As Asia gathers strength and has a more forceful impact on the global economy, opportunities arise for Asia to shape a global order of greater stability, sustainable growth and shared prosperity. One area that Asia has begun to recognise is the importance of a more balanced growth strategy both for the benefits of Asia and the world in general. Indeed, three particular trends within Asia are already emerging and they will continue to gain momentum as policy places greater focus on them. First is the balancing of an outwardoriented development strategy with efforts to promote the greater role of domestic demand. For some Asian economies, this takes the form of promoting domestic investment activity to meet the immense development needs within Asia, as well as to accelerate the transformation of Asian economies towards higher value-added output. For many, policy content to build broader social safety net and institutions to increase the role of private consumption in contributing to growth is gaining importance. The second trend in Asia is the acceleration of regional economic integration as intraregional trade and investment flows rise rapidly and financial markets are increasingly interlinked. Following the rapid trade liberalisation across Asia to improve market access is the growing pace of intra-regional investment flows. Increasingly, a vast market for goods and services will be created. Within Asia, as China becomes the locus of economic growth and transformation, the speed of ASEAN economic integration as one common market will provide added support to Asia’s pace of growth and dynamism.
Indeed, many new areas of growth in Malaysia would benefit from higher investment, such as in niche growth segments in the services sector, as well as in the development of enabling infrastructure such as in broadband and green technology. Investment in green technology has the potential to not only increase the efficiency of the economy, but also to open up new sources of growth. As Malaysia moves from a cost-competitive economy to one that is more knowledge and innovation-driven, it is not just the quantity of investment that matters, but the quality of investment that would dictate our ability to move up the value-chain. An important consideration in ensuring high quality investment is the availability of complementary factors. Here, I would like to highlight three of these factors, namely a private sector-led competitive environment, high quality workforce and the availability of enabling infrastructures. A business friendly environment with minimal market distortions is critical to ensure that the private sector can direct its investment activities efficiently and to areas of the greatest growth and return potentials. Similarly, the availability of skilled workforce and modern infrastructures such as high-speed broadband is key in ensuring that high value-added and high knowledge-content investments take place. Much is currently being discussed and debated on the issues of high quality workforce and information age enabling infrastructures, especially given the Government’s renewed emphasis on them in the recent efforts to transform the Malaysian economy.