Both Malaysia and Pakistan have had general elections in 2018, with two new governments in place that share a few similarities. Both have a strong anti-corruption rhetoric that contributed to their massive electoral victories. Both countries have a large majority of Muslim populations and are being led by charismatic leaders that enjoy huge public trust and support. Although Malaysia gained independence in 1957 it has been treading on a high economic growth trajectory for many decades now and has emerged as a global economic giant.
During a visit to the East Asian country the Pakistani Prime Minister Imran Khan expressed the desire to learn from the Malaysian experience. The PM expressed the same desire while visiting China as well. In 1980, the year before Mahathir Mohamad became Prime Minister, Malaysia’s gross domestic product was just $12 billion. By last year, it had grown to $210 billion, and per capita income stood at $3,540, the third-highest in Southeast Asia.
However, it will be interesting to see what exactly Pakistan could potentially imbibe from the Malaysian experience particularly related to its Economic growth and development. Malaysia’s underlying economic strengths include a diversified economic structure, a strong external position, robust institutions, and significant natural resources and human capital endowments. Nonetheless, a much detailed analysis of historical, cultural, social and political dynamics will be required to understand the environment in which economic progress took place in the East Asian nation.
Considering the current challenges the government is facing, Pakistan can certainly benefit looking into three attributes of Malaysian economic and political policy.
Pakistan still struggles with building, forging and delineating a balance between various institutions
Firstly, export led growth achieved by Malaysia has been phenomenal. Pakistan currently faces an enormous mismatch in balance of payments that keeps recurring due to its dwindling exports base. In order to improve on foreign reserve account we need more vibrancy in export sector coupled with value addition, technological and product upgradation. In Malaysia the successful development of the electronics and electrical (E&E) industry is particularly noteworthy from the perspective of diversification given its minimal links to resource-based industries. Its take-off created jobs for previously underemployed rural workers, accelerating urbanization through migration and boosting on-the-job upskilling. According to ADB (2014) since the 1990s, it has been the leading contributor to Malaysia’s participation in global value chains, producing components such as semiconductors for mobile devices and automotive components, as well as computer parts. E&E exports are presently Malaysia’s largest exported component, accounting for approximately 36 percent of total export by 2015. In terms of Malaysia’s leading export destinations in 2015, Singapore and China accounted for around 14 percent and 13 percent respectively of total exports. Post CPEC Pakistan must also take leverage from the opportunity of enhancing its export productivity and boost trade with China, Iran, Turkey, Afghanistan and other SAARC countries. It also needs to focus on technological and product upgradation towards medium value added and high valued exports. While capitalizing on textile, leather and other products with competitive advantage it needs to build its capacity in energy production and local manufacturing industries to support CPEC initiatives.
Secondly, education and investment in human capital is a pivotal pillar of any sustainable, long term economic development policy. There is an urge in the incumbent government in both countries to invest more in R&D and education and skills. The PM Khan recently inaugurated the PM house which has been converted into a university. It is debatable whether antics provide any real support to the cause. Albeit, there is an awareness of the need for change. The question is how quickly we can upgrade the education system in terms of imparting high quality instruction and updated skillset?
Considering the level of social development in Malaysia, it has also been exceptional with the advancement in human capital development. Malaysia’s education policy has long focused on inclusiveness, and access to education has improved vastly in recent years. In line with the Millennium Development Goals, it has reached near-universal levels, with primary education enrolment at around 98 percent in 2015 and secondary education enrolment at around 89 percent respectively. Increasing the quality of education is critical to boosting human capital development and workforce productivity, increasing the availability of skilled workers and improving Malaysia’s attractiveness to investment in higher value-added activities. Ambitious reforms are already underway to improve collaboration between industry and tertiary educators to align curricula to industry specifications and internationally recognized qualifications, while also increasing opportunities for job placements during and after the completion of studies. The Education Blueprint 2013-2025 provides the overarching framework for reforms to basic education. Reforms have also been introduced for more holistic examinations and student benchmarking, a comprehensive framework for teacher evaluation, training and career development.
Thirdly, an effective, coherent and a unanimous foreign policy is what Pakistan needs direly since past many decades. Regional integration and cooperation is one of the cornerstones of Malaysia’s foreign policy hence Pakistan must also strengthen regional cooperation with its neighbors. Peace in Afghanistan and opening trade with Iran can be extremely important for peace and stability in the region. Pakistan must also keep emphasizing the importance of SAARC in South Asia to enhance economic cooperation within the region as it is still one of the least integrated regions in the world. Inclusion of more members may help in ameliorating the dominance of a single player (India) which holds back SAARC from regional cooperation as per its convenience. In order for SAARC to become effective forum for redressal of issues of the countries in the region it needs to take cues from ASEAN.
Pakistan could stress the strategic significance of the regional treaty and call for addressing the environmental challenges, boosting the level of trade and business cooperation between regional countries, progressing intra-regional communications in terms of road transport as well as enhancing energy network could be helpful in promoting regional peace and security.
Pakistan government also must turn towards real and pressing issues of the public and make them a central concern instead of playing political gimmicks with dissenting voices implicitly or explicitly. Rising inflation, unemployment, declining exports and remittances should be a grave policy concern.
A combination of long -term stability, shrewd government policies, strong private sector development and political and social stability all contributed to the success of economic diversification in the Malaysian context. Moreover, in Malaysia politicians can come and go without having all that much effect on the outcome because it’s a reasonably well institutionalized country. There is no risk of a military takeover. Malaysia inherited a strong division between the bureaucracy and the military, with the bureaucracy in control.
Pakistan still struggles with building, forging and delineating a balance between various institutions. In order to have sustained progress, ending politics of victimization and reformation of accountability mechanisms to have impartiality and transparency could be instrumental in keeping checks and balances in place while curbing misuse of political power in case of violation.
The writer is an Economic Development Analyst based in Lahore and has represented Pakistan at the Young Diplomat Forum
Published in Daily Times, December 30th 2018.