Speaking at the 2021 Youth Economic Forum this morning, Muhyiddin pointed out that Malaysia’s gross domestic product (GDP) had dropped to 4.6% in the two decades after the Asian financial crisis, when it was once 8.4% yearly.

“With productivity growth now stagnant, annual per capita income has stalled at about US$10,000 for nearly a decade, suggesting that Malaysia is snared in the middle-income trap.”

To overcome this, he said, the nation needed to become a global export player as, in the past, other countries developed by producing new and high-value products to be exported.

To this end, he said, the critical driving force of growth would be entrepreneurs with global ambitions.

“Secondly, Malaysia needs to grow our manufacturing capabilities to make increasingly complex and sophisticated products. Based on the Economic Complexity Index, even a one standard deviation increase can elevate GDP growth in Malaysia by between 0.7% and 1.6% a year.

“Thirdly, Malaysia needs to create home-bred multinational companies, as the pay-off for economic growth is very high,” he said in his address, using firms like Samsung and Hyundai in South Korea as examples.

The goal, he said, was to produce Malaysian firms in frontier technologies that were competitive at a global stage, adding that this was where young Malaysians played an important role.

Muhyiddin said Putrajaya was recalibrating its industrial policies and foreign investment strategies to overcome the decline in exports growth and the manufacturing sector’s contribution to the nation’s GDP.