The Malaysian Reserve

Nor Shamsiah is bold in her GDP assessment

Pic By BERNAMA

She says the GDP growth has not translated into a better overall well- being of Malaysians

By FARA AISYAH / Pic By BERNAMA

Datuk Nor Shamsiah Mohd Yunus (picture) faced the media for the first time as the governor of Bank Negara Malaysia (BNM), to announce the country’s growth for the second quarter of 2018 last Friday.

Nor Shamsiah, who was appointed to the position in June this year, would have preferred a more positive financial figure. But her appointment came after an almost standstill economy due to the massive campaigning and election process.

The country’s gross domestic product (GDP) grew 4.5% during the April-June quarter, the slowest rate since the final period of 2016. The growth rate was also lower than the 5.4% achieved in the same period last year and below the consensus estimate of 5.2%.

The country’s economy was dragged by the contraction in the mining and agriculture sectors.

Clad in black and composed through the face-off with the media, Nor Shamsiah — who was seen as a close ally to the central bank’s former governor Tan Sri Dr Zeti Akhtar Aziz — resonates a confident figure. She was blunt in her analysis and sang a more critical undertone compared to her predecessor.

A former central bank deputy governor from 2010 until 2016, and who had sat in the rows when the GDP numbers were released to the media many times, she was bold in her assessment of the country’s economy.

She said the GDP growth has not translated into the improvement of the overall wellbeing of Malaysians.

“There were several factors, including the level of income which was low and unevenly distributed, which significantly affected the household wellbeing.

“The cost of living was higher, especially on lower income households, high debt obligations and deteriorating housing affordability. There was also household worsening perception of corruption, fuelling scepticism over the strength of the Malaysian economy,” she said during the session.

The accountancy graduate from the University of South Australia, and who joined the central bank in 1987, did not sugarcoat the key problems facing the country.

“For policymakers, apart from focusing on headline figures like inflation and GDP, we need to give more attention on jobs creation, cost of living and housing affordability, among others,” she said.

Market observers had previously welcomed Nor Shamsiah’s appointment. Zeti said Nor Shamsiah’s appointment was “an excellent decision by the government”.

Following her departure from the central bank two years back, months after Zeti’s exit from the central bank, she served as assistant director of the Monetary and Capital Markets Division of the International Monetary Fund.

But the second lady to lead BNM is well-known for her role in the investigations into 1Malaysia Development Bhd (1MDB) at the central bank level.

When asked about 1MDB, she said “we did fine 1MDB”.

“At that point of time, we were prohibited from revealing the amount of the fine. At that point of time, the fine we were allowed to impose on 1MDB was RM15 million and that was for the non-disclosure of information to BNM,” she said, without elaborating the parties that prevented the bank from announcing the figure.

1MDB is critical, but Nor Shamsiah’s focus will have to help shape the country’s economy during a period when Turkey is facing a looming financial crisis, and the US-China trade war which could send the global economy a few percentage in the reverse.

“My priorities, and the bank’s priorities, are about delivering our mandates on promoting financial stability and growth of economy, as well as practise a much leaner organisation structure.

“We are also looking at ways to improve productivity and leveraging more on technology platforms, while creating a more positive work culture,” she said as the leader.

Her comment on the country’s health will resonate in Putrajaya and the corridors of local financial institutions and policymakers abroad. But she had set the undertone for a “new Malaysia”.