Malaysia

Malaysia’s Economist King: Sultan Nazrin Shah of Perak

Victor Tan
 

Hello sepupus!

The following Personality Report is one that I have wanted to write for a very long time. It is about a figure who is an eminent economist, but who is also a part of one of Malaysia’s most important institutions: The Royalty within Malaysia’s constitutional monarchy.

Because this is a topic that is of significance to Malaysia and Malaysia’s history and one that I consider important and relevant to all Malaysians, it will be made free to all readers; like other premium reports, you may purchase an individual copy for USD10 for your personal use, or get access to this report (and all other Premium Reports and features!) as well as discounts to other resources through a Premium membership.

…But this one is currently free, and if you are a citizen of Malaysia, or you’ve only had a passing understanding of the royalty of Malaysia, or if you are an international observer who has never thought about this aspect of Malaysia before, I hope that you will find this enlightening and interesting.

I extend this as a small gift to the world. Please read this and share it before I change my mind!

Thank you!

Your Highness, I hope you will enjoy this report. I have done my best to do justice to your legacy; any errors and omissions are my own.


Source: Official website of the Office of the DYMM Paduka Seri Sultan Negeri Perak

Introduction

In the landscape of modern monarchy, Sultan Nazrin Muizzuddin Shah – the Sultan of Perak – stands out as a rare blend of royalty and scholarly intellect. 

He holds degrees from the world’s elite universities, including Oxford and Harvard, and even a doctorate in political economy – an unprecedented feat for a Malaysian monarch (1)

Even as His Highness serves as Malaysia’s Deputy Yang di-Pertuan Agong, he is far from a figurehead, and has leveraged his education and passion for knowledge to become a thought leader on economics, history, and governance. 

Sultan Nazrin frequently engages with intellectual circles and the public on issues ranging from economic development to interfaith dialogue (2), even as he describes himself as a “friend of intellectuals everywhere”. (18)

This report explores the journey of Sultan Nazrin Shah – his historical context, education in economics, scholarly projects, publications, and the role he plays as a public intellectual monarch – to shed light on how education has shaped an exemplar king in 21st-century Malaysia.

A Royal Heritage Shaped by History

Sultan Nazrin Shah’s story cannot be separated from the rich history of the Perak Sultanate and its encounters with colonialism. Perak, a state in Peninsular Malaysia, was thrust into the colonial spotlight with the signing of the Pangkor Treaty in 1874, an agreement that marked the start of British political control in Perak (3)

This treaty, imposed after a period of succession disputes and unrest, brought in a British Resident to “advise” the Sultan, effectively subordinating Perak’s traditional governance to colonial interests. 

The late 19th and early 20th centuries saw Perak’s economy transformed by booms and busts in tin mining and rubber, global commodity cycles, and the upheavals of two World Wars and the Great Depression (3)

These historical forces not only altered Perak’s fortunes but also shaped the role of its monarchy. The Sultan’s institution had to navigate the legacy of colonialism, from the erosion of traditional authority under British rule to the challenges of post-independence nation-building.

Born on 27 November 1956, Sultan Nazrin Shah grew up in a royal family conscious of this historical legacy. His grandfather had ruled during colonial times, and his father, the late Sultan Azlan Shah, was himself an accomplished and modern monarch – a former Lord President (chief judge) of Malaysia who strongly valued education and the rule of law. 

From a young age, His Highness was imbued with an understanding that a monarch’s legitimacy lies not just in lineage but in service to the people and dedication to knowledge. 

He later acknowledged the influence of his parents in instilling “uncompromising moral and ethical values” and a passion for justice (4). This grounding in history and values would inform his intellectual interests and his vision of monarchy’s role in society.

The Making of an Economist King: Education and Early Career

Sultan Nazrin Shah’s educational journey is a striking departure from the leisurely princely paths of old. As a boy, he received both local and international schooling, reflecting his family’s emphasis on a well-rounded education. He attended primary school in Kuala Lumpur and continued his secondary education at St. John’s Institution – a premier school in Malaysia’s capital – before going abroad for his pre-university studies. 

In the early 1970s, the young prince studied at The Leys School in Cambridge, UK, for his A-Levels (5). This early exposure to rigorous academic environments set the stage for his higher education at some of the world’s top universities.

In 1976, Raja Nazrin (as he was then known, holding the title of Crown Prince of Perak) matriculated at the University of Oxford. There, he read Philosophy, Politics, and Economics (PPE) at Worcester College and earned a Bachelor of Arts (Honours) degree. 

PPE at Oxford is renowned for producing leaders and thinkers, and it gave him a strong foundation in political and economic theory. Not content with a bachelor’s alone, His Highness pursued graduate studies at Harvard University’s John F. Kennedy School of Government, obtaining a Master’s in Public Administration

He went on to break new ground for Malaysian royalty by completing a Ph.D. in Political Economy and Government at Harvard as well (6)

By the time he returned to Malaysia in the early 2000s, Sultan Nazrin Shah had become one of the most highly educated monarchs in Malaysian history, with academic credentials spanning Oxford to Harvard.

His scholarly training was not merely for prestige – it shaped his perspective on governing and development. At Oxford and Harvard, His Highness absorbed lessons in economics, public policy, and history that he would later apply to understanding his own state and country. 

For instance, he studied the mechanisms of economic growth and governance in developing countries, and he delved into historical analysis as part of his doctoral research (7). This deep academic immersion set him apart as a thinking ruler – one who could engage with experts and citizens on complex policy issues. It also earned him esteem among academia: he has since been made an Honorary Fellow of Worcester College, Oxford and of several colleges at Cambridge, recognitions of his scholarly bent (2).

Doctoral Research: Linking History, Economics, and Colonialism

Sultan Nazrin’s PhD work proved to be a defining chapter in his intellectual development. 

At Harvard, his research zeroed in on Malaysia’s economic history – specifically the early 20th-century economy of Malaya (the precursor to modern Malaysia) during the late colonial period. Titled “Historical National Income Accounting and Economic Growth in Malaya” (or similar, based on his topic), his dissertation involved painstaking original research. He made pioneering estimates of Malaya’s Gross Domestic Product (GDP) for the early decades of the 1900s – a time for which official economic data were scant (7)

By scouring colonial archives and employing econometric techniques, Sultan Nazrin Shah reconstructed how the Malayan economy performed under British rule and how it transitioned through tumultuous periods like World War I, the interwar years, and the Great Depression.

This academic project was more than an abstract exercise – it was Sultan Nazrin’s way of connecting the economic impact of colonialism with Malaysia’s present. His Highness’s research illuminated how colonial policies and global market forces shaped Malaya’s prosperity and later struggles. For example, British exploitation of natural resources (tin ore and rubber, in particular) brought great wealth to states like Perak, but also made them vulnerable to global price crashes. 

Sultan Nazrin explored these dynamics in his thesis, explaining the “volatile” economic changes of that era with data-driven analysis (7). It was uncommon for a royal figure to dive so deeply into archival research and statistical number-crunching, but Nazrin Shah was passionate about uncovering the truths of Malaysia’s economic past. As he later remarked, understanding history – especially the colonial economic legacy – is essential to formulating a path forward for national development (8).

In 2001, armed with his newly-minted doctorate, Sultan Nazrin Shah returned to Malaysia with a new Dr. title, and with a mission. His time in Harvard’s halls had not only earned him academic accolades but kindled a long-term commitment: to advance the study of Malaysia’s economic history and share its lessons with a wider audience. 

This commitment would soon take shape in a major research initiative back home.

Advancing Economic History: The EHM Project

Rather than shelving his thesis and moving on, Sultan Nazrin Shah expanded it into a broader project for the nation’s benefit. 

Soon after his return, with encouragement from the late Malaysian economic historian Shaharil Talib, he established a research team at the Asia-Europe Institute of University of Malaya in Kuala Lumpur (7)

For a crown prince (he was the Raja Muda of Perak at the time) to personally lead a research effort was extraordinary. 

Sultan Nazrin, however, was hands-on: despite the demands of royal duties, he convened regular meetings with his team of researchers – up to 15 assistants managed by economist Dato’ Gnasegarah Kandiah – poring over data and guiding the work (7)

The initial focus of the Economic History of Malaysia (EHM) project was ambitious and clear: to construct a robust set of historical GDP accounts for Malaya, year by year, from 1900 to the eve of World War II (9).

For several years, Sultan Nazrin Shah’s team sifted through colonial records in both Malaysia and the UK, piecing together statistics on tin production, rubber exports, population, and other economic indicators. 

They innovated methods to estimate economic output where records were incomplete. 

The result was a comprehensive time series of Malaya’s GDP (and its components by sector) from 1900 to 1939 (9). This dataset broke new ground – it gave scholars and policymakers a quantitative window into how Malaysia’s economy evolved under colonial rule, through boom times and crises.

By 2016, the project had grown in scope and entered a new phase. 

Sultan Nazrin Shah launched an online platform – the Economic History of Malaysia website – to disseminate the research findings and data (9)

This initiative made decades of painstaking work publicly accessible. The website not only hosts historical GDP statistics and methodology, but also features articles by various scholars on Malaysian economic and social history, reflecting Sultan Nazrin’s inclusive approach to scholarship (9). Under his patronage, EHM became a living project, constantly updating with new research, engaging experts from around the world, and educating Malaysians on their own economic heritage.

Publications and Thought Leadership

One hallmark of Sultan Nazrin Shah’s intellectual engagement is that His Highness has not kept his research confined to academic circles – he actively publishes and speaks to share insights with a broader audience. Over the past decade, he has authored several notable books, effectively translating historical economic analysis into narratives for policymakers and the public. His publications form a trilogy (with more to come) that tracks Malaysia’s economic journey from colonial times to the present:

  • Charting the Economy: Early 20th Century Malaya and Contemporary Malaysian Contrasts (2017) – This was Sultan Nazrin’s first flagship publication after years of research. In it, he revealed the newly assembled data on Malaya’s early 1900s economy and drew comparisons with Malaysia’s post-independence economy in the late 20th and early 21st century (10). The book “broke new ground” by documenting Malaya’s GDP and economic structure under colonial rule, and analyzing how those historical trends set the stage for Malaysia’s later growth (10). It provided a long-run perspective – for instance, showing how per capita incomes, trade, and industries shifted from the colonial period to modern times. Charting the Economy was lauded for its rigorous scholarship and accessible style, reflecting Nazrin’s aim to educate not just economists but also his people about their economic roots.
  • Striving for Inclusive Development: From Pangkor to a Modern Malaysian State (2019) – Sultan Nazrin’s second book moved from pure historical data into the realm of policy and vision. Here, he took a broad view of the past 150 years of Malaysian economic and social development (11). The title itself invokes Pangkor – a nod to the 1874 treaty and the colonial era – juxtaposed with the modern Malaysian state. In this work, Sultan Nazrin charted how far Malaysia has come since the days of British rule, achieving significant economic transformations and social progress, but he also candidly examined the challenges that remain (11). A key theme of the book is “inclusive development” – ensuring that growth benefits all segments of society. Sultan Nazrin emphasized the need to address inequality and to strengthen national unity in the development process, consistent with his long-held advocacy for education, interethnic harmony, and good governance. Striving for Inclusive Development reads as both an analysis of Malaysia’s nation-building journey and a manifesto urging continuous effort toward an inclusive, cohesive society.
  • Globalization: Perak’s Rise, Relative Decline, and Regeneration (2024) – His third and most recent book zeroes in on his home state of Perak, using it as a case study of globalization’s  mixed fortunes. Published by Oxford University Press, this work is the culmination of an in-depth study Sultan Nazrin led on Perak’s economic and social history over 150 years, especially how global economic waves impacted the state (12). Perak was once Malaya’s wealthiest region, riding high on tin mining and rubber during the British era – a time remembered as the state’s spectacular “rise.” The book documents how mid-20th century shifts – the collapse of the tin industry by the 1980s, for example – led to Perak’s “relative decline” within Malaysia as other states like Selangor and Penang surged ahead (12). Yet, Sultan Nazrin does not paint a picture of doom; he explores signs of “regeneration” and potential revival, discussing strategies for Perak (and similarly situated regions) to reinvent their economies in the 21st century. Notably, the book delves into themes such as colonial institutional legacies, federal-state relations, industrial agglomeration, and migration – showing how Perak’s story mirrors those of other once-prosperous areas left behind by globalization (12). Dedicated “to Perakians everywhere,” this volume is as much a scholarly monograph as it is a personal offering from a ruler to his people, distilling lessons from the past to inform future policy.

Accompanying these books, Sultan Nazrin Shah has also edited and contributed to other publications and delivered numerous keynote addresses. 

In fact, his very first published monograph, “The Monarchy in Contemporary Malaysia”, was based on a public lecture he gave in 2004 while he was still Crown Prince (13)

In that lecture – organized by the ISEAS institute in Singapore – Raja Nazrin Shah spoke about the evolving role of constitutional monarchy in a modern democratic nation. It was an early indication that he was already thinking deeply about how a traditional institution could remain relevant in contemporary society

His speeches and essays over the years cover a wide range of topics, reflecting an intellectual breadth not typical of royalty. 

He has written or spoken about ethno-religious relations in Malaysia, the importance of education, the principles of Islamic finance, nation-building and good governance, and the challenges of globalization, among other subjects (14). Many of these speeches are later published or compiled, effectively making Sultan Nazrin a public intellectual in his own right, not just a ceremonial figure.

Not only does he author books, but Sultan Nazrin often officiates at book launches and academic events, signaling his support for scholarship and knowledge-sharing. For instance, in 2018 he launched a historical book about the Perak Sultanate’s cultural heritage, emphasizing how understanding history is crucial for state pride and identity (15)

He has written forewords for academic works and regularly graces conferences and seminars with his insights. Through these actions, he bridges the gap between the ivory tower and the general public, using his platform to promote literature, history, and research.

Engagement with Education and the Public

Upon becoming the Sultan of Perak in 2014, Sultan Nazrin Shah immediately continued the tradition of royal engagement in education – but with his own scholarly twist. 

He was installed as the Chancellor of the University of Malaya (UM), Malaysia’s oldest university, a position traditionally held by the Sultan of Perak. In this role, Sultan Nazrin is a figurehead for one of the country’s top institutions of higher learning, presiding over convocations and promoting academic excellence. 

However, he is not a mere titular head; colleagues at UM note that his “diligence [and] erudition” are an inspiration to the campus community (2)

He has also become Chancellor of Sultan Azlan Shah University, a newer institution named after his late father (2). Through these roles, he advocates for educational advancement and often speaks on the need to empower youth with knowledge and critical thinking skills.

Sultan Nazrin’s involvement in education extends beyond universities. He serves as Chairman of the Board of Governors of Malay College Kuala Kangsar (MCKK), a premier boarding school in Perak that has historically groomed many Malaysian leaders (1)

His interest in nurturing future generations is evident in his frequent addresses to student audiences and graduates. He reminds young Malaysians that education is not just a personal asset but a pillar of national development, a theme he highlighted at forums like the Pangkor Dialogue in 2017: “Education contributes to development by empowering individuals to reach and fulfill their potential… and [it] makes it imperative for education systems to stay ahead of the game in our competitive and challenging times” (he noted in one speech) (16). Such statements underscore his belief that an educated populace is crucial for Malaysia’s progress.

Beyond formal education, Sultan Nazrin Shah has positioned himself as a patron of intellectual and cultural initiatives

Fittingly, he is the Royal Patron of the Harvard Club of Malaysia, connecting him with the community of Malaysian alumni of Harvard University (2)

In this capacity, he supports activities that promote learning and public discourse, often attending Harvard Club events and sharing his experiences to motivate others. 

He is similarly a patron or fellow of numerous institutions: the Oxford Centre for Islamic Studies (where he is Vice-Chair of the trustees) and several Oxford and Cambridge colleges have made him an honorary fellow for his support of academic collaboration (2). Sultan Nazrin also patronizes think tanks and professional bodies; for example, he is a Royal Fellow of Malaysia’s Institute of Strategic and International Studies (ISIS Malaysia) and the Institute of Defence and Security, reflecting his engagement with policy research communities (2).

One of the most visible ways Sultan Nazrin engages with the public is through high-profile lectures and forums. He often speaks at conferences such as the Khazanah Megatrends Forum, a major annual event on economics and finance hosted by Malaysia’s sovereign wealth fund. In 2014, newly enthroned, he delivered an address at Khazanah’s forum emphasizing that as Malaysia rides the “rising tide of the Asian century,” the fruits of prosperity must be equitably shared and sustainably managed for future generations (16)

He stressed that inclusiveness should be the “lynchpin” of the nation’s economic philosophy, a statement reflecting both economic insight and moral conviction. Sultan Nazrin’s words carried weight coming from a monarch-scholar: he was effectively nudging policymakers and business leaders toward a more inclusive and sustainable model of development. Such interventions have earned him respect as a non-partisan voice of reason in national conversations about the economy.

Similarly, Sultan Nazrin has used platforms like the Institute of Southeast Asian Studies (ISEAS) and other international forums to articulate the role of the monarchy in modern governance. In his 2004 Singapore lecture and in subsequent speeches, he argued that the monarchy can and should provide stability, continuity, and moral guidance in a democracy. He famously asserted that the monarch is not meant to be “deaf, blind and dumb” to the nation’s issues, but rather should be a voice of impartiality, fairness, and justice (17).  

This perspective was not just theoretical. 

In Malaysian public life, Sultan Nazrin often speaks up on matters of national importance, from racial unity to governmental integrity, in line with those principles. For instance, during times of political uncertainty, his statements often remind leaders and citizens of the constitutional framework and the need for fair governance.

Perhaps the most telling example of his public leadership came during his inaugural royal address as Sultan of Perak in 2015. In that speech, delivered at his formal installation ceremony, Sultan Nazrin proclaimed that “the monarchy does not merely play the role of a ‘decorative ornament’ for Malaysia” (18)

He went on to elaborate that the institution of the monarchy is a pillar of unity and harmony, enshrined in the country’s Constitution with important duties to perform (18). Using vivid metaphors and even drawing on historical and religious sources, he reminded his people that a ruler must rise above politics as a symbol of justice and fairness (18)

“Thus, the monarch has to be energetic, dynamic and convincing while also fulfilling his duty as a unifying presence,” he said, likening the monarchy to an umbrella under which the people find shelter amid an increasingly divided landscape (19). These words, coming at the moment he formally assumed the throne, set the tone for his reign. They signaled that Sultan Nazrin Shah sees his role not as a passive figurehead, but as an active guardian of his people’s welfare – intellectually, morally, and constitutionally.

Monarchy as Public Intellectualism in the 21st Century

Sultan Nazrin Shah’s unique profile – a head of state with a Harvard PhD and a catalog of serious publications – prompts a broader reflection on what monarchy can contribute to public intellectual life today. In many countries, monarchs have ceded day-to-day power and remain largely ceremonial. Malaysia’s constitutional monarchy is no exception in legal terms; Sultans do not govern, and they must act on the advice of elected governments for most matters. However, Sultan Nazrin represents a case of how a modern monarch can carve out a meaningful space by leveraging soft power – namely, the power of ideas and moral suasion.

By all accounts, Sultan Nazrin Shah is Malaysia’s most educated monarch – a fact that has earned him admiration from the public and the moniker of “Learned Sultan.” Education has given him credibility when he speaks on complex issues. He is able to engage with academics, economists, and statesmen in their own language, often citing data or historical precedent in his arguments. This has allowed him to act as a bridging figure between academia and the public, and between the government and the governed. For example, when he discusses economic policy or the challenges of globalization, people listen not just because he is a Sultan, but because he clearly understands the subject matter. His ideas carry a non-partisan authority – they are rooted in research and the long-term view, rather than in short-term politics.

Moreover, Sultan Nazrin’s scholarly inclination has helped modernize the image of the monarchy in Malaysia. He embodies what some observers call the “Nazrinian monarchy” model: a monarchy that presents itself as a thoughtful, unifying institution, not merely steeped in pomp and ceremony. In a diverse country where unity is fragile, he uses the stature of his office to emphasize common values and shared history. 

His intellectual projects, like the Economic History of Malaysia, also show that a monarch can contribute concretely to national knowledge. Instead of simply patronizing charities (which he also does), he has patronized research that builds an archive of the nation’s memory. It’s a form of intellectual philanthropy: investing time and resources to enrich the country’s understanding of itself.

Importantly, Sultan Nazrin Shah has been careful to stay within constitutional bounds even as he voices out on issues. He often prefaces his more pointed remarks by framing them as lessons from history or principles from the Constitution, thus educating listeners while gently guiding opinion. For instance, during political crises, he might quote past statesmen or legal provisions, indirectly advising leaders to uphold democratic ethics. This approach underscores how his academic mindset complements his royal duties. He navigates sensitive topics by leaning on scholarly evidence or historical anecdotes, which lends a neutral, educational tone rather than a political one.

The Sultan’s emphasis on lifelong learning also sets an example for his subjects. Well into his 60s, he continues to stay updated, engage with new ideas, and even work on new editions of his books to address recent global developments (12). By highlighting that learning never stops – even when one has ascended a throne – Sultan Nazrin inspires Malaysians to value knowledge and expertise. In a speech to an Islamic university, he once emphasized that a community’s strength lies in its knowledge and that leaders must be readers and learners. As patron of the Harvard Club, he often reminds alumni to give back by sharing what they have learned. In these ways, he redefines royalty not as a distant elite, but as a role model for personal development and intellectual humility.

Looking at the broader picture, Sultan Nazrin Shah’s role suggests that constitutional monarchies in the modern world can find renewed purpose by embracing education and intellectual leadership. A monarch who writes books, engages in policy discussions, and supports research can contribute to a nation’s “intellectual capital.” In Malaysia’s case, where the monarchy is intertwined with national identity, having a learned Sultan elevates the prestige of the throne and can even enhance national pride. Many Malaysians take pride in the fact that one of their Rulers has spoken at international forums or authored a book published by Oxford University Press. It places Malaysia’s monarchy in a positive light globally, as progressive and enlightened.

Of course, this approach also comes with the weight of expectations. The public holds Sultan Nazrin in high esteem, which means they listen intently to his words and often hope he will speak out during crises of governance or social tension. Navigating this responsibly has been one of his tasks – to be vocal enough to guide, yet neutral enough to stay above the political fray. Thus far, he has managed this balance adeptly, using historical and economic perspectives to comment on contemporary issues without taking partisan sides.

In summary, Sultan Nazrin Shah exemplifies how a royal figure can serve as a “public intellectual monarch.” Through education, he gained knowledge; through knowledge, he gained influence; and through influence, he strives to better his state and country. His journey from Oxford and Harvard back to the throne in Kuala Kangsar is more than a personal narrative – it reflects a model of leadership where tradition and modern intellect harmoniously coexist. In a very real sense, Sultan Nazrin Shah has shown that scholarship and monarchy, far from being at odds, can together contribute to the public good in the modern world.

Conclusion

Sultan Nazrin Shah of Perak stands as a compelling figure in Malaysia’s contemporary landscape – a monarch by heritage, an economist by training, and an intellectual by passion. His life trajectory, from studying the philosophical debates at Oxford to parsing economic data at Harvard, back to presiding over a historic Sultanate, has given him a unique voice among leaders. Branded “Malaysia’s Economist King,” he has leveraged his knowledge to interpret the past and envision the future for his people. Under his patronage, forgotten chapters of economic history have been reconstructed, and new generations are reminded of the lessons of colonialism, globalization, and nation-building.

The Sultan’s deep engagement with education – both his own and that of his nation – has made him an exemplar of lifelong learning and enlightened leadership. At a time when public discourse can be polarized and short-sighted, Sultan Nazrin injects a long-term, principled perspective grounded in history and data. Whether he is addressing a room of scholars, a hall of students, or a nation hungry for guidance, he invokes the values of knowledge, inclusivity, and unity. In doing so, he reinforces the idea that a monarch’s relevance today lies not in wielding power, but in wielding ideas that inspire and guide.

Sultan Nazrin Shah’s reign in Perak is still in progress, but already his impact is evident in the scholarly works he’s produced, the institutions he’s supported, and the minds he’s touched through his speeches. He has become a bridge between Malaysia’s past and future – illuminating how the trials of history inform the challenges of today, and how good governance and education can pave the way for a better tomorrow. For the Malaysian public, he offers a narrative of royalty that is not about opulence or ceremony, but about service, intellect, and moral stewardship.

In essence, Sultan Nazrin Shah has proven that a king can indeed be an economist, a historian, and a teacher for his nation. His story enriches the tapestry of Malaysia’s monarchy, showing that tradition can find new life and purpose in scholarship. As Malaysia continues to navigate the complexities of the 21st century, the example of its “Economist King” – a leader who continually learns and enlightens – will remain a beacon, reminding all that knowledge is the truest royal inheritance.

References (Bibliography)

  1. Nazrin Shah of Perak – Wikipedia. Sultan Nazrin Muizzuddin Shah (born 1956) is the current Sultan of Perak (ascended 2014) and is noted for being a strong advocate of education, holding a BA from Oxford and a PhD from Harvard(en.wikipedia.org)(harvardclubofmalaysia.org).
  2. Harvard Club of MalaysiaOur Patron, Sultan Nazrin Shah. Describes Sultan Nazrin as ascended in 2014, Chancellor of University of Malaya, Honorary Fellow at Oxford and Cambridge colleges, etc., and notes his roles (former Financial Ambassador, now Royal Patron for Islamic finance initiative) and UN co-chair position. It highlights his research interests in economic and political development, and lists his publications Charting the Economy (OUP 2017) and Striving for Inclusive Development (OUP 2019). It also mentions he speaks on constitutional monarchy, governance, Islam, finance, education, etc.( 1. harvardclubofmalaysia.org).
  3. Economic History of Malaysia (EHM)About the Project. Explains the historical context of Malaya/Malaysia’s economy, “defined by the signing of the Pangkor Treaty in 1874” which led into waves of globalization, tin and rubber boom-bust cycles, colonialism, world wars, decolonisation and independence in 1957. Emphasizes that understanding this history is key to an informed society( ehm.my).
  4. EHM – About HRH Sultan Nazrin Shah. Highlights Sultan Nazrin’s advocacy of good governance, multiculturalism, and rule of law “like his father, Sultan Azlan Shah”, noting he has a passion for judicial independence and credits his parents for instilling strong moral values(ehm.my).
  5. Wikipedia (Early life education details). Notes that Nazrin Shah studied at Sekolah Rendah Jalan Kuantan (KL, 1962–67), St. John’s Institution (KL, 1968–70), and The Leys School in Cambridge, UK (until 1975) before pursuing higher education(en.wikipedia.org).
  6. EHM – About HRH. Confirms Sultan Nazrin’s higher education credentials: B.A. (Honours) in PPE from Oxford University; MPA from Kennedy School of Government, Harvard; and Ph.D. in Political Economy and Government from Harvard University(ehm.my).
  7. EHM – About the Project. Describes how Sultan Nazrin’s interest in economic and social development was propelled by his PhD dissertation at Harvard, where he produced pioneering estimates of Malaya’s early-20th-century GDP and analyzed the volatile economic changes of that period with econometric methods(ehm.my).
  8. EHM – About the Project. Details the establishment of the research team at University of Malaya after his return in 2001. Sultan Nazrin led a team (with Dato’ Gnasegarah, Harbans Singh, etc.) to create a comprehensive historical GDP series for Malaya (1900–1939) by gathering colonial statistical records from archives in Malaysia and the UK(ehm.my).
  9. EHM – About the Project. Chronicles the evolution of the Economic History of Malaysia project. In 2016 it launched a public website to share data and research. It notes Sultan Nazrin “launched his first flagship publication Charting the Economy: Early 20th Century Malaya and Contemporary Malaysian Contrasts in January 2017,” which broke new ground in understanding Malaya’s economic performance under colonial rule vs post-independence( ehm.my). It also notes a second volume (methodology) was prepared. Further, it records that in July 2019 he published Striving for Inclusive Development: From Pangkor State to a Modern Malaysian State, analyzing Malaysia’s transformations and remaining challenges, calling for an inclusive Malaysia(ehm.my).
  10. EHM – About the Project. Describes the Perak-focused research starting 2020, covering how “British colonialism took over from Perak’s traditional governance, exploiting tin and rubber,” and examining sub-themes like colonial legacy, federal-state relations, etc., with global parallels(ehm.my). It notes the outcome as Sultan Nazrin’s third book Globalization: Perak’s Rise, Relative Decline, and Regeneration, published June 2024 by Oxford University Press(ehm.my).
  11. EHM – About HRH. Quotes Sultan Nazrin from an Oxford-Cambridge Society dinner (2008) on monarchy’s role: “The monarchy in Malaysia has discretionary powers… but also responsibilities beyond what’s written. Rulers cannot be deaf, blind and dumb to critical issues… They must be voices of impartiality, fairness and reason… and must adapt to new realities to remain vibrant.”(ehm.my).
  12. Malay Mail“Sultan Nazrin: Monarchy not just decorative ornament” (7 May 2015). Reports on his inaugural address as Sultan of Perak, where he stated “the monarchy does not merely play the role of a ‘decorative ornament’… [it is] one of the main pillars of the nation’s unity and harmony.” It mentions his speech’s rich content (Qur’an passages, historical anecdotes) and his description of the monarch’s role as a bipartisan upholder of justice and fairness(malaymail.com). It also quotes him: “Thus, the monarch has to be energetic, dynamic and convincing while also fulfilling his duty as a unifying presence,” and notes he likened the monarchy to an umbrella uniting the people in a divided landscape(malaymail.com).
  13. ISEAS PublishingThe Monarchy in Contemporary Malaysia (Public lecture by Raja Nazrin Shah, 27 July 2004 in Singapore). A 26-page paper published from his lecture on the modern role of monarchy, indicating early engagement with such intellectual discourse (13)(bookshop.iseas.edu.sg).
  14. Harvard Club of Malaysia – further notes. Highlights that Sultan Nazrin has “written articles and spoken on a wide range of issues including constitutional monarchy, nation-building, governance, Islam, Islamic finance, ethno-religious relations, education, and socio-economic development,” reflecting his broad intellectual interests(harvardclubofmalaysia.org).
  15. Malay MailSultan Nazrin launches book on history of Perak Sultanate (3 July 2018). Details that Sultan Nazrin launched a book titled “Perak Sultanate: The Historic Royal Glory of Perak Tengah,” published by UTP, which covers Perak’s cultural heritage and history. During the launch, he spoke about how the book captures important historical dynamics and challenges faced by past rulers, linking them to the state’s present stability and prosperity(malaymail.com).
  16. Economic History Malaysia – quotes of Sultan Nazrin. For example, at the Pangkor Dialogue 2017, he said “Education contributes to development by empowering individuals… imperative for education systems to stay ahead in competitive times.” And at Khazanah Megatrends Forum 2014, he emphasized inclusiveness and sustainability: “the ethos of inclusiveness and sustainability should form the lynchpin of our economic philosophy… growth must be sustainable across generations”(ehm.my).
  17. EHM – About HRH. Notes Sultan Nazrin’s engagement with diverse groups and forums, stating he “reaches out to young Malaysians, graduates, professionals (e.g., Inter-Pacific Bar Association) and international Islamic finance community… presenting on constitutional monarchy, nation building, governance, education, socio-economic development, etc.”(ehm.my).
  18. EHM – About HRH. Describes Sultan Nazrin as “a friend of intellectuals everywhere” with a “seemingly insatiable appetite for knowledge.” As UM Chancellor, “his diligence, erudition and fairness are a source of inspiration to staff and students”. This speaks to his role in academia and influence on educational institutions(ehm.my).
  19. Harvard Club / UN roles. Sultan Nazrin was appointed Co-Chair of the UN High-Level Panel on Humanitarian Financing (2015) by the UN Secretary-General, reflecting international recognition of his expertise. He also served as Malaysia’s Special Envoy for Interfaith and Inter-Civilisational Dialogue at the UN Alliance of Civilisations, underlining his involvement in global discussions on cultural and religious harmony(harvardclubofmalaysia.org). These roles complement his intellectual and moral leadership at home.

Islamist Economic Governance: PAS, Global Islamist Parties, and the Case of Iran

Victor Tan
 

Hello and welcome back, sepupus! (Psst! Join our Telegram group!)

Politics is not conventionally considered a part of Economics, but in reality, the subjects are deeply intertwined; Economics is the art of allocating resources to best meet the unlimited wants of humans in the best possible ways, while politics in many ways decides what every society and economy deems best.

The relationship goes a little further than that, but the first ‘economists’ like Adam Smith, Ricardo, JS Mill, and Karl Marx were political economists – they wrote not only about how resources are allocated in society, but also institutions, laws, class relations, governance, and moral philosophy.

These aren’t topics I’ve written about just yet, but they are things I will touch on a little later.

Meanwhile, today, we will be talking about Islamist economic governance, focusing on PAS and later Iran. Exciting topic – normally, this would be a premium resource given the amount of research that has gone into it, but in this instance, your access will be free although you will have to register in order to read this piece in full.

Why?

Well, because today, I saw a strange recommendation from former Minister in the Prime Minister’s Department for Legal Affairs and Judicial Reform, Zaid Ibrahim.

This was what I first saw when MalaysiaKini reported the matter.

I could not believe what he had said, and there was a part of me that just immediately had something almost akin to an allergic reaction. Iran? Like, in the middle of a war and being threatened by Donald Trump Iran?

Before long, I had started writing, and the result is what you see today – Which begins by understanding what Zaid actually said.

Here is what Zaid said:

I find Zaid’s opinion interesting. I respect Zaid’s right to his opinion, but I do not share it for various reasons, including the fact that an ulama council would not be elected and would not be subject to democracy – not that PAS really respects democracy beyond a means to an end to confront the fact that their end goal is impossible under the conditions of the nation state, but certainly, we can see that they try.

In the very first place, it is unclear that PAS respects the constitution of Malaysia or our monarchy (Feat. A discussion between me and Dr. Azmil Tayeb), and it has been rebuked by the royals for that specific reason, preaching respect for royalty only when it is convenient for them.

I would also observe that PAS may have tried to offer a moral and political direction, but it appears that what we have is repeated instances of lawsuits because of slander, shaky assertions from leaders such as Siti Mastura and Razman Zakaria, what seems to be a culture of facilitating that slander and hate speech on the part of its leaders, heady declarations against non-Muslims asserting that they cannot and should not have political power and that no matter what, Malay Muslims must rule and other races are safe only IF that is the case, failure to address drug addiction, maintain water infrastructure, and so on and so forth while they maintain moral and religious policing while peddling hatred with no clear or apparent benefit, and preach morality while failing to maintain moral standards amongst the populace while insisting that it is only with their governance that they can ensure a moral population despite minimal evidence that they have succeeded in any meaningful way on that front unless morality is racial saber rattling, pretending to ‘protect’ people while trying to co-opt racial causes built on scaring their own race, including people who visited Christmas celebrations by choice, supporting individuals punished for the charge of slandering people and thereby jeopardising their right to religious freedom (See: Becoming Hannah), while pretending they are the representatives of the Malays, repeatedly lying about their political opponents, imagining that disasters involving foreign nationals are a ‘punishment from God’ with half-baked logic, and then reaping the rewards of their logic by praying for concerts to be canceled by rain only to receive floods in their states. This they do while stifling critical thinking across almost every dimension while preaching a constant narrative about their being oppressed or colonized in every way, while casually trying to establish dominance, betraying their political partners

Oh, how about the part where they even tried to conduct foreign interference into Singapore, peddling influence of a flavor that Ahmad Mattar from the PAP alleged was one of the PAP’s deep concerns (Page 254 – 255, The Singapore Dilemma by Lily Zubaidah Rahim – now selling for the pretty price of RM1179.20 on Shopee, and SGD81 on Kinokuniya Singapore – or it would be if it weren’t out of stock) and gaslighting Singaporean Malays, as part of tag teams with individuals of questionable repute such as Noor Deros?

Need I say more?

Let’s also observe that netizens too do not share his opinion, although note that this is merely one part of the echo chamber, and there are more echo chambers out there – do read widely to avoid that, and don’t take what I say as the truth without evaluation.

Also, opinions are not evidence or truth – but they do say something. Consider some of the truth conveyed by the comments below.

As for no financial scandals?

Maybe.

But then Clare Rewcastle-Brown might disagree on that point.

Well, Zaid is entitled to his opinion – but if you were to ask me?

It is my opinion that constitutionally, ethically, educationally, developmentally, institutionally, environmentally, socially, and culturally, PAS has failed.

In other words?

Well, Zaid said that PAS can “take Malaysia to heights we have yet to reach”.

That’s interesting.

Do we have proof that they have done so that somehow we have a confidence that they have the ability to govern the present as a rational basis for the future?

Do we have any proof that they can do that beyond their feeble statements in parliament, and their whataboutism involving DAP?

What’s the verdict?

It is not encouraging.

If it is true as Zaid says that PAS can “take Malaysia to heights we have yet to reach”, that does not really seem to be related to its religious agenda, and it would appear that it has to be tied directly to what is common to all of us after you cut away everything else.

This brings us now to our main topic.

That’s right, sepupus.

This is Sepupunomics, and it logically follows that we must talk about the economy.

PAS and the Economy

We discussed the numerous failures of PAS on multiple fronts earlier, all of which relate in nuanced ways to methods of capturing standards of living that stand beyond the usage of gross domestic product per capita – to demonstrate that PAS has failed on all of those fronts.

If PAS administration is good administration, then that logically must mean that it is able to push Malaysia forward to achieve goals such as standards of living improvements – Rather than just religious sabre-rattling and moral policing while hoping for sedekah or rezeki or for parties like DAP to do research through their think tanks on matters like the hydrogen transition, National Energy Transition Roadmap, National Semiconductor Strategy, or the New Industrial Master Plan 2030.

What do we mean?

If we are to say that PAS can in fact rule Malaysia, then they must be able to deal with the Malaysian economy and show proof that they can deal with the Malaysian economy.

Otherwise, it is meaningless to talk about the concept of ‘advancement’ in the first place.

Let’s understand what PAS is doing with what it has at the moment to try to understand whether it has what it takes to deal with the rest of the country and in turn deal with the rest of the world.

PAS‐Ruled States in Context

It would not be fair to declare that the present state of PAS-run states is purely the result of PAS administration, and we have to look at what all these governments were dealing with beforehand – a very important part of economic logic.

In economic terms, what happened on the margin?

In other words, what happened as a result of PAS administration that would not have as a result of PAS administration, to the extent that we know it?

In the best case scenario, we would be able to split up reality into two dimensions, and have PAS rule one set of states and another dimension where PAS did not rule those states, and then compare the economic differences.

Unfortunately, we only have one reality to look at, and we cannot completely know what an alternate history would look like where PAS ruled states were not ruled by PAS.

However, we can make comparisons across states in order to get ourselves an idea.

With that in mind, let’s first have a look at what PAS is dealing with and its timeline of control to understand what they have done with the economies of the states they have ruled.

Timeline of PAS Control

StatePAS First Took OfficePeriods of RuleQuick Context at Handover
KelantanOct 1990Continuous since 1990Already Malaysia’s poorest; GDP pc ≈ RM3–4 k in 1990 (≈15 % of national). Rural, rubber-rice economy and ageing infrastructure.
TerengganuNov 19991999-2004, then again since May 2018Inherited an oil-rich state (royalty > RM1 bn/yr) but BN had financed many prestige projects; PAS immediately lost royalty as Putrajaya converted it to wang ehsan cash grants
(thenutgraph.com)
.
KedahMar 20082008-2013 (Pakatan-PAS), lost, then since May 2020Took over a state with Kulim High-Tech Park (1990s BN legacy) and large paddy sector; manufacturing cluster linked to Penang supply chains.
PerlisNov 2022Since 2022Tiny, agrarian economy; PAS administration too recent for trend analysis.

1 What Has Happened to the Numbers under PAS?

Let’s compare the growth rates of PAS economies as compared to Malaysia as a whole as a baseline to understand what we are working with.

Key idea: Instead of looking only at today’s ringgit values, compare how fast each state’s GDP per capita (current prices) has grown since 2015 ― the first year with a consistent DOSM time-series. Eight years is long enough to see whether PAS administrations are closing the gap with the rest of Malaysia.

StatePAS in power*GDP pc 2015 (RM)GDP pc 2023 (RM)Nominal compound growth 2015-232023 level vs. national avg. (RM 54 612)
Kelantansince 199012 07516 836+4.2 % a year31 % of national
(en.wikipedia.org)
Terengganu1999-2004, 2018-now26 52931 111+2.0 % a year57 % of national
(en.wikipedia.org)
Kedah2008-13, 2020-now18 24926 353+4.7 % a year48 % of national
(en.wikipedia.org)
Perlissince 202220 19624 004+2.2 % a year44 % of national
(en.wikipedia.org)
Malaysia (average)37 10454 612+5.0 % a year100 %
(en.wikipedia.org)
Penang (for contrast)non-PAS44 84772 586+6.2 % a year133 %
(en.wikipedia.org)
Selangor (largest economy)non-PAS42 61162 492+4.9 % a year114 %
(en.wikipedia.org)

* PAS first entered Kedah in 2008, lost in 2013, and returned in 2020. Terengganu had a BN interlude 2004-18.


What the numbers mean – in plain language

  • Kelantan: grew by about 4 % a year, but Malaysia as a whole grew faster (5 %). That means Kelantan has slid from 32 % of the national average in 2015 to 31 % today. Put simply: it’s still the poorest state and is not catching up despite three decades of uninterrupted PAS rule.
  • Terengganu: even with billion-ringgit oil royalties, its income per person rose just 2 % a year – the slowest of any PAS state and far below the national pace. In 2015 an average Terengganu resident earned 71 % of the national mean; by 2023 that share is 57 %. The gap widened.
  • Kedah: the bright spot among PAS states. Thanks largely to the pre-existing Kulim High-Tech Park and Penang spill-overs, Kedah grew almost as fast as Malaysia. Yet its citizens still earn less than half the national average, so the distance hasn’t really narrowed.
  • Perlis: PAS only took office at end-2022, so its below-average trend (2 % growth) mostly reflects long-standing structural limits of a small, rural economy.
  • Penang & Selangor (benchmarks): These non-PAS states show what higher growth (5–6 % a year) looks like. Both started ahead and pulled further away – which is NOT what we would expect.

How about Poverty?

2022 Absolute-Poverty Rates by State

(Department of Statistics Malaysia – Household Income Survey)

State2022 poverty rate (% of households)*Notes
Sabah19.5 %Highest in the country
(sdg-for-malaysian-states-sdsn.hub.arcgis.com)
Kelantan 12.4 %Second-highest; long-run PAS administration
(sdg-for-malaysian-states-sdsn.hub.arcgis.com)
Terengganu 12.0 %Heavily oil-royalty dependent; PAS since 2018
(sesricdiag.blob.core.windows.net)
Sarawak9.0 %Large rural interior
(sdg-for-malaysian-states-sdsn.hub.arcgis.com)
Kedah 9.0 %PAS-led since 2020; figure crept up from 8.8 % (2019)
(en.wikipedia.org)
Perlis 8.9 %PAS only from late 2022; tiny agrarian state (DOSM dashboard)
(sesricdiag.blob.core.windows.net)
Perak7–8 %Mixed agriculture/industrial belt (DOSM dashboard)
Pahang~7 %Large rural east-coast interior (DOSM dashboard)
Johor3.9 %Diversified, manufacturing & services hub
(sesricdiag.blob.core.windows.net)
Melaka3.9 %Tourism–manufacturing mix
(sesricdiag.blob.core.windows.net)
Pulau Pinang3.9 %Electronics cluster, high urbanisation sesricdiag.blob.core.windows.net
Negeri Sembilan4.3 %Commuter belt to Klang Valley
(sesricdiag.blob.core.windows.net)
Selangor1.5 %Malaysia’s richest state
(aei.um.edu.my)
W.P. Kuala Lumpur1.4 %High-income, service economy
(aei.um.edu.my)
W.P. Labuan0.4 %Offshore finance hub
(aei.um.edu.my)
W.P. Putrajaya0.2 %Civil-service enclave, small population
(aei.um.edu.my)

Plain-English take-aways

  1. Poverty is clearly higher in PAS-governed states.
    • Kelantan and Terengganu are the only states on Peninsular Malaysia with double-digit poverty rates.
    • Kedah and Perlis also sit well above the national average despite far smaller populations.
  2. Royalty money isn’t a silver bullet.
    • Terengganu receives > RM1 billion in oil royalties most years, yet its poverty rate (12 %) is only slightly better than Kelantan’s (no royalties).
    • The quality of spending and economic diversification are stronger predictors of outcomes than the size of fiscal transfers.
  3. Urban, diversified states do best.
    • Selangor and Kuala Lumpur post poverty rates near 1 % thanks to broad-based job creation in manufacturing and services.
    • Penang, with an electronics export hub, keeps poverty under 4 % despite limited natural resources.
  4. East-Malaysia outlier.
    • Sabah’s 19.5 % underscores that geography and late infrastructure catch-up still matter; it is not a PAS state, showing that party control is only one factor.
  5. Trend since 2019:
    • Poverty nationwide rose sharply during COVID-19 (8.4 % in 2020) and eased to 6.2 % in 2022, but PAS states have been slower to recover, partly due to weaker tourism and outward migration of workers.

In short, PAS-run states consistently occupy the higher-poverty end of Malaysia’s spectrum, and while limited royalties (Kelantan) or boom-bust royalties (Terengganu) contribute, the persistent gap points to deeper issues of investment climate, industrial mix, and human-capital retention rather than fiscal transfers alone.


2 What PAS Inherited vs. What Changed

Kelantan

  • Starting point (1990): Poorest state, weak industrial base, poor road/water networks, but strong overseas remittances from migrant Kelantanese.
  • PAS record:
    • Limited capital spending—average development allocation < RM700 m/year vs > RM2 bn in most states.
    • Tight syariah-first bylaws (gender-segregated cinemas, alcohol curbs) seen by investors as red-tape; ISEAS notes “low private-sector dynamism” and out-migration of talent(iseas.edu.sg).
    • Oil royalty dispute: offshore deposits are beyond 3 n mi; Kelantan receives token goodwill money only (RM 58 m April 2025)(theedgemalaysia.com).
    • Outcome: GDP pc climbed, but only from 15 % to 31 % of national level; poverty remains > 20 %. Water losses (non-revenue water > 50 %) and roads top public-complaint list(theedgemalaysia.com).

Terengganu

  • Starting point (1999): An oil province with royalties > RM1 bn/yr; BN trophy projects (Crystal Mosque, Monsoon Cup) but limited diversification.
  • First PAS term (1999-2004): Federal government withheld royalties; growth stalled; PAS lost 2004.
  • Second PAS term (2018-present): Royalties restored—RM 1.05 bn in 2018, ~RM 1.27 bn in 2019(malaymail.com)(malaymail.com)
  • Structural flaw: 70 % of revenue from royalties; MARC Ratings flags “crowding-out” of tax effort and boom-bust budgets(marc.com.my). Non-oil GDP share stagnant.

Kedah

  • Starting point (2008): Paddy belt+Kulim High-Tech Park (Intel, OSRAM); poverty falling.
  • PAS 1st era (2008-2013): Focus on smallholder schemes & religious schools; disputes with Penang over water pricing dampened interstate cooperation; electronics cluster continued under MNCs.
  • PAS return (2020-): New agenda on rare-earth mining, solar parks; water dispute persists; SG4 bloc created with Dr Mahathir as adviser to lure FDI(straitstimes.com).
  • Scorecard: GDP pc rose but to only 57 % of national; poverty at 9 % (higher than 2009’s 5–6 %).

Perlis

  • PAS/PN only since 2022; too early for data shifts. Baseline: small agriculture, border trade with Thailand.

3 Systemic Differences in PAS Governance

FeatureHow PAS States DifferEconomic Consequence
Fiscal ModelHeavy reliance on federal transfers (Kelantan) or oil royalties (Terengganu); low own-source taxes.Volatile budgets, under-investment in infrastructure during downturns.
Regulatory ClimateMoral bylaws (liquor, entertainment segregation) stricter; local councils dominated by party cadres
(iseas.edu.sg)
.
Adds compliance costs; tourism & service SMEs complain of red-tape, deterring diversification.
Development PrioritiesHigher share of spending on religious schools, welfare stipends; lower on industrial parks, R&D.Slower tech & manufacturing catch-up vs. neighbour Penang; brain-drain of graduates.
Oil WindfallsTerengganu spends >60 % of royalty on operating outlays rather than long-term funds; Kelantan lacks such windfall but similar outcome.Classic “resource curse”: consumption today, limited savings for tomorrow.
Inter-governmental RelationsPeriodic royalty and grant disputes with federal govt.project delays (water, highways), investor uncertainty.

4 Did Anything Improve under PAS?

  • Human development: Literacy rates and basic amenities (electricity, piped water) improved nationwide, including PAS states. DOSM shows Kelantan’s rural electrification > 98 % by 2022 (from < 60 % in 1990).
  • Industrial enclaves: Terengganu’s downstream oil & gas cluster (Kertih) kept expanding; Kedah’s Kulim Park attracted higher-end chip back-end plants—both projects originated pre-PAS but were not derailed.
  • SG4 experiment (2024-): First proactive effort by PAS administrations to pool resources and seek FDI collectively; still untested but signals a shift from grievance politics to deal-making.

Is “Lack of Oil Royalties” the Whole Story?

No. Kelantan’s chronic poverty correlates with zero or low royalties, yet Terengganu shows that having > RM1 bn/year royalties doesn’t ensure prosperity; governance quality and diversification matter.

Oil cash is neither a silver bullet nor the root of all woes; it magnifies whatever institutional strengths or weaknesses already exist.


5 Bottom Line

  • PAS took over already-lagging states, but the gap with the national average has not closed; in relative terms Kelantan and Kedah remain stuck, Terengganu slid somewhat, and Perlis is unchanged.
  • Structural choices—fiscal dependence, moral-regulatory conservatism, modest investment in growth sectors—explain more of the under-performance than royalties alone.
  • The new SG4 bloc may indicate learning—but until PAS states address core issues (talent outflow, business climate, revenue diversity), oil checks or federal grants will continue to fund subsistence, not transformation.

Key Sources: DOSM state GDP & poverty datasets(en.wikipedia.org)(dosm.gov.my)(open.dosm.gov.my); CEIC state GDP series(ceicdata.com); oil-royalty payments reports(theedgemalaysia.com)(malaymail.com); ISEAS studies on PAS governance(iseas.edu.sg)(bookshop.iseas.edu.sg); Straits Times on SG4 formation(straitstimes.com); MARC Rating on Terengganu dependency(marc.com.my).

The Oil Royalty Question

Now perhaps Zaid or PAS politicians would like to talk about how in fact they have been deprived of royalties and don’t have the money and cannot develop.

Let’s now consider that aspect of the argument. In relation to what we can see from the moral policing that is characteristic of PAS states.

Why growth lags despite (or regardless of) oil money

  1. Oil royalties aren’t everything
    • Terengganu proves that having RM 1 billion-plus a year is no guarantee of faster growth; poor diversification and stop-go spending blunt the benefit.
  2. Investment climate matters
    • Kelantan’s restrictive by-laws (gender-segregated entertainment, liquor curbs) and limited infrastructure make investors choose Penang or Selangor instead.
  3. Fiscal model
    • Kelantan relies on federal grants; Terengganu on royalties. Both spend heavily on salaries and welfare, leaving less for productive capital projects that raise long-run incomes.
  4. Human-capital leakage
    • Young professionals from PAS states migrate to Klang Valley or Penang for better jobs, so local productivity growth stays low.

Take-away in one sentence

Over 2015-23 all PAS-run states grew in absolute terms, but—except for Kedah—they grew slower than Malaysia as a whole, so their people are not catching up in relative prosperity.

That shortfall stems more from policy and governance choices than from the presence or absence of oil royalties alone.

Wow, that was a long discussion. Give yourself a round of applause and sip some tea.

What can we see here?

We can see that even though PAS took over from other parties that were already lagging, they did not raise their states to new heights.

They are not doing so, there is no evidence that they are able to do so, and any potential indication that they will raise Malaysia to greater heights is wishful thinking and is likely ideological rather than on the basis of the existing data about PAS governance.

But wait, Mr. Zaid might say, “Past (PAS?) results do not guarantee the future!”

How wonderful. Therefore, we should not support your favourite party.

Maybe he will say:”Well, the statistics show that the Malay support PAS!”

How wonderful. Therefore, it is desirable for non-Malays to migrate unless there is deep evidence indicating that there will be a tectonic shift. That evidence is not present in your states and is at best based on a vain promise that is not supported by any earthly thing. We do not believe in your spiritual things, and based on your actions as identified above, it seems reasonable to conclude that many of you do not either.

Oh, but then…”You haven’t looked at what the people in Iran are doing! Clearly, they are deeply more capable!”

I’m glad that you asked!

Because this analysis includes also what our friends in Iran and in fact all Islamist parties around the world are doing.

With that in mind, here is a full-scale analysis of Iran which Mr Zaid seems to love so much, to establish a comparison between PAS and its existing failures that in turn do not tell a touching or inspiring tale about the economic future of this country if that governance were extended to the rest of Malaysia.

Introduction

Islamist political parties – those seeking to govern by Islamic principles – have had varied success in managing economic affairs. This report examines their economic governance across several countries (including Malaysia’s PAS) and then focuses on Iran.

We compare Iran’s economic progress before and after the 1979 Islamic Revolution, in percentage growth terms, against world averages. We also consider the role of oil, private enterprise, and other factors in Iran’s economic trajectory. Finally, we analyze common trends in how Islamist-led regimes affect economic growth.

I’d like to briefly interrupt this discussion to let you know that the next section will be a membership required section.

In normal premium resources like this one, you will have to sign up for a membership to access the content. However, in this case, you can just sign up for a free membership by signing up at the link below. By signing up for a membership, you affirm your consent to receive communications from sepupunomics.com.

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Rafizi Ramli: Bearer of Reformasi, (ex)-Minister of Economy.

Victor Tan
 

This is a website that is dedicated towards understanding economics and understanding the economy.

Yes, it is targeted towards students, but yes it is also relevant towards people of all ages as well and designed to be accessible whether you know about the full context of economics yet or not.

But there are things that are inherently interesting and that should not be dumbed down (also, young people can be much smarter than many old people!), and that deserve to be explored in an interesting and in-depth manner.

With that in mind… Those of you who are my Malaysian audience may know that in Malaysia we have a Ministry of Economy.

Yes, that’s right, a full-on ministry dedicated towards economic planning, which means economic planning.

Economic planning refers to the process by which a government sets out strategic goals and allocates resources to achieve national economic objectives over a specified period. Rather than letting markets operate entirely freely, the government plays an active role in:

  • Directing investment
  • Guiding industrial growth
  • Reducing inequalities
  • Improving infrastructure, education, and social services

As Minister of Economy, Rafizi Ramli was (wow, that’s weird to say) responsible for drawing up the Malaysia Plans, (frameworks for charting out the economy of Malaysia), setting a direction for Malaysia, and creating a whole range of different initiatives along the way.

But then, some time ago, Rafizi lost the PKR deputy president elections race… And is soon to be host of the Yang Berhenti Menteri podcast.

I’ve covered this pretty extensively on my YouTube channel, and you can look at all of that coverage here, there, and everywhere – Now, the man has said goodbye, but not before ensuring job security for the people in his office.

In this post, I’d like to do something a little bit different. I’d like to analyze Rafizi Ramli’s role as Minister of Economy (and therefore technically head of economic planning of Malaysia as a country) and go a little further and deeper into the dynamics of his relationship with his party.

It is a bit of a coincidence that I’m thinking about this and also making this site at the same time because I recently made a tweet that Rafizi actually responded to one of my tweets (yes, I do tweet! Follow me on Twitter at @victortanws!)

Aside from strange and funny pictures inspired by reading one too many manhwas (as you can see, lol), I thought it would be fun for those of you who are part of premium memberships to consider this little report about Rafizi Ramli.

If you prefer to purchase access to this piece individually, you may do so for USD10 over here instead – but if you are a part of Premium memberships, you should be able to access it immediately.

Even if you do not have access to Premium memberships, the piece should provide you some fun insights into his life and career that may help you understand his work a little more than you did before.

Rafizi Ramli: Bearer of Reformasi, (ex)-Minister of Economy

Historical Overview

Rafizi Ramli emerged during Malaysia’s late-1990s Reformasi movement, aligning early with Datuk Seri Anwar Ibrahim’s struggle against the Barisan Nasional government (therakyatpost.com)

As a student in the UK, Rafizi was active in protests supporting Anwar after the latter’s 1998 dismissal, marking him as a next-generation reformist
(therakyatpost.com)
.

He built a reputation as a whistleblower and strategist throughout the 2000s and 2010s – notably exposing the 2012 National Feedlot Corporation scandal involving a minister’s family, for which he was even charged under banking laws (a conviction later overturned in 2019)

In 2012, Rafizi founded the National Oversight and Whistleblowers (NOW) centre to encourage government accountability
(therakyatpost.com)
, cementing his image as a corruption-buster.

By the 2013 general election, PKR fielded him in Pandan, a Kuala Lumpur seat, where he won decisively, entering Parliament as one of the opposition’s rising stars.

Early on, Rafizi proved to be an innovative political strategist. In 2014 he engineered the “Kajang Move,” a bold (if controversial) plan to prompt a by-election in Kajang and install Anwar as Selangor’s Chief Minister – an operation that ultimately ousted the incumbent but resulted in Azmin Ali (then PKR Deputy President) taking the post instead. Following this, Rafizi’s standing in PKR grew: he was elected one of the party’s Vice-Presidents in 2014 and simultaneously appointed PKR Secretary-General, allowing him to shape party direction from within Anwar’s inner circle.

He spearheaded new campaign approaches, most famously by leveraging data analytics through an outfit called Invoke Malaysia, which he founded in 2016. Invoke became a cutting-edge political tool – it compiled voter data and employed big-data microtargeting to help the opposition in the 2018 elections
(malaymail.com)
.

With a team of software developers and data strategists, Invoke profiled millions of voters on issues and demographics, mirroring techniques from Obama’s and Modi’s campaigns(malaymail.com).

This effort was unprecedented in Malaysia; by early 2017 Invoke was working with dozens of opposition candidates in marginal seats to hone their outreach
(malaymail.com)
. Rafizi’s data-driven approach contributed to Pakatan Harapan’s historic 2018 victory, and he later noted that Invoke’s predictive models correctly foresaw that upset (cambridge.org). This cemented his image as a technocratic strategist who blends activism with analytics.

Despite these successes, Rafizi’s political journey has seen pauses and setbacks. In 2018, he chose not to contest the general election due to a pending court sentence (related to the NFC exposé) that raised questions about his eligibility
(en.wikipedia.org)
. Around the same time, he fought a bitter battle for PKR’s deputy presidency against Azmin Ali. That 2018 PKR leadership election ended in defeat for Rafizi, a blow that led him to temporarily retreat from frontline politics. During the tumultuous “Sheraton Move” of 2020 (when Azmin and others defected, collapsing the PH government), Rafizi remained on the sidelines, having announced a hiatus from politics. For about three years, he focused on private ventures and policy research, largely avoiding day-to-day party affairs.

Re-entry in 2022: Sensing the need to rejuvenate PKR’s reformist fervor, Rafizi made a high-profile comeback in March 2022, declaring he would contest for PKR Deputy President in the upcoming party polls. At that point, the deputy post was vacant (Azmin had been sacked in 2020), and many saw Rafizi as the ideal figure to rally the grassroots. Party leaders were split on his return – some welcomed the injection of energy, while others were wary of his uncompromising style.

Nonetheless, Rafizi campaigned on a platform of reviving “idealisme Reformasi” within PKR and decisively won the deputy presidency in May 2022, defeating Datuk Seri Saifuddin Nasution.

This victory re-established him as PKR’s No. 2 and heir-apparent to Anwar in the party hierarchy.

Shortly after, in the November 2022 15th General Election (GE15), Rafizi also returned to Parliament, recapturing his Pandan seat with a thumping 48,000-vote majority – a testament to his enduring electoral appeal. When GE15 produced a hung parliament, Rafizi was involved in the frantic coalition negotiations that followed. He had publicly advocated that Pakatan Harapan seek alliances either with Sabah/Sarawak parties or BN, whichever would deliver a stable majority
(malaymail.com)
. Eventually, PH formed a unity government with former rivals (Barisan Nasional and others), installing Anwar Ibrahim as Prime Minister in late 2022. Rafizi was appointed the Minister of Economy in Anwar’s Cabinet, a role befitting his technocratic strengths. In this capacity, he became responsible for economic planning, statistical agencies, and strategic initiatives – effectively the government’s policy wonk tasked with translating the reform agenda into concrete programs.

Policy Review

As Economy Minister and PKR deputy chief, Rafizi has helmed or shaped a slate of major policies in the Anwar administration. His agenda spans social subsidies, digital transformation, regional development, and industrial innovation. Below is an analysis of key initiatives associated with Rafizi, including their implementation status, public reception, impact, and alignment with Pakatan Harapan’s manifesto promises.

Targeted Subsidies and the PADU Database

One of Rafizi’s signature efforts is the move toward targeted subsidies – a shift from blanket subsidies (for fuel, electricity, etc.) to need-based aid. To enable this, Rafizi’s ministry developed PADU (Pangkalan Data Utama), a central socio-economic data hub. Launched on 2 January 2024 by PM Anwar
(theedgemalaysia.com)
, PADU compiles individual and household profiles from over 400 agencies as a “one-stop” database to identify aid recipients
(theedgemalaysia.com)
. Rafizi spearheaded this initiative, positioning PADU as the backbone for equitable subsidy reform.

Implementation Status: PADU was opened for public data verification in Q1 2024 and, according to Rafizi, became “ready… at any time” for the government to implement targeted subsidies (paultan.org). However, by mid-2024 the system was not yet fully utilised for fuel subsidy decisions, leading to public queries. (Rafizi revealed that PADU’s development cost exceeded RM85 million, prompting questions why the data wasn’t immediately used to determine RON95 petrol eligibility threads.net.) In May 2025, he disclosed that after trial runs and four cabinet discussions, the Finance Ministry would take over final decisions on RON95 subsidy rationalisation(thestar.com.my) – indicating that PADU’s data would feed into policy, but the politically sensitive rollout would be handled by the Finance Minister.

Public Reception: The PADU database drew mixed reactions. Many Malaysians were anxious about data privacy and the opt-in registration (indeed, as of early March 2024, only a few million households had verified their details, below the target)
(worldofbuzz.com)
. The government has repeatedly assured data security – Communications Minister Fahmi Fadzil even urged citizens to use PADU “without worries,” stressing existing laws protect the data
(theedgemalaysia.com)
. Economists and think-tanks generally laud the idea of a unified registry to cut subsidy leakages, but caution that low-income groups must not be left out due to tech barriers. Rafizi himself appealed to Malaysians to help “non-tech savvy” family and friends register on PADU so that no eligible household is overlooked
(worldofbuzz.com)
.

Economic Impact: The targeted subsidy reform is expected to significantly improve fiscal health if executed. Rafizi noted that channeling subsidies only to the truly needy would help Malaysia trim its budget deficit to ~3.0–3.5% of GDP by 2025
(theedgemalaysia.com)
. It would also correct inefficiencies where blanket fuel subsidies disproportionately benefited higher-income drivers
(theedgemalaysia.com)
. However, as implementation has been delayed, the impact is still prospective.

Alignment with PH Manifesto: Pakatan Harapan’s manifesto emphasized fiscal reform and equitable aid – moving away from blanket subsidies aligns with that pledge of “targeted assistance to those who need it most.” Rafizi’s PADU lays the groundwork for fulfilling this promise in a data-driven way. The challenge will be ensuring the transition (e.g. a tiered fuel pricing system) doesn’t spark public backlash. So far, Rafizi has handled the policy’s unpopular implications head-on – for instance, he proposed a two-tier petrol price where only the top 15% earners and foreigners pay market rates
(freemalaysiatoday.com)
. This technocratic candor, while risky politically, shows his commitment to the reform’s integrity.

“AI untuk Rakyat” and Digital Upskilling

To drive Malaysia’s digital economy, Rafizi introduced the “AI Untuk Rakyat” (AI for the People) program – a public artificial intelligence literacy campaign. Launched in January 2024 by Anwar and Rafizi
(malaymail.com)
, AI Untuk Rakyat is an online self-learning portal (at ai.gov.my) offering modules in Malay, English, Mandarin, and Tamil
(thestar.com.my)
.

Objective: close the digital literacy gap and demystify AI for ordinary Malaysians
(malaymail.com)
. Rafizi framed it as both an educational tool and an economic strategy: introducing AI concepts to students and workers so they can participate in future high-tech sectorsmalaymail.commalaymail.com.

Status: The portal is live, and the ministry set a target of 1 million Malaysians gaining basic AI skills within 3 years
(thestar.com.my)
.

In content, it is divided into interactive sections – “AI Aware” (covering use-cases and dispelling myths) and “AI Appreciate” (applications of AI across industries)malaymail.com.

Corporate partners like Intel Malaysia collaborated, with Intel’s MD calling AI “a critical driver of the economy” and supporting the program’s outreachmalaymail.com.

Reception: The initiative has been well-received as forward-looking, though the writer of this report thinks that the cost does not justify the benefit. Tech communities and educators however see it as a step toward building an AI-ready workforce.

Rafizi has explicitly tied it to bigger national ambitions – citing a report that AI could add US$113 billion (nearly 25% of GDP) to Malaysia’s economy
(thestar.com.my)
if broadly adopted.

His vision is to make Malaysia an ASEAN AI hub, part of what he dubbed the “KL20 Blueprint” to rank Malaysia among the top 20 countries for nurturing start-ups
(thestar.com.my)
. This emphasis on emerging tech portrays Rafizi as a moderniser in government, keen on not just short-term fixes but long-term competitiveness. Impact: In the short term, AI Untuk Rakyat is building awareness (thousands have reportedly enrolled in its first months). Long term, if even a fraction of the targeted 1 million participants move into AI-related jobs or innovate in that space, it could help address the digital talent shortage. The program aligns with Malaysia’s broader digital economy blueprint (MyDIGITAL) goals of creating a tech-savvy workforce by 2030.

Alignment with Manifesto: PH’s manifesto advocated for the digital economy and IR4.0 initiatives. By providing free AI education, Rafizi’s program delivers on the promise to “equip Malaysians for the jobs of the future”. It’s also politically savvy – promoting technology in an inclusive way (“AI for the Rakyat”) helps counter fears that automation will only benefit elites. In Rafizi’s own words, the portal aims to “rid fears that AI will replace humans” by empowering people to understand and use it
(thestar.com.my)
.

Bumiputera Economic Transformation (PuTERA 35)

In August 2024, Rafizi unveiled PuTERA 35 – the Pelan Transformasi Ekonomi Bumiputera 2035, or Bumiputera Economic Transformation Plan to 2035. This comprehensive roadmap is Rafizi’s answer to longstanding affirmative action in a new, sustainable mold.

Policy Overview: PuTERA35 outlines three core pillars (aligned with Anwar’s “Malaysia MADANI” economic framework) to uplift the Bumiputera community (ethnic Malays and other indigenous groups) without sidelining other races
(malaymail.com)
. Rafizi acknowledged that poverty and wealth gaps remain disproportionately high among Bumiputeras, especially in Sabah, Sarawak, and Kelantan, as well as among Orang Asli communities
(malaymail.com)
. The plan’s goal is to produce Bumiputera who can compete domestically and globally, by focusing on talent development, higher-skilled workforce participation, income growth, equity ownership, and property ownership
(malaymail.com)
.

Key Targets: By 2035, the government wants Bumiputeras to hold 70% of high-skilled jobs and contribute 15% of GDP via Bumiputera-owned companies
(theedgemalaysia.com)
. It also aims to nurture a vibrant Bumiputera Commercial and Industrial Community (BCIC) – an aspiration dating back to the New Economic Policy that Rafizi noted is still unfulfilled
(malaymail.com)
. PuTERA35 plans to address hurdles like the community’s concentration in low-value-added work and over-reliance on government grants. For example, Rafizi pointed out that limited capital and support for start-ups have kept many Bumiputera enterprises from moving up the value chain
(malaymail.com)
, a gap this plan seeks to plug through better access to financing and mentorship.

Implementation: The plan was launched with much fanfare at the Putrajaya International Convention Centre (PICC)
(malaymail.com)
, and it dovetails with other national strategies (the MADANI Economy framework and the 12th Malaysia Plan adjustments). Rafizi positioned PuTERA35 as inclusive – explicitly assuring it “won’t compromise rights of other races”
(malaymail.com)
– to preempt criticisms of nepotism or zero-sum outcomes. As of 2025, ministries and agencies are aligning their programs to PuTERA35’s pillars, and a council under the Economy Ministry monitors progress.

Reception: Within the Malay community, PuTERA35 has been welcomed as a necessary recalibration of pro-Bumiputera policies for the 21st century. Many Bumiputera NGOs and entrepreneurs appreciate that Rafizi’s plan emphasizes capacity-building over handouts, focusing on skills, startup support, and moving up the economic value chain
(malaymail.com)
. However, some Malay political rivals (e.g., Perikatan Nasional leaders) remain skeptical, either arguing it doesn’t go far enough or doubting PH’s commitment to Malay rights. Non-Bumiputera audiences have been cautiously supportive since Rafizi stressed the plan’s intent is to lift poor Bumiputeras without hurting other communities
(malaymail.com)
. So far, no major ethnic friction has arisen from PuTERA35, indicating Rafizi’s careful positioning paid off.

Impact: It’s too early to measure outcomes; 2035 is the horizon. But one immediate impact is signaling – it signaled to the Malay electorate that the unity government is serious about inclusive growth. This could shore up Malay support for PKR/PH if results (like higher Bumiputera incomes or business success stories) start appearing. Alignment with Manifesto: PH has always had to balance its multiracial platform with the reality of Bumiputera economic concerns. PuTERA35 aligns with PH’s manifesto promises of “reducing inequality” and creating a high-value economy for all, by tackling intra-Malay inequality in a reformist (less rent-seeking) way. It also complements Anwar’s narrative of “Malaysian Malaysia with Malay leadership” – proving that a reformist Malay leader can advance his community’s welfare in a fair, future-oriented manner. Rafizi, as a data-driven policymaker, brought a fresh take to a decades-old affirmative action discourse, emphasizing outcome-based metrics (skills, value-add) over quotas alone
(theedgemalaysia.com)
.

Johor–Singapore Special Economic Zone (JS-SEZ)

Rafizi has also played a strategic role in regional development initiatives, most notably the planned Johor–Singapore Special Economic Zone. This cross-border SEZ is an ambitious project modelled after China’s Shenzhen, aiming to synergize Johor’s land and labor with Singapore’s capital and technology.

Rafizi’s Role: As Economy Minister, Rafizi co-signed the Memorandum of Understanding with Singapore’s Trade Minister on 11 January 2024, formally proposing the JS-SEZ
(lexology.com)
. He represented Malaysia’s economic interests in negotiating this framework, which was agreed in principle by both governments. A year later, on 7 January 2025, Malaysia and Singapore inked a binding agreement to establish the SEZ (lexology.com) – a milestone reflecting Rafizi’s year-long diplomatic groundwork.

SEZ Details: The JS-SEZ will span about 3,500 sq km in Johor (an area five times the size of Singapore) covering nine designated zones from Johor Bahru city to industrial hubs like Pengerang. It targets core sectors such as manufacturing, digital economy, logistics, energy, education, and tourism across those zones. By integrating the two economies’ strengths, the SEZ hopes to attract global investments that neither could as effectively alone. Proposed initiatives include seamless customs clearance, joint investment incentives, and talent exchange programs.

Status: Following the agreement, task forces from both countries are ironing out implementation details – e.g. special immigration passes, infrastructure linking Iskandar Malaysia and Singapore, and regulatory alignment. Rafizi has actively engaged stakeholders like banks and investors; in May 2025 he hosted a “JS-SEZ Partners Dialogue” where six major banks committed to support financing within the zone
(thestar.com.my)
. The SEZ is expected to launch initial projects by late 2025 or 2026.

Public Reception: In Johor, the prospect of an economic boom has been welcomed – the state government (including MB Datuk Onn Hafiz) is supportive, seeing the SEZ as a catalyst for jobs and development. Singapore’s involvement lends credibility, though it also raised some nationalist eyebrows in Malaysia worried about sovereignty or one-sided benefits. Rafizi and Anwar have addressed this by emphasizing mutual gain: Johor will gain high-tech investments and better jobs, while Singapore can expand its economic footprint without land constraints. Thus far, reception is cautiously optimistic. Many recall that past Iskandar projects didn’t fully live up to hype; Rafizi’s challenge is to ensure JS-SEZ has tangible impact (e.g., new semiconductor fabs or R&D centers setting up in Johor within a few years).

Impact & Alignment: If successful, JS-SEZ will bolster PH’s manifesto goals of regional equalization and foreign investment. It aligns with the manifesto’s pledge to “spur economic growth corridors in every region”. It’s also a political win for Pakatan Harapan’s narrative of international cooperation – showcasing how Anwar’s government can work with Singapore (often portrayed as a competitor in the past) for mutual prosperity. Strategically, Rafizi’s involvement in JS-SEZ highlights his technocratic and internationalist bent, focusing on long-term structural growth (as opposed to parochial or short-term measures). It’s a bet that thoughtful economic integration can yield jobs and growth that voters will reward in the future.

Semiconductor Industry Push – Chip Design & ARM Deal

Perhaps the boldest of Rafizi’s initiatives is Malaysia’s leap into the semiconductor design arena. Traditionally strong in chip assembly and testing, Malaysia under Rafizi’s economic stewardship launched a plan to become an IC design and R&D hub – a major upshift in the value chain. The centrepiece of this plan is a partnership with Britain’s Arm Holdings (the SoftBank-owned chip design giant). Policy Details: In March 2025, Malaysia announced a “radical approach” deal with Arm worth US$250 million (RM1.1 billion) to acquire Arm’s advanced chip design blueprints and IP over 10 years
(malaymail.com)

(reuters.com)
. Rafizi negotiated this deal as a catalyst for a domestic chip design ecosystem. Essentially, Malaysia will license seven high-end Arm chip designs and receive technical support
(reuters.com)
, enabling local companies to develop “Made-in-Malaysia” semiconductors based on proven architectures. As part of the pact, Arm will open its first Southeast Asian office in Kuala Lumpur(reuters.com) and help train 10,000 Malaysian engineers in chip design and AI-related silicon over the next decade. Rafizi described this strategy as Malaysia “moving from the back-end to the front-end” of the semiconductor industry (malaymail.com) – no longer content with just packaging chips for others, but designing its own.

Status: The deal was signed and announced by PM Anwar and Arm’s CEO Rene Haas on 5 March 2025. Implementation has begun: a joint committee (Economy Ministry and Arm) is setting criteria to select local firms that will receive the design licenses and training, to ensure the IP is put to good use. Malaysia has also earmarked at least RM25 billion in public and private investment to support this semiconductor drive(malaymail.com) (e.g., through grants, setting up design incubators, and upgrading fabs). Rafizi is personally overseeing this multi-agency effort, given its importance to the MADANI Economy goal of becoming a technology producer.

Public and Industry Reception: The move grabbed headlines as an innovative attempt to vault Malaysia into the big leagues of chip design. Tech industry players have responded positively – seeing it as a way to leverage Malaysia’s existing semiconductor talent (from companies like Intel, Infineon, etc.) for higher-value work. Many noted it’s the first time a country is directly buying cutting-edge IP in this manner to jumpstart local firms
(reuters.com)
. Rafizi himself called it a “radical approach” aimed at building the whole ecosystem”
(malaymail.com)
, acknowledging the audacity. Domestically, most praised the ambition, though a few critics wondered if the hefty price tag will pay off. Rafizi addressed this by projecting the creation of 10 Malaysian chip design companies each with US$1.5–2 billion annual revenue within a decade. If achieved, that would contribute an extra 1% to GDP and firmly establish Malaysia as a global tech player.

Impact: It’s early days, but the announcement itself has placed Malaysia on the radar of high-tech investors. Microsoft, Google, Nvidia and others have recently poured billions into Malaysian data centres and AI R&D since 2023 (reuters.com), and the Arm deal complements this momentum by focusing on hardware innovation. Over the next 5–10 years, the expected impact is a new chip design industry employing thousands of engineers, creating homegrown IP, and reducing reliance on imported tech. Rafizi envisions Malaysia eventually exporting RM1.2 trillion worth of semiconductors by 2030 if all goes well
(malaymail.com)
– an ambitious target that aligns with the country’s second “semiconductor wave” strategy
(straitstimes.com)
.

Alignment with Manifesto: PH’s manifesto didn’t explicitly mention semiconductors, but it did stress moving the economy up the value chain and embracing the digital/tech revolution. This initiative exemplifies that pledge. It also addresses strategic concerns: in an era of US-China tech rivalry and supply chain disruptions, having indigenous chip capability is a national asset(malaymail.com). By championing this, Rafizi has bolstered the government’s technocratic image. Internationally, it signals Malaysia’s intent to be a serious player in AI and chip tech (key for autonomy and high-income aspirations). Politically, though average voters may not feel the impact immediately, successful execution could translate into prestige and high-quality job creation, which is a win for the government’s narrative of “economic transformation” under PH. Notably, Rafizi’s handling of the media for this policy has been smoother than on consumer issues – he has passionately articulated the vision (in interviews with Bloomberg and others) rather than downplaying it.

Other Reforms: E-Invoicing and Subsidy Rationalisation

Beyond his flagship programs, Rafizi has lent support or strategic input to adjacent reforms in government finances and subsidies:

  • E-Invoicing for Businesses: In 2023, Malaysia’s Inland Revenue Board (LHDN) began phasing in an electronic invoicing system – a digital reporting requirement for B2B invoices aimed at curbing tax evasion. While this falls under the Finance Ministry’s purview, Rafizi has been a proponent of digitising the economy’s “plumbing” to increase efficiency and revenue. He spoke at the National e-Invoicing forum alongside tax experts, highlighting that a universal e-invoice system will ensure transparency, faster payments, and reduce leakages in tax collection
    (m.facebook.com)
    (instagram.com). Observers note that such digital tools complement Rafizi’s PADU approach – together forming a data-rich governance model. KPMG Malaysia estimated e-invoicing will significantly improve compliance and help the government address tax leakages, boosting coffers in line with Rafizi’s fiscal reform aims
    (facebook.com)
    (malaymail.com). The system started with large taxpayers in 2024 and is slated to encompass all businesses by 2025m.facebook.com. This reform matches PH’s promise to increase revenue without raising tax rates, by plugging holes in the system.
  • Subsidy Rationalisation (beyond fuel): Rafizi has also been involved in rethinking other subsidies, such as electricity tariffs and welfare payouts, to ensure they are better targeted. For example, the government is studying a tiered electricity subsidy where heavy users (industry and high-income households) pay more, while ordinary folks continue getting discounts – an approach Rafizi’s ministry has analyzed using PADU data on household incomes. He has often been the face explaining why painful subsidy cuts are necessary for long-term economic health (theedgemalaysia.com).
  • However, recognising the political volatility, either the government and cabinet decided or Rafizi chose to recently hand over some of these decisions to the Finance Ministry (as seen with fuel subsidies), a move interpreted as strategic compartmentalisation: let the Finance Minister (who is also the PM) bear the brunt of announcing subsidy cuts, insulating Rafizi somewhat from public anger.

Summary of Policy Agenda: Taken together, Rafizi’s policies portrayed a leader focused on structural reforms (targeted subsidies, Bumiputera empowerment via productivity, high-tech industry creation) and digital governance (AI literacy, data integration, e-invoicing). The implementation record is a mix – some initiatives are fully launched and making initial impact (AI program, PADU sign-ups, Arm deal signed), while others are in planning or pilot stages (targeted fuel subsidies pending, SEZ groundwork). Public reception has ranged from enthusiastic (tech and youth initiatives) to cautious or critical (cost of living suggestions, subsidy removals). Throughout, Rafizi has tried to align these moves with Pakatan Harapan’s manifesto – which emphasized reformasi economics: equitable, modern, corruption-free, and forward-looking.

Strategic Positioning and Personal Posture

Beyond formal policy, Rafizi Ramli’s strategic posture since 2022 reveals much about his political mindset. As a minister and deputy party president, he has had to navigate public expectations, internal pressures, and personal well-being. Key facets of his positioning include his communication style, handling of unpopular reforms, “technocrat” branding, and even deliberate withdrawal from constant connectivity – all of which reflect the strain of governance and political calculation.

But now, no longer a minister after his recent resignation, and after some hints that things were going wrong, things may change.

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