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.