Anwar Ibrahim is one of Malaysia’s most seasoned and recognizable political figures, with a career that spans decades and two crucial terms managing Malaysia’s economy—first as Finance Minister in the 1990s and now as Prime Minister since late 2022. His track record includes both notable achievements and controversial decisions, and assessing his legacy requires examining both his past and current economic policies. Has Anwar lived up to his reputation, and is he truly Malaysia’s best economic manager?
Anwar in the 1990s: Growth, Crisis, and Reform
Anwar Ibrahim’s rise to prominence came during Malaysia’s high-growth era in the early 1990s. As Finance Minister under Prime Minister Mahathir Mohamad, he oversaw an economy that was booming, with GDP growth averaging between 7% and 9% annually. This expansion was driven by industrialization, rising exports, and a flood of foreign investment.
Internationally, Anwar was hailed as a reformist. Euromoney and Asiamoney named him among the world’s top finance ministers. He implemented liberal economic policies, attracted international investors, and promoted Malaysia’s integration into the global economy.
However, the Asian Financial Crisis of 1997 tested his leadership. While Mahathir favored capital controls and rejecting IMF assistance, Anwar initially leaned toward international orthodoxy, advocating for austerity and fiscal restraint. He cut public spending, shelved mega-projects, and pushed for greater transparency and accountability. Although some credit him for preventing a deeper collapse like in Indonesia, others believe these measures worsened the slowdown. Ultimately, political tensions led to his dismissal and imprisonment, curtailing what might have been a transformative tenure.
The Return: Economic Management as Prime Minister
After a long political struggle, Anwar returned to power and assumed the Prime Minister role in November 2022. He took over at a time of post-pandemic recovery, with Malaysia’s GDP growing by 8.7% in 2022—the fastest in Southeast Asia. However, that momentum came with challenges: high public debt, a growing fiscal deficit, inflationary pressures, and an uncertain global environment.
By 2023, growth moderated to about 4%, as global demand weakened and U.S. tariffs affected Malaysia’s electronics exports. Anwar’s response was measured: rather than retaliating, he focused on diplomacy and maintained Malaysia’s trade competitiveness.
Fiscal Discipline and Budget Reform
One of Anwar’s top priorities has been narrowing Malaysia’s budget deficit. In 2022, the deficit stood at 5.6% of GDP. By 2024, his administration targeted reducing it to about 4% through a combination of spending cuts, tax reforms, and subsidy restructuring.
His decision to rationalize fuel and electricity subsidies—traditionally available to all Malaysians—was bold but controversial. These subsidies were replaced with targeted aid for the bottom 40% income group (B40), saving the government billions of ringgit. However, it also raised the cost of living for middle-income earners and triggered public frustration.
To balance the impact, Anwar raised civil servant salaries, adjusted minimum wages, and provided direct cash aid. These efforts reflect a pragmatic balance between economic reform and political survival.
Inflation and Monetary Policy
Despite global inflation spikes, Malaysia’s inflation rate remained relatively low—averaging around 2% in 2023 and dropping below 2% by late 2024. Bank Negara Malaysia kept its interest rate stable at 3.0%, indicating confidence in the country’s price stability.
This was seen as a major achievement, especially compared to other emerging markets grappling with double-digit inflation. It also allowed households and businesses to avoid the financial strain of rising borrowing costs.
Vision 2030: Industry, Green Growth, and Digital Economy
A centerpiece of Anwar’s economic agenda is the New Industrial Master Plan 2030 (NIMP 2030). This blueprint aims to transform Malaysia into a high-tech, high-income economy. It focuses on:
- Advanced electronics and semiconductor manufacturing
- Green energy and decarbonization
- Automation and robotics
- Upskilling the workforce
- Increasing economic complexity
In tandem, the National Energy Transition Roadmap (NETR) was unveiled to push Malaysia toward renewable energy and sustainability. These long-term plans are designed to align Malaysia with global trends and improve competitiveness.
A Surge in Investment: A Vote of Confidence
Under Anwar’s leadership, Malaysia hit a historic high in approved investments. In 2024, the country secured RM378.5 billion (approx. US$83 billion) in total approved investments. Of this, RM170.4 billion came from foreign direct investments (FDI), signaling strong investor trust in Anwar’s economic direction.
Top sources included the U.S., Germany, China, and Singapore—particularly in high-tech sectors like semiconductors, EVs, and green tech. The influx of capital is expected to generate over 100,000 jobs and upgrade Malaysia’s industrial base.
Trade and Global Relations
Anwar has remained firmly pro-trade. Malaysia ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and began the process of deepening involvement in the Regional Comprehensive Economic Partnership (RCEP).
His administration also revived talks for a Malaysia-EU Free Trade Agreement and emphasized non-alignment between the U.S. and China, preserving ties with both superpowers while keeping Malaysia’s export sector protected.
Comparing Past Leaders
To gauge Anwar’s effectiveness, comparisons with previous leaders are instructive:
- Mahathir Mohamad (1990s): Oversaw rapid industrialization but faltered during the Asian Financial Crisis.
- Abdullah Badawi (2003–2009): Promoted moderate reforms, but faced slow implementation and waning public support.
- Najib Razak (2009–2018): Delivered infrastructure and oil revenue growth but marred by the 1MDB scandal and rising debt.
- Muhyiddin Yassin & Ismail Sabri (2020–2022): Focused on pandemic response, but struggled with political instability.
Anwar’s tenure so far presents a mix of fiscal discipline, macroeconomic stability, and forward-looking industrial policies. His performance is especially impressive considering today’s complex global environment of trade wars, inflation, and supply chain shocks.
Challenges and Limitations
Despite successes, Malaysia still grapples with:
- Income inequality and relative poverty, especially in rural areas
- Weak productivity growth in some traditional sectors
- Political instability, with fragile coalitions and opposition scrutiny
- Implementation delays in long-term projects
The long-term effects of Anwar’s industrial and subsidy reforms will take years to assess. For now, the economic indicators—low inflation, record investment, improving deficit—are promising.
Conclusion: A Strong Manager, But Too Soon to Crown the Best
Anwar Ibrahim has proven to be a disciplined and forward-thinking economic manager. His experience, fiscal reforms, investment push, and industrial policy vision mark him as one of Malaysia’s most capable economic leaders. He has balanced international diplomacy with domestic reform, avoided populist pitfalls, and positioned Malaysia for long-term transformation.
But is he the best economic manager Malaysia has had?
That’s a title history will decide. His policies are still in motion, and their full impact is yet to unfold. However, based on current evidence, Anwar is certainly among the top-tier economic leaders Malaysia has ever seen—and perhaps, with time, the best.