Malaysia has long been acknowledged as one of the most economically successful post-colonial countries in the world, transcending widespread poverty and a dependence on primary resource extraction inherited from the British colonial administration.
The Merdeka era saw patriotic founding fathers wisely steering multicultural Malaysia through the choppy waters of nascent nations building, including two near contemporaries who laid the groundwork for Malaysia’s sustained economic growth.
Tun Tan Siew Sin
Tun Tan Siew Sin was the son of Independence icon Tun Dato’ Sir Tan Cheng Lock, founder of the Malayan Chinese Association (MCA). He remains Malaysia’s longest-serving Finance Minister (1959–1974) and his prudent leadership proved crucial for the country to find its feet during a period of upheavals and uncertainty, from the early years of Independence to the collapse of the Bretton Woods international monetary system.
As Finance Minister, he strengthened the taxation system, including going after tax evasion and instating a progressive tax system with top tier, turnover and luxury taxes, alongside various new duties. The Treasury’s coffers swelled and thus was able to afford much-needed development expenditure for the new nation, such as creating impressive infrastructure for education, healthcare, energy and transportation, including Subang International Airport.
Despite significant development spending, Tun Tan Siew Sin was always concerned with maintaining a balanced budget. He was known to be fiscally conservative and careful with money, recalls Tan Sri Dato' Mohd Sheriff Mohd Kassim, who was a young officer at the Economic Planning Unit (EPU) at the time.
“Any development programme would have to rigorously justify its spending and value for money in order to get Tun Tan Siew Sin’s stamp of approval. He was strict with the purse strings, and he was as financially prudent in his own personal life as he was with the country’s expenditure,” says Tan Sri Sherriff, who is a former EPU director-general and Treasury secretary-general.
In the wake of the May 13th tragedy, the New Economic Policy (NEP) was announced in the 1971 Malaysia Plan with the aim of alleviating poverty and addressing socioeconomic imbalances. Tun Tan Siew Sin championed the idea that the economy as a whole had to grow much faster in order for prosperity to be shared more equitably.
“[A] re-distribution of wealth to redress economic imbalances…would be much easier if the economic cake were much larger. In this way, we do not have to take away from those who have in order to give to those who have not. Only the additional cake will be redistributed and this would benefit all,” Tun Tan Siew Sin said in a speech in 1971.
Tun Ismail Ali
Known for his spartan habits, no-nonsense demeanor and unassailable integrity, Tun Ismail Mohamed Ali was the country’s first Malaysian Governor (1962–1980) of Bank Negara Malaysia (BNM). An alumnus of KL’s Victoria Institution, he was the second Malay student to win the Queen Scholarship, and like Tun Tan Siew Sin, he studied at Cambridge University.
As the Central Banker, Tun Ismail was rather conservative, believing in stability for the new country. Yet behind the stern bearing and finely-tailored suits, beat a strongly nationalistic heart, which had Malaysia’s independence at the forefront.
He reshaped the national financial system, including by issuing our first currency, expanding local banks, increasing restrictions on the liquidity of the British exchange banks, removing expatriate influence on the currency board, instituting plans for a comprehensive exchange-control system to prevent capital flight and successfully supporting legislation that would prevent foreign banks from opening additional branches in Malaysia. In
In 1980, as head of the Commodities Trading Commission, the visionary “economics man”, as Tunku Abdul Rahman described him, oversaw the setting up of the KL Stock Exchange, with the wider ambition of making KL a major trading and financial hub, thus reducing the hold of overseas markets in London, New York and Singapore on Malaysia’s raw material sales.
Later on, as the founding Chairman of Permodalan Nasional Berhad (PNB), he created the hugely popular unit trust known as Amanah Saham Nasional (ASN). Primarily an instrument of redistribution, ASN allowed ordinary citizens to invest as little as RM1 and share in the profits of the rapidly growing national economy.
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