‘Emerg­ing marts have coped well with un­cer­tainty’

The Sun (Malaysia) - - SUNBIZ -

SIN­GA­PORE: Emerg­ing mar­ket economies over­all have ab­sorbed cur­rent chal­lenges and are fac­ing them quite well, said In­ter­na­tional Trade and In­dus­try Min­is­ter Datuk Seri Mustapa Mo­hamed.

“We must ac­knowl­edge that some of the emerg­ing mar­kets have im­proved upon their fun­da­men­tals and they are bet­ter pre­pared to face volatil­ity now, than ever be­fore.

“Cap­i­tal flight from emerg­ing mar­kets has not trig­gered a cri­sis sim­i­lar to that ex­pe­ri­enced in the past,” he said in a keynote ad­dress at the PwC-Insead Sec­ond Emerg­ing Mar­ket Con­fer­ence here yes­ter­day.

Mustapa said there are many rea­sons why some coun­tries are in a much bet­ter po­si­tion to cope with un­cer­tainty. Some are more in­te­grated and con­nected in global cap­i­tal mar­kets, with higher for­eign as­sets, in­clud­ing for­eign ex­change re­serves.

He also said pol­icy frame­works in a num­ber of emerg­ing mar­ket economies had gen­er­ally im­proved over time as it in­cluded bet­ter strate­gies in deal­ing with debt and macro pru­den­tial poli­cies.

Hav­ing said that, “we are faced with a new real­ity, ‘the new medi­ocre’, a phrase coined by Chris­tine La­garde, the In­ter­na­tional Mon­e­tary Fund man­ag­ing di­rec­tor,” said Mustapa.

“This is a pe­riod char­ac­terised by low growth in out­put, in­vest­ment, trade, and earn­ings. As warned by Madam La­garde, the chal­lenge to pol­i­cy­mak­ers is to pre­vent ‘the new medi­ocre’ from be­com­ing ‘the new real­ity’.

“Whether we like it or not, volatil­ity will be with us for quite a while and we need to nav­i­gate our way through shift­ing sands,” he added. – Ber­nama

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