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Asean Affairs   20 April 2011

Investment doesn’t threaten Malaysia

By  David Swartzentruber

AseanAffairs     20 April 2011

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Since the 1997 financial crisis in Asia, Malaysia has the reputation of managing its economy in a singular and distinctive style. At that time when the speculative bubble burst in the region and Malaysia’s neighbors, such as Thailand, accepted International Monetary Fund emergency funding, Malaysia did not. It instituted capital controls and seemed to come out of the crisis in better financial shape and faster than most other Asian countries.

Moving forward to 2011, Asean Affairs has frequently reported on the issue of “hot money,” capital inflows streaming into Asean countries. Most of this investment goes into stocks or other vehicles that have high liquidity as investors seek better returns in Asia than are found in the west. When higher returns are found elsewhere, then these investments can be rapidly switched. This is what happened in 1997 when the speculative bubble burst.

Malaysia has developed another highway for investors to travel through its Economic Transformation Programme (ETP). The ETP was announced in October 2010 with the goal of achieving a per capita income of US$15,000-US$20,000 by 2020, bringing Malaysia into the ranks of developed nations.

At the recent fifth update of the ETP, Malaysian Prime Minister Datuk Seri Najib Tun Razak said that a total of RM11.16 (US$3.7 billion) had recently been invested in 72 projects that would create about 75,000 jobs. New projects include the establishment of an electrical home appliance manufacturing hub and an international distribution network in Penang. The entire program has so far generated RM 106.40 billion (US$35.7 billion) and created 300,000 jobs.

Although Malaysia still has an active stock exchange, the Bursa Malaysia, and it surely benefits from hot money capital inflows, the announced success of Malaysia’s Economic Transformation Programme is noteworthy.

Paul A. Ebeling, Jnr

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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