Tuesday, December 29, 2009

Malaysia's Economic Recovery: Not For the Faint Hearted

Malaysian Institute of Economic Research (MIER) executive director Dr Mohamed Ariff Abdul Kareem expected the Malaysian economy to face tougher and more challenging times following concerns that the United States may be heading for a double-dip recession.

He said all available evidence clearly showed that Malaysia was out of recession. The country would register positive growth in the fourth quarter of this year, and this would probably continue into 2010.

Dr Ariff warned of a possible double dip in the US economy first half of next year. Rightly pointed out, the global economy recovery especially in the US is fueled by fiscal stimulus packages and not real recovery in consumer demand and confidence. Unemployment rates are still high in US and Western Europe.

Closer to this region, the China economy is plagued with an asset bubble fear. This threat has been hovering over China's economy in the last few years, even before the full blown global economic crisis this March.

Malaysia's recovery is going to be a bit more tricky. Without accurate and updated economic data, we are not even sure of the real unemployment rates. Job creation remains slow and sluggish.

Consumer demand has not been that encouraging even during the recent festive seasons. They are going to continue to thread carefully next year. Family expenditure will remain prudent because parents may have to make provision for their unemployed children.

Unemployment for young graduates and school leavers may hover above 100,000 next year. Despite PM Najib's call to increase per capita income, the entry level salary and salary growth are expected to be sluggish and stagnant.

Malaysia's dilemma is deep and complex. Apart from the global economic crisis, we have to discover a new dynamism and inertia to move this economy forward.

Malaysia's structural change is not for the faint hearted. According to MIER, a mild economic recovery can be expected in the year 2012 but this recovery will be largely resource (commodities and oil & gas) driven.

We need to reinvigorate our manufacturing and services sectors. We need to do better to capitalize on our natural resources and strengths. The education system needs a major revamp.

Foremost, we need better calibre policy makers, administrators and managers. Curb corruption and wastage of useful limited resources.

The changes must start with mindset and cultural changes.

Hence, this journey is going to be a long and arduous one. Even a change of government will not erase these problems overnight. The direction of this country cannot be dictated by a mere 222 politicians. The future of this country lies in the hands of 28 million people.

Malaysians must be prepared to work hard for the next 20 years to get this country back on its feet again.

And, the journey must start from now.

5 comments:

Anonymous said...

Malaysia needs men with integrity not smart leaders. Honesty and accountability are missing in our leaders> look at singapore, a small nation with no natural resources and learn a few lessons from them. Lets be humble. how did singapore progressed so far ahead in this region ? We dont need to look east and produce all sort of slogans - vision 202, clean ,efficient government
. Talk is really cheap . No amount of media spinning can change the rot in malaysia. Concrete action requires great courage and honor to drive malaysia forward. national interests must come first. Can our leadership change and make our nation better? Your guess is anyone guess? Based on previous track record it is unlikely much will happened. Our leaders has yet to fathom or understand the magnitude and complexity of the ills afflicting Malaysia> this is the legacy left behind by the previous administrations>

Anonymous said...

Very very tough!The education system is not turning out the right mix of graduates to propel the economy! That is why so many graduates are jobless.Religious studies? Arts & Social Studies???Worst only well versed in BN.

CITIZEN said...

Yes,the legacy left behind by that mamak fler,gambler,speculator and at the same time trying to be hero of the 3rd world by quarelling with people to show how smart he is.Now we see foreigners are not coming and just depend on our commodities(oil and palm oil)will bring disaster to us one day!You govt officers,please wake up! and work with integrity and professionalism! Politicians also please behave like politician(politically)and not just to cari makan and make some stupid noises or act like jokers in the parliament!

Anonymous said...

After sliding down the slippery slope of decline for decades in the quality of the economic, social, political, educational and judicial institutions, it will be a Sisyphean challenge for the country to recover from the quagmire.

Time is running out and failure to address these issues effectively ASAP will bring the country untold miseries for the generations to come.

The core issue is, where is the engine of growth which will create wealth and provide employment? The country needs a "New Deal" now.

If the asset bubble in China burst and the American economy dips into recession in 2010, Malaysia's economic recovery will fizzle out.

Anonymous said...

I sense a new awakening sweeping across the nation. The people are no fools, and will be the new wave that moves the nation.

A new consciousness will rise from the people to change things for the better - for the good of the nation and harmony and happiness of the people.

This change will come and all will be embraced with the change for the better.

The change may come sooner than expected. Let all thinking Malaysians be ready, prepared and bold to face and deal with corruptions, injustice, discriminations, nepotism, cronyism, incompetency, rascism, abuse of power, etc.