To create more jobs, raise wages and enable the population to escape the middle-income trap, Malaysia should pivot its economic strategy. We believe the services sector offers the strongest prospects as a future driver of growth. In particular, Malaysia has demonstrated regional competitiveness in three service segments: mass tourism and the related higher value-added segments of medical and education tourism.
In a world increasingly fraught with geopolitics and divided by the US-China battle for AI supremacy, countries are under pressure to choose sides; neutrality may no longer suffice. Against this backdrop, heavy dependence on the electrical and electronics (E&E) sector — already accounting for 40% of total exports — carries heightened risks.
Malaysia must prioritise structural reforms that strengthen economic resilience.
