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PETALING JAYA: While Selangor has done well economically, there still are key issues that must be addressed moving forward.
For instance, structural changes are essential, regulation and red tape should be minimised and there must be good governance, according to economists Rajah Rasiah and Geoffrey Williams.
Rajah of Universiti Malaya said a more serious upgrading plan is necessary to infuse more value-added activities within industries.
Such activities should be more aligned towards achieving climate resilience, digitalisation and digitisation, he told FMT Business.
“Selangor must recognise that it is shaping Malaysia’s technology and development frontier, and hence, it must refine its policies to reflect a focus on becoming a technologically developed state, while ensuring equity and a focus on the environment,” he said.
On the issue of good governance Rajah said responsible and ethical businesses would expect to see an end to corruption and the implementation of transparent policies.
The state can encourage the private sector to focus on these goals by offering certain incentives, he added.
Given the current scenario, Rajah said, Pakatan Harapan (PH), under the leadership of caretaker menteri besar Amirudin Shari remains the best option to form the next government.
Selangor accounted for a record 25.5% of the national gross domestic product (GDP) last year, an increase of 0.7% from 2021.
The state has received a total of 1,329 investment projects since 2017, with a total capital investment of RM67.5 billion.
Spur entrepreneurship
Williams of the Malaysia University of Science and Technology (MUST) said the policies of the PH administration are very supportive of large and small businesses and have attracted a great deal of investment.
“So generally it is on the right track,” he told FMT Business.
“As a major hub for foreign and domestic investments, Selangor must foster an open and welcoming environment for businesses,” he said.
This, he added, would entail ensuring minimal regulation and bureaucratic red tape.
Williams also urged the state government to spur entrepreneurship.
“Offering opportunities for young people is essential because Selangor is home to many universities and young people migrate from other states to Selangor to study,” he pointed out. “They need opportunities too for jobs, businesses and a better standard of living.”
Building a link between universities, local and international businesses and young entrepreneurs would be a good strategy for the state,” he added.
Technology transfer
Malaysia Youth Council fellow Adli Amirullah said that whichever party comes to power in Selangor should focus on acquiring investments that promote technology transfer.
“For instance, we know that Tesla is opening their headquarters here. It’s all sunshine and rainbows on paper, but what we should expect is more than just setting up an office in Selangor.
“The state government should work closely with the federal government to consider how corporations like Tesla can bring their expertise into the country and transfer their technology to local talents and vendors,” he told FMT Business.
“This is the type of investment that will have better and higher spillover effects in the long run,” he added.
“Imagine if the state government invests in and empowers the integrated electronic circuit industry in Selangor. One day we may get the industry to be the main supplier for Tesla electric vehicles (EVs) in Malaysia.
“The potential of this industry is huge and the state government needs to be among the first movers when it comes to investment,” he said.
On July 14, Prime Minister Anwar Ibrahim announced that EV manufacturer Tesla will set up its Malaysian headquarters in Selangor this year.
He said the investments by Tesla and its sister company SpaceX have the potential to create “tens of thousands” of high-value jobs in the country.
Political stability matters
Williams also highlighted the importance of having political stability for businesses to thrive.
“The business community is generally happy with the policy framework and engagements with the Selangor government,” he said.
“They would mostly like to see stability in the state administration. A change is unlikely but would not be welcomed by businesses generally,” he added.
Source: https://www.freemalaysiatoday.com/category/highlight/2023/08/10/economists-call-for-continuity-in-selangor/