Different people will have very different interpretation of the country’s current state of economy.
Senior government officials will keep reminding us that Malaysia is enjoying a robust economic health despite some hiccups, citing numbers and international indicators, and generally speaking there is still space for further growth.
Malaysians of different trades and industries may have different views from the official interpretation, while most people perceive of the economy from their day-to-day experiences, such as goods prices, income levels and rising expenses.
Businessmen, in particular importers and exporters, are at the mercy of the ringgit exchange rate fluctuation, while falling commodity prices have far-fetching effects on the market, in addition to drastically reduced incomes of smallholders.
Stock market performance is yet another key indicator of the country’s economic health.
Bursa Malaysia has been trending rather weakly over the past one year, and this downtrend is not going to end any time soon. And this has something to do with PM Mahathir’s policy of slashing public debts through fiscal crunch.
However, construction companies are poised to benefit from the reinstatement of major infrastructural projects such as Bandar Malaysia and ECRL, and foreign fund managers remain upbeat of the local bourse.
We can see that the Malaysia’s economic performance is affected by multiple factors.
Khazanah Research Institute senior advisor Prof Dr Jomo Kwame Sundaram said Malaysia is bracing for tougher times as a result of intractable external situation.
He admitted that the country is currently suffering from a sluggish economy and the decline of commodity prices is a consequence of such sluggishness.
Jomo is not trying to alarm the nation, but he wants the entire country to come together in unity to tackle the challenges of a slowing economy during such a difficult time.
External situation is one of the challenges that we need to deal with, and this is what is beyond the control of the Malaysian government.
As for the heated trade war between the United States and China at this moment, both countries are our major trading partners, especially China where many Malaysians businesses have their investments.
In addition, Malaysian companies also have ongoing joint venture projects with their counterparts in China, and we will not be spared from the impact if China is subjected to trade barriers.
Even though such external factors are beyond our control, that does not mean we can remain completely passive. The government needs to initiate institutional reforms to better equip ourselves in tackling the challenges.
Jomo pointed out that the economic stimulus packages introduced by the government in the past had been ineffective and had instead created new problems.
He insisted that the government should enhance accountability and transparency in order to boost the domestic economic development instead of relying wholly on foreign investments.
Many Malaysians will tend to agree with Prof Jomo given the fact that the progress of the government’s reform has been pathetically slow.
The biggest victim of the ruling coalition’s political deadlock is none other than the national economy.
Malaysians have backed the PH’s reform agenda because they want to see more substantial reforms and improved economic climate, which unfortunately remain illusory today.