KUALA LUMPUR: Prominent economist Jomo Kwame Sundaram said the ringgit’s steady decline over the past one-and-a-half years cannot be simply attributed to the plunge in global crude oil prices, as it also points to a confidence crisis that must be resolved.

He said this as he observes that the global market is pushing through current turbulent and extraordinary times, amid UK’s Brexit (leaving the European Union) vote and Donald Trump’s unexpected win in the US presidential election.

“What is of concern is that over the last one-and-a-half years or so, the ringgit has been steadily declining. This cannot be simply attributed to the collapse in the price of crude oil.

“There are many other factors behind it, including a loss of confidence in the government as more and more revelations are made about 1MDB (1Malaysia Development Bhd),” he said.

Jomo was speaking to reporters on the sidelines of the National Economic Outlook Conference 2017-2018 yesterday. He said the crisis of public confidence is very serious and has huge implications on Malaysia.

About what can be done to restore confidence in Malaysia, he noted the recent resignation of two world leaders.

“The South Korean president has offered to resign and that is one way of restoring confidence. The prime minister of Italy has also just resigned. These are extraordinary times. We have to think out of the box,” said Jomo.

South Korean president Park Geun-hye has offered to step down in April next year, over a corruption and influence-peddling scandal, while Italian premier Matteo Renzi had resigned after voters rejected his constitutional reforms.

However, Jomo said any transition in power in Malaysia has to be well-managed and inclusive.

“What she [Park] has done was very responsible. She asked the ruling party and the opposition party to work together to manage the transition process, whereas when Renzi resigned, there was a lot of uncertainty.

“[The transition] should be in the interests of the Malaysian people. It should not be something just in the interest of the parties — whether it is Barisan Nasional or the opposition parties,” he said.

Jomo also warned that the country is now entering a new world, as major changes are taking place in major economies.

He cited Trump’s infrastructure plan, saying if the US President-elect does follow through on his pledge to build and maintain infrastructure, it would be a turning point for the global economy.

“It will be a turning point not only for the US economy, but others will also do things differently. Europe has realised that they are in very bad shape, and many of the incumbent leaders and presidents are going to go down.

“Something else may happen in France next year too. Basically, we will see a lot of changes in the world, especially in the Western world.

“We are entering a very different world and especially for a country with an open economy like Malaysia, it is extremely important that we have a realistic understanding of what is going on and the options we have, going forward,” he said.