Thread by @chedetofficial

INDUSTRIALISATION

** This article was originally published in THE EDGE DAILY , April 19, 2021

1. We want to be a developed country. Industry, manufacturing industry will help us achieve this ambition. But we need to adopt a different strategy.

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2. When we decided to industrialise, our objective was to give people some income. But we had no knowledge about manufacturing, no capital, no expertise in management and no knowledge of the market. So we decided on foreign direct investment.

3. It worked and we can say we have become an industrialised country. 80% of our exports now are made up of manufactured goods.

4. But we are still not a developed country. If we look at Japan, Korea and China, we will notice a difference. They industrialise through acquisition of technology and producing their own branded products to compete in the international market. And they succeeded.

We now see Sony, Hitachi, Toshiba products from Japan. Hyundai, Kia, Samsung and LG from Korea. And now Huawei and all kinds of products from China.

5. We do not have Malaysian branded goods internationally except gloves although we produce sophisticated components for some of the best brands in the world.

6. It is time for us to change our strategy. We should produce not for the domestic market but for the world market. Currently we dominate the world in the production of rubber gloves.

7. We should be able to identify other products for the world market.

8. We are blessed with a lot of raw materials. We have rubber and palm oil of course. But we also have tin, silica sand, rare earth, bauxite and maybe other minerals.

We should identify products using these raw materials. But if we do, we should aim for the world market. We should be big in the particular product.

9. There are thousands of products made from rubber. Malaysia should produce all the rubber tyres of the world – airplane tyres, tractor tyres, wheelbarrow and lawn mower tyres etc. Like rubber gloves we should be big in some of these products.

10. Rare earth is much needed for batteries. As we turn to electrification to reduce pollution with CO2, more and more batteries would be needed.

Already motorcars can do 400km per charge. With research, the range would increase. And the millions of cars switching to EV would need huge numbers of batteries using Lithium-Ion magnets.

11. Power plants using gas would depend upon many components which we can manufacture. We may not have the raw materials. But we can import them. Already Malaysia can produce solar panels and turbines.

12. We do not really have a glass industry. The demand for glassware can be met by our abundance of silica sand. We produce sheet glass but we export mainly silica sand with no added value. There are also industrial usage for glass which we can manufacture.

13. Our universities should train engineers. The capability of Malaysians is enormous. We had no knowledge about animation before.

Now we produce a number of good animated films. There are no films involved. Everything is electronics now. Apart from entertainment, there are demands for animation in many industries.

14. Animation makes teaching easier. We can see how the inside of engines work. The parts can be illustrated individually, assembled through animation, sliced through to show how the parts work. We can see how the parts work with animation.

15. We are already producing composite parts of airplanes. We can do more. Precision engineering can be so precise that the products would perform faultlessly.

16. It is a mistake to limit ourselves to supplying the domestic market. Korea does not need ships as the land is continuous. But Korea decided to build ships for the world market.

Today Korea builds most of the big ships in the world. Korea even built a gas liquefaction plant on a floating platform. Petronas has two of them.

17. South Korea builds cars and lithium-ion batteries for the world. And it is one of the two biggest producers of micro-chips for the world.

18. We are world beaters too. We have been the biggest canned pineapple producers, tin and rubber and palm oil producers in the world at one time. Now we are falling behind others in these fields. Yet we can be very big in manufacturing if we aim at the world market.

We have the capacity. There should be a new policy to encourage the manufacture of products for the world market.

19. The Government should support big locally owned industries so that we can be fully industrialised. If we can give tax-free incentives to FDI, we should be able to do the same for our big industries to supply the world.

20. Now we are in the information age. This is a new power which lends itself to the invention of other products, to automation and robotics. Everything that we do today can be enhanced by artificial intelligence.

21. We don’t need labour intensive manufacturing i.e., dependence on foreign workers. We need to discourage such industries. We have to replace them with local engineers trained to handle robots and automated machines.

22. Our palm oil and rubber estates need workers. We should reduce acreage for these estates while depending on other kinds of agriculture. Modern agriculture depends more on technology than manual workers.

23. By changing our industries and agriculture to depend less on labour, we will be rid of our foreign workers. It would be painful.

Those depending on foreign workers will scream. But the answer is not to increase the quota for foreign workers but to switch to other industries and automation.

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