Same economic problems but different prescription

Some of the major concerns of economies in these region including Malaysia is the slowing down of the world economic growth. World trade is also moderating. This means lower demand for our exports.

Other concerns include:
Asset bubble - rising property and housing prices
increasing household debt
quantitative easing in US....
money flowing into Asian economies... huge capital inflows must be scrutinized closely
rising inflationary pressures
strengthening domestic currency
slowing exports

All these concerns not confined to Malaysia only but all the regional economies in East and South-east Asia. when I was in Xian, China these issues were discussed in detail. At one point time the world criticized Malaysia for its capital control measures. Now, countries are openly discussing, even the IMF, WBank and ADB are presenting papers on capital control as an instrument to safeguard the economy from outside speculation.

Having said that I'm not suggesting we should go into capital control or implement ringgit pegging. These measures were good at that point of time and not now. I don't understand why DR.M is criticizing the current Government. Dr.M's era is over, his policies maybe good (debatable) during his time and he maybe world class leader, but the situation is different now. His time is over and finished. He is out of touch and no more in the Government. He may read a lot and gather information from internet but he is not exposed to the reality of the world economy. The current economic environment is so dynamic and changes very fast compared to his time. The policy prescription will be different although the problems seems to be the same. Its like the same disease before but can't be cured today with the same medicine. The virus has mutated and new and stronger virus has emerged which requires different set of medicine.

The previous capital control and ringgit pegging may be good during Asian Financial crisis but we are not in a financial crisis. Asian financial and banking system remain sound and strong. Ringgit strengthening is not because of speculative activities but more because of a weaker US dollar. Of course, there is huge capital inflows into portfolio market. Translating short-term capital inflows into long-term capital or into real sectors of the economy would reduce the risk of capital out-flows.

Let us manage our economy properly and overcome all the obstacles towards achieving the status of a developed and high-income economy.