Dr Atiq ur Rehman

Prime Minister of Malaysia Tun Mahathir bin Mohamad popularly known as Dr Mahathir Muhammad is visiting Pakistan March 21-23, 2019 at the invitation of Prime Minister Imran Khan. Dr Mahathir would be the Guest of Honour at the Pakistan Day Parade on 23 March.

Pakistan can learn plenty of things from Malaysia in the domains of cultural diversity, economic growth, trade, food and water security and women empowerment. Key learnings are presented below:

Business and Economic Growth

Malaysian economy has grown very rapidly. In 2017 per capita income reached US$ 28,650, on purchasing power parity basis. Export earnings of Malaysia reached US$ 188 billion – 9 times higher than the export earnings of Pakistan. How could Malaysia achieve this miraculous growth? Major strategies taken by the Malaysian Government to promote business and economic growth are:

  • Political stability and consistent policies: Democratically elected governments are allowed to freely make and implement policies. All former governments completed their terms: Tunku Abdur Rahman (1957-70), Abdur Razak Hussein (1970-76), Hussein Onn (1976-81), Mahathir Mohamad (1981-2003), Abdullah Ahmad Badawai (2003-2008), Najib Razak (2009-2018). Political stability has ensured consistency of the government policies and built trust of the business community in the government.
  • Law and order: Police is very active in maintaining law and order. There are several law enforcement agencies which operate under the umbrella of Royal Malaysia Police, to maintain law and order. It is not possible for anyone to escape the grip of the law – who so ever the person may be. It gives confidence to the business community to invest and run their businesses.
  • A large number of foreign citizens live in Malaysia, primarily because they feel very safe there. They don’t come alone. They bring financial capital. Malaysian government launched second home Malaysia My Second Home (MM2H) scheme. Under this scheme you (along with your family) can get residential visa for a period of 10 years. It is renewable after every 10 years. You only need to deposit a certain fixed amount in a bank in Malaysia (RM 150,000 for age above 50 and RM 300,000 for person below age 50) to become eligible for the scheme.
  • Competition among states: There are 13 states in Malaysia. Every state is run by an elected government. The states compete with each other in growing their economies, attracting local and foreign investment, foreign students for studying in local universities, and foreign tourists.
  • Independence of institutions: Four key pillars of the state run parallel without interfering in each other domains. These pillars include: 1) the king/sultan of the federation (the Yang di-Pertuan Agong) and the kings/sultans of the states; 2) parliament; 3) government; and 4) judicial system. Shariah courts are also there which function in parallel to the main judicial system. However, shariah courts entertain only those cases which are relevant to muslims. It is also interesting to note that the judges don’t come to the media/public to ensure impartiality in the delivery of justice.
  • Automation and integration of government systems and processes: Almost all business processes of the government are fully automated and integrated. Technology has made taxation system very transparent, efficient and effective. It does not allow anyone to avoid tax liabilities. No one is exempted. On the other hand, in Pakistan many mighty segments of the society enjoy exemptions.
  • Deregulation of economy: Businesses are run predominantly by the private sector. Private sector enjoys freedom to function to the fullest of its potential. Even the state governments have delegated many of their functions to the private sector entities for more efficient service delivery. This strategy has succeeded in achieving higher level of efficiency, agility and innovations. It is very easy to launch any new business. On the index of Ease of Doing Business, Malaysia is placed among leading 15 countries.
  • Free flow of capital: There are least restrictions on the movement of financial capital into and out of Malaysia. Besides, foreigners are allowed to freely enter and invest in many sectors of the economy. Eventually, foreign investment keeps flowing into the country. Foreign investment does not come alone. It brings new ideas, more sophisticated and innovative technology and high quality human capital. It eventually keeps adding substantial value to the Malaysian economy on sustainable basis.
  • Integration with regional economies: Malaysia is an active member of the Association of South East Asian Countries (ASEAN). The ASEAN community is gradually progressing towards a model of European Union, in line with the ASEAN Community Vision 2025. Many restrictions on the movement of financial and human capital have already been removed. ……..END of PART 1

Dr Atiq ur Rehman is a Pakistani living in Malaysia. He  has been working as Chief Operating Officer with an IT company in Kuala Lumpur .