Building National Champions: Lessons from Malaysia’s Entrepreneurial Path for Ghana

Malaysia: A Blueprint for Economic Transformation

To understand what Ghana could achieve, it is incredibly insightful to study a country that began with strikingly similar colonial structures, cultural fragmentation, and anxieties about wealth and inequality. Malaysia, in the late 1960s, mirrored Ghana in many ways: multi-ethnic, resource-dependent, politically fragile, and apprehensive of economic domination by small elites. Yet, while Ghana’s historical traumas often solidified into mistrust, Malaysia’s became a powerful catalyst for deliberate nation-building.

Standing in the 1960s, if one were to identify two developing nations with nearly identical destinies, Ghana and Malaysia would have been prime candidates. Both were young, diverse, newly independent, and striving to transform fragile political unions into engines of prosperity. Both inherited colonial economies designed to keep indigenous populations at the periphery of modern commerce. Both had societies bound by deep communal obligations that often constrained long-term capital accumulation.

However, one of these countries – Malaysia – successfully forged a path out of its constraints. Ghana, regrettably, did not and has yet to do so. Understanding this divergence requires an examination not of inherent culture, but of critical choices; not of predetermined fate, but of the psychological courage to confront crisis and fundamentally restructure society from within.

The pivotal moment for Malaysia arrived with the May 1969 ethnic riots – a national shock profound enough to compel the country to reimagine its entire economic order. The leadership recognized that political stability was inextricably linked to a new social contract. This contract, the New Economic Policy (NEP), was far more than a conventional poverty program. It was an ambitious plan to construct a new kind of nation by actively fostering a new kind of business class.

Colonial Legacies and Economic Structures

British colonialism shaped both countries with striking symmetry.

Malaysia’s British rulers strategically positioned Chinese and Indian migrants at the commercial and administrative core of the economy, while Malays predominantly remained in rural agriculture. Ghana’s British administrators concentrated modern economic activity in the hands of expatriate firms—entities like UAC, CFAO, and Lonrho—leaving indigenous Ghanaians primarily as cocoa farmers, clerks, and petty traders.

Both nations, upon independence, inherited:

• A modern economy largely not controlled by local entities.
• A civil service meticulously modeled on British bureaucracy.
• A dual economic structure: a modern sector dominated by foreign interests and a subsistence sector primarily controlled by locals.
• Limited indigenous capital accumulation.

In both contexts, independence granted political sovereignty but largely withheld economic power.

Malaysia was a tri-ethnic society—Malay, Chinese, Indian—each possessing its distinct language, religion, and economic niche, with underlying suspicions always present. Ghana, a vibrant tapestry of Akan, Ewe, Ga-Dangme, Dagomba, Gonja, Frafra, Nzema, and dozens of other groups, each proud of its heritage, each negotiating its place in the fledgling nation. Both countries thus entered independence with national identities that were more aspirations than established facts.

The Fork in the Road: Commodity Dependence

In the early post-colonial decades, both Malaysia and Ghana relied heavily on commodity pillars that were structurally similar and equally vulnerable to global fluctuations. Their economies were built on products whose prices were dictated in distant markets, whose extraction or cultivation demanded minimal technological sophistication, and whose revenues could vanish overnight with shifts in global demand.

Malaysia’s prosperity ebbed and flowed with rubber and tin. Later, palm oil—claimed to have originated from Ghana—emerged as a major export, yet the fundamental vulnerability persisted. Rubber prices plummeted repeatedly throughout the 1960s and 70s. Tin, once a symbol of Malayan pride, suffered a catastrophic collapse in the early 1980s due to global oversupply and cartel breakdown.

Malaysia lived with the constant anxiety that its primary sources of foreign exchange could disappear overnight.

Ghana faced an identical predicament. Cocoa formed the backbone of its economy, yet it was a crop notorious for wildly fluctuating prices. Timber exports were highly susceptible to global construction cycles. Gold prices surged and fell unpredictably. Like Malaysia, Ghana earned its livelihood in markets over which it had no control.

The structural position of the two countries was identical:

Both were highly exposed to the fickleness of global commodity markets, both were dependent on products that required little innovation, and both risked remaining perpetual suppliers of raw materials to far richer industrial economies.

In this shared predicament lay a fundamental question: Would commodity wealth serve as a stepping stone to national industrialization, or would it become a trap that cemented long-term dependency? This was not a trivial dilemma.

Malaysia’s political cracks widened perilously until the 1969 ethnic riots threatened the very survival of the state. Ghana, in contrast, endured successive coups, ideological swings, and command-economy experiments that decimated private-sector confidence and shattered its entrepreneurial class.

In both nations, the political center struggled to hold. But only one country harnessed crisis as a catalyst for institutional reinvention.

Both Malaysians and Ghanaians also existed within dense systems of extended family responsibility. Wealth was rarely perceived as an individual achievement; it was often viewed as a communal resource. Every successful person typically carried a long line of dependents. This cultural trait frequently inhibited savings, discouraged significant risk-taking, and complicated long-term investment. Neither society was inherently born into a capitalist culture. Yet, Malaysia somehow overcame this structural burden, while Ghana did not.

The Twins Split: Malaysia Confronts Its Trauma

The turning point in Malaysia was brutal, painful, and profoundly clarifying. When political rallies escalated into ethnic violence in Kuala Lumpur, hundreds lost their lives. Entire neighborhoods burned. The government collapsed, and the army assumed control. For a harrowing moment, Malaysia glimpsed a future of permanent fracture in the mirror.

This profound crisis compelled an extraordinary national realization: the economy, as it was structured, would inevitably tear the young nation apart. Malaysia courageously accepted that its trauma was not merely an emotional wound—it was a deep-seated structural flaw demanding structural repair.

Ghana, sadly, has never experienced such a moment of collective reckoning. Our national traumas—the destruction of indigenous entrepreneurs during AFRC rule, the colonial dispossession of African capital, the politicization of wealth—have largely remained unexamined. We have, instead, layered competitive democracy atop unresolved psychological injuries and optimistically hoped for the best.

Malaysia chose honesty. Ghana chose avoidance.

Malaysia’s Radical Answer: The New Economic Policy (NEP)

By 1971, Malaysia stood at a precipice. The ethnic riots of 1969 had brutally exposed the country’s deepest anxieties. The violence was not merely political; it was profoundly economic. It laid bare a nation constructed on a fragile foundation where one group dominated commerce, another wielded political power, and all lived in quiet apprehension of each other’s ascendancy. The country simply could not continue in this manner. Something fundamentally had to change.

What Malaysia did next is precisely what differentiates it from nations like Ghana: it chose to confront its trauma head-on and meticulously redesign its economy from first principles. In that moment of profound national vulnerability, the leadership unveiled the New Economic Policy (NEP) – a bold, ambitious, and unapologetically interventionist framework for national reconstruction. The NEP was not a poverty program in the conventional sense; it was a comprehensive political, economic, and psychological contract, meticulously designed to rebuild trust between groups that no longer believed they shared a common future.

Its goals were audacious and, for the time, nearly revolutionary:

1. Reduce poverty across all communities.
Malaysia understood that poverty, when concentrated within specific ethnic groups, becomes political dynamite. Reducing it was not merely economic policy; it was a matter of national security.

2. Redistribute corporate ownership.
Corporate Malaysia in 1970 was overwhelmingly dominated by foreign firms and by Chinese-Malaysian family conglomerates. The NEP set the explicit target of increasing Malay (Bumiputera) ownership of national wealth from roughly 2 percent to 30 percent. This was not symbolism; it was structural rebalancing.

3. Create a sizable Malay middle class.
A stable democracy requires a stable middle class. Malaysia grasped this fundamental truth decades before economic literature fully recognized it. The NEP trained Malay engineers, managers, bankers, doctors, and entrepreneurs in unprecedented numbers.

4. Prevent ethnic monopolization of the economy.
Malaysia recognized the inherent danger of allowing one group to control the commanding heights of the economy while another dominated politics. Maintaining equilibrium was deemed essential for national unity.

5. Build domestic companies capable of anchoring industrial growth.
The NEP served as a powerful engine for creating national champions. It fostered the conditions that produced giants like Petronas, Sime Darby (in its modern form), UEM, DRB-HICOM, and an entire generation of Malay and Chinese conglomerates that reshaped the industrial landscape.

The NEP was far from perfect. It was not universally embraced. It was frequently criticized for favoritism, inefficiency, and elite capture. And yet, it achieved its most critical goal: it prevented the country from tearing itself apart. More importantly, it compelled Malaysians to adopt a new civic identity. The NEP pushed society to think as nation-builders, rather than as tribal actors. Its message was straightforward: prosperity must be shared, opportunity must be broad, and economic power must reflect the true diversity of the nation. The NEP imparted a truth to Malaysia that Ghana still struggles to accept: economic stability and national unity are inseparable. Where Ghana permitted historical wounds to fester and distort its relationship with wealth, Malaysia, despite its imperfections, bravely confronted its fractures and constructed a strategic framework to transform a fragmented society into an industrializing one.

Building the Capitalists: How Malaysia Did It

Herein lies perhaps the most uncomfortable truth for Ghana. Malaysia did not passively await the natural evolution of its capitalist class. It deliberately cultivated one, much like South Korea, Japan, and many other Southeast Asian success stories. The Malaysian state actively identified and nurtured entrepreneurs—often small, overlooked individuals running modest businesses—and transformed them into national pillars. It sought out the entrepreneurs it already possessed—small, scrappy, imperfect—and purposefully turned them into instruments of national renewal.

Below is the story of a few of those entrepreneurs and the state-supported companies they built into national pillars:

1. YTL CORPORATION – Yeoh Tiong Lay

A small construction subcontractor in the 1950s, founded by Yeoh Tiong Lay, a young man of modest means, primarily engaged in cement work and minor repairs—not unlike Ibrahim Mahama in Ghana. In the 1970s, Malaysia selected YTL for significant public works development. The government’s confidence stemmed less from ideology and more from Yeoh’s consistent reputation for delivering under pressure. Over subsequent decades, YTL burgeoned into one of Asia’s largest infrastructure groups, encompassing power plants, water systems, rail, cement, and telecommunications.

Why Malaysia picked him: Competence. Reliability. The proven ability to execute. These are the very traits Ghanaian leaders routinely overlook in our own entrepreneurs.

2. GENTING GROUP – Lim Goh Tong

A carpenter who later became a small machinery trader, Lim Goh Tong was not a polished industrialist. He was a migrant worker who repaired machines in the highlands. The Malaysian government granted him a once-in-a-generation opportunity: to develop a mountain-top resort to stimulate tourism and economic activity. The task was so formidable that most businessmen declined. Lim accepted. Genting Highlands subsequently became one of the world’s most profitable integrated resorts, and Genting evolved into a global conglomerate operating in energy, plantations, hospitality, and gaming.

Why Malaysia picked him: Boldness. Vision. Fearlessness—traits the state recognized and amplified.

3. DRB-HICOM – Yahaya Ahmad (and earlier HICOM’s state leadership)

A small automobile dealer who became an assembler, Yahaya Ahmad began in the motor trade, hardly the typical background of a national industrialist. For Ghana, this could have been a Safo Kantanka. Under the NEP, Malaysia needed Malay-owned champions in the automotive and heavy industry sectors. DRB grew by acquiring state assets, absorbing technology partnerships, and receiving strategic government contracts. It later merged with HICOM, itself a state-backed industrial holding company. DRB-HICOM became the foundational backbone of Proton, Malaysia’s national car project.

Why Malaysia picked him: He possessed a deep understanding of distribution, logistics, and manufacturing, even at a small scale, much like Daniel McKorley. The state simply magnified that inherent capacity.

4. UEM GROUP – Halim Saad

A young accountant with a modest investment firm, Halim Saad was not born into inherited wealth. He was a technocrat with formidable financial acumen. The government, through the NEP, supported his ascent by backing UEM (United Engineers Malaysia) to construct the North–South Expressway, one of the region’s most vital infrastructure corridors. That monumental project transformed UEM into a national giant.

Why Malaysia picked him: Technical competence, discipline, and a proven capacity for large-scale project management.

5. SAPURA GROUP – Shamsuddin Abdul Kadir

A tiny electrical repair shop founded in 1975, where Shamsuddin primarily repaired TV antennas, wiring, and small electronics. Malaysia supported Sapura through technology grants, industrial credit, and strategic partnerships in telecommunications. Sapura eventually evolved into a major force in IT, defense electronics, and engineering.

Why Malaysia picked him: He possessed a foundational understanding of technology and engineering, even at a small scale. The state leveraged that for national development.

6. BERJAYA GROUP – Vincent Tan

A small-scale entrepreneur initially selling cash registers, Tan began with a dealership for Japanese office equipment. The state provided licenses and crucial opportunities in consumer finance, gaming, real estate, and media. Berjaya rapidly expanded into an expansive conglomerate.

Why Malaysia picked him: He executed with remarkable speed and aggression. The state consistently rewarded execution.

A Pattern Emerges: Discipline and Vision

In each of these cases, the entrepreneurs were neither nationalist icons, nor saints, nor figures of universal social approval. They were gritty, practical builders with humble beginnings. The government did not select them because they were universally loved; it selected them because they could consistently produce tangible results.

This is precisely where Ghana has repeatedly failed.

Malaysia did not distribute favors haphazardly. It meticulously constructed institutional engines that disciplined these firms:

• The Economic Planning Unit (EPU): The country’s master coordinator for economic policy.
• Khazanah Nasional: A strategic sovereign investor that actively invested in these selected national companies.
• PNB (Permodalan Nasional Berhad): Utilized to restructure corporate ownership, transitioning it away from direct government control and attracting private capital.
• Petronas: Professionally managed and deliberately shielded from political interference, with appointments based on merit, not political patronage.
• Large development banks: Providing essential long-term industrial finance to domestic companies.
• Mandatory performance contracts and export targets: Holding companies accountable for results.

Malaysia’s state did not trust entrepreneurs blindly. It trusted performance and consistently punished failure.

Malaysia was not inherently braver; it was profoundly more honest about its deep-seated wounds. After 1969, it recognized that trauma—ethnic inequality, historical mistrust, colonial distortions—would inevitably destroy the country unless deliberately corrected. And so, it meticulously constructed a system that infused local talent with a robust national purpose.

Meanwhile, Ghana’s traumas—the colonial sabotage of African business, the shocks of 1979 and 1981, cycles of politicized procurement—were never truly resolved. They calcified into a national reflex: to suspect every successful indigenous firm. Malaysia utilized its entrepreneurs as fundamental building blocks. Ghana, in contrast, often treats its entrepreneurs as inherent risks. Malaysia consistently pushed its firms to export. Ghana often pushes its firms into political defense. Malaysia cultivated national champions. Ghana, regrettably, often generates controversies.

The Foundational Truth

The foundational truth is simple: Malaysia, much like South Korea, built robust national companies by trusting the imperfect entrepreneurs it possessed and disciplining them effectively with the strong institutions it deliberately created.

Ghana possesses the raw material. What we demonstrably lack is the institutional courage – and the profound psychological healing – required to truly utilize it.

~ Hene Aku Kwapong, CDD Ghana Fellow, former SVP at New York City Economic Development Corporation.