Publication Source: The Edge Markets
As part of the cover story – Fixing the Economy – for its year-end edition, The Edge asked a select group - a minister, a former minister, a banker, economists and business leaders - for their views on the outlook for 2019. Our President and Group CEO, Tan Sri Shahril Shamsuddin, shared his thoughts on the challenges and policy expectations. Below is his opinion piece in full.
CONFIDENT IN THE FACE OF A DISRUPTIVE FUTURE
Changes are the norm in a global business. As a global company, Sapura Energy embraces change and is adaptable to transitions in the industrial landscape as we manage our growth and continue our investments in people and assets. With the advent of the Fourth Industrial Revolution (4IR), we have been preparing ourselves to face more changes and disruptions to our business. Given our resilience, agility and solid corporate culture, we are confident in facing the disruptive future and taking a leading role in the era of the “new normal”. We continue to be an active member of the community and contribute to the progress of society and remain committed to energy and environmental sustainability.
We have been focused on running Sapura Energy’s global business, part and parcel of which is managing change as we balance stability and flexibility, creating more partnerships across national borders and formulating our vision for the company and the country as well. Cognisant of changes that are affecting all areas, we are committed to being part of the solution for climate change by providing safe, clean and affordable energy. Amid the new power dynamics and shifting trade relations, global businesses must demonstrate a convincing approach to globalisation and support it with actions that promote sustainability and equality.
The biggest challenge is keeping the company agile to adapt quickly to new environments and ecosystems while continuing to deliver high-quality services to our partners and clients, which include some of the most prominent oil and gas players worldwide. Overlaying all of these is strong governance that keeps the entrepreneurial spirit alive.
Country in metamorphosis
Rebuilding is a continuous process of change and Malaysia is undergoing a metamorphosis. So, seven months is too short a period for a fair and comprehensive evaluation. Of real importance at this juncture is the consensus to develop a shared vision and strategy and recognise our strength in diversity as we chart a new path to building a developed, productive nation. We are sure that the vision and strategy will include effective policies that are targeted at encouraging productivity and creativity for the creation of new businesses and technologies in the 4IR era.
Meeting the challenges of change, distribution and affordability requires fresh thinking among our population of 32.5 million – the median age being a youthful 28.6 years old. We must take advantage of our favourable demographics by mobilising the population to create a productive and creative nation, and strengthen our capacity for change to realise the promise of the 4IR. Policies that allow economic and social projections for our market and encourage more integration with ASEAN, supported by good connectivity, full-gender engagement and other incentives, will pave the way for our young people and young companies to create more value and contribute to the economy and community.
Rising inequality has become a driver of the widening trust gap, which has helped fuel the rise of populism the world over. As social stability is crucial for Malaysia to achieve high-income nation status, policies on education, job creation and upskilling that lift the living standards of all Malaysians must be put in place although, ultimately, society’s mindset must change in order to drive progress.
Coordination in policymaking is one area where a partnership between the public and private sectors is important and could provide a paradigm shift for businesses. We look forward to a robust dialogue between the two sectors, as well as targeted, focused collaboration to accelerate economic growth and as part of nation building. The private sector, which is the primary engine of economic growth, has so much to contribute in areas that include skilled expertise, foreign direct investments and research and development.
Together, the public and private sectors must build resilience to prepare for fast-changing priorities brought about by the 4IR and develop new businesses and technologies to support high-quality and inclusive economic growth. These measures are especially important now that global trade policies are being challenged, taking some lustre off growth. In its latest report, the International Monetary Fund revised downwards its global gross domestic product (GDP) growth forecast for 2018 and 2019 to 3.7% from 3.9%, compared with 2017’s 3.8%, the fastest global growth since 2011.
With this in mind, and to mitigate the fallout from the global trade war, we must seize the opportunity to further leverage ASEAN to bring in more investment. The world has witnessed a major reordering of rules, leading to chaos in some instances and making ASEAN – which is open to investment and trade, but moves slowly and by consensus – a welcome contrast. With US$2.8 trillion in GDP and 642 million consumers on our doorstep, there are tremendous gains to be had if we get our act together and take advantage of the opportunities that the region has to offer.
Targeted incentives necessary
There are many challenging and sensitive issues to address, but, in our view, the priorities would be to ensure the sanctity of law as a pre-requisite to investment to spur economic and social development and to reform the education system to train our youth to thrive in the 4IR. Together with political calm and stability, the sanctity of law is vital in convincing investors of the sustainability and consistency of our policies. Investors must be reassured that the policy reforms are for the long haul.
A national, multi-stakeholder engagement is needed to design policies that take into account the promise and perils of the 4IR. Already, new technologies, such as blockchain, artificial intelligence and advanced robotics, are causing massive transformations around the world, raising important questions on matters that include jobs, data and energy, which must be addressed to place Malaysia firmly as a winner in the new revolution. To fuel innovation and unleash entrepreneurial spirit, targeted incentives - especially in industries where we have natural advantage - are necessary. We must embrace entrepreneurship - still an untapped source of economic power - in crafting our policies.
The new revolution demands new skill sets, which in turn, demand new approaches to education and learning. To keep up with the rapidly-evolving environment, we need a reformed educational framework that is aligned to the needs of the economy in the context of the 4IR, and a multi-disciplinary curriculum that equips our children with the required skill sets and critical thinking, as well as improved English proficiency. Along with the focus on quality, we believe efforts to foster national unity via the education system should move in tandem.