“I think provided Malaysia kept on the path of continued market liberalisation, engaged with the rest of the world in sensible guided streams of globalisation, and investments remained healthy, there would be no mechanical obstacle for Malaysia to achieve its aspirations,” he told StarBiz after delivering a lecture entitled, “Nobody's world, everybody's problem? Who's afraid of a little global hegemony?” organised by the University of London.
He said that people should be well taken care of and recognised, as well as being provided with continued opportunity to keep rising up the economic ladder.
On the upcoming general election, he said it would be a difficult question to answer, as both the ruling coalition and opposition had their own manifestos.
“Malaysians have to work through these and decide, but it's clear that the ruling coalition has a track record in economic management and expertise built up over the years,” Quah noted.
He said most people would be supportive of the transformation programmes, and Malaysia as a whole needed to keep a perspective of what it wanted to achieve, i.e, to be a developed nation by 2020, and economic prosperity for everyone, inclusive of the bottom 40% of society.
“The middle-income trap is being faced by many Asian economies, including Malaysia, and many other regional countries. The trap refers to the possibility that when a country reaches a certain level of income, it would be unable to keep growing after that,” he explained.
He said things looked pretty grim according to what the World Bank had documented.
“The World Bank has documented the growth of about 200 developing countries, and in the last 30 years only 13 of them have been able to evade the mechanics of the middle-income trap. That's bad news. The other piece of bad news is that one of them is actually Cyprus and other not-so-performing European countries at this point,” he said.
In his lecture, Quah projected the shift of the economic centre of gravity over the decades to the East by 2049.
“The axis is already near Kuwait and would move to the East soon enough. Malaysia would be near the centre of the world economy, and there would be greater attention paid to different economic opportunities.
“The country would see more inflow of capital and ideas, and much more entrepreneurial economic activities. Malaysia needs to stand ready to face East,” he said.
However, despite the economic centre of gravity moving over to the East, he said the centre of political power would still remain in the West, causing economic and political fractures in its course of shifting.
“This is not something we cannot fix, but is something we have to look at thoroughly in every system of decision-making, and re-examine affirmative actions and programmes.
“What matters more than just processes and mechanisms is the delivery of results, like China delivering its economic reforms, despite not having a political structure like the West,” Quah said.
