Rethinking Malaysia’s Economic Future: UBI, AGI, and the Promise of Modern Monetary Thinking

As Malaysia edges closer to the frontier of artificial intelligence and automation, a quiet revolution is brewing beneath the surface. The emergence of Artificial General Intelligence (AGI)  machines capable of performing any cognitive task that humans can,  is no longer science fiction. It is rapidly becoming science fact. And its implications for the future of work, income distribution, and national economic planning are nothing short of profound.

In a future where machines can outperform humans in nearly every domain, how do we ensure Malaysians still have access to income, dignity, and opportunity?

One idea is gaining increasing traction: Universal Basic Income (UBI)  a regular, unconditional cash payment to all citizens. But for many, the question immediately arises: Can Malaysia afford such a policy?

From “Can We Afford It?” to “How Can We Manage It?”

This is where a new school of economic thought, Modern Monetary Theory (MMT), offers a compelling shift in perspective.

Traditionally, governments are expected to manage budgets like households  collecting taxes before spending, and keeping deficits in check. But MMT challenges this view for countries that issue their own sovereign currency, like Malaysia. Under MMT, the real constraint on government spending is not the budget deficit  but inflation.

This means the government can create money to finance programs like UBI, as long as the economy has spare capacity (such as idle labor and underutilized factories) and inflation is kept under control. The question then transforms from “Can we afford UBI?” to “How can we design UBI to avoid inflationary risks?”

UBI in the Age of AGI

As AGI systems become more advanced, we will likely see significant job displacement across nearly every sector  from customer service and transportation to legal services and even education. While productivity will soar, traditional employment may become increasingly scarce.

UBI offers a simple but revolutionary solution: a basic income floor that ensures every Malaysian can meet their essential needs, regardless of employment status.

In the context of MMT, this is not about charity or “giving away money”  it is about redefining national economic security in a world where machines can generate vast wealth, but where that wealth risks being concentrated in the hands of a few.

Managing Inflation: The Real Challenge

A common concern with UBI is inflation: won’t people spend more, and drive up prices?

Here’s where policy design matters. A carefully planned UBI program, implemented in parallel with:

• Strategic taxation to rebalance excess demand;
• Local supply chain investments to ensure goods and services can keep up with demand;
• Digital tools powered by AGI itself to monitor price movements in real-time;

…can ensure inflation remains under control. Indeed, if AGI makes production cheaper and more efficient, many essential goods may actually fall in price, further easing inflationary pressure.

Why Malaysia Should Act Now

Malaysia is no stranger to social support systems  from BR1M to Bantuan Prihatin Rakyat, the country already has administrative experience in delivering cash transfers at scale. This infrastructure could serve as a foundation for piloting more universal programs.

Moreover, Malaysia’s diverse economy, growing digital capabilities, and relatively young population position it well to become a regional pioneer in balancing technological disruption with inclusive economic policies.

A UBI trial  perhaps starting with vulnerable groups or those in rapidly automated industries  could yield valuable insights before scaling nationally. Coupled with education reform, reskilling, and green industrial policies, UBI could support a more resilient, humane economic system.

UBI is Not a Cost  It’s an Investment

If AGI truly changes everything  from how we work to how we live  then Malaysia must start reimagining the future not with fear, but with vision. Under MMT, UBI is not a financial burden, but an investment in national stability, social peace, and human dignity.

Just as previous generations built roads, schools, and power grids, the next generation must build the infrastructure of inclusive digital economies  where no citizen is left behind by automation, and where the wealth generated by AGI benefits all, not just the few.

Can We?

In a world reshaped by AGI, Malaysia cannot afford to ask “Can we afford UBI?” We must instead ask: “How can we implement it responsibly, sustainably, and in the service of all Malaysians?”

It is time to shift our national conversation. Let us think boldly, plan wisely, and act compassionately  so that the future of work, even in the era of AGI, remains a future of hope.