Thursday, February 23, 2017

Economist: Think ‘Fast & Furious’ when talking about economy

Susan Loone     Published     Updated
INTERVIEW For Shankaran Nambiar, one of the country's most distinguished economists, Malaysia must get the big picture for the economy right.

The big picture, according to him, is somewhat lost, and what constitutes the big picture at present are remnants of Mahathirian “grandeur, a fuzzy reflection of the Malaysia Boleh ethos”.

“Who will create the spirit of this big picture? Or can that too be outsourced?’ asked the former economics lecturer in an interview with Malaysiakini.

“But why is this big picture necessary?

“Because now - and it seems pressing at this juncture - one needs a vision to guide the management of the economy,” said Shankaran, who explains it all in his new book “Malaysia in Troubled Times”, a 177-page anthology of articles from 2014 to 2016 published by the Strategic Information and Research Development Centre.

His book, with the front cover showing a streak of lightning piercing through the sky over the iconic Twin Towers, encourages interested readers to think and talk about the political economy of Malaysia.

“Just as you talk about the movie 'Fast and Furious', you should think and talk about the economy and what affects it,” said Shankaran, who also authored “Sen’s Capability Approach and Institutions” and “The Malaysian Economy: Rethinking Policies and Purposes”.

‘Fast & Furious’ is a series of American action films featuring illegal street racing and heists, which have been distributed by Universal Pictures since 2001.

'Gaps in reasoning process'

Shankaran’s book focuses on four important areas: Macroeconomy at Risk, Shifts in the Region, Public Policy and Getting the Big Picture right.

“Most books on the Malaysian economic policy look at trends; they analyse how the structure of the economy, for instance, has changed over the years,” said Shankaran, who is currently a senior fellow at the Malaysian Institute of Economic Research (MIER).

“However, I am more interested in looking at gaps in the reasoning process, pointing out issues that are being ignored and drawing attention to what has to be done,” added the consultant for several United Nations agencies, International Labour Organisation and the Asean Secretariat.

Shankaran’s book, the third to his name, has received overall praise from experts in the field.

Ellen Frost, senior adviser of the East-West Center, Washington, described the book as “provocative, clearly written insights on the challenges facing Malaysia’s economy and Malaysian leadership”.

She sees Shankaran as repeatedly challenging his readers to think hard on past lessons and their implications for the future.

MIER chairperson Sulaiman Mahbob said the book is absolutely essential reading for anyone interested in the Malaysian economy.

Former MIER chairperson cum current chairperson of Standard Chartered Bank Malaysia, Mohd Sheriff Mohd Kassim, said Shankaran's essays look into the pulse of the economy and state of nation.

Vikram Nehru, senior associate of Carnegie Endowment for International Peace, Washington, said what is striking (in the book) is Shankaran’s “balanced analysis” of current economic issues.

'Past issues still relevant today'

The articles were written during several key points in the Malaysian economic history, including Prime Minister Najib Abdul Razak’s announcement of the six percent goods and services tax in 2015, as Malaysia held the Asean chair, while the world watched how he handled the Trans Pacific Partnership Agreement (TPPA).

One wonders if Shankaran's analysis is still relevant, given that it was based on his observations for the period between Dec 19, 2014 and Jan 11, 2016.

He considered Malaysia’s economy then not to be in crisis but in “murky waters” due to the massive foreign capital outflows.

In 2016, several changes have taken place globally, for example, Donald Trump’s presidency in the United States in November, and the change in Trump’s foreign policies, including his anti-TPPA stance.

In July 2016, the United States Department of Justice moved to seize assets worth US$1 billion from individuals linked to Najib, including his stepson Riza Aziz and Penang-born businessman Low Taek Jho, or better known as Jho Low, for money laundering related to 1MDB.

But Shankaran said his book is no less relevant today than it was in 2014; in fact, some of the problems have been long-standing.

“I have, for instance, been talking about the urgent need for good institutions, good governance in the last 15 years. It seems no less crucial today than when I first wrote about it,” he countered.

“It is the same with policy inconsistency. I've long spoken about it. The book illustrates the problems of policy inconsistency over the period 2014 to 2016. I don't think we've seen the last of policy inconsistency.”

Shankaran noted that during his administration, prior to 2003, former prime minister Dr Mahathir Mohamad saw the need for a knowledge economy.
He does not think Malaysia is anywhere close to finding a solution to the problem Mahathir had identified back then.
“Until we seem reasonably close to a solution, we need to keep drumming that the problem exists,” he believes.

“My illustrations are rooted in 2014-2016, but the issues and principles still demand attention. You still need a way to frame your economic problems and to talk about them, and I’ve suggested one way of doing it.”

And one way of doing it, Shankaran suggests in the last paragraph of his latest book, is to go beyond the "empty slogans to revive the animal spirits that have receded".

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