Monday, February 1, 2010

Hype on Global Recovery

This evening, I attended the KL Advanced Toastmasters Club meeting, and I maintained my usual low profile – the only role I took on was as Table Topics Master. Alan Tan, a HICT Toastmaster also came along and he did his CC speech # 9 – and although KL Advanced members were critical of his speech, Alan still felt that he has learnt a lot from the evaluations, both from his evaluator, Arvind Sriram as well as from the others in the Open Evaluation session. Alan has good attitude, I daresay.

Martin Khor in his “Global Trends” piece in the Star today (p N45) asked us to be wary of hype on global recovery – at least based on the somber assessment of three eminent personalities, i.e. Dr. Yilmaz Akyuz, special economic advisor of the South Center, Dr. Supachai Panitchpakdi, Secretary-General of the UN Conference on Trade and Development (UNCTAD) and Prof Deepak Nayyar, former vice-chancellor of Delhi University.

According to Dr. Yilmaz, although there is consensus that recovery has started, with positive growth expected in all major economies this year – the crisis intervention policies in developed countries, based on increased government spending and monetary expansion, are creating another bubble, with financial institutions out of touch with the real economy again. Dr. Supachai warned developing countries not to be misled by talk about an “early recovery” – in his estimate, more than 100 developing countries are still in recession. Besides, the recovery is partial, taking place in some sectors (e.g. the stock market and real estate), and there is still to be the unwinding and deleveraging from household and corporate debt. Prof Deepak urged a rethinking of development – there should be a reform in orthodox macroeconomic policy thinking which should not focus only on inflation control, and there should be caution in financial liberalization. Importantly, developing countries should also re-think their relative reliance on external and internal markets and financial resources. Domestic markets are critical and external markets cannot be substitutes.

So let’s not be so reckless and hasty in our judgment that Malaysia is out of the woods. We are an export-dependent country – so ‘tis better to exercise caution.

The New Straits Times today has this to say about the Manchester United-Arsenal match: “Manchester United delivered a devastating statement of (English) Premier League intent yesterday when they beat title rivals Arsenal 3-1” (p 44). I would have used the word “demolished” to emphasize how well Man U played.

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