The average Malaysian is struggling to keep pace with the rising cost of living despite receiving comparatively high wage growth annually — because the majority of new jobs created over the years are low-paying ones. As a result, the national savings rate is in a long-term downtrend. Household debt has risen to the highest among our peers — second only to South Korea — even as we try to maintain our lifestyle. Much has been written about the looming retirement crisis, if nothing is done now, where large sections of the population will fall into poverty in old age over the coming 20 to 30 years.
In a little over two decades, Malaysia has gone from being one of the fastest-growing economies in the early-1990s, to the slowest in the region — in terms of per capita GDP. Not surprisingly, we failed to achieve our long-term ambition to become a high-income nation by 2020.
The stock market, Bursa Malaysia (formerly Kuala Lumpur Stock Exchange), too, has seen a sharp reversal in fortunes — from the heydays of the early 1990s super bull cycle to being a chronic underperformer. The FBM KLCI and FBM Top 100 Index consistently rank among the worst-performing indices in the last 5-, 10-, 15-, 20- and 25-year periods — compared with market benchmarks in Vietnam, South Korea, Thailand, Indonesia, the Philippines and Singapore. Back then, the KLSE’s market cap far exceeded those in all of these countries. Today, Bursa’s market cap is smaller than all but that of the Philippines. Malaysia’s weightage in the MSCI Emerging Market Index fell from a peak of 20% in 1994 to a little over 1.3% by end-2021, underscoring this comparative underperformance. For the past decade, Corporate Malaysia has been suffering from what appears to be a secular decline in revenue, profits and return on capital.
