This article first appeared in Forum, The Edge Malaysia Weekly on June 8, 2026 - June 14, 2026

Capital is mobile by nature, drawn towards opportunity and away from uncertainty, and its value lies in what it leaves behind. In this cycle, attracting that capital depends on offering returns with resilience, as investors weigh energy security, supply-chain reliability and whether a government can hold steady through a shock. For Malaysia, the task is to raise the capital we attract into national capability that lasts.

Asean has seen global capital reshape economies before, beginning when Singapore opened its doors in the late 1960s. The Plaza Accord routed Japanese manufacturing to Malaysia and Thailand. Indonesia rode the commodity supercycle and Vietnam became the clearest China-plus-one story. The wave now arriving, shaped by the artificial intelligence (AI) capital expenditure cycle and a global search for trusted neutrality, asks more of host economies than any before it. Countries that attract capital without building capability can win one cycle and lose the next.

Malaysia enters this cycle from a position of strength. Approved investments reached RM426.7 billion in 2025, the highest in the country’s history, expected to create around 240,000 jobs. Gross domestic product (GDP) growth held at 5.4% in the first quarter of 2026 despite the Middle East crisis. Market confidence followed, with foreign central banks and governments holding a record 36% of Malaysian government securities at end-March, up from 29.4% a year earlier. This did not happen by accident. It reflects a connected national effort to RAISE Malaysia’s economic base by Reforming foundations, Activating capital, Improving investability, Strengthening capability and Enabling scale.

Confidence begins with how a government runs its own house and reforms the foundations. The Public Finance and Fiscal Responsibility Act 2023, Government Procurement Act 2025 and Public Service Efficiency Commitment Act 2025 strengthen fiscal discipline, spending transparency and service delivery. The deficit has narrowed from 6.4% of GDP in 2021 to 3.7% in 2025, while subsidy reform creates room to cushion the latest energy shock, with BUDI95 and SARA protecting the most exposed households. These reforms have lifted fiscal and market credibility, reflected in stable sovereign ratings and Malaysia’s 11-place rise to 23rd in the IMD World Competitiveness Ranking.

Stable foundations earn the first look from investors and activating capital turns that look into commitment. Foreign capital often brings the first plant, the first technology and the first global customer, while domestic capital helps build the second plant and the supplier base that gives capital a reason to stay. Through GEAR-uP, our six government-linked investment companies have committed an additional RM120 billion of domestic direct investment over five years, on top of RM440 billion managed through steady-state programmes. This activation also runs through more than 30 government-linked companies, with the aim of lifting shareholder returns towards 7.5% a year, adding RM100 billion in market value and moving almost 200,000 employees to a minimum living wage of RM3,100 a month.

Beneath these commitments runs a financing chain across the company lifecycle, so firms can find the right capital at each stage of growth. Khazanah Nasional Bhd’s RM6 billion Dana Impak anchors venture, scale-ups and semiconductors, while Jelawang Capital strengthens the venture layer by backing new managers and expanding start-up capital. Retirement Fund Inc’s (KWAP) RM6 billion Dana Pemacu pairs global managers with local talent, expanding Malaysia’s private-market capacity.

The same chain reaches firms that are too small for capital markets but too important to remain small. Khazanah’s RM1 billion Mid-Tier Companies Programme supports mid-tier firms ready to grow, while TEKUN, Bank Simpanan Nasional, MyCIF and SJPP extend the ladder through microfinancing, crowdfunding, peer-to-peer financing and guarantees. The aim is to help more firms move from financing access to market readiness.

Activating capital goes only so far on its own. The real test is whether it produces companies with the growth, value and governance that investors can back. Investors cannot back the next economy if it remains outside the investable universe. For Malaysia, the answer is to move the market from legacy-economy exposures towards new-economy growth.

Malaysia’s capital-market agenda is built to do this, widening the market and lifting company quality. The Securities Commission Malaysia’s Capital Market Masterplan 2026-2030 (CMP4) targets capital-market growth from RM4.3 trillion at end-2025 to RM5.8 trillion to RM6.3 trillion by 2030, implying 6% to 8% annual growth above nominal GDP. At the company level, the MY Value Up Programme sharpens disclosure, capital allocation and shareholder returns across the top 88 companies, around 80% of the total market capitalisation.

That shift is beginning to show in Malaysia’s technology pipeline. Oppstar’s share price rallied 113% after its Arm Flexible Access agreement, while SkyeChip’s initial public offering was oversubscribed by 95 times, signalling that investors reward Malaysian companies once they become visible and investable.

Better valuations matter only when they are supported by real capability. That means firms and workers are able to perform more complex work, not simply host higher-value projects. Through the New Industrial Master Plan 2030, Malaysia is moving manufacturing towards greater complexity and higher-value parts of the chain. The early gains are visible in the wider manufacturing base, with output rising 4.4% to RM399.3 billion in 2025 and the median manufacturing wage increasing 5.4% to RM2,490.

Semiconductors are the clearest opportunity, with the National Semiconductor Strategy drawing RM85 billion so far against a RM500 billion target for 2030. Global anchors are deepening that base, from Intel’s US$7 billion advanced-packaging plant due in 2028 to Infineon’s Kulim 3 silicon carbide fab, set to be the world’s largest of its kind. That progress is already visible in trade, with semiconductor exports rising 20% to RM465.6 billion in 2025. The next task is to grow more Malaysian firms around these anchors, from NSW Automation in advanced packaging to Heng Hiap Industries in recycled-content materials.

Growing them, though, takes more than capability, because a firm can be excellent and still be small. Size and reach come from turning individual companies into ecosystems and regional platforms that can grow beyond Malaysia.

Those platforms are now taking shape through corridors, clusters and digital infrastructure. The Johor-Singapore Special Economic Zone links Singapore’s connectivity to Malaysia’s industrial base. Penang and Kulim anchor semiconductor depth in the north, while Sarawak builds a lower-carbon energy base. Data centres add a digital layer, with RM144.4 billion approved since 2021, creating a base that can support cloud, AI and semiconductors.

Malaysian companies are already carrying that scale to global markets, with exports from micro, small and medium enterprises (MSMEs) up 31.3% to RM196.8 billion in 2024. Aonic, a home-grown drone technology company, now operates in 15 countries and DF Automation has deployed over 500 autonomous mobile robots across 10 countries.

These gains are encouraging, but durability will depend on three harder tests. The first is whether our ecosystems become deep enough to hold capital. Malaysia has many of the pieces, from industrial strategy and domestic capital to economic zones and global anchors. The question is whether they connect deeply enough to keep producing talent, companies and economic complexity, as Silicon Valley, Taiwan and South Korea have done over decades.

The second is cultural, because building more founders and champions needs a higher tolerance of risk. Companies must be able to fail, learn and return, and investors price failure without leaving the market. The third is the rakyat test, and it matters most. Capital flows must translate into better wages, stronger local supply chains and higher-value work, so households feel progress in practical ways.

What holds an investor is the ecosystem around the company. Once that ecosystem deepens, capital becomes anchored here rather than being merely located here. Malaysia can ride this wave by raising the capital we attract into national capability that endures. This is how Malaysia defines true economic victory — by turning global investment into a self-sustaining ecosystem that delivers tangible progress for the rakyat.

Datuk Seri Amir Hamzah Azizan is Finance Minister II

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