Malaysia Is Seen As A Politically-Driven Economy: A Personal Perspective

ByMohd Azad Jasmi

Disclaimer: The opinions expressed in this article are solely the author’s and do not represent any official stance.

In the landscape of economic development, Malaysia has often been perceived as a politically-driven economy. This viewpoint stems from the observable closeness that many entities and companies aspire to maintain with the ruling government. While this observation is subject to interpretation, it’s worth delving into the nuances of a politically-driven economy and exploring the advantages and disadvantages associated with it.

The perspective I’m presenting regarding Malaysia’s identification as a politically-driven economy is rooted in my personal observations, as well as insights gathered from conversations with various companies and government officers.

This narrative has evolved through my interactions and informal discussions, offering a glimpse into the dynamics that shape our economic landscape. It’s important to emphasize that the viewpoints shared in this context reflect an amalgamation of experiences and viewpoints from diverse sources.

The impression that Malaysia is perceived as a politically-driven economy is not unfounded, especially when one observes the regular patterns surrounding our national elections. It becomes evident that a significant portion of governmental focus and resources gets channeled into the election process and its aftermath. This occurrence has the potential to halt economic progress for a considerable span of time, often lasting approximately three to four months.

A key observation is the noticeable surge in interactions between agencies, entities, and governmental offices in the months leading up to a national general election. The level of engagement peaks not only in the anticipation of the election itself but also in the period that ensues—usually one to two months before and after the election.

During this critical phase, there is a marked shift in priorities, with government officers actively transitioning their roles to support various ministries, particularly those headed by contesting ministers.

The implications of this focus on the election process and its aftermath are significant.

Firstly, governmental funding, which plays a pivotal role in supporting various initiatives, tends to be temporarily redirected towards election-related activities. The allocation of resources towards campaigns and election logistics can lead to a diversion of funds that would otherwise contribute to ongoing development projects.

Secondly, the commitment of government officers to support ministries during the election season can potentially affect the seamless continuity of their day-to-day operations. This shift in personnel focus may disrupt the effective execution of projects and services, potentially causing delays and inefficiencies.

Moreover, the normal nature of election-related focus results in a recurring economic slowdown for a notable portion of the year. This intermittently stunted economic progress can hinder the momentum required to achieve long-term growth targets and can impact investor confidence.

It is essential to recognize that while elections are a cornerstone of democracy, the recurrent interruption of economic activity does highlight a concern. The periodic hiatus in development and decision-making can potentially hinder the nation’s progress.

While acknowledging the significance of democratic processes, it is equally crucial to explore ways to mitigate the economic implications of election cycles. This could involve devising strategies that ensure continuous economic activity, even during election seasons.

My personal observation that Malaysia’s economy experiences a temporary standstill around the time of national elections sheds light on the intricacies of our political landscape. This insight serves as an invitation to consider ways to minimize the economic disruption caused by election cycles while upholding the principles of democracy and good governance. By ensuring a balanced approach that supports both political engagement and economic growth, Malaysia can strive towards a more resilient and dynamic national landscape.

Advantages of a Politically-Driven Economy

  1. Access to Resources and Opportunities: Being closely associated with the government can grant companies access to resources, contracts, and business opportunities that might not be readily available otherwise. This symbiotic relationship can facilitate the allocation of resources for growth-oriented projects.
  2. Policy Influence: Businesses aligned with the government can potentially influence policies that are beneficial to their industry. This collaboration can lead to the creation of more favorable regulatory environments, fostering industry growth and innovation.
  3. Stability and Support: Closer ties to the government can offer a level of stability and support, especially during uncertain economic times. Businesses may find themselves better shielded from sudden policy shifts and market fluctuations.

Disadvantages of a Politically-Driven Economy

  1. Uneven Playing Field: A politically-driven economy can sometimes result in an uneven playing field, where well-connected businesses receive preferential treatment. This can hinder healthy competition and innovation, ultimately affecting market dynamics.
  2. Corruption and Cronyism: The intertwining of politics and business can inadvertently lead to corruption and favoritism. When decisions are influenced by political considerations rather than merit, it can erode trust in the system and hinder economic progress.
  3. Economic Vulnerability: Over-reliance on political ties can leave businesses vulnerable to shifts in the political landscape. Changes in government can bring about policy reversals that impact the viability of certain industries or projects.

While there are benefits to maintaining close ties with the ruling government, it’s essential for Malaysia’s long-term economic health to consider the potential drawbacks of a politically-driven economy. As the saying goes, “Don’t put all your eggs in one basket.” Relying heavily on political connections can lead to stagnation when the political climate changes.

I believe that Malaysia should strive to detach from political parties in its pursuit of sustainable economic growth. A heavy reliance on specific political parties can lead to a situation where policies shift dramatically with each change of government, causing disruption and uncertainty for businesses. Imagine if “Company A” is heavily dependent on “Party X,” and when Party X loses power, Company A faces abrupt policy changes that affect its operations.

To mitigate this risk, Malaysia should actively work towards diversifying its partnerships. By collaborating with international companies and fostering relationships with independent entities, we can ensure a more stable and resilient economy. This approach will help insulate businesses from the impact of frequent political transitions that come with a change in government every five years.

My Take

Let me try to give some thoughts, suggestions and examples of how companies in Malaysia can reduce their dependence on political parties and navigate a more independent path:

  1. Focus on Meritocracy and Transparency:
  • Implement clear performance-based promotion and hiring practices that prioritize skills, qualifications, and expertise over political affiliations.
  • Example: A company could establish a transparent promotion process that emphasizes employee accomplishments, skill development, and contributions to the organization.

2. Diversify Clientele and Partnerships:

  • Build a diverse portfolio of clients and partners, both locally and internationally, to reduce over-reliance on a specific political network.
  • Example: A manufacturing company could seek contracts with various industries and clients, expanding its customer base beyond government-related projects.

3. Invest in Research and Development (R&D):

  • Shift focus towards innovation and R&D to create products and services that are not solely reliant on government policies or support.
  • Example: An agriculture company could invest in developing new crop varieties or advanced farming technologies that cater to broader market demands.

4. Corporate Social Responsibility (CSR) Initiatives:

  • Engage in meaningful CSR programs that benefit local communities and contribute positively to society, irrespective of political influence.
  • Example: A telecommunications company could support education initiatives, healthcare services, or environmental conservation efforts.

5. Build Strong Industry Networks:

  • Foster relationships within the industry, trade associations, and professional networks to stay informed about market trends and opportunities.
  • Example: An IT company could actively participate in industry conferences, seminars, and workshops to gain insights and establish connections.

6. Adopt Transparent Lobbying Practices:

  • If lobbying is necessary, do it transparently by advocating for policies that benefit the entire industry, not just the company’s interests.
  • Example: An energy company could lobby for renewable energy policies that align with the nation’s sustainable development goals.

7. Encourage Employee Engagement and Advocacy:

  • Empower employees to voice their opinions and concerns, fostering a culture of engagement and innovation within the organization.
  • Example: An e-commerce platform could encourage employees to share their insights on improving the platform’s user experience and customer service.

8. Focus on Customer-Centric Strategies:

  • Center business strategies around meeting customer needs and delivering value, regardless of political influences.
  • Example: A retail company could continuously refine its products and services based on customer feedback and market trends.

9. Build Brand Trust and Integrity:

  • Establish a reputation for ethical business practices and integrity, which can attract customers, partners, and investors.
  • Example: A financial institution could prioritize transparency in its operations and ensure fair treatment of clients.

10. Strengthen International Connections:

  • Expand operations beyond national boundaries, collaborating with international companies and markets for growth and stability.
  • Example: An export-oriented manufacturing company could explore markets in neighboring countries to diversify its customer base.

Hence, companies should strive to be resilient, adaptable, and independent by focusing on their core strengths, ethical practices, and customer-centric approaches. By embracing these strategies, companies can reduce their vulnerability to frequent political changes and create a more sustainable path for growth and success.

Indeed, the close relationship between companies and government officials, while offering potential benefits, can also create an environment conducive to unethical practices such as bribery. The desire for projects, approvals, funding, and other forms of support can lead to a transactional mindset, where some individuals within both the corporate and governmental sectors may be tempted to engage in corrupt activities.

Bribery as a Consequence

  1. Quid Pro Quo: Companies seeking favors may feel compelled to offer something in return for the assistance they seek, leading to a quid pro quo situation where both parties stand to gain. This can create an unhealthy exchange of benefits and favors.
  2. Culture of Patronage: Over time, a culture of patronage may develop, where the allocation of resources, projects, and opportunities is perceived to be contingent upon offering something of value in return. This can erode the principles of fair competition and meritocracy.
  3. Undermining Transparency: Bribery can lead to decision-making processes that are not transparent, where projects and contracts may not be awarded based on merit, but rather on hidden exchanges of value.
  4. Erosion of Public Trust: Instances of bribery can lead to a loss of public trust in both the private and public sectors. Such practices undermine the integrity of institutions and erode confidence in the fairness of economic transactions and governance.

Mitigating Bribery Culture

  1. Strong Regulatory Framework: Implementing and enforcing stringent anti-corruption laws can serve as a deterrent to bribery. Companies and individuals found engaging in corrupt practices should face legal consequences.
  2. Transparency and Accountability: Encouraging transparency in procurement processes and decision-making can help prevent favoritism. Publicizing project allocations, contracts, and funding decisions can reduce opportunities for bribery.
  3. Ethical Leadership: Companies should prioritize ethical leadership, setting the tone from the top that bribery and corrupt practices will not be tolerated. Encourage a culture of integrity and fair play.
  4. Whistleblower Protection: Establish mechanisms for whistleblowers to report corrupt activities without fear of retaliation. This can help uncover instances of bribery and hold those responsible accountable.
  5. Civil Society and Media Oversight: An active civil society and vigilant media can play a role in exposing corrupt practices, putting pressure on both companies and government officials to uphold ethical standards.
  6. Corporate Social Responsibility (CSR): Companies can focus on contributing positively to society through CSR initiatives that benefit the community. This can help shift the focus from transactional relationships to ethical partnerships.

It’s crucial to recognize that while close relationships between companies and government officials can have advantages, they should be built on ethical foundations that prioritize the greater good. A concerted effort by both the public and private sectors is essential to create an environment that fosters transparent, fair, and accountable business practices, thus mitigating the risks of bribery and corruption.

In navigating the complex landscape where businesses intersect with government, the potential for close relationships to foster corruption and bribery cannot be overlooked. The allure of projects, approvals, and resources can create a breeding ground for unethical practices, undermining the very fabric of fair competition and public trust. As Malaysia strives for economic growth and prosperity, it must simultaneously champion a culture of integrity, transparency, and accountability.

To ensure a future that is free from the shadows of bribery, both companies and government entities must commit to upholding the principles of ethical conduct. Transparent procurement processes, strong regulatory frameworks, and a zero-tolerance stance on corruption are the cornerstones upon which a resilient and ethical business ecosystem can be built.


As Malaysia advances on its journey of progress, the nation’s success will be measured not only by economic metrics but also by the ethical standards it upholds. Striking a delicate balance between pursuing growth and maintaining unwavering ethical standards is imperative. By fostering an environment where business decisions are made based on merit rather than influence, Malaysia can pave the way for an equitable and thriving economy, earning the respect and trust of its citizens and the global community alike. In the end, a commitment to principled conduct will define the legacy we leave for future generations.

In conclusion, while forging connections with the government is important, Malaysia’s economic progress should not be tethered solely to political affiliations. Embracing a more independent and diversified approach will bolster our resilience and set the stage for a thriving economy that remains robust regardless of political changes. By striking this balance, we can create an environment where businesses flourish and the nation as a whole prospers.

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