JANUARY 24 — Having spent some time talking to people across Malaysia, the message I have received is remarkably consistent. They trust what they feel in their wallets, not what they read in reports on economic growth. 

Many Malaysians today feel disconnected from the official economic success story – rising food cost, childcare, rent, insurance, and transport dominate their daily struggle. On paper, the economy appears strong. GDP is growing (estimated at 4.9 per cent for 2025, surpassing official expectations), and key macroeconomic indicators – investment, trade, employment, and the currency – are all moving in the right direction. 

Yet for many households, daily life feels unchanged or even more difficult. This dissonance has increasingly led to a key question: does the government truly understand the pressures the rakyat face daily? 

What GDP can and cannot tell us 

While GDP measures the total value of goods and services produced, it does not tell us whether wages are rising, food is becoming more affordable, or families feel more secure about their future. 

This is not an argument against GDP. Indeed, it helps us understand whether the economy is growing and the country has the resources to invest, redistribute, and plan. But focusing on GDP alone can dangerously overlook several well-known problems. 

First, the cost of living can rise faster than incomes even when GDP is growing. Families may see the economy expanding while their purchasing power quietly shrinks. 

Second, growth is often uneven. It tends to be concentrated in capital-intensive, export-oriented sectors, while most Malaysians work in SMEs or in informal and semi-formal jobs that are not necessarily benefiting from headline growth. 

Third, jobs alone are insufficient. People want upward mobility: career progression, and real wage growth. 

Finally, GDP is macro, technical and historical, reported quarterly. Life pressures are a deeply personal and emotional, felt daily. Middle-income families often feel the greatest squeeze – too well-off for government’s support and yet not able to earn or save enough to feel economically secure. For this category of Malaysians, economic survival is judged by one simple test: how much money is left at the end of the month? 

Under the Madani Economy framework, the government has tried to put more money into people’s pockets, through measures like the targeted subsidies and cash assistance. When I was in the Ministry of Investment, Trade and Industry (Miti), our efforts to boost productivity (including making our workforce AI-ready) under the New Industrial Master Plan (NIMP) 2030 were also structurally geared towards boosting the rakyat’s earning capacity sustainably for the longer term. For example, the rise in median wages in the manufacturing sector was a metric we tracked religiously. 

However, while many Malaysians believe the government cares, many still feel that its messaging is tone deaf and out of touch with their daily struggles. This perception matters, because trust in economic management is built not only on outcomes, but on whether people feel seen and heard. 

So, besides the obvious policy responses, we must care about whether most Malaysian ‘feel’ the nation’s economic success, and ‘reframe’ that success in terms of the People Economy, or Ekonomi Rakyat. 

What is the people economy, and why it matters? 

At its core, the People Economy measures and manages the economy based on how people live, alongside traditional macro indicators. 

The GDP tells us how big the economy is. The People Economy tells us how well people are living. Unfortunately, the divergence between economic growth and a sense of economic security has widened further with each major global crisis: the 2008 Global Financial Crisis, the Covid-19 pandemic, and the post-pandemic surge in living costs. 

So, although GDP has grown for many countries post-crises, it has not been broad-based. In numerous countries, the masses’ capacity to rise above their daily struggles has been eroded, partly because wages have not grown in tandem with price increases, denying them of economic security. When growth is concentrated in only certain sectors, it also bypasses many households, denying them of economic opportunities. 

Placing the People Economy front and centre reconnects economic policy with daily human realities. It is fundamentally a response to lived reality rather than any real ideological shift – but holds serious implications for the stability of nations, because populism or even extremism will quickly fill the void that the breakdown of trust creates. 

This phenomenon has been deleterious for the West. It would be fatal if it took root in Malaysia. 

Rebuilding trust through empathy and the right narratives 

We cannot survive, much less thrive, if there is no trust in our communities. Rebuilding trust requires the government to deliver outcomes, steadily and credibly, while working on structural reforms for sustainable, broad-based growth. 

Meanwhile, a clear People Economy narrative is essential, particularly in demonstrating that the Government understands the pain people feel and is doing or has done something about it. Otherwise, the resulting vacuum is easily filled with anger, cynicism, and blaming every issue as a government failure. 

When people trust that the government understands them and acts in their interest, they are more supportive of reform and of the transitions these require. 

Talking the lingo of the people’s economy 

Communications on the People Economy must always start with validation. What people need is honesty, not spin; empathy, not lectures; and practical help, not rhetoric. 

Both policy and messaging must shift from programmes to outcomes, and must link GDP growth to broad-based impact. The key question should always be: will this policy make life easier for ordinary Malaysians now and in the future? 

Policy and messaging must also acknowledge constraints honestly and without defensiveness, and tie initiatives to execution and clear outcomes. 

To be sure, narratives rarely trump experience. If the government explains before it delivers, the message will be dismissed as spin. Delivery creates credibility. Credibility makes communication effective. 

While the Madani Economy framework has rightly emphasised on cost of living, targeted subsidies, and household income, the narrative is still evolving. The faster the Government can reframe this towards the People Economy, the faster we can achieve the clarity necessary for Malaysia to restore trust, strengthen governance, and sustain political legitimacy moving forward. 

Ultimately, when economic policy is measured by lived experience as much as by macro performance, growth becomes more meaningful to the masses and trust can be rebuilt. 

* Datuk Seri Tengku Zafrul Abdul Aziz is chairman of Malaysian Investment Development Authority (Mida) 

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.