MIEA invites Tan Sri Rafidah Aziz for dialogue on the effects of the Global Economic Downturn on Malaysia.
“No country can be isolated totally from the process of globalization,” according to Tan Sri Rafidah Aziz while speaking to real estate agents at an exclusive dialogue titled The Economic Downturn in Europe and the US and Its Effect on the Malaysian Property Market late 2011 – she was explaining about Malaysia’s economy in relation to the economic downturn in Europe and US.
The former Minister of International Trade and Industry noted that the economic crisis in both these countries have been prolonged and does not seem to improve in the near future despite rescue plans and initiatives by their governments. “This in turn will begin to affect the real economy across sectors and across borders,” she said.
Once known as the Iron Lady, Tan Sri Rafidah shared that the economic crisis will spread from country to country and she simply calls this the ‘Contagion Effect’.
“It is like when someone has the flu and passes it on to another,” adding that the resistance of a country towards this ‘flu’ depends on the strength of it financial market and the amount of trade links with the affected country. The more ties a country has, the worse it will be affected.
While globally, the economy may continue to spiral downwards, Tan Sri Rafidah remained optimistic of Malaysia’s future stating that Malaysia does not have extensive trade links with the US and countries in Europe.
“The Malaysian financial market will face minimal effect because our exposure is minute,” said the former politician who has experienced two global financial crises since the 1980’s. She also said that the Malaysian government has learnt from the past and are prepared through constant supervision and a regulatory framework in place.
Commenting on the property market in particular, however, she cautioned that the industry may be one of the first to feel the pinch of the crisis. This is due to the nature of property investment. “Real estate is not like the daily buy-and-sell routine. Rather, it is more of a once-in-a-lifetime purchase. That is where buyers will adopt the ‘wait-and-see’ habit,” said Tan Sri Rafidah.
Organized by the Malaysian Institute of Estate Agents (MIEA) the dialogue enabled real estate agents in Malaysia to get a better picture of what the situation is like in other countries and what they can expect in 2012.