Remember we had previously articulated how the increasing dominance of state-owned enterprises (government-linked investment companies and government-linked companies) in Corporate Malaysia came to be over the past decades, which now encompass sectors where the private sector is well able to operate effectively and is competitive (“Sustained economic success comes only from harnessing local private enterprises”, The Edge, Aug 25, 2025)? This crowding-out has a cascading long-term impact. It disadvantages, disincentivises and stunts private sector growth, big or small (including micro, small and medium enterprises, or MSMEs).
Over the past two weeks, we have written about the challenges Malaysia faces in reindustrialisation — growing and improving manufacturing — including the rapid changes brought on by technological advancements and artificial intelligence (AI), as well as rising geopolitics (protectionism, national security and national interests). Against this backdrop, nations (especially those that are heavily reliant on trade) must redouble efforts to strengthen domestic economic resilience. For Malaysia, we think part of the strategy is to pivot to services.
Last week, we discussed the importance of tourism as an inclusive economic growth driver for the nation, given its high multiplier effect, ability to absorb mass employment (from population growth as well as the likely displacement of manufacturing jobs due to automation and use of robotics) and as a stable source of foreign currency earnings. This week, we are following up with two higher value-added subsectors related to tourism: medical and education tourism (not beaches and sunsets, but brains and bodies).
