Jomo: Forget about politics, tough times are here

This article first appeared in The Edge Financial Daily, on June 18, 2019.

(From left) Minority Shareholders Watch Group chairman Tan Sri Dr Sulaiman Mahbob, Jomo, Institute for Democracy and Economic Affairs president Tunku Zain Al-’Abidin Tuanku Muhriz and Malaysian Institute of Accountants past president Datuk Mohd Nasir Ahmad at the Malaysian Economic Convention yesterday. Photo by Sam Fong

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PETALING JAYA: Warning that the country’s economy is facing real problems, economist Professor Dr Jomo Kwame Sundaram said Malaysians should set aside political differences in dealing with issues arising from external headwinds that are impacting the economy.

"Forget about the politics for a moment. You can wait until before the next election to start worrying about politics. But for the time being, we really need to unite for the country's sake,” he said.

"There are real problems the economy is facing. This is going to be a very, very tough time because the external situation is very bad and is deteriorating almost on a daily basis.

"[Although] many of these problems are beyond the control of the Malaysian government, we probably have to prepare ourselves for a situation where these tough times are going to be there for some time to come,” he added.

Jomo, who is a member of the Council of Eminent Persons and senior adviser at Khazanah Research Institute, was speaking to reporters on the sidelines of the Malaysian Economic Convention, jointly organised by the Malaysian Economic Association and Universiti Malaya’s Faculty of Economics and Administration yesterday.

Jomo said Malaysia could be caught in the crossfire of the US-China trade tensions, especially with China being Malaysia’s major trading partner.

“Also, there are a lot of investments and we are tied up with joint ventures. Those things we cannot run away from — whether it's the last (previous) government or this — it is a problem which is now part of our economy.

“There are many ways of dealing with that, and that is why it is important that we recognise these problems and deal with them together as a country,” he said.

He reiterated the need for Malaysia to start thinking about domestic investors, as more than 90% of investments in this country — and in most countries — are domestic.

“It (an economic slowdown) is already happening and it is affecting our commodity prices — and those things are not going to change immediately,” he said.

Asked if the country’s economy needed new stimulus, Jomo said: "I usually favour stimulus, but you also have to recognise that in the name of stimulus, in the last 20 years (since the Asian financial crisis), we have been stimulating the economy.

“There have been a lot of nonsense going on, including excessive borrowings. We really need to improve our accountability and transparency."

Commenting on the country’s reform agenda, Jomo said it is important to prioritise urgent matters, such as the 1Malaysia Development Bhd and any associated problems, as they deal with the question of national  debt.

“You have to prioritise and [deal with] the most urgent problems.

“Of course I would like more to be done, but we are talking about trying to bring about reforms where there are strong vested interests who are going to resist reforms. It is not easy,” he said.