Balancing the Scales
Balancing the Scales
By Mehmet Enes Beşer
It is the story of the emerging economies that Malaysia, by and large, has been referred to as a low-profile achiever — a country whose internal complexities, notwithstanding, has experienced an even economic rise during the last fifty years. Underneath the surface level of its stupendous GDP statistics and furious industrialization, however, is more of a seething boiling current: the fierce interdependence between political stability and economic performance. In Malaysia, political mood has never been a passive backdrop to economic action but a dynamic and volatile force impelling investment climate, corporate moods, and the course of future national development.
Malaysia’s post-colonial life offered early evidence of this meeting. The BN coalition political leadership created the type of stability international capital craved. Infrastructure schemes abounded, factories mushroomed, and Kuala Lumpur became an increasingly regionalized economic hub. But at cost. Deep-entrenched patronage networks, uneven prosperity, and a locked-down political culture fostered corrosive resentments. When the Reformasi movement exploded in 1998, political stagnation had clearly lost ground to the socio-economic tensions in rapidly modernizing society.
The decades that followed were characterized by fluctuations between stretches of hesitant reform and abrupt disturbance. The 2018 political earthquake, during which the Pakatan Harapan coalition overthrew the BN after sixty continuous years in office, was simultaneously a democratic reawakening as well as an economic turning point. Investors, accustomed to Malaysia’s political stability, were faced with a new reality of power realignments, policy uncertainty, and institutional readjustment. Although early expectations of reform were paid for in monetary terms, prolonged volatility — in the guise of a series of leadership changes and loose coalitions — soon started to influence the market psyche.
The pandemic years exposed the weakness of this unstable volatility even more. As Malaysia wrestled with public health crises, politicians were more concerned with securing tenuous parliamentary majorities than with offering stable government. Economic stimulus packages would be mired in bureaucratic inefficiencies and political deal-making, diluting their effectiveness. In the business community, only uncertainty was certain. Investment strategies were delayed, consumer confidence varied, and Malaysia’s competitiveness rankings slipped back, while regional neighbors made more robust recoveries.
Malaysia’s story is one of irreversible breakdown. What distinguishes it from much of the remainder of middle-income countries is its institutional memory and its historical resilience. Political instability has paradoxically brought forth a more engaged civil society, a more independent judiciary, and a more vigorous media. These developments, painful though they are to the elite, are a structural deepening of Malaysia’s democratic foundation — an enabler of sustainable and inclusive long-term economic growth.
The biggest challenge Malaysia needs to overcome today is how to move away from a politics of crisis management to one of consensus politics. Economic development in the 21st century requires more than a rise in GDP; it requires social cohesion, open government, and strategic vision. Malaysia needs to move away from the perception of politics as a zero-sum game where short-term victory is the ultimate goal at the expense of institutional trust and policy stability. All political unrest may satisfy proximate factional appetites but pulls down the stability upon which extended investment and innovation are based.
We should not forget the external pressures as well. The international economy is undergoing tectonic shift — be it supply chain overhauls or green energy revolutions and digital economy upheavals. The nations that offer political stability, policy stability, and regulatory stability shall be the ones that attract the lion’s share of capital, talent, and technology. Malaysia’s competition is no longer regional peers like Thailand, Vietnam, or Indonesia. It is global and incessant. With that in mind, each political blunder, each excursion into policy retreat, has higher economic stakes than ever before.
But there are reasons to be optimistic. Malaysia’s demographic structure of young people, solid financial sector, and diversified economy are sound fundamentals. The Twelfth Malaysia Plan’s move towards high-tech sectors, green technology, and digitalization shows that policymakers understand the need to future-proof the economy. The issue is not having the correct vision, but political maturity to implement them across election cycles consistently.
There is also a shift in the generational sense. Malaysia’s young electorate, as recent elections have shown, are less bound up by identity politics once ruling national life. They are demanding meritocracy, openness, and clean policy discussion. Politicians will need to accomplish these goals more than catering to old cleavages if Malaysia is to still realize a more stable and inclusive pattern of economic growth — less prone to electoral waves and more based on high-level consensus.
Finally, the political stability-economic growth connection in Malaysia is linear, rather than dialectical. Stability brings growth, but stability can be sustained only through growth that is participatory, equitable, and inclusive. Malaysia’s future riches will not depend on how rapidly it can grow, but on how effectively it can govern. And that, in turn, will require a mature political culture, one that understands that genuine stability is not the avoidance of change but being capable of commanding change without the loss of national confidence.