By Danial Dzulkifly
SHAH ALAM, Dec 2 — Selangor’s financial management and economic strategies have earned the state a hypothetical AAA rating from a prominent economist, who praised its near-debt-free status and strong gross domestic product (GDP) growth.
Bank Muamalat chief economist Afzanizam Abdul Rashid noted that Selangor’s economic performance continues to outperform the national average, while projecting a 6.0 per cent growth in 2025, outpacing Malaysia’s GDP growth forecast of 4.5 to 5.5 per cent.
“If you examine the GDP trend, Selangor consistently outpaces the national average by a factor of about 1.3. For example, if the national GDP growth is 5 per cent, applying this multiplier indicates Selangor achieving growth well above five per cent.
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Bank Muamalat chief economist Mohd Afzanizam Abdul Rashid speaks during an interview at Media Selangor’s headquarters in Shah Alam on October 30, 2024. — Picture by FIKRI YUSOF/MEDIA SELANGOR[/caption]
“That goes to show the speed of Selangor’s economic growth is much faster compared to the national level. And of course, the state contributes more than a quarter to the national economy, underscoring the state’s prominent role,” he said on the latest episode of Selangor Journal’s Lunch on Us! talk show.
Afzanizam added that Selangor’s deeply entrenched and well-connected core sectors, like logistics, aviation, and education, have contributed to its strong economic growth.
He was commenting on recent remarks made by Selangor Opposition leader Datuk Seri Mohamed Azmin Ali and fellow Perikatan Nasional lawmakers questioning the handling of the state’s budget, citing the need to table a supplementary budget during the recently-concluded State Legislative Assembly sitting.
Afzanizam said Selangor’s economic success is evident as it advances towards developing more established and complex industries.
“I think it is just politics. It is natural for them (the Opposition) to compete and create a narrative that challenges the incumbent government. Perhaps, it is a healthy competition if it spurs debates on policies that benefit the state.
“However, the numbers speak for themselves. For instance, the state government being nearly debt-free, to me, is remarkable. If Selangor is to be rated for creditworthiness, it would likely receive a AAA rating. From a capital market perspective, Selangor is well-positioned to leverage market funding if needed,” he said.
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Menteri Besar Dato’ Seri Amirudin Shari speaks at the First Selangor Plan Pre-Launch Symposium at the MBSA Convention Centre, Shah Alam, on July 7, 2022. — Picture by AHMAD ZAKKI JILAN/SELANGORKINI[/caption]
Strategic projects drive growth
Afzanizam also highlighted several initiatives and strategic projects that are expected to drive further development in Selangor.
Among these are the creation of new economic zones — the Sabak Bernam Development Area (Sabda), the Integrated Development Region in South Selangor (Idriss), the Selangor Maritime Gateway Economic Development Zone (ZPE SMG), and the recently-announced Kuala Selangor and Hulu Selangor Development Zone.
Other major infrastructure projects included the Pulau Indah Power Plant and Waste to Energy plants in Jeram, as well as the state’s efforts to incorporate artificial intelligence (AI) into government services.
He also applauded the state’s ambitious plan to develop the Kita Selangor Rail Line and extend it to Seremban, Negeri Sembilan.
“Obviously, there will be multiple effects from these projects. They will create demand for raw materials, and the construction work will have spillover effects on sectors such as manufacturing and services.
“During and after construction, the projects will also impact property values, how cities are connected, and the development of surrounding areas. And because the state government is financially resilient, it is able to consider large-scale projects.
“However, these projects will likely always follow the Public-Private Partnership (PPP) model, which also creates spillover benefits for other industry players.
“I also think it’s important to promote public transport, especially given the future decline of internal combustion engines. Expanding rail-based transportation will help the government achieve its sustainability targets.
‘These projects will also accelerate urbanisation, create new townships, and have a range of positive spillover effects,” Afzanizam said.
Similarly, he commended the Speed Selangor Policy announced by Menteri Besar Dato’ Seri Amirudin Shari during the 2025 Selangor Budget, which aims to cut red tape by, among other things, reducing the approval period for planning permits for industrial areas from three-and-a-half months to 14 days.
The policy can serve as an additional impetus to attract investors into the state rather than just providing tax breaks and incentives.
“When foreign investors invest in a particular country, yes, tax incentives matter. But beyond that, they will look at the ease of doing business, especially their experience here. Perhaps, more clarity in terms of the procedures (will attract them).
“So, this initiative will actually help foreign investors to have a seamless experience when they invest in Malaysia (and Selangor),” Afzanizam said.
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A general view of Shah Alam city. — Picture via SHUTTERSTOCK[/caption]
