Thursday, October 23, 2008

Malaysia and Global Financial Turmoil

Many politicians from the government claimed that the current global financial crisis will not hit Malaysia since we have strong economic fundamentals. Our domestic sector is strong and we have enough liquidity.

While I do believe that our domestic sector is strong and we have enough liquidity in the market, the external sector worries me. Our economy is much of export-driven, so international trade is very important and vital to our growth. Domestic sector alone is not enough to support our growth. Many of the goods that we produce are for international market. When these countries can no longer buy as much goods as before, basically we cannot sell our goods. Then the chain reactions start. When domestic businesses lose their foreign buyers, they will face potential losses. To avoid that, they will start to cut off productions. To do so, they will have to lay off some of their workers. When people lose their jobs, the domestic economy will be affected.

To say that we will not be affected by the global financial turmoil is a bit exaggerate, I think. I would rather say that the impact will not be felt in Malaysia as quickly as others had faced it. Thank God we have a system that prohibits debt trading. It's time to go back to God. Say no to usury.

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