5 Things Every Malaysian Should Know About Their Economy But Don’t | Apurva Sanghi | TEDxKL

People call me a walking economy. You

know why? My hairline is in recession.

My stomach's a victim of inflation. And

together that puts me in a great depression. Now talking of the economy,

depression. Now talking of the economy, I think most of you know that the world's two largest economies are China

and the United States. So after

controlling for prices, uh, for example, how a haircut is less costly in Shanghai than in San Francisco, China makes up

for about 1920% of the world's economy.

The United States comes second at 15.

But have you ever wondered what is Malaysia's share?

It is 0.7%.

That's less than 1%. That's less than the margin of error in World Bank economic forecasts.

But here's the thing though. Malaysia is

small in size but not in story.

So today I share the story with you in the form of five things Malaysians should know about their economy but

don't. So even though Malaysia's a

don't. So even though Malaysia's a sliver of the global economy, it has lifted over 14 million people out

of poverty.

This is not a mere statistic. It's 14

million lives transformed. It's a

national miracle.

10 years after independence, almost 50% half of all Malaysians were poor. Today is just 5%.

poor. Today is just 5%.

When Malaysia and Singapore split that inherited the larger, poorer, Dural population, yet it managed to lift

millions out of poverty and that too without creating permanent slums. And every single Malaysian should be proud

of this fact. Plus, let's be honest, Malaysia also got the better Nasi Lama.

And the even better news is that most of this progress has come from the boommy putras, once the most disadvantaged.

Poverty today is less about ethy and race and more about class.

The challenge now is to reduce disparities, is to close the gap within ethnic groups and not across them. So

that was number one. And here comes number number two. Now I guess you know that

number two. Now I guess you know that Malaysia is not a highincome country yet. But how many of you know

yet. But how many of you know how long Malaysia has been stuck in a middle income trap?

It's almost four decades. That's a long time. So, South Korea, Singapore,

time. So, South Korea, Singapore, Taiwan, they escaped the middle income trap a long time back and became high income. Malaysia hasn't.

income. Malaysia hasn't.

Oh, by the way, even though Malaysia does not have high per capita income, you know what? It does have high per capita opinion. Everyone has an opinion

capita opinion. Everyone has an opinion about something or the other. That's

what I found out. Now, the good news is that Malaysia can become high income in the next five, six, seven years. And I

hope when it does, Michelle Yo flies in and cuts a ribbon or something.

But the bad news is that even when it does, six out of 10 Malaysians would still remain below the high income threshold.

And this tells you how deep disparities run. So for example, people in KL are

run. So for example, people in KL are richer than people in Portugal, a high-income country. But people in

high-income country. But people in Kelan, they are as poor as those in Sri Lanka and seven times poorer than their fellow

citizens in KL. Now this is the map of Malaysia as we know it and love it. In

the next slide, you will see the map of Malaysia resized by how rich people are in each state. You see the disparities

blow up literally.

So the point is you cannot become high income on the backs of just a few.

Otherwise you run into the problem of your citizens saying how come my country is rich but I'm poor.

So that is fact number two and here comes number.

Okay. So so far I've told you two things. How Malaysia has lifted the

things. How Malaysia has lifted the floor on poverty. It is stuck in a middle income trap now struggling to raise the feeling further. So how do we

square these facts? So to answer this and this is number three. Let's ask

ourselves the question, what powers the Malaysian economy.

Well, we know what powers Malaysians.

But what about the economy?

Historically, it used to be commodities like tin, river, now oil, gas. But their

contribution is shrinking. What truly

powers Malaysia's economy today is semiconductors.

In fact, Malaysia is among the top 10 semiconductor exporters in the world.

Semiconductors are Malaysia's golden goose. But you know what? This goose is

goose. But you know what? This goose is getting a bit tired, is getting a bit old.

It could have been a badminton champion, but is perfectly content playing pickle ball on weekends. And you know why?

Because this goose did not innovate.

As a world races towards AI and advanced chips, Malaysia risks remaining stuck,

assembling them, and not developing or inventing them where the money is.

Get this.

Only 18% 18 only 18% of Malaysia semiconductor patents go to Malaysian residents. China 40% of their patents go

residents. China 40% of their patents go to their residents.

Taiwan 60%.

Now it's not that Malaysians are not innovative.

I'll prove it to you. You all know what this is. You can't see it, but let me

this is. You can't see it, but let me explain it to you. Is something that all of you have is your trustworthy touchandgo card. And you know the scene.

touchandgo card. And you know the scene.

You're at a toll booth, window down, arms stretching like a yoga master crying your touchandgo card to somehow

make contact with that magic sensor that somehow manages to stay out of reach.

We all been there, right? No worries.

Along comes a Malaysian genius and fixes this problem.

Ladies and gentlemen, I give you voila, the magic touchandgo wand. Now I'm

waiting for some Malaysian genius to fix RFID, which as somebody said in Malaysia, RFID stands for reverse,

forward inshallah detect.

So, it's not that Malaysians are not innovative.

It's the fact that the innovation ecosystem is lacking. Low levels of long-term financing for innovation,

low tolerance for failure, low levels of spending on research and development, R&D.

In fact, Malaysia spends less than 1% of its GDP on R&D, research and

development. Singapore twice that. Korea

development. Singapore twice that. Korea

four times more. So Malaysia's middle income trap is essentially an innovation trap. Okay, three down, two more to go.

trap. Okay, three down, two more to go.

Here comes number four. Malaysia has an enviably low rate of unemployment of 3%.

But there's a catch. Even though most Malaysians have jobs, almost four in 10 Malaysians work below the skill level.

In other words, they are under employed.

You know, I often think of u Iswan, my grab driver once who used to work for Petronas.

I think of my son's math tutor juggling multiple gigs. I think of the millions

multiple gigs. I think of the millions of Malaysians, undermployed Malaysians struggling to make ends meet.

In fact, about half of Malaysian workers earn

less than $3,000 ringit or $700 US a month, not even enough to pay taxes. And

brain brain data captures this. In 1990,

only 350,000 Malaysians lived and worked in Singapore.

Today is 1.5 million, not counting day trippers. That's almost a quarter of

trippers. That's almost a quarter of Singapore's population.

And many have become Singaporeans.

So, this goes to show that Malaysians don't lack drive, just opportunity. And

this brings me to this point.

Actually, you know what? Let me ask all of you this question. What do you think is Malaysia's most important, most valuable

renewable resource?

Now, it's not timber, it's not solar, it's not hydro, it is its youth.

Young Malaysians are hungry to innovate, to contribute, to do good.

Yet, they're also three times less likely to land a job.

Why?

One reason is they're held back at an early age. The World Bank calculated

early age. The World Bank calculated that four out of 10 Malaysian kids at

the age of 10 cannot fully comprehend or read an age appropriate text. Malaysian

students spend 12 and a half years in school. Yet they learn the equivalent of

school. Yet they learn the equivalent of less than nine. That's more than three and a half years of schooling of education down the drain. So no wonder

when they enter the workforce they are already playing catchup. So fixing this is important

but fixing this without creating more or better jobs means that you're training

talent for even more export. So the $420 billion question and now you know Malaysia's GDP.

Look at you getting smarter. Is why are there no better jobs?

Well, one reason is a dominant state that smotherers private enterprise.

Another is red tape that stifles innovation, that stifles uh initiative.

Case in point, one ministry regulates child care. Another ministry regulates

child care. Another ministry regulates preschooling.

Now, if you're a private business who wants to provide joint child care and preschool services because that's what young parents are demanding,

you have to go to the first ministry to get a license and the second ministry to to get a second license. You have to open two separate premises, each with

their own entrance. The result, you guessed it, most private providers or many private providers bypass these

restrictive rules and operate in the shadows.

So, it's important to get this private sector mojo back. It's important to tackle learning poverty at its roots

because no number of freebies, AI or training later on will help because you cannot build a high income nation on the base of low skills and an anemic private

sector. Here's number

sector. Here's number five. Malaysia's purse is getting

five. Malaysia's purse is getting lighter. Did you know that 80% 80%

lighter. Did you know that 80% 80% of all personal income taxes

are paid by just 7 to 8% of workers.

Malaysia's revenue from taxes as a share of GDP is less than 13%.

Way below what it itself used to collect 12 years back and way way below its high income aspirants.

So this light purse, this lighter purse is depriving ordinary Malaysians of quality health care, education, infrastructure,

even paying just the interest on national debt is getting tougher and tougher. Sure, cutting uh subsidies and

tougher. Sure, cutting uh subsidies and reducing corruption helps because every ring saved is a ringit earned, but it

will not be enough. Malaysia must

solidify its revenue base because you cannot build a highincome nation on a low resource foundation. So these were

my five things.

The question is what can you do? Well,

you can do a lot, but start by being better informed and I hope my talk today is helping. Now, talking of information,

is helping. Now, talking of information, I lived uh in Russia for 5 years before moving to Moscow and I was surprised

that in a country like Malaysia, in a democracy like Malaysia, there is no Freedom of Information Act.

Well, one is soon on its way. As I'm

sure you Malaysians know, the Freedom of Information Act is soon on its way. And

it can really shift the current secrecy by default culture in Malaysia to an openness by default. A real gamecher.

But beware because governments are known to dodge even the best freedom of information laws. How? By stonewalling

information laws. How? By stonewalling

requests.

By charging for information.

By playing that good old national security guard. Now most people think

security guard. Now most people think that the currency that governments issue is money. Ring, dollars, pounds, rupia.

is money. Ring, dollars, pounds, rupia.

Wrong. The real currency that governments issue is trust.

And nothing devalues the currency of trust faster than withholding information or misinformation.

So as concerned Malaysians, we can ensure that Malaysia passes and implements the best freedom of

information law in the world. In 2017

in Moscow during the entire month of December, we received a grand total of six minutes

of sunshine.

6 minutes of sunshine spread over 31 days. That's less than 12 seconds of

days. That's less than 12 seconds of sunshine a day. Heck, that's even less than the light you get scrolling Tik Tok

in the morning. But here's the thing.

When I open my curtains every day in KL, I'm pretty much guaranteed that warm, beautiful, golden sunshine. So even

though Malaysia's share of the global economy is small, it share of hope,

ambition, and sunshine is huge. Don't

take that for granted. Thank you.