Asia will continue to be a bright spot with India leading the pack of major economies while China’s economy is still considered robust despite slowing growth. Asia is leading the world in economic integration, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership recently coming into force and the Regional Comprehensive Economic Partnership still under negotiation. At home, Malaysia’s GDP is expected to expand by 4.8% in 2020 from 4.7% in 2019 with estimated RM2.3 trillion economy (Economic Outlook 2020 Highlights, 2019). However, the recent economic situation will reduce this figure to between -2.0% and 0.5% due to “necessary” global and domestic actions to contain the Covid-19 pandemic (Bank Negara Malaysia, 2020) Governance of the global economy is fragmenting as multilateral institutions become less representative of current realities and economic integration becomes more regionalised. The potential demise of the post-World War II economic order would herald weaker long-term prospects for global economic growth and prosperity as well as a more complicated international regulatory environment for companies. Protectionist policies, violations of both the rules and the spirit of free trade agreements, anda looming risk theWorld Trade Organization’s dispute settlement mechanism will cease to function create profound risks for the current system of international trade. In addition, the US–China trade war threatens to weaken global growth prospects while
raising costs and creating supply chain disruptions for many companies.
Companies need to adjust to slowing growth in a multi-local world. It is becoming clear that the new age of multi-localism—characterised by the preference for local communities, industries, products, cultures, and customs—is extending into international economic governance. National governments are going it alone to implementpoliciesoutside thestructures of the traditional multilateral institutions and are pursuing regional economic integration as global agreements become less desirable or untenable. To compete in this environment, companies may need more regional supply chains and greater devolution of management and operations to the local level. Economic perspective The World Bank’s Digital Adoption Index (DAI), which reflects accessibility and usage of digital services by consumers, businesses and the Government, classifies Malaysia as an ‘adopter’ country. While in some respects, this places Malaysia’s digital progress as comparable with some advanced economies, the economy still lags notable ‘front-runners like the United States, Estonia, South Korea, Japan and Singapore. Malaysia must aspire to become a ‘front- runner’ on the digital front to fully unlock the economic benefits. From the study by BankNegaraMalaysia. Delving deeper into the factors that propel economies to “front-runner” status reveals that these
MALAYSIA’S GDP IS EXPECTED TO EXPAND BY 4.8% IN 2020 FROM 4.7% IN 2019
RECENT ECONOMIC SITUATION WILL REDUCE THIS FIGURE TO BETWEEN -2.0% AND 0.5% DUE TO “NECESSARY” GLOBAL AND DOMESTIC ACTIONS TO CONTAIN THE COVID-19 PANDEMIC
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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology
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