Titiwangsa MP Johari Ghani warns slow economic growth puts Malaysia behind Asean countries

KUALA LUMPUR, Feb 14 — Titiwangsa MP Datuk Seri Johari Abdul Ghani today cautioned the government that Malaysia might risk lagging behind neighbouring countries, particularly within the Asean region due to its slow economic growth.

He told the Dewan Rakyat that the gross domestic product (GDP) growth of 8.7 per cent recorded last year was mainly contributed by the low-base effect.

The former second finance minister said that the recent World Bank’s forecast showed that Malaysia will only score four per cent growth this year and 3.9 per cent next year, while neighbouring countries such as Indonesia, Philippines and Vietnam are expected to score 4.8 per cent up to 6.5 per cent

“If the trend continues and the World Bank’s projections come true, it will lead to increased unemployment, and household incomes will not be able to cover the rising cost of living.

“In the first quarter of 2022, our economy grew 3.8 per cent, the second quarter dropped to little 3.5 per cent and the third quarter fell to 1.9 per cent, but what worried me was that when it came to the fourth quarter, the Malaysian economy contracted to -2.6 per cent.

“The World Bank predicts that in 2023 and 2024, Malaysia is only projected to grow by four per cent and fall by 3.9 per cent in 2024, meaning that the economy will decline lower than the average economic development before Covid-19 between 2017 and 2019 at an average of five per cent.

“When compared to other Asean economies, the World Bank predicts Indonesia will grow 4.8 per cent in 2023 and 4.9 per cent in 2024. The Philippines will grow 5.4 per cent (2023) and 5.9 per cent (2024), while Vietnam is projected to grow 6.3 per cent (2023) and 6.5 per cent (2024).

“This is the figure that should be our concern as a country and government, to see how we can end this trend,” he said when addressing the Agong’s speech motion in the Dewan Rakyat, today.

Johari also urged the government to immediately find a way to reduce dependence on Petronas, which was too high, causing international rating agencies to downgrade the country’s petroleum company.

He said the dependency was contributed by the widespread provision of oil subsidies without a target, to the point that the revenue received from Petronas could not cover the much higher oil subsidy rate.

“On average between 2018 and 2022, the government took an average of almost RM60 billion from Petronas. However, in 2022, petrol and diesel subsidies will reach almost RM80 billion, causing every income from Petronas not to be used to develop the country, but only to pay subsidies,” he said.

Johari also touched on the situation of Malaysia lagging behind as a preferred investment destination compared to Indonesia and Vietnam.

He said foreign direct investment (FDI) that Malaysia receives are far behind compared to the two neighbouring countries.

“In 2021, Malaysia got US$7.3 billion, but Indonesia collected almost US$23.2 billion and Vietnam recorded US$22.6 billion. In 2022, our FDI increased to US$17 billion, but Indonesia recorded US$45.6 billion and Vietnam recorded US$27.7 billion,” he said.