MALAYSIANS must brace for tough times ahead, warned a top economist, as the economy faces “real problems” amid an intractable external situation that is deteriorating on an almost daily basis.

Dr Jomo Kwame Sundaram, a senior adviser at Khazanah Research Institute, said many of these problems are beyond the control of the government, and so, the people need to prepare for hard times.

“The economic war is not just about trade between the US and China, and we cannot run away from it, as it is also part of our economy.

“We are going to get caught in the situation as China is our major trading partner, and there are a lot of Malaysian investments in China as well. We have joint ventures, such as Proton and Geely,” he told reporters on the sidelines of the Malaysian Economic Convention 2019 in Kuala Lumpur today.

He said it is important for Malaysians to recognise the said problems and deal with them “together as a country”, putting aside political differences.

The nation should also start focusing on domestic investments instead of continually viewing foreign ones as its “economic saviour”, he said.

Jomo said the economic slowdown is already happening, affecting Malaysia’s commodity prices, and is not going to turn around immediately.

“We are not a low-cost oil-producing country like Saudi Arabia, and even the Saudis are revising their policies due to the current economic situation.”

On whether the Malaysian economy needs a new stimulus, he said the country has been stimulating its economy for the past 20 years, since the Asian financial crisis, with a lot of borrowings, adding that there has been “a lot of nonsense going on” in the name of stimulus.

What Malaysia needs now is to improve in terms of accountability and transparency, he said.

He said reform is not easy and the wish list is long, hence, the government must prioritise tackling such urgent problems, even if they do not align with “what others, such as the World Bank, tell us to do”.

Dealing with the 1Malaysia Development Bhd scandal and national debt may be the most important thing on the agenda, he said.

“I cannot say what the government is doing is wonderful, as there is a lot more to be done… As they work on trying to institute reform, there are quarters with vested interests who resist reform, therefore, it is not easy.” – Bernama, June 17, 2019.