Malaysia sees exodus of its wealthy citizens

A report issued on Tuesday found that over a quarter of wealthy Malaysians are seeking permanent residency abroad. The economy is doing well, growing at 4.5% this year, with a financial system that is widely lauded. But Malaysians with a net worth of over $30 million feel there are few opportunities in the country.

It doesn’t help that the government of P.M. Najib Razak is becoming increasingly illiberal, cracking down on independent press while fending off corruption allegations. But given the country’s largely ethnic-based politics, at least for Malays (who have historically reaped most economic and political rewards over the Chinese and Hindu groups) he’s one of their own. However, according to Andrew Aeria, a politics professor at the University of Malaysia Sarawak, there is a "genuine fear" that Malays "will lose all their privileges and benefits accorded to them" if the opposition manages to take power.

Meanwhile, better business and educational opportunities in places like London and New York form the pull factors enticing the rich out. (These are the kinds of immigrants that Western countries want to attract.)

Another indication of a rise in Malaysian emigration comes from statistics of the country’s social security administration, the Employees Provident Fund. Last month its chief Shahril Ridza Ridzuan said that the number of Malaysians who withdrew from their principal retirement pension account in 2015 was 23% higher than the year before.

Malaysia’s rate of wealthy emigration is now second only to that of China, which is not a sign of confidence in the economy. Najib cannot exactly pander to the wealthy to get them to stay, as he himself has to explain how hundreds of millions of dollars made their way to his personal bank account. (For more on this theme, see the video from last year’s Blouin Creative Leadership Summit panel, The Consequences of Global Inequality.)

Though if Malaysia’s economy keeps growing like it is, it can survive this wealthy exodus without much strain. And Najib will keep hanging on to power.