasingly challenging global economic environment.

Based on projections made by the World Bank, the global economy is expected to grow by 1.7% this year and 2.7% in 2024.

The slow pace of economic growth is driven by the economic recession in the United States, economic uncertainty in Europe as well as slow market demand in China.

This phenomenon urges us to set fresh ideas and new direction with an effective formula to ensure that the country continues to be strong and resilient to face a more complex global economic competition.

Therefore, the government’s move to announce the Madani economic roadmap is the right answer to ensure economic sustainability, competitiveness and the wellbeing of the people.

The framework, unlike past policies, gives clarity on the target to be achieved in the next 10 years based on two main principles: restructuring the economy and quality life for the people.

Among the targets set are such as becoming one of the top 30 economies in the world (currently 37), ranking 12th in the Global Competitiveness Index (currently 27), ranking 25th in the Human Development Index (currently 62) and ranked 25th in the Corruption Perceptions Index (currently 61).

Nevertheless, details to action and implementation must be emphasised to ensure the idea is not just rhetorical.

In relation to that, several new strategies and policies such as the National Energy Transition Roadmap, the New Industrial Master Plan 2030, the Hydrogen Technology and Economy Roadmap that will be announced are seen as important to support the implementation of the roadmap.

Apart from the stated plans and policies, some new initiatives and approaches should also be taken into account, such as the introduction of new and fresh incentives for investors.

Among them is the introduction of special incentives for “strategic cooperation” between foreign and local companies. In this regard, investors in high-quality and high-tech investment categories are eligible for a 100% corporate tax exemption incentive for a period of up to 10 years. I suggest this tax exemption period be extended up to a period of 15 or 20 years provided the foreign investor is prepared to offer equity up to 30% to a government-linked company or any local enterprises.

Through this method, it not only gives local companies the opportunity to make profits, but they will also be involved in the transfer of technology and global supply chains, especially in the high-tech sector.

In addition, the government can also consider proposals to create special incentives in rural areas. In this regard, any investor who are willing to invest in rural and undeveloped areas is proposed to be given a special incentive of 100% corporate tax exemption for a period up to 10 years.

Through this incentive, it will encourage more new investments in underdeveloped areas while promoting inclusive, fair and balanced development across districts and states. – August 10, 2023.

* Ahmad Shahir Abdul Aziz is senior manager, InvestPerak.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.