Resilience Through Openness

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Malaysia has transformed from a producer of commodities (tin, rubber, palm oil) to a diversified upper-middle-income economy spanning services, manufacturing, and trade.
The IMF projects the $516 billion economy will grow 4.7 percent this year.
Interview subject: Amir Hamzah Azizan, 59, appointed finance minister II in December 2023; most recently CEO of the Employees Provident Fund, which manages $315 billion in retirement savings for private sector workers.

Thirteenth Plan projection: annual growth will average 4.5 to 5.5 percent between 2026 and 2030.
Targeted growth drivers:
- Electrical and electronics sector and semiconductor sector with a focus on attracting higher-end value-chain investment.
- Development of data centers, including AI-layered data centers.
- High-grading the economy through innovation and efficiency to maintain global relevance.

Policy consistency highlighted as core to resilience: clear planning, transparent execution, and legal certainty to inspire investor confidence.
Export base and markets are described as diversified across manufacturing, services, and mining.
Approach to geoeconomic fragmentation: maintain openness, pursue free trade deals to secure permitted practices, and leverage trade connectivity to avoid being left behind.

Fiscal strategy includes curbing subsidies and increasing sales tax to reduce deficits; measures were legislated under the Fiscal Responsibility Act.
Mitigation for vulnerable groups when taxes were introduced included moderating impacts on necessities like food and water.
Fiscal space was used to:
- Reduce government debt.
- Expand social protection.
- Improve talent management and training to help lower-income groups upgrade skills.
Timing note: fuel price reform began "about two and a half years ago," which moderated the subsidy bill when oil prices rose after the Middle East crisis.

Acknowledges youth concerns about job prospects with AI adoption.
Policy responses:
- Skilling programs and government training partnered with new investors.
- Tax reforms to incentivize responsible business use of AI.
- Strategy to attract data-center investment to create better jobs and supporting ecosystems.

Positive view on Asia: retains a demographic dividend and drives innovation and experimentation.
Regional strategy: strengthen intra-regional activity (ASEAN example) to build resilience against trade wars and supply-chain disruptions.
Specific metric: trade between ASEAN countries is probably 32 percent of its potential.
Recommendation: expand regional cooperation from an ASEAN play to a broader Asian play to increase resilience.

Key risks to monitor:
- Climate change, described as "going to be a big thing" requiring measured responses.
- Geopolitical fragmentation and external conflicts beyond Malaysia’s direct control.
Governing principle: focus on controllable actions—fix domestic levers, build new partnerships, and insulate where feasible.

Interview with Amir Hamzah Azizan, as published in F&D Magazine; edited for length and clarity.

Resilience Through Openness
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