MGCC Pressespiegel - 04.12.2024

Umno's efforts to regain political dominance are hindered by its continued defense of former Prime Minister Najib Razak, say political analysts. Syaza Shukri of the International Islamic University Malaysia argued that Umno’s refusal to accept Najib’s conviction and attempts to "save" him are major issues. Former UMNO member Shahril Hamdan noted that the party's failure to address the 1MDB scandal has led to a strained relationship with Pakatan Harapan. Political scientist Wong Chin Huat emphasised that UMNO's losses in the past two general elections were due to the 1MDB scandal, which alienated middle-ground Malay voters. He argued that Umno must sever ties with Najib to regain support.

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The Immigration Department has expanded the autogate facility for immigration clearance to visitors from 53 additional countries, bringing the total to 60 countries. This includes 26 EU countries, 17 European countries outside the EU, 6 Arab countries, and 4 others (Canada, Hong Kong, China, and Taiwan). The government is also considering a new system using QR codes at KLIA to expedite immigration checks and reduce congestion, improving efficiency and security. The system may be expanded to other entry points, including land and sea borders. Additionally, 1,568 automatic passport scanning machines are in operation.

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Medical insurance premiums in Malaysia are expected to increase by 40-70% next year, with many policyholders unable to afford the rising costs, leading some to consider terminating their policies. The hikes, driven by the rising cost of healthcare at private hospitals, are causing financial strain, with policyholders reporting significant increases in their monthly premiums. Critics, including consumer advocates, are calling for limits on premium hikes and greater transparency from insurance companies regarding their financial losses. There are concerns that these increases will push the middle class toward overcrowded government hospitals, as they can no longer afford private healthcare.

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Prime Minister Anwar Ibrahim announced that leave for all Cabinet ministers has been frozen due to the worsening flood situation in Malaysia. Ministers and deputy ministers have been instructed to assist in flood-hit areas. The floods have affected several states, with Kelantan and Terengganu reporting the highest number of evacuees. On Monday, Anwar said the government will provide additional allocation to repair schools, temporary evacuation centres (PPS) and other essential infrastructure damaged by the floods

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The High Court granted a Discharge Not Amounting to an Acquittal (DNAA) to former Prime Minister Najib Razak and former Treasury Secretary-General Mohd Irwan Serigar Abdullah in an RM6.6 billion criminal breach of trust case linked to payments to the International Petroleum Investment Company (Ipic). The court's decision, made on 27 November, was based on the prosecution's failure to comply with the Criminal Procedure Code (CPC), particularly Section 51A, which requires the prosecution to provide certain documents before the trial. Justice Muhammad Jamil Hussin noted the case had experienced significant delays, and despite the DNAA, the prosecution could still recharge the accused. Both accused had paid RM1 million bail, which was ordered to be returned.

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Malaysia, as a partner country of BRICS, will closely monitor US president-elect Donald Trump's threat to impose 100% tariffs on BRICS nations if they create a rival currency to the US dollar, said Malaysia’s Investment, Trade, and Industry Minister Tengku Zafrul Aziz. He emphasised that while Malaysia is not a BRICS member, it remains open to trade and engagement with all countries. Tengku Zafrul also highlighted the importance of multilateral trade platforms like the CPTPP for boosting economic stability and prosperity, welcoming the UK's upcoming participation in the agreement.

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Perak attracted RM3.04 billion in investments from January to June this year, across 166 projects, with RM2.85 billion from domestic investments and RM184.2 million from foreign investments. The manufacturing sector contributed RM601.5 million from 30 projects, while the services sector accounted for RM2.44 billion from 136 projects. These investments are expected to create 1,560 job opportunities, with 1,249 in manufacturing and 311 in services. In Taiping alone, approved investments totaled RM272.7 million, including both domestic and foreign contributions, with 17 projects expected to generate 277 jobs.

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Pahang's economy grew by 5.2% in 2023, with a GDP of RM64.9 billion, surpassing the national growth rate of 3.6%. The manufacturing sector was a major contributor, accounting for 21.6% of the state's GDP, totaling RM14 billion in 2023, up from RM13.7 billion in 2022. Exports, particularly chemicals and metals, boosted the state's trade revenue, reaching RM32.7 billion. The manufacturing industry also created thousands of job opportunities, helping reduce the unemployment rate from 2.5% in 2022 to 2.0% in 2023, supporting local economies and families.

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Malaysia’s air passenger traffic grew 13% year-on-year to 8 million in October 2024, though it saw a 2.7% month-on-month decline from September due to lower domestic traffic. The figure reached 89.7% of pre-pandemic levels, reflecting continued recovery in both international and domestic travel. Year-to-date traffic stood at 80.3 million, on track to meet the full-year forecast of 95.4 to 97.6 million passengers. International travel led growth with a 20.5% increase, while domestic traffic rose by 5.9%. Malaysia's aviation sector benefited from expanded seat capacity, new flight routes, and visa exemptions. Air cargo also saw significant growth, increasing 21.7% year-on-year in Q3 2024.

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Malaysia's banking sector is expected to see higher profits in 2025, driven by steady loan growth, a stable interest rate environment, and increased non-interest income. Economist Afzanizam Rashid forecasts a 5.5% loan growth, supported by household and business financing demand. He also expects lower US Treasury bond yields to boost banks' non-interest income through mark-to-market gains. While the overnight policy rate is likely to remain steady, competition in the deposit market and from digital banks may pose challenges. Additionally, the impact of external events, such as US trade policies, and domestic risks like fuel subsidy changes will be closely monitored.

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On 27 November, Singapore and Malaysia agreed to continue sharing information on the ecology of the Johor Strait and collaborate on water quality monitoring to protect its marine biodiversity. The strait, under pressure from aquaculture farms and land reclamation, faces challenges due to limited water flushing, high nutrient levels, and low oxygen. In response, Singapore unveiled a plan to overhaul its aquaculture sector, focusing on reducing environmental impact by managing nutrient release. Both countries aim to address unsustainable farming practices that harm water quality and marine life in the strait. 

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Malaysia aims to produce 2 million tonnes of hydrogen annually by 2030, scaling up to 16 million tonnes by 2050, under its Hydrogen Economy and Technology Roadmap (HETR). The shift to green hydrogen will help reduce fossil fuel dependence and decarbonise critical sectors, with potential revenues of RM905 billion by 2050. The government is focusing on cost-competitiveness, financial incentives, and hydrogen infrastructure to accelerate adoption. 

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