Purchase OBG Publications

The 11th Malaysia Plan lays out the government’s latest five-year development strategy, covering the period 2016-20. It is also the final five-year plan leading up to Wawasan 2020, the year by which the government’s vision to make Malaysia a high-income, knowledge-based economy is meant to be realised. For this pivotal period, the plan lays out initiatives for the transport sector including construction of a seamless transport system and facilitating enhanced mobility of people. The latter involves ensuring that 40% of transport in the Greater Kuala Lumpur-Klang Valley region is composed of public options. In the other state capitals the target is 20%. This chapter contains interviews with Ruben Emir Gnanalingam, CEO, Westports Holdings; and Mohd Azharuddin, CEO, Land Public Transport Commission.

A series of economic reforms launched in 2010 support Malaysia’s goal of lifting itself out of the middle-income trap and into the ranks of high-income economies by 2020. As part of the Economic Transformation Plan (ETP), the government established the Agensi Inovasi Malaysia (Malaysian Innovation Agency, AIM) to lead policies and strategies related to innovation. Additionally, innovation and research and development have been identified as crucial to success in five of the 12 National Key Economic Areas targeted for transformation, including hydrocarbons and palm oil, as part of a strategy to move from labour-intensive to knowledge-based industries. Over the past few years, policymakers have sought to make the country more conducive to innovators and risk-takers. The 11th Malaysia Plan, which lays out the country’s economic path through to 2020, describes innovation as one of its game-changers. This chapter contains an interview with Mark Rozario, CEO, Malaysian Innovation Agency.

With oil prices depressed and global economic activity slowing, these are undoubtedly challenging times for oil and gas companies, producers and countries worldwide, and Malaysia is no exception. Yet despite the downsides, these are also key times for the development of new resources and strategies in the sector, with Malaysia at the forefront of many renewable energy trends. Even as it makes a major contribution to global oil and gas production, the country is leading the way in biofuels and biomass, solar energy and hydroelectric power. It is also a key player in the regional energy network, a system being rapidly enhanced by the arrival of the ASEAN Economic Community. This chapter contains an interview with Mohd Yazid Ja’afar, CEO, Johor Petroleum Development Corporation.

Malaysia’s insurance and takaful, or Islamic insurance, sector has recorded consistent growth in recent years. In 2015 total assets of both combined expanded by 5.6% to RM264bn ($65.3bn). Within the life insurance and family takaful sector, the growth of takaful contributions has been notable, accounting for almost 18% of new premiums and contributions. Insurance and takaful provide an important avenue for the public to save and invest, as well as a form of risk protection for events such as death, disability and retirement. The target penetration rate for insurance and family takaful policies is 75%. As of 2015 the penetration rate was 54.9%, while in 2014 it stood at 55.5%. This chapter contains an interview with Yen Saw, CEO, Tokio Marine Insurans.

Amidst a mixed earnings performance around the world in 2015, Malaysia’s capital market posted modest growth over the course of the year. The sector grew by 2.1% in 2015, according to the Securities Commission Malaysia, the capital market regulator, to reach RM2.82trn ($698bn) by the end of the year, which was 2.5 times the size of the economy. Bursa Malaysia, the nation’s stock exchange, accounted for roughly 60% of this total, with a year-end market capitalisation of RM1.7trn ($420.8bn), while outstanding debt issuances made up the remaining RM1.12trn ($277.2bn). This follows on from half a decade of steady growth in the total value of Malaysia’s capital market. In recent years the country has emerged as a substantial player in a number of areas including fund management, sharia-compliant finance and debt issuance. This chapter contains interviews with Foo Su Yin, CEO, RAM Ratings; and Shahril Ridzuan, CEO, Employees Provident Fund.

Although funding conditions in Malaysia are tightening due to prudential considerations and heightened macroeconomic risks, the banking system as a whole remains profitable, liquid and well capitalised. The country’s 27 domestic and foreign banking institutions are amongst the most dynamic in the region, serving clients at home as well as the wider South-east Asia region. An early adopter of sharia-compliant financial systems, Malaysia is now reaping the benefits as it continues to consolidate its global lead in Islamic finance. In the 23 years since commercial banks were allowed to offer Islamic banking products, the sector has emerged as a formidable force in providing funding to the Malaysian economy and beyond, creating additional high value at home and abroad. This chapter contains interviews with Nor Shamsiah Mohd Yunus, Deputy Governor, Bank Negara Malaysia; Mahendra Gursahani, Managing Director and CEO, Standard Chartered Malaysia; and Jaseem Ahmed, Secretary-General, Islamic Financial Services Board.