Extract from book review of Ruchi Sharma’s “Breakout Nations: In pursuit of the next economic miracles” by John Loh published in StarBizWeek today
In his chapter on Malaysia, Sharma has a more stark prognosis.
“Malaysia’s economy slowed dramatically after the Asian crisis,” he writes, adding, “There is a widespread sense in Kuala Lumpur that the economy has been growing because of extensive government spending and fortunate circumstances rising global commodity prices have been a huge boost to its rubber and palm oil exports not from smart choices.”
The dramatic reforms taking place in Indonesia, Sharma argues, have “no parallel” in Malaysia, putting it at risk of sliding backward.
Malaysia, he points out, is the only Asian country where FDI is declining as at the last quarter of 2011, it was flowing out at a rate of 2.5% of GDP.
Sharma also tells SBW that the country is obsessed with central planning and grand schemes, but has often fallen short on execution.
“This is the biggest difference with other South-East Asian markets such as Indonesia: Malaysia has fallen off the investment map,” he writes.
“Malaysia needs to move on and rebuild the institutions damaged during the later stages of Mahathir’s rule. Nearly a decade after his retirement, Mahathir should not be casting such a long shadow on the country.”