Holistic strategies towards economic resilience
DEPUTY International Trade and Indutsry Ministry Minister Dr. Ong Kian Ming recently released a statement analyzing and addressing fears of an economic recession in 2019.
In essence, the piece challenged the over dependance on single – and sometimes misleading – indexes as a basis to reflect the state of the current economy as well as outlooks into the future.
Admittedly, numerous reports from expert analysis around the world are pointing to the sentiment of a slower economy, especially in manufacturing, fueled by the various indicators of conservative growth estimates and reduced global demands.
Indicators are what they are: forecasts based on the analysis of numerical symptoms to diagnose the future. However, economics is not always a zero sum game, and unlike medical prognosis, have higher probabilities in underestimating the strong will of the patients – the internal acumen that make up the core strength of industry players and business owners themselves.
In January 2015, a rising greenback sent out waves of conservatism among the local industry players, as costs of imported raw materials would have adverse effects on car prices. Despite this, total industry volume (TIV) achieved a volume of 666,674 in the same year, its highest ever recorded figure – demonstrating that industry sentiment does not necessarily reflect consumer sentiment.
However, to enhance our understanding of the industry scenario, it is key that we take a holistic outlook beyond domestic sales and production figures alone.
As a nation aspiring to emerge as a regional hub for Energy Efficient Vehicles (EEVs), indicators such as foreign & domestic direct investment, export figures (at all value chain levels), technology penetration, job and business creation and SME participation should be factored into our success story.
This is to say nothing of non-numerical events and activities that bring positive impacts to the unmeasurable moral and human enrichment of Malaysians.
As an industry that takes pride in overcoming problems and delivering solutions, we must lead our economy despite any sentiment, and initiate change internally to turn negatives into positives.
It is said that the higher the risk, the higher the reward. For me, as long as we can be smart enough to manage high risk, they can be mitigated to still achieve such high rewards.
In the most conservative of times, it is important to spend with prudence, but as economies are cyclical, be mindful of the long term.
For the transportation sector, the long term scenario is getting clearer – we can not run from the advent of big data, robotics, artificial intelligence and the Internet of things. Despite conservative sentiment, long term goals must be planned and implemented above conservative risk management. There is no point holding on to investment, knowing that when the market sentiment returns, our competitiveness gap has remained the same due to our wait.
Next week, MARii will be announcing its review of the automotive industry in 2018, and also an insight into 2019. We will be continuing the tradition in introducing a holistic overview of the state of the industry, but most importantly – presenting new opportunities for Malaysian talents and businesses and exploring new avenues in overall mobility, as well as robotics and IoT as mentioned above.
The future is shaped around our attitude, appetite and ideas surrounding it. To move forward, let us push new ideas – those that will make us competitive, and remain sustainable in the long run.
This week marks the fifth anniversary of this column, which has allowed me to share my thoughts and perspectives, and address your concerns about issues surrounding the industry. I would like to thank everyone for allowing this great honour, and also hope it’s not too late to wish all of you a Happy New Year 2019.