Is Malaysia Running Faster?

 

Malaysia has an ambition to become one of the world’s top 30 economies within the next five years. And that is not unachievable. To achieve this, Malaysia must rise as a centre of innovation and high-quality research and development (R&D) to give the economy the support it needs. The problem is: the country is not spending enough on R&D despite the clear policy direction to do so. As always, ideas do not translate into the best implementation.

 

Source: https://en.m.wikipedia.org

 

The country has failed to reach its 12th Malaysia Plan (12MP) target of 2.5% gross expenditure on R&D (GERD) to the gross domestic product (GDP) by 2025. The 2.5% target has now been pushed to 2030 under the 13th Malaysia Plan (13MP). This is a huge downgrade compared to the earlier target of 3.5% GERD-to-GDP by 2030 as mentioned in the National Science, Technology and Innovation Policy 2021-2030.

 

As of 2022, Malaysia’s GERD-to-GDP stood at just 1.01%, down from the peak of 1.44% in 2016. In comparison, South Korea and Japan recorded a ratio of 5.2% and 3.4% in 2022. Meanwhile, Singapore’s GERD-to-GDP was 1.8%, slightly lower than 2021’s 1.9%.

 

Amid the lower-than-projected spending, it is worth noting that the country has also missed its target for patent application by Malaysians. The 12MP had aimed for 2,000 patent applications by 2025. However, as of last year, 993 – or less than half the target – were applied for by Malaysians.

 

As pointed out by the government itself, shifts in government policy, fluctuations in the economic climate and adjustments to the R&D strategies all caused the failure. The 13MP has laid out a slew of key strategies to boost R&D initiatives over the next five years. These include improvement to investment models, intellectual property, talent and R&D governance. However, such measures can only be achieved if they are monitored and implemented well. Expenditures on R&D must be tied to the fulfilment of performance indicators. The nation should not keep funding so-called R&D efforts that have no clear directions and poor results. For example, existing research grants for universities must be reviewed and new expectations must be set for grants to be approved. Is the nation spending on low-quality research with low commercialisation potential?

 

In the Global Innovation Index 2024, Singapore ranked fourth in the world, followed by South Korea (six), China (11) and Japan (13). Malaysia, on the other hand, was ranked 33rd. This is still far from 12MP’s target to enter the Top 20 by 2025. Under the new 13MP, the target has been postponed to 2030. Without a comprehensive overhaul to Malaysia’s approach to R&D and innovation, the new target is still difficult to achieve.

 

We need to run faster. The post-tariff world will only reward competitive and innovation-driven nations. So, are we prepared to scuttle some “old” songs on equity and affirmation action or still want to cling on to right-wing flag issues or other rigid religious sentiments?

 

Reference:

Running faster to top 30, Ganeshwaran Kana, The Star, 9 August 2025

Should We Demonise the “Maha Kaya”?

 

It has become somewhat fashionable to portray the rich as parasites that drain a country’s welfare. There is clamouring for the rich to pay their fair share of taxes, and subsidies for the rich are seen as a huge negative in Malaysia. The point made for reducing or eliminating petrol subsidies is to prevent the rich from benefiting from subsidies that are meant for the poor. Another argument is that the rich waste subsidised petrol as they have more cars using cheap fuel.

 

Source: https://www.wikihow.com

 

In painting a negative picture of the rich, it is silent that they pay the bulk of personal income tax. According to reports, the top 20% income group (T20) contributed RM33.68bil, or 85%, of the RM39.26bil personal income tax collected in 2022. That amount is only expected to rise in the future. A person with a chargeable income of RM200,000 pays about RM33,400 in taxes. An increase in chargeable income results in a higher effective tax rate and higher tax payment.

So even if the T20 individual is “benefitting” from subsidised petrol, the amount saved is usually less than the amount paid in taxes. The T20 also helps the government provide other welfare services and goods, such as universal healthcare. There is no doubt that the T20 is one of the main drivers of domestic consumption, which drives the domestic economy. About half of the country’s consumption activity is attributed to them.

 

Who is spending on expensive cars, buying luxury houses, eating at nice restaurants, and shopping at boutiques around town? It is primarily going to be T20 players and even well-to-do tourists. Because of the spending of the “rich”, all those businesses employ tens of thousands of workers. It is certainly not the bottom 40% income group that is being wooed when it comes to attracting investors and residents.

 

Because of their spending power, Malaysia will target the rich for its “Malaysia My Second Home” programme. Making the T20 look like bogeymen serves no purpose. When salaries are combined, reaching the T20 threshold is not difficult for a household.

 

As Malaysia aims to attain high-income status, we must refrain from painting the T20 as leeches in the national economy. It is not they who will further burden the welfare economics employed by the government. No one wants to remain poor. Given a chance everyone will choose riches and happiness. There are countries that are welcoming the rich to reside in, so we should not chase ours away.

 

Reference:

Demonised for being rich, Jagdev Singh Sidhu, Insight/The Star, 9 August 2025

 

 

 

Uncertainty Over Semiconductor Exports

 

Malaysia faces the steepest growth risk in Asia from the United States’ looming sectoral semiconductor tariffs, as uncertainty over exemptions continues to cloud the sector’s prospects. Nomura’s baseline GDP growth forecasts for Malaysia are 4.4% for 2025 and 4% for 2026.

 

The US President Donald Trump threatened to impose a 100% tariff on semiconductor imports, with exemptions for companies that have committed to or are in the process of building manufacturing facilities in the United States. In April, the Trump administration launched a Section 232 investigation into semiconductors, which will assess whether imports threaten US security and allow the president to impose tariffs in response.

 

Source: https://simple.wikipedia.org

 

The administration has signalled plans to fast-track the review, with some reports suggesting results may be announced months ahead of the original December deadline – possibly as early as September.

 

The longevity of Asia’s low effective tariff rate (ETR) hinges critically on the timing of US tariffs on pharmaceuticals and semiconductors. Currently, it noted that given a higher share of exemptions, the ETRs are substantially lower for Singapore and Malaysia.

 

In electronics, Taiwan’s exposure is the highest in the region, with its ultimate exposure to the United States reaching 2.8% of GDP. Malaysia follows at 2.3% of GDP, with Singapore, South Korea and Thailand (1.3% to 1.4% of GDP each). Transitioning investment takes time in sectors like chips and pharmaceuticals and companies could face immediate margin pressure. Malaysian assembly and test plants would either have to absorb compressed margins or pass costs downstream, making final chips less price competitive.

 

Malaysia’s best strategy is to strengthen domestic capabilities, diversify sourcing, and pursue stable trade arrangements. UOB Research estimated an ETR of 24% on Malaysia’s semiconductor exports to the United States, based on certain assumptions. It assumes 68% of exports are taxed at 19%, about 11% at 100%, and the remaining 21% – linked to multinational semiconductor firms – are exempt. This exceeds the 19% reciprocal tariff rate.

 

The real impact of all this will be in 2026. It will negatively impact US inflation and GDP and the MAGA land will be devasted with poverty rather than prosperity. So, much for TACO Trump!

 

Reference:

Uncertainty looms over semiconductor exports, Elim Poon, The Star, 11 August 2025

 

 

 

 

 

 

 

 

 

 

 

Which Countries are Leading Exporters to the US?

 

The United States is the world's largest importer of goods. Altogether, the country imported goods worth roughly $3.3 trillion in 2024, according to the U.S. Census Bureau. Mexico, China, Canada, Germany, and Japan were the largest exporters of goods to the U.S.

 

1. Mexico

Mexico topped the list of exporters to the U.S. in 2024 with an estimated $505.9 billion worth of goods. Total trade between the two regions was estimated to be $839.9 billion. Some of the top imports from Mexico include vehicles, machinery, electrical machinery, medical devices, and agricultural goods, such as fruit, vegetables, and beer.

 

The U.S. has a lengthy trade relationship with Mexico. The two countries, along with Canada, are part of the United States-Mexico-Canada Agreement (USMCA), a trade deal that replaced the North American Free Trade Agreement (NAFTA) in 2020.

 

Source: https://en.wikipedia.org

 

2. China

Total trade between the U.S. and China was estimated at $582.4 billion in 2024. U.S. imports from China reached roughly $438.9 billion, an increase of 2.8% from 2023.6.

 

Once associated with low-skilled labour, China has increasingly become a source of high-value technological goods. Smartphones, computers, lithium-ion batteries, toys, and video game consoles accounted for more than a quarter of the imports from China. China's products are also diversifying to include things like bedding and furniture.

 

3. Canada

Canada is the third-largest provider of goods to the United States, totalling $412.7 billion. As noted above, the country has favourable trading terms with the U.S. and Mexico under the USMCA. Total trade between Canada and the U.S. was estimated at $762.1 billion in 2024.

 

Canada exports energy products, such as crude oil, natural gas, and petroleum, to the United States, along with vehicles and agricultural goods like oils, beef, fruit, vegetables, and cereals.

 

 

4. Germany

Imports from Germany totalled $160.4 billion in 2024, while total trade between the country and the U.S. was estimated to be $236.0 billion. Vehicles, vehicle parts, vaccines, packaged medications, motor vehicle parts, and medical instruments were among the top products imported by the U.S. from Germany.

 

5. Japan

Total trade between the U.S. and Japan reached $227.9 billion in 2024. Imports from Japan came in at roughly $148.2 billion that year. Vehicles, vehicle parts, machinery, chemicals, and medical instruments were among the most commonly imported goods from Japan.

 

The U.S. and Japan established a trade partnership in 2020, aiming to lower tariffs on agricultural goods and improve digital trade between the two nations, among other goals.

 

The Bottom Line

While the U.S. is a major exporter of goods and services, it buys more goods from other countries, making it a net importer. In 2024, most American imports came from Mexico, China, Canada, Germany, and Japan, five of its major trading partners.

 

Reference:

U.S. Imports: Which Countries Do We Buy Most from and Why It Matters, Rajee Dhir, Investopedia, 4 July 2025

Merdeka: Are People First in Our Leaders’ Minds?

A 13-year-old girl, beaten nearly to death in Bukit Beruntung. Another in Sabah.
A navy cadet, Zulfarhan Osman, tortured with a hot iron until he died.
A boy, T. Nhaveen, sexually assaulted, burned, and beaten — his attackers walking free.
Teenagers driven to suicide by relentless online harassment.
A mother of three ending her life after months of TikTok abuse.

These are not stories from war zones.
These are Malaysia’s own children and citizens.
Victims of violence, bullying, and systemic neglect.

Source: https://en.wikipedia.org

According to the Malaysia Crime Prevention Foundation, 84% of children under 18 in Malaysia experience bullying in some form — cyber, physical, verbal. In certain communities, the rate spikes even higher. Yet, when these tragedies strike, public outrage fades within days. Investigations drag on. Families wait for justice. The next victim appears. And it ends with NFA (No further action) by the Police.

Our children suffer and die.  What captures our leaders’ urgent attention?
An upside-down flag.
A “ham sandwich.”
Socks with “A****” printed on them.

Meanwhile, Prof Dr Mohamad Tajuddin Rasdi has openly said he is now afraid to fly the flag for Merdeka, fearing opportunists will twist honest mistakes into racial and political ammunition. A flag hung wrong can get you arrested overnight. A child beaten unconscious in school. That can wait.

We see it daily. MPs shouting slurs across the floor of Parliament, making racial insinuations, playing to their voter base’s fears rather than debating real solutions. Some even wear religious headgear, projecting piety — yet their actions preach division, not unity. Because some are non-believers?

If we judge leaders not by what they say but by what they prioritise, the truth is ugly:
They will fight tooth and nail over a flag blunder. But they will not stand in schools to ensure our children are safe from bullies and predators. They will demand apologies for imagined insults to race or religion. But they will not demand resignations when negligence leads to death.

Before the next election, Malaysians need to stop getting swept away by the smoke and mirrors of outrage politics. Ask yourself:

·       When a minister or MP is shouting about a flag, what problem are they distracting you from?

·       When the opposition walks out of Parliament over a symbolic issue, what policy are they avoiding?

·       When politicians claim to “defend our honour,” are they defending your life, your child’s safety, your job security, your cost of living — or just their own relevance?

Every voter should remember: you don’t have to guess who the idiots are — their actions tell you everything.

Who visits a bullied child’s hospital bed?
Who ensures school bullies face justice and victims get protection?
Who fixes the systems, so these tragedies stop happening?

Who does not blame SOPs but those in charge?

Malaysians want a safer, fairer nation, we must demand it — loudly. Not just when it’s easy, not just when it’s fashionable, but when it’s uncomfortable and requires holding our own politicians accountable or you will have a Taco “Trump” in Malaysia.

In the end, a country that values symbols more than lives is a country that has lost its soul. Will you fly the Jalur Gemilang this year? 

Reference:

Bullying, Deaths, and Distractions — Are Malaysians Really First in Our Leaders’ Minds? Amarjeet Singh @ AJ

Malaysians Want Their Lump Sum!

A recent poll on Newswav showed that most Malaysians are not keen on the idea of receiving their EPF savings in monthly instalments for five years after turning 55. Out of 4,000 respondents, 69% rejected the proposal while 17% supported the five-year monthly payout plan, and 14% agreed with the concept but preferred an even longer payout period.

The proposal for monthly EPF withdrawals comes from a concern that some retirees finish their savings too quickly, leaving them struggling in their later years. By paying out in smaller, regular amounts, the idea is to ensure retirees have a steady income for a longer time, similar to a pension system. This proposal sparked a wave of debate — not because Malaysians don’t understand the importance of financial discipline, but because they feel the decision on how and when to spend their own retirement savings should remain in their hands.

While there are some who see monthly payouts as a way to avoid overspending early on, the majority feel it’s unnecessary for the government or EPF to control how members access their own money. Some said that after years of contributing, they should have the right to decide what to do with their savings — whether to budget carefully or withdraw it all at once. Others suggested it should be optional for contributors, not a mandatory policy.

Deputy Finance Minister Lim Hui Ying said the plan to introduce monthly, pension-style payouts for EPF members — announced during the tabling of the 13th Malaysia Plan — will not affect current members’ withdrawal rights. The new mechanism would apply only to members who register after it takes effect, as outlined by the Prime Minister. Existing members may opt in voluntarily if they wish.

The core issue is insufficient savings. So, whether lump sum or pay-out over a period, the majority cannot survive for another 20 years. What can be done? We could extend retirement age to 65; increase contributions by employees/employers; put in a supplementary fund from the Government or place them on a welfare scheme after exhausting their funds. Nothing is easy!

Reference:

Survey: Malaysians Want Their Lump Sum Money As 69% Say “No” to Monthly EPF Payouts, Opinion, Newswav, 12 August 2025

Underemployment Rises!

 

Malaysia’s unemployment rate officially has held steady for a decade at 3% as of June 2025. But underemployment has been rising – close to the two million mark due to a persistent skills mismatch in the labour market. Skill-related underemployment climbed from 1.183 million in the first quarter of 2017 (1Q17) to 1.956 million in 2Q25, edging up from 1.954 million in the previous quarter. 

By gender, underemployed females rose to 1.073 million in 2Q25 from 1.068 million in 1Q25, while males eased to 882,000 from 886,000. Among those aged 15 to 34, skills-related underemployment increased to 1.239 million from 1.188 million, whereas for those aged 35 and above, it fell to 717,000 from 766,000.

 

Source: https://www.wikiimpact.com

Professor Yeah Kim Leng recently said the trend reflects a mismatch between the graduates that universities are producing and the skills the labour market needs. Skilled labour shortages are evident in sectors such as semiconductors, chip design, robotics and artificial intelligence (AI) applications – and that universities need to reorient their curricula to meet industry demands.

Employment rose to 16.92 million from 16.86 million a month earlier, and from 16.42 million a year ago. The employment-to-population ratio stayed at 68.7% but rose from 68.3% in June 2024. The labour force expanded by about 50,000 to 17.43 million in June from 17.38 million in May, and by almost half a million from 16.97 million a year earlier. With an expanding labour force and rising employment, the labour force participation rate (LFPR) remained steady at 70.8%. 

By gender, the male labour force rose to 10.98 million in June from 10.95 million in May, with the LFPR unchanged at 83.3%. The female labour force edged up to 6.45 million from 6.44 million, with the LFPR steady at 56.4%. The number of individuals outside the labour force was little changed at 7.18 million, mainly due to housework/family responsibilities (43.7%) and schooling/training (40.9%). In 2Q25, Malaysia’s labour force averaged 17.37 million, up 0.8% from 17.23 million in 1Q25 and higher than 16.91 million in 2Q24. The LFPR also improved, rising one percentage point to 70.8% in 2Q25 from the previous quarter.

Based on Malaysian Investment Development Authority data, approved investments in 1Q25 totalled RM89.8bil, up 3.7% from the same period last year. For 2024, approved investments stood at a record of RM378.5bil. 

Unemployment at 3% generally considered full employment. What happens if it is lower? Wages may go up with supply constraints. But underemployment is the issue – how can a religious studies scholar fit into an administrative role in the private sector? He or she may not have any clue on what to do unless he or she is re-trained or has the willingness to “convert”. 

The Government, universities and industry have to map-out what is required for the future. We know we lack engineers, but will there be a revamp of the education system? Is TVET the answer? The current leadership in MoE has a blueprint but no skill set to adopt and adapt changes. That leaves parents and students to survey and decide what’s beneficial for their future. Please change the Minister of Education, anyone else can do a better job! 

Reference:

Underemployment rises despite low jobless rates, Kirennesh Nair, The Star,
12 August 2025