KUALA LUMPUR (April 30): Prime Minister Datuk Seri Anwar Ibrahim’s call for the creation of an Asian Monetary Fund (AMF) as an alternative to the International Monetary Fund (IMF) is pragmatic given the current needs of many Asian countries. said one economist.
Juwai IQI’s chief global economist Shan Saeed said now is the time for policymakers to consider establishing a new multilateral organization that can provide and promote development, growth and stability.
“The alchemy of global financial markets has changed over the past 16 years. Global economic instability and financial weaknesses are penetrating markets deeper, and disruptions in markets such as stocks and bonds are on a scale not seen in a decade.
“The global economy is now at a critical juncture and many economies would experience either slow growth or no/negative growth. So the question is, how will global leaders bring stability and growth to economies?” he said.
Speaking to Bernama, he emphasized that many global and institutional investors rely heavily on the insights of established banks such as Blackrock, JP Morgan, Bank of America, UBS, Goldman Sachs and Citibank to make strategic decisions about their future investment portfolios.
“For experienced and astute investors, it is very important to delve into the global macro picture to fully understand the points to make economic and financial sense,” he said.
Established in 1944 at the end of World War II, the IMF and the World Bank Group are two key institutions underpinning United States (US) dominance in the global financial system.
The World Bank works with developing countries to reduce poverty and increase shared prosperity, while the IMF serves to stabilize the international monetary system and acts as the “guardian of world currencies”.
However, critics claim that the IMF and World Bank are institutions acting on behalf of the US, which seeks to maintain its hegemonic position as the world’s sole superpower both militarily and financially via the US dollar.
Shan added that Asian economies are increasingly in need of support as global growth shifts to Asia, the Gulf Cooperation Council and Africa, particularly in infrastructure, technology, education, manufacturing and e-commerce.
He noted that Asia has investments of about US$2 trillion in infrastructure, education (US$300-500 billion), technology (US$3 trillion), manufacturing (US$1-2 trillion) and e- Commerce ($500) needs billion).
“Only an institution like the AMF can strengthen the developing and growth regions of the Asian economies.
“These investments can only come from an Asia-based institution that understands the local economy, culture and people to support the prospects of Asian economies in terms of growth, development and stability without any strings attached,” he said.
Shan said that China, Japan, Korea, Brunei, Singapore, Malaysia, Saudi Arabia, Qatar, the United Arab Emirates and Kuwait could be the founding members who could start the AMF’s formation process with the goal of regional stability and prosperity to ensure.
The AMF can become one of the pre-eminent multilateral financial institutions dedicated and dedicated to the growth of Asian economies, ushering in an era of macro-level prosperity and mass recovery, he said.
He stressed that investing in education is key to the strategic development of the region and strongly advocates women’s education, which is directly related to a country’s gross domestic product growth.
“We have live case studies from China, Korea and Japan, where female literacy has contributed immensely to the country’s growth parameters,” he added.
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