The Near-Term Outlook: The Malaysian Economy and The Currency Peg

The Liberal Forum Malaysia sponsored by the Friedrich Naumann Foundation recently organized a half-day hot seat forum in partnership with the Malaysian Institute of Economic Research on: The Near-Term Outlook: the Malaysian Economy and the Currency Peg at the Grand Plaza Parkroyal Hotel Kuala Lumpur, Malaysia on Thursday 24th February 2005.

The forum invited Emeritus Professor Dr. Mohamed Ariff, Executive Director of Malaysian Institute of Economic Research (MIER) as the speaker and Datuk Dr. Sulaiman, President of Institute Integrity Malaysia as the moderator.

Dr. Ariff had given an outstanding presentation on the current Malaysian economic situation, the pros and cons of the currency peg and the possible implications for the Malaysian economy. He also touched upon external issues such as the implications of the revaluation of the yuan currency on the ringgit peg. His insightful information and productive discussions were highly praised among the participants. Moreover, Datuk Dr. Sulaiman’s moderating role had substantially promoted active participation among the participants which resulted fruitful dialogue.

In general, the Executive Director of MIER was able to provide a balanced presentation of the topic at this meeting, although many participants had noted that Dr. Ariff’s previous work had mentioned the importance of Malaysia being able to re-evaluate this dollar-pegging policy. This is in light of Dr.Ariff’s preceding forecast that the Malaysian economy could experience a harsh adjustment period in 2008. And as such, it could be more favorable to re-evaluate this policy sooner, while the Malaysian economy remains in a position of advantage, rather than at a time when the country would be forced to do so.

The forum was attended by about 180 participants from political parties, government agencies, the private and corporate sectors, academia, civil society organisations and the media. The number of participants was much larger than expected and thus a number of late applications were regrettably turned down. This was largely due to the popularity of the topic and the reputation of the expert in the hot seat whose commentaries on the issue are well known.

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