KOTA KINABALU, Oct 5 — Malaysians need to understand and accept that the country, being an open market economy, is exposed to the effects arising from global economic uncertainty, according to Economy Minister Rafizi Ramli.
However, he said that practising open trade also has its advantages, as seen by the country becoming among the world’s top-20 largest trading nations.
“Hence, as a trading nation which relies on exports for our revenue, whether electronics, palm oil, petroleum or other products, we will continue to be exposed to (external) factors beyond our control,” he told reporters after officiating the launch of the Sabah PKR State Leadership Council (MPN) office here today.
The PKR deputy president was replying to a question on whether the Malaysian economy would be adversely affected by the current global economic uncertainty.
As an example, Rafizi said, although Malaysia has nothing directly to do with the US Federal Reserve’s interest rate decisions, its economy could still be influenced by adopting the open trade policy.
“Similarly, the wars in Ukraine and Gaza (Palestine) will also have an effect. The latest example is Israel’s attacks on Lebanon and Iran’s retaliation against Israel, and the world now awaits Israel’s move.
“Every time such a geopolitical conflict happens, fund managers globally need to take action to safeguard their investments.
“Their normal practice is to transfer funds from existing investment instruments to traditional, conventional and low-risk investments such as gold,” he explained.
Therefore, Malaysia must change the economic structure in terms of government practices to ensure strong financial governance, Rafizi said.
“(This is to) ensure we have high financial reserves and capability to navigate uncertainties. At the federal level, we always say we need to undertake fiscal reforms to strengthen our fiscal position,” he added. — Bernama
