Revolutionizing Malaysia’s Economy: The Madani Economic Narrative and Its Potential Impact

In light of the upcoming trifecta of economic policies – the Industrial Master Plan, the Midterm Review of the 12th Malaysia Plan, and Budget 2024 – the Malaysian Finance Ministry has initiated a public consultation process via the “Suarakan Pendapat Anda – MoF” portal. This move comes ahead of the unveiling of the Madani economic narrative in August, a transformative economic framework that aims to reshape the country’s economic landscape.

The economic challenges facing Malaysia are formidable, with the global economic outlook exerting additional pressure. High levels of national and household debt, sluggish global economic growth, disruptions in food and fuel supply, the rising cost of living, and high-interest rates are all factors that need to be addressed. In response to these challenges, I propose a comprehensive approach that focuses on three major areas: economy, subsidies, and social development.

Firstly, the Madani economic narrative, a concept introduced by Prime Minister Datuk Seri Anwar Ibrahim, is expected to bring about a radical change in national economic policies. It calls for the full implementation of Adam Smith’s economic philosophy – an open market that operates alongside ethics and morality to prioritize the concerns of the marginalized and the poor. This approach necessitates the strengthening of the social market to revitalize a humane economy, ensuring prosperity for the people and fair distribution of the nation’s wealth.

The Malaysian economy must transition from being primarily driven by government companies to being propelled by micro, small, and medium enterprises (MSMEs). These enterprises account for more than 90% of business entities in the economy, with a focus on essential areas such as food security. An economic boost from MSMEs will bring about significant national economic growth.

The economy must avoid excessive reliance on debt, as debt often leads to recession, as outlined by Ray Dalio in his template on economic cycles every 8 to 10 years. A stable economy undoubtedly desires sustained productivity with low risks of severe downturns.

Islamic social finance, which derives funds from philanthropy, zakat, and wakaf, must be maximized to replace project financing models. This ensures that national infrastructure projects are not burdened with profit-driven financing, thereby alleviating the burden on the majority of the people.

On the topic of subsidies, the principles of subsidies should ideally be established through a specific Act to prevent them from being easily changed according to political preferences and seasons.

Read this: Malaysia Is the Top Nation in Backing Islamic Economy

A profit-sharing mechanism or a two-tier pricing method should be heavily considered for natural resource products such as oil and gas, as well as cash crops like palm oil and cooking oil. This would allow the people to enjoy the country’s resources at lower rates, not at the world market prices that end up burdening them. For example, the price of Petronas gas for domestic energy usage can be rationalized to not follow world market prices, making it affordable and subsequently benefiting the entire population across income levels.

In essence, the principles of subsidies must be clarified: are they assistance to the people or are they the people’s rights?

Thirdly, social development should fully harness the potential of Islamic social finance, such as instead, to uplift the dignity of the poor from abject poverty. Cooperation with wakaf and Zakat institutions should be streamlined and expedited. Burdensome project financing models should be replaced with social financing that lowers costs.

Collaboration with highly skilled organizations should be encouraged as a means of upskilling the workforce to meet the demands of the Fourth Industrial Revolution, focusing on current needs such as digitalization, green economy, and renewable energy. This approach should be implemented extensively in every region, from urban areas to the hinterlands.

In formulating policies based on the Madani economic narrative, the principles must not be detached from the guide of a verse of alIn light of the impending rollout of three significant economic policies – the Industrial Master Plan, the Midterm Review of the 12th Malaysia Plan, and Budget 2024 – the Finance Ministry of Malaysia has launched a public engagement initiative through the “Suarakan Pendapat Anda – MoF” portal. This initiative is designed to gather public input ahead of the introduction of the Madani economic narrative in August, a transformative economic framework that aims to reshape the country’s economic landscape.

The economic challenges facing Malaysia are formidable, with the global economic outlook exerting additional pressure. High levels of national and household debt, sluggish global economic growth, disruptions in food and fuel supply, the rising cost of living, and high-interest rates are all factors that need to be addressed. In response to these challenges, I propose a comprehensive approach that focuses on three major areas: economy, subsidies, and social development.

Firstly, the Madani economic narrative, a concept introduced by Prime Minister Datuk Seri Anwar Ibrahim, is expected to bring about a radical change in national economic policies. It calls for the full implementation of Adam Smith’s economic philosophy – an open market that operates alongside ethics and morality to prioritize the concerns of the marginalized and the poor. This approach necessitates the strengthening of the social market to revitalize a humane economy, ensuring prosperity for the people and fair distribution of the nation’s wealth.

The Malaysian economy must transition from being primarily driven by government companies to being propelled by micro, small, and medium enterprises (MSMEs). These enterprises account for more than 90% of business entities in the economy, with a focus on essential areas such as food security. An economic boost from MSMEs will bring about significant national economic growth.

The economy must avoid excessive reliance on debt, as debt often leads to recession, as outlined by Ray Dalio in his template on economic cycles every 8 to 10 years. A stable economy undoubtedly desires sustained productivity with low risks of severe downturns.

Islamic social finance, which derives funds from philanthropy, zakat, and wakaf, must be maximized to replace project financing models. This ensures that national infrastructure projects are not burdened with profit-driven financing, thereby alleviating the burden on the majority of the people.

On the topic of subsidies, the principles of subsidies should ideally be established through a specific Act to prevent them from being easily changed according to political preferences and seasons.

A profit-sharing mechanism or a two-tier pricing method should be heavily considered for natural resource products such as oil and gas, as well as cash crops like palm oil and cooking oil. This would allow the people to enjoy the country’s resources at lower rates, not at the world market prices that end up burdening them. For example, the price of Petronas gas for domestic energy usage can be rationalized to not follow world market prices, making it affordable and subsequently benefiting the entire population across income levels.

In essence, the principles of subsidies must be clarified: are they assistance to the people or are they the people’s rights?

Thirdly, social development should fully harness the potential of Islamic social finance, such as instead, to uplift the dignity of the poor from abject poverty. Cooperation with wakaf and Zakat institutions should be streamlined and expedited. Burdensome project financing models should be replaced with social financing that lowers costs.

Collaboration with highly skilled organizations should be encouraged as a means of upskilling the workforce to meet the demands of the Fourth Industrial Revolution, focusing on current needs such as digitalization, green economy, and renewable energy. This approach should be implemented extensively in every region, from urban areas to the hinterlands.

In formulating policies based on the Madani economic narrative, the principles must not be detached from theIn anticipation of the forthcoming three economic policies – the Industrial Master Plan, the Midterm Review of the 12th Malaysia Plan, and Budget 2024 – the Finance Ministry of Malaysia has initiated a public consultation process through the “Suarakan Pendapat Anda – MoF” portal. This move comes ahead of the unveiling of the Madani economic narrative in August, a transformative economic framework that aims to reshape the country’s economic landscape.

Malaysia faces a complex economic landscape, with high levels of national and household debt, sluggish global economic growth, disruptions in food and fuel supply, the rising cost of living, and high-interest rates. These challenges are further compounded by the pressure of the global economic outlook. In response to these challenges, I propose a comprehensive approach focusing on three major areas: economy, subsidies, and social development.

Firstly, the Madani economic narrative, a concept introduced by Prime Minister Datuk Seri Anwar Ibrahim, is expected to bring about a radical change in national economic policies. It calls for the full implementation of Adam Smith’s economic philosophy – an open market that operates alongside ethics and morality to prioritize the concerns of the marginalized and the poor. This approach necessitates the strengthening of the social market to revitalize a humane economy, ensuring prosperity for the people and fair distribution of the nation’s wealth.

The Malaysian economy must transition from being primarily driven by government companies to being propelled by micro, small, and medium enterprises (MSMEs). These enterprises account for more than 90% of business entities in the economy, with a focus on essential areas such as food security. An economic boost from MSMEs will bring about significant national economic growth.

The economy must avoid excessive reliance on debt, as debt often leads to recession, as outlined by Ray Dalio in his template on economic cycles every 8 to 10 years. A stable economy undoubtedly desires sustained productivity with low risks of severe downturns.

Islamic social finance, which derives funds from philanthropy, zakat, and wakaf, must be maximized to replace project financing models. This ensures that national infrastructure projects are not burdened with profit-driven financing, thereby alleviating the burden on the majority of the people.

On the topic of subsidies, the principles of subsidies should ideally be established through a specific Act to prevent them from being easily changed according to political preferences and seasons.

A profit-sharing mechanism or a two-tier pricing method should be heavily considered for natural resource products such as oil and gas, as well as cash crops like palm oil and cooking oil. This would allow the people to enjoy the country’s resources at lower rates, not at the world market prices that end up burdening them. For example, the price of Petronas gas for domestic energy usage can be rationalized to not follow world market prices, making it affordable and subsequently benefiting the entire population across income levels.

In essence, the principles of subsidies must be clarified: are they assistance to the people or are they the people’s rights?

Thirdly, social development should fully harness the potential of Islamic social finance, such as instead, to uplift the dignity of the poor from abject poverty. Cooperation with wakaf and Zakat institutions should be streamlined and expedited. Burdensome project financing models should be replaced with social financing that lowers costs.

Collaboration with highly skilled organizations should be encouraged as a means of upskilling the workforce to meet the demands of the Fourth Industrial Revolution, focusing on current needs such as digitalization, green economy, and renewable energy. This approach should be implemented extensively in every region, from urban areas to the hinterlands.

In formulating policies based on the Madani economic narrative, the principles must not be detached from the guide of a verse of al-Quran, which urges usIn anticipation of the forthcoming three economic policies – the Industrial Master Plan, the Midterm Review of the 12th Malaysia Plan, and Budget 2024 – the Finance Ministry of Malaysia has initiated a public consultation process through the “Suarakan Pendapat Anda – MoF” portal. This move comes ahead of the unveiling of the Madani economic narrative in August, a transformative economic framework that aims to reshape the country’s economic landscape.