Author: Mohamed Ariff, INCEIF
After registering an impressive 7.2 per cent growth in 2010, the Malaysian economy visibly slowed down in 2011. GDP growth moderated to 5 per cent in the first half of the year, due mainly to sluggish export growth, but increased to 5.8 per cent growth in the third quarter, thanks to commodity exports and domestic demand.
Manufactured exports, the main driver of growth, did not fare well over the year, owing to depressed demand conditions in the US and EU. Read more…
Author: Mohamed Ariff, MIER
Having been in the thick of the global economic crisis, Asia can now play a pivotal role in the post-crisis rebalancing exercise.
Although regional cooperation efforts in Asia after the 1997-98 Asian financial crisis were largely reactive and inward-looking, it is important to note that individual economies in the region maintained their outward-looking posture. Read more…
Author: Mohamed Ariff, University of Malaya
There is no need to belabour the point that flexible prices play a key role in correcting imbalances, be they between supply and demand for products, or between saving and investment or, for that matter, global imbalances of international capital or trade flows.
This is simply the magic of the price mechanism in text books. Read more…
Author: Mohamed Ariff, MIER and University of Malaya
Economic openness, through international trade and foreign investment, has brought much prosperity and progress to Malaysia, transforming it from a traditional primary producer into a modern industrialising economy. The price Malaysia has had to pay has been exposure to international ups and downs, transmitted through trade and financial channels, the impact of which can be minimised by appropriate macroeconomic policy responses.
The country has arrived at a new crossroads in the wake of the global economic crisis, prompting the authorities to seek a new growth model. Read more…
Author: Mohamed Ariff, MIER and University of Malaya
Amid relief that the worst is over, serious concerns remain over even the sustainability, let alone the robustness, of the world’s economic recovery. There is no suggestion that the recent economic statistics lack credibility, but there are worries in the minds of many that these data tend to gloss over the cracks underneath.
The year just past has turned out to be not as bad as feared. Read more…
Author: Mohamed Ariff, Malaysian Institute of Economic Research
International Monetary Fund (IMF) programmes in Europe now are similar to those implemented in Asia a decade ago, but there are important differences in approach. These are largely attributable to the valuable lessons that the IMF learned from its experience in Asia.
Hungary, Iceland, Latvia and Ukraine were among the 15 recipients of IMF help this time around, between November last year and May this year. Read more…
Author: Mohamed Ariff, MIER
There are signs that the global economic crisis is abating and a recovery is dawning. Economic data and earnings have surprised on the upside. While this seems reassuring, there are nagging doubts about the sustainability of the anticipated recovery.
Second-quarter numbers relating to private consumption, manufacturing production, exports and imports and gross domestic product have been encouraging, in that they have not been as bad as initially feared.
Read more…
Author: Mohamed Ariff
The global economic crisis has brought East Asia to a crossroads. It now has three options: one, continue as before with no change; two, take a U-turn and look inward; and three, stay outward-looking but with a distinct difference.
One must, however, acknowledge that the export-led growth strategy has paid handsome dividends for the East Asian economies, enabling them to fly high. No wonder, Japan and South Korea were able to climb the development ladder rapidly through exports, especially to the United States.
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Author: Mohamed Ariff, MIER
Since opening up in a big way in the early 1990s, China has made amazing progress on the economic front, thanks mainly to its highly pragmatic, market-friendly policies.
China has emerged as the manufacturing warehouse for the whole world, facilitated by massive inflows of foreign investment into the country. China has moved up the development ladder rapidly, fuelled by blazing double-digit growth rates.
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Author: Mohamed Ariff, Executive Director, MIER
The media everywhere are abuzz with talk of an impending, if not imminent, recovery for the ailing world economy in general and emerging economies in particular. This is based on signs of improvement in industrial production, corporate profits, stock market performance, etc.
Increased industrial production in the emerging Asian economies, including South Korea, Singapore and Thailand in recent months, equity market vibrancy in Japan, China, India and Vietnam, and improved profit figures from Goldman Sachs, JP Morgan Chase and the Citigroup Inc in the United States are among the beacons of the much anticipated recovery.
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Author: Mohamed Ariff
Recently, the StarBizWeek in Malaysia convened a roundtable discussion to gauge the impact of the global crisis on Malaysia, best and worst-case scenarios, and how the country can mitigate the effects of a protracted downturn while keeping an eye on addressing several structural shortfalls to ensure long-term sustainability.
The panellists are former Bank Negara deputy governor Tan Sri Dr Lin See Yan, Meridian Asset Management Sdn Bhd chief investment officer Tan Beng Ling and Malaysian Institute of Economic Research executive director Prof Datuk Mohamed Ariff Abdul Kareem. The discussion was moderated by P. Gunasegaram, managing editor of The Star.
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Author: Mohamed Ariff, MIER
A common currency for East Asia has been bandied about as a long-term goal, which may take many decades to materialise. No doubt, a common currency would be a great boon to intra-regional movement of goods and services and factors of production. But this proposition would make sense only if East Asian economies are successfully integrated and the thorny issue of national sovereignty can be sidestepped. A currency union for East Asia would represent the highest form of regional integration. It is important that this goal is not lost sight of, although it is extremely difficult to draw a timeline for it. It is best achieved through evolution, not decree.
While the common currency idea is kept on the back-burner, it will be in the interest of East Asian economies, in the interim, to cooperate and coordinate with one another in their exchange rate management.
It will not be difficult to put in place a coordinated basket peg so that there can be flexible, but stable, exchange rates in the region.
This will facilitate increased intra-regional economic transactions and render the region financially resilient.
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