Philippa Malmgren, who served as a special assistant to former US president George W Bush, said many in Malaysia believe that China is the most efficient place for manufacturing.
“But this is not true because China’s cost base has become very expensive,” she told FMT on the sidelines of a forum at Universiti Malaya yesterday.
“Wages have increased dramatically and quality control is not very good,” she added.
In fact, she said, many other markets can now compete with China as well, while Chinese companies are even setting up shop in the US.
Malaysia, too, could compete with China in this area if it tried, she said.
Regarding the economy, she said, Malaysia should focus on strengths such as eco and medical tourism. She said the country has many pristine tourism spots and a “fantastic” medical community.
“Medical tourism should be a much bigger part of the economy, with Americans and Europeans coming here for treatment,” she said.
Malmgren, a former member of the president’s working group on financial markets, also said Malaysia is a place of interest for many foreign investors.
“The problem is, Malaysians are not interested in foreign investments,” she said at the forum titled “Weathering the Geopolitical Storm: Malaysia’s New Economic Narrative”.
She referred to the owner of a globally recognised brand whom she said had been considering investing in Malaysia. However, due to various government requirements, the investor had opted for Singapore instead, she said.
“Every nation needs to be more flexible in the modern environment,” she said. “This cuts across everything.”
She said this meant less red tape and the creation of an environment and ecosystem that supports innovation.
Former Johor menteri besar Abdul Ghani Othman who was also at the forum said Malaysia could do better in the continuity of long-term plans, citing Dr Mahathir Mohamad’s vision for Cyberjaya.
Like Singapore’s founding prime minister Lee Kuan Yew, Ghani said Mahathir too had good ideas. The problem, he said, was lack of continuity.
“When Lee retired, he was made a senior minister. When Goh Chok Tong retired, he too was made a senior minister. Maybe it helps.
“What we see here is that when there is a leadership change, policies change and the (previous) ideas either get neglected or marginalised.”
Ghani also said Malaysia needs to improve its preparation in terms of regulatory framework.
“Singapore can receive all the money coming out from Hong Kong because it is ready to receive them. People in the financial sector tell me that we do not have that kind of regulatory framework.”
It was recently reported that Goldman Sachs Group Inc estimates investors have moved some US$4 billion from Hong Kong to Singapore, an alternative financial centre in Asia, amid the ongoing turmoil in the semi-autonomous Chinese territory.