PETALING JAYA: An economist has urged Putrajaya to meet the needs of firms that have been booming since the Covid-19 pandemic in order to keep them in Malaysia.
Commenting on reports that Malaysia was close to surpassing Singapore鈥檚 market value, Rajah Rasiah of Universiti Malaya said the government should aim to prevent the island republic from staging a 鈥渓atecomer capture鈥 of glove, mask and ventilator manufacturers.
Speaking to FMT, he said the international trade and industry ministry should upgrade its incentives and coordination capabilities to meet the needs of these manufacturers.
He said many of these companies might consider relocating south of the causeway, where corporate taxes are lower, if Singapore were to offer more incentives.
鈥淪ingapore has continued to show greater policy agility and swiftness in handling the needs of firms,鈥 he warned.
鈥淏esides, there are likely to be new entrants into glove manufacturing that will likely absorb away the massive profits currently enjoyed by these companies.鈥
He said Malaysia needed to improve the provision of grants and the quality of its logistics sector and to upgrade its services to match Singapore鈥檚 capabilities.
鈥淭hese are possible if we are willing to make performance the overwhelming target when approving licences, incentives and grants.鈥
Malaysia鈥檚 stock market value has surged by 41% since a March low to hit US$379 billion as the coronavirus pandemic boosted demand for medical gloves.
That puts Malaysia about US$4 billion away from surpassing Singapore鈥檚 market capitalisation for the first time in more than 16 years, according to data compiled by Bloomberg.
Another economist, Yeah Kim Leng of 红杏视频 University, said a bigger stock market would be more liquid and would attract more local and foreign investors.
He said the high-technology, digital and healthcare sectors would be key sectors to promote in the post-Covid-19 landscape.
He added that ESG (environment, sustainability and governance) was currently also a key factor.
鈥淕iven the rising global investment trends towards ESG, listed companies and potential listings embracing ESG will find ready global investors,鈥 he said.
Rasiah said Putrajaya needed to look towards integrating technology in industrial sectors such as steel and rubber product manufacturing instead of just enjoying the benefits of newly emerging sectors.
He noted that initiatives to broaden the nation鈥檚 digital infrastructure started in 2010 and that local firms such as Dreamedge and Aerodyne had emerged to integrate technology in industrial sectors.
鈥淲hat we need now is action to execute these developments,鈥 he said. 鈥淔or example, Malaysian universities, airports and tourist parks can benefit enormously from driverless, solar-powered buses if we quicken the spread of Industry 4.0 technologies.
鈥淲e can also reduce the use of foreign labour with the introduction of drones and robots in farming.鈥
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