Govt needs crisis management team, says Rafidah

KUALA LUMPUR: THE government should establish a crisis management team to take preemptive measures and weather the forecasted economic headwinds.

National Economic Action Council member Tan Sri Rafidah Aziz said proactive actions should be taken to counter any slowdown driven by external factors.

“There are economic disputes, even political disputes. Countries will be affected directly and indirectly. There’s no doubt about (that) because we are exposed to the international environment, including the economic trading infrastructure, investments.

“So we should think ahead. I prefer to use the word preemptive so that we won’t be caught unaware (should recession occur). We are aware of what is currently happening and should take action the soonest.

“This is so that it’s easier to manage and see the trend of where the headwinds are coming and what nature, because it’s evolving.

“Should it turn into a full-scale economic crisis, we are prepared not just at the government level but also the private sector (level). This is because our economy is driven by the private sector,” she told the New Straits Times.

Rafidah said the team should engage industries to find out challenges that they face and find solutions to manage them.

“The economic action plan’s role is more towards policies. The crisis management team would look for ways to manage these challenges.

“Collaborative efforts should be made to ensure that as stakeholders, we are able to manage it in the short term and, if necessary, over the long term,” said the former international trade and industry minister, adding that she would propose the matter to the government soon.

Economists had previously warned of a possible global recession next year. This is expected to have an adverse impact on open economies like Malaysia.

Some were reported as attributing this to the escalating United States-China trade war and expected the government to devise an expansionary expenditure plan to cushion the impact.

It was reported recently that central banks in some of the world’s largest economies are gearing up to deploy new monetary stimuli to stave off global recession.

But Morgan Stanley chief economist Chetan Ahya said this wave of stimuli might not be enough due to a combination of low interest rates, rising debt levels and trade policy uncertainty.

Malaysian Industrial Development Finance Research had reported that it expected a better economic growth for Malaysia this year, compared with 4.7 per cent recorded last year, saying that it would be influenced by various internal and external factors such as a global slowdown, global financial instability, threat of protectionism, commodity price volatility and labour market condition.

However, Morgan Stanley economists predict global growth to average 2.7 per cent in the coming quarters.

Earlier this month, analysts warned that the escalation of the US-China trade war could add more risks to the global economy, including Malaysia, due to the supply chain factor.