Week 4 @ The Flat World (World Economy)

The world as I know it, only went round for a few years before becoming flat again. Geography tells us how the world is round while the world economy says otherwise. More significantly in the past few decades where we had seen the domino effect of financial crises, how one country (if not continents) collapses after another.

There are a few afterthoughts that I’ve got from the class with Jenny.

Firstly, the world is getting smaller and smaller with all the economical linkages. The world trades and cross border investments have increased exponentially in the past 3 decades as far as globalization is concern. Producers and investors are no longer satisfied fighting over small pies available in their local market. I think at some point in time, China will assemble almost all the consumer products available in the market and that they are scatter all over the world. However, not all the parts were produced in China. I had a chance to visit a Japan based factory in Kota Tinggi, Johor last year. Apparently, they produce the metal parts for the Blackberry logo (behind every BB phones in Asia - I was amazed because the process requires super high precision machineries) before sending them to Foxconn in China. See how a Canadian firm appoints a Japanese manufacturer who engages its Malaysia factory to produce parts to be sent to China and finally to be marketed around Asia?

Secondly, the world economy dominance has started to spread globally. We all would agree that in the past, major economies such as the US, England and Japan almost single handedly dictates the directions of the economy. In recent years, the likes of China, India, Russia and Brazil have joined the ranks. Economic conditions within these countries play a major role in setting the economic atmosphere across the regions. Luckily for us, the boom of these ‘awakening giants’ soften the blow of the recent subprime mortgage crisis that spurred a worldwide financial crisis. In many aspects, developing country such as Malaysia depend a lot of the wellbeing of such giants. We could see now that Malaysia is ‘decoupling’ from the US and able to grow under our own steam.

But most importantly, I fell in love with economics and am very much inspired by the people that we have here in the Bank. Being in JEK has now become a silent desire of mine. I would definitely want to emulate the likes of Jenny, Allen or even the governor herself if not outperforming them some day. Not only to mention the personal satisfaction that it gives me, being part of the economics team in the Bank really gives me a direct way to contribute to the nation and its people.