Malaysia is looking to the tourism industry and palm oil production to stimulate its ailing economy, Prime Minister Dr Mahathir Mohamad said today.

“The tourism business is a cash business. In fact, at one time, tourism earned us (the most money) after (national oil and gas company) Petronas," he told The Malaysian Insight.

Mahathir added that Malaysia is looking at courting tourists and foreign investors in the hospitality industry.

He also expressed confidence that the palm oil sector would continue generating significant income for the country.

"Any land that you have, you plant oil palms, you get money.”

According to TMI, the tourism and hospitality industry contributed RM182.4 billion to the nation's coffers last year, amounting to 14.8 percent of Malaysia's GDP.

Palm oil, rubber, cocoa, and timber exports amounted to RM121.99 billion in 2016, with palm oil plantations making up to 7.4 percent of the GDP.

Belt-tightening measures

Even so, he said the country still needed to tighten its belt when it comes to spending.

“The people must accept that we are not doing well.

"There are other means of earning money, but more importantly we need to have a budget that is thin," he said.

Mahathir added that while Petronas was also capable of generating profits, it was not earning as much as it used to when global oil prices were higher.

“Now it is US$70 (down from US$120 per barrel), so we earn less, but we still earn. But you cannot take all of it as profit because Petronas needs to invest continuously.”

On the matter of 1Malaysia People’s Aid (BR1M), Mahathir said the government would be gradually lowering the amount of the payouts before it is scrapped.

BR1M was replaced with the Cost of Living Aid (BSH) initiative when the new government took over in May following the 14th general election.

The third instalment of the BSH allowance for 2018 was paid out earlier this month before Hari Raya, involving a total of RM1.6 billion.