Small Businesses and Overseas Malaysians: The Unsung Heroes of Malaysia’s Economic Resilience
KUALA LUMPUR, 2 May 2025 — While much attention is given to mega projects and foreign direct investments, two often-overlooked contributors are quietly strengthening Malaysia’s economic foundation: small businesses and Malaysians working abroad.
Together, these groups not only create jobs and income but also help bolster the country’s foreign reserves and long-term economic stability.
🧑💼 SMEs: The Backbone of Malaysia’s Economy
Small and medium enterprises (SMEs) represent over 97% of business establishments in the country. They provide employment to more than 7 million Malaysians and contribute approximately 38% to the national GDP.
“SMEs are vital not just for job creation but for economic diversity and innovation,” said Dr. Khairul Azman, an economist at the Institute of Strategic Analysis. “They serve local communities, fuel domestic supply chains, and some are even breaking into export markets.”
Many SMEs are now tapping into e-commerce and regional exports, offering niche products like halal food, fashion, and traditional crafts. These ventures generate foreign income that directly supports Malaysia’s external trade balance.
🌍 Malaysians Working Abroad: The Silent Foreign Currency Earners
According to government data, more than 1.5 million Malaysians live and work abroad, particularly in Singapore, the Middle East, Australia, and the UK. Their remittances — money sent back home — contribute billions of ringgit annually to Malaysia’s economy.
“Remittances from the diaspora are a steady source of foreign currency, often more stable than trade during global slowdowns,” noted Bank Negara Malaysia in a recent statement.
Beyond financial contributions, overseas Malaysians also bring back valuable global experience, skills, and professional networks. This reverse brain drain benefits Malaysia’s industries, especially when returning talents launch startups or take on leadership roles in key sectors.
💡 Policy Implications: Time to Strengthen Both Pillars
Experts believe that enhancing SME resilience and engaging the Malaysian diaspora should be key pillars of Malaysia’s post-pandemic recovery strategy.
Among proposed initiatives:
• Targeted funding and export training for SMEs
• Tax incentives for Malaysian professionals returning to invest or work locally
• Diaspora engagement programs to tap into global expertise and capital
• Re-skilling and up-skilling programs for returning workers and local entrepreneurs
📈 Building a More Inclusive, Resilient Economy
As Malaysia prepares for its next phase of growth under initiatives like the Madani Economy Framework and Visit Malaysia Year 2026, leveraging local talent and global Malaysians will be critical.
“These groups don’t often make headlines,” said social economist. “But they are quietly doing the heavy lifting — sustaining households, growing businesses, and bringing in foreign income. Recognizing and empowering them should be a national priority.”
-Dino Gombak
