KUALA LUMPUR, Jan 30 -- Malaysia will not be trapped in the "middle-income syndrome" but will progress to achieve its high-income goal by 2020, given the growth and equity based economical policies that the government has implemented so far.
Renowned economic researcher, Professor Dr Erik S. Reinert said the Malaysian economy has been widely presumed being stuck in the middle, between the high-income and the low-income economy.
"As I see it, Malaysia is not stuck in the middle. This is an idea that comes from the United States, looking on imports into the United States.
"Countries in the middle cannot compete with low-cost nations such as China and India, or high technology economies like Singapore and Taiwan, but Malaysia definitely does compete with all these countries," he said.
"The high-income goal by year 2020, is something realistic and achievable given the policies that the government had introduced and the stability that Malaysia has," he told reporters after a presentation at the Tun Ismail Mohamed Ali Memorial Lecture Series 2012/2013, here today.
Reinert said a nation's economy cannot be primarily judged on its export performance, but on the standard of living of its inhabitants and in Malaysia this is being continuously improved by the government.
He also said Malaysia has gone through many stages of economic development in a very short span of time, only because of economical plans drawn under the "growth and equity" model.
"A transformation from a raw material economy to modern industrial segment, serves as a testament to the statement that Malaysia is doing very well, in a challenging world.
"But it is important for Malaysia to focus more on technological change, and being at the forefront of technological development, especially in new areas such as solar energy."
Reinert said it was challenging for Malaysia to easily adopt technological advancement, as Sabah and Sarawak would have to follow suit.
He also said Malaysia should find niches, focus and segmentation for its exports, as limiting the dependence on export would be a good "insurance policy" against the crises in the West.
"Malaysia should protect its local and traditional manufacturing sectors such as automotive, while at the same time promote domestic research and development," he added.
Reinert is the Chairholder of the Tun Ismail Mohamed Ali Distinguished Chair in Investment and Finance at Universiti Kebangsaan Malaysia.
He is also the author of "How Rich Countries Got Rich and Why Poor Countries Stay Poor". The book won the Myrdal Prize in Economics and the Norwegian Selvaag Prize, both in 2008.
Source: sabah & sarawak news
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