The Malaysia government and government-linked investment companies (GLICs) will invest MYR1 billion ($211.12 million) in additional funds to match private funds in a bid to support local startups and encourage technopreneurs, its Prime Minister said.

The initiative, which is one of several under the new economic road map, would include ensuring the provision of funds for each phase of a company’s growth, alongside expanding the implementation of programs such as Corporate Hackathon and MYHackathon, said Anwar Ibrahim in his speech at the launch of the so-called “Ekonomi Madani” plan on Thursday.

According to the prime minister, Malaysia ranked 20th in the world based on the report of The Global Startup Ecosystem 2023, valuing the Malaysian start-up ecosystem at $46 billion for the first half of 2020 to 2022.

It will also allocate an additional MYR100 million ($22.12 million) to intensify research, development, commercialization and innovation, with a focus on industrial needs, such as renewable energy, food security and new growth areas.

Anwar: Capital market needs to be “more lively” for more local unicorns

Anwar said the capital market also needs to be “more lively” by bringing more company listings and thus giving birth to new local ‘unicorns’.

The banking system and capital markets have to act quickly to meet business financing needs. The Securities Commission will develop Financial Market Reform Policies by facilitate the investment of retail investors, attract more investors to finance MSMEs as well as the country’s new growth activities; and increase the level of competitiveness of the capital market at the international level, he added.

To drive digital economic reforms, Anwar said the government will implement “Digital ID” to develop online businesses and related industries. A matching grant for digitalisation will be increased by RM100 million to assist micro, small and medium enterprises (MSMEs) in accelerating their shift towards a more digital business model, he added.

The government has decided to provide an e-cash credit of MYR100 to all Malaysians with an annual income of MYR100,000 or below.

“The number of eligible recipients is estimated to exceed 10 million people, including the B40 (bottom-tier households) and M40 (middle-tier households) groups, with funds totaling MYR1 billion ($211.12 million).

Malaysia aims to be regional economic powerhouse

“Malaysia must learn from the decline of past nations which have risen again nimbly to the front. Like it or not, we must become a regional economic powerhouse. We need to think globally and internationalize the economy to generate prosperity. With that, we will be able to achieve the targets set for the Top 30 largest economies in the world in the medium term,” Anwar said.

“If we are just satisfied with the status quo, it is expected that our economic growth will continue to grow between 4 to 5 percent However, if we work hard towards implementing reforms aligned with Ekonomi Madani, we are more than capable to reach 5.5 percent, and I believe that it is not impossible to reach even up to 6 percent,” he added.

In order to accomplish this significant goal, he said:

• We need to establish greater economic integration with neighbouring countries, especially considering the world is facing supply chain constraints. Therefore, we need to nurture more high-competitive local companies to penetrate the ASEAN regional market.

• Our efforts now need to go beyond Free Trade Agreements. For instance, trade diplomacy and strategic arrangements can enhance bilateral and multilateral market integration and facilitate the movement of goods, capital, skilled workforce, and technology sharing with neighboring countries.

• Until now, our emphasis has been on main sector activities, encompassing Electrical and Electronic (E&E) and chemistry. As we advance, the new industrial mission under New Industrial Master Plan (NIMP) will center around activities that offer high-added value or economic sophistication.

For instance, cluster in Penang focus should be on high-value E&E activities such as Integrated Circuit (IC) design. As for the chemical sector, petrochemical and oleochemical companies should prioritise manufacturing specialty chemicals, the prime minister said.

The government will introduce outcome-based tax incentives to support and reward companies focusing on high-impact activities, he added.

“We must implement reforms so that Malaysia can be ranked among the 12 best economies in terms of competitiveness and ease of doing business,” Anwar added.

Malaysia welcomes investors & businesses

Thus, it should be announced to all corners of the world that Malaysia is open and ready to welcome investors and businesses.

According to him, so far several companies have announced investment commitments including Sumitomo Corporation, Tesla and Rongsheng and Samsung Engineering.

The government is also launching the Malaysia’s National Energy Transition Roadmap (NETR) to accelerate energy transition and change the way energy is generated in Malaysia in order to improve climate resilience.

According to Anwar, efforts to be implemented include increase renewable energy generation capacity, installing solar panels on Government buildings, and implementing renewable energy trading policies through the electricity market system.

“We should also take inspiration from Sarawak’s pioneering efforts in the bus project that utilises hydrogen energy and CCUS (Carbon Capture, Utilisation & Storage). To promote these new green growth activities, the government
plans to provide specific incentives,” he added.

Malaysia to reform startup ecosystem, focus on investment, says minister – report