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Economic Crises In Malaysia: Causes, Implications And Policy Prescriptions

Okposin, Samuel B. and Ming , Yu Cheng Economic Crises In Malaysia: Causes, Implications And Policy Prescriptions. Asean Academic Press. ISBN 1901919323

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Abstract

Abstract Purpose: This book examines macroeconomic policy application in Malaysia during economic crisis. Although the 1997-98 financial crisis was the most severe, Malaysia has been confronted with four other major economic crises: (i) “the early commodity crisis” 1956-72, (ii) “the first oil crisis” of 1973-74, (iii) “the second commodity/oil crisis” of 1980-81, (iv) “the electronic/third commodity crisis” of 1985-86. Method: Macroeconomic data were used to examine economic policies adopted prior to the financial crisis of 1997-98. For instance, the economy was faced with an increasingly severe labour shortage. Unemployment was marginalised to such an extent that the exigent labour demand caused a labour shortfall, which was ameliorated by the presence of 1.14 million registered migrant workers. The 1990s marked a turning point in terms of employment, changing Malaysia from a labour surplus country to one of the deficit-marked nations in newly industrialising economies of the South East Asian nations Result: Malaysia learned three important lessons out of the exercise in managing crises. Firstly, policy makers recognised the importance of the role of the private sector. The private sector can be an efficient engine of growth provided appropriate incentives are given. Secondly, there was a need to reduce fiscal deficits and to control Non-financial Public Enterprises (NFPEs). Lastly, Malaysia recognised the importance of continued coordination of fiscal and monetary policies. This is important to bring about optimum if not maximum impact on the economy. In all three experiences – overcoming recession as well as moderating inflationary pressures – Malaysia were able to effectively coordinate both monetary and fiscal policies.

Item Type: Book
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Dr Samuel B. Okposin
Date Deposited: 31 Mar 2015 09:55
Last Modified: 31 Mar 2015 09:55
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/4450

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