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Malaysia Loses Crown as Asia’s Best Place to Retire

Bangkok and the Chao Phraya River in Thailand, the new 'best country in Asia' for retirement | Image Credit: Mashable SEA
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The fall from grace marks a sad epilogue to the MM2H saga at a time when Malaysia would benefit greatly from the billions in foreign-sourced income that retirees bring in.

First things first: We love Malaysia. TEG Media has been a champion for expats living, working, and retiring in the country for over 25 years. Like so many expats, we love the country because of its friendly, welcoming people, low cost of living, warm climate, excellent healthcare system, extensive opportunities to travel and discover new places both in and around the country, and the endless parade of outstanding food.

But we cannot deny that official government policies with regard to foreigners can and do trump all of the many positives of any country, and in this area, Malaysia has hurt itself mightily in the last couple of years.

The confused and often unexplained policy changes regarding working expats and the woeful mistreatment of Malaysia My Second Home (MM2H) visa holders during the pandemic certainly did the country no favours, but the worst damage was surely done by the widely panned changes to the MM2H programme announced in 2021.

Only a massive backlash from multiple quarters compelled the government to backtrack on its decision to apply the onerous new conditions to existing MM2Hers, something the government had in the past assured them would not happen. Following the outcry, it was announced that only a couple of the new provisions would apply to those who had already been approved for the visa.

Still, the damage done to the programme and Malaysia’s international reputation has been significant. Some MM2Hers have told us that regardless of how everything ultimately plays out, the trust they had placed in Malaysia’s government has been lost.

This is exceedingly unfortunate for Malaysia, as the benefits of the MM2H programme for the country far outweighed any downfalls. Apart from the significant revenue brought in by these retirees, particularly those who decided to settle in and make Malaysia their new home, the country’s embrace of foreign retirees inspired confidence and trust in Malaysia, which of course affected decision-makers who are looking to invest abroad.

Sadly, much of that goodwill has been destroyed, and it seems to have adversely affected Malaysia’s ranking as a preferred retirement destination, which shouldn’t surprise anyone who’s been following the developments over the last couple of years.

Malaysia, once Asia’s darling of the retirement world, has seen that love affair soured | Image Credit: iProperty

A FALL FROM GRACE

Malaysia has always fared very well in such rankings, both for working expats and for retirees. Quite recently, the country routinely sat atop the leaderboard as the best country in Asia in which to retire. Penang, meanwhile, was named the third-best island in the world for retirees.

For years, International Living named Malaysia as the best spot to retire in Asia and the Ministry of Tourism frequently quoted the publication’s Retirement Index as a part of their promotional material. That will no longer be possible as its position has dropped/

The latest 2022 rankings from global leader International Living suggests the impact from the government’s actions has been quite negative. Malaysia didn’t just slip out of first place as a retirement destination, it’s no longer even in the top 10 worldwide, coming in now at 15th place.

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As reported in early January, Thailand is now Asia’s best place to retire, handily wresting the title from Malaysia. We’ve said repeatedly that Thailand would likely be the biggest beneficiary of the Malaysian government’s actions regarding the MM2H programme, and that indeed now appears to be the case.

In the spirit of full disclosure, though named the top spot in Asia on more than one occasion, Malaysia was never at the top of the worldwide rankings, which are occupied by countries in Central and South America. These countries (such as Costa Rica, Panama, Ecuador, and Mexico) typically offer very attractive programmes aimed at earning them a share of the massive amount of dollars held by retired Americans. Many US retirees choose to relocate southward for sunnier climates and lower costs of living.

Costa Rica is a perennial contender for the global top retirement spot | Image Credit: What If Costa

CHANGES AND CONFUSION ATTRACT CRITICISM

The new rules for MM2H have been met with near-unanimous disdain. Nevertheless, Hamzah Zainudin, the Minister of Home Affairs, recently reaffirmed in Parliament that the new criteria for the programme would stay despite the widespread criticism and feedback indicating it would fail to attract many applicants.

The MM2H programme, even before the recent upheaval, only attracted a small number of people. After 20 years, we estimate there are only about 30,000 people living here with the visa, which is less than 0.1% of the population. The Minister had previously stated that in response to concerns from Malaysians he as capping the number of visa holders at one percent of the population, which indicates he had been given bad information about how many people had taken up the visa and moved to Malaysia to begin with. It seemed extremely unlikely the old programme would ever achieve so many applicants, while the revised rules will all but certainly significantly reduce the existing number of participants.

Home Minister Hamzah Zainudin has been outspoken in the push to change MM2H programme requirements | Image Credit: Berita Harian

Hamzah’s recent announcement included the comment that he had come up with the new rules after discussions with key stakeholders. However, we were informed by the MM2H agents’ organisation that they were never consulted, and we have been closely involved with the programme and interacted with many thousands of visa holders over the last year and no one approached us for feedback or input. The huge outcry from many other quarters, ranging from property developers to chambers of commerce to other members of Parliament, certainly casts doubt on the notion that any meaningful consultation was carried out.

MALAYSIA’S LOSS

Thailand now stands to benefit from Malaysia’s tumble out of the top spot. Although for most Malaysians it will have gone unnoticed, the recent announcement of the ‘best places to retire’ will doubtlessly have an impact. International Living’s ‘Retirement Index’ is closely watched by tens of thousands of people trying to decide where to settle for their retirement years.

This is a big loss for Malaysia at a time when that foreign-sourced income is sorely needed in the wake of the economic devastation from the pandemic.

Here at TEG Media, we recently conducted a survey after the new MM2H rules were announced to gather feedback. We received replies from 500 people who had a definite interest in joining the programme before the announcement, and only 10 of them planned to proceed if the new rules were implemented. Our research has been quoted in several of the national media outlets, but clearly no information reached the Minister because he remains convinced the new programme will somehow help the country’s economic growth.

Penang has fared very well with retirees, so the island may feel the impact if their numbers drop significantly | Image Credit: Agoda

It should be clear that if the number of people interested in the programme had dropped by 98% (as indicated by our survey), then the benefit to the Malaysian economy would be significantly reduced even if those new applicants were wealthier.

This fact, coupled with the overall attitude of some in government, has made many expats conclude the new rules are aimed more at keeping people out of the country rather than attracting the ‘higher quality’ people which it is claimed are the target group.

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Meanwhile, many people who were looking forward to a quiet retirement in Malaysia are making plans to join competitive programmes in Europe, Thailand, Indonesia, and the Philippines. The loss of income for the Malaysian economy will not be devastating, but it’s still signficant, and it is hard to understand why Malaysia does not want it.

Health Minister Khairy Jamaluddin, one of the more respected Ministers in Malaysia, was recently quoted in the national media saying the country could not afford another lockdown. It is obvious that these economic problems will only be worsened by the country turning its back on all the retirees who were planning to come here. They could have continued to come and contribute billions of ringgits for the benefit of the country and the Malaysian people, but now that has been blocked.

On top of that, the recent treatment of MM2Hers and other expats is creating a real risk of the country losing out on foreign direct investment. Potential investors are beginning to feel that Malaysia no longer welcomes foreigners. Moreover, it is not just expats who are unhappy about this attitude, as we have heard and read comments by many Malaysians who believe this treatment of the current and potential expat community is bad news for their country.

It is, then, perhaps not surprising that the Malaysia sees itself descending the rankings of best places to retire.




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