Go with the growth.
A highly successful exporter into Asia once told me he could make an educated guess at the volume of sales he would achieve of his premium tinned foods by standing on a street corner and counting the number of Mercedes that went by.
Although I wasn't standing on the corner in Kuala Lumpur last week, I could see what he meant. I was actually sitting on one, more specifically in one of Illy's espressamente chain of coffee bars and watching the cars go by while jotting down notes and wondering how much faith an investor should put in a nation's economic momentum.
In the medium-term, will sound investments of whatever sort -- property, shares, bonds, gilts, ETFs, whatever -- in a fast-evolving economy produce better returns than in a mature one?
Bottom up
It's a fraught issue over which economists have spilt much angst. But after talking with the waiter, a highly personable mid-twenties Malay of Chinese extraction, I came to the conclusion that, yes, this is a place to put your money, albeit after the usual due consideration. He was one of scores of people I chatted with during the week we stayed in Malaysia's capital and every time I came away with the sense that this country is going places.
Reasons? Just one is that these people redefine the meaning of industriousness. "How many hours do you work a day?" I asked the waiter.
"Eight to eight, with an hour off for lunch." he said in the fluent English we came to expect. "But I often don't get lunch until 4pm. The boss says 'we're a small team and we must help each other out.'"
It turned out he's got a degree in hospitality and is working his way up the ladder. "You've got to start at the bottom and learn everything," he said. "Otherwise you have no respect as a manager."
With that, he rushed off to deal with a growing queue of customers. The Illy chain, just one of dozens of prestige European and North American brands that have opened up in KL, is popular with tourists, expats and Malays alike.
Good enough isn't good enough
If the commitment of the workforce can be counted as an economic factor, Malaysia's gdp should go through the roof. Most retail staff toil from 10am to 10pm, five or six days a week, and somehow still come up smiling. Hotel personnel in the big chains work an eight-hour day in theory but, as they confided, are expected to throw in an extra few hours for nothing when things are busy.
Language is another plus. It's often said that India may leapfrog China as the dominant Asian economy because English is the lingua franca and its commercial law is based on Britain's. If that's true, it surely applies to Malaysia as well because many of its 27m people speak English.
It's also a highly aspirational nation where the accumulation of wealth is almost a national mission. The day before we left, prime minister Najib Abdul Razak gave an impassioned speech about how Malaysia must become "a precision society where terms like lebih-kurang [good enough] are not used any more." This, he said, was the way to economic creativity.
Smile, smile, smile
Like China and India, Malaysia is changing economic direction. Having kick-started things with exports, it's now working on domestic growth with all that implies for the profits of local companies. In The Pavilion, a massive new mall in the five-star area of Bukit Bintang right beside Illy's espressamente, young people were spending up large at the international retail outlets such as Top Shop and Levi. And the two and three-star malls further downtown are usually thronged, not with tourists but Malaysians. Unsurprisingly, the Malaysian Retail Chain Association with 200 members predicts sales will grow by five to eight per cent this year after a contraction last year.
Ambitious tourism targets -- 36m visitors a year by 2020 -- can only further boost gdp. Ditto for a government initiative to put more goods on the duty-free list.
Meantime medical tourism is going gangbusters. Want a face-lift, dental makeover, cancer therapy? It's all available in KL, generally at a fraction of western costs. We entered the "White Smile" dental clinic in Times Square, not knowing quite what to expect. Our dentist turned out to be in his early thirties, with three degrees including a doctorate from the US. We come away with a long-term dental plan.
He's one reason why Khazanah Nasional, Malaysia's sovereign wealth fund, this week outbid India's Fortis for control of Parkway Holdings, Asia's biggest listed hospital operator. Khazanah paid US$4bn at a fat premium to the share price, which tells you a lot about the prospects for medical tourism.
The investing infrastructure has some way to go. With the exception of the blue-chips, the companies listed on the main stock exchange, Bursa Malaysia, are not exactly famous for transparency. However the Bursa is working on it and has just issued a draft corporate disclosure guide to bring things up to western standards.
Another step in the precision economy, you might say.
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