Commentary: Malaysia’s economic indicators are improving, so why aren’t Malaysians celebrating?
A nation let down many times might be fearful to believe so readily, even when the numbers objectively look better, says Malaysia politics observer James Chai.
(CNA) – A video posted on Instagram by “finfluencer” HY Tan went viral on Aug 17. In the video, Ms Tan talked about how the Malaysian ringgit had strengthened significantly in the past few months, attributing it to both the government’s efforts and external conditions. At the time of writing, the video had more than 660,000 views, and over 21,000 likes.
The host also cited international reports, including from JPMorgan, which has upgraded Malaysia’s rating from “underweight” to “neutral”’. Such complimentary videos are rare, and for a country that has made international news for the wrong reasons for the past decade, you would expect local exuberance. But the reactions were mostly scepticism and cynicism.
Among the popular comments posted by users were if the video was a paid government advertisement. Another user asked whether this meant that the prime minister was doing a good job. Yet another acknowledged the challenges of governing, noting that if the ringgit performs poorly, the government is criticised, but if the ringgit does well, any praise is viewed suspiciously as paid propaganda.
This sentiment stood in contrast to the growing enthusiasm international media and investors have developed for Malaysia.
In March, the Financial Times published a piece focusing on Malaysia’s beneficiary position in the United States-China chip war. A few days later, an article in The New York Times highlighted how Malaysia has become a “crucial link’’ in the chip supply chain. Outfits such as Bloomberg and Nikkei Asia have characterised Malaysia’s story as a comeback economy after years of being overlooked.
THE GAP BETWEEN DOMESTIC AND INTERNATIONAL ENTHUSIASM
Malaysia’s economic indicators have been objectively improving. The most recent quarterly gross domestic product growth exceeded estimates and was its best-performing in the past six quarters.
Malaysian stocks have “outpaced” the region, and the RM2 trillion (US$461.4 billion) market capitalisation is at an all-time high. As was pointed out in the viral Instagram video, the ringgit is indeed performing well, the best in Asia against the US dollar. Last year, Malaysia’s foreign direct investment was its highest, and the performance in the first half of 2024 was 18 per cent higher compared to the same period last year.
To understand the gap between international and domestic enthusiasm about Malaysia’s economy, we need to replay the events of the past decade.
