Why Should Malaysia Avoid Services and Return to its Manufacturing Roots?

Development Economics Professor at Cambridge University, Ha-Joon Chang, spoke to Carla Sapsford Newman about his counter-intuitive recommendation that Malaysia should stick to its manufacturing roots to ensure future sustained growth. He discusses why, in his opinion, a shift towards a service-oriented economy is not in Malaysia's longer-term interests. He discusses some of the problems associated with service-oriented economies:  rising wages, a brain drain, dependence on FDI from multinational companies and a dependence on a relatively small number of sectors which are more vulnerable to global economic conditions. He discusses why Budget 2012's liberalisation of 17 service sectors is the wrong direction for the country to be moving in.