2. Expert Insights

Malaysia has witnessed strong sustained growth over the last three decades, growing at an average annual rate of 5.8%. This sustained growth performance has been accompanied by significant structural shifts in the economy, reflecting the transformation of the Malaysian economy amid the changing global and domestic environment.

Malaysia has a long history of internationally valued exports, being known from the early centuries A.D. as a source of gold, tin and exotics such as birds’ feathers, edible birds’ nests, aromatic woods, tree resins etc. The commercial importance of the area was enhanced by its strategic position athwart the seaborne trade routes from the Indian Ocean to East Asia.

The slides highlight: 1) overview of Islamic world on Islamic economic; 2) Halal industry and ecosystem; 3) key issues and challenges; 4) opportunities of halal industry.

In the last few years, SMEs have witnessed a marked improvement in their performance. Real Gross Domestic Product (GDP) of SMEs has consistently outperformed that of the overall economy, expanding at an average annual growth rate of 6.8% versus 4.9% for the overall economic growth in the period 2004 - 2010.

This research paper attempts to empirically examine the short-run and long-run causal relationship between income level, energy consumption and carbon emission. Trade openness and urbanization is also included to act as control variables.

The slides highlight the research questions on: 1) would the presence of Islamic finance be associated with lower shadow economy; 2) are Islamic finance and the financial development complementary in reducing the shadow economy sector?

The novel COVID-19 pandemic has caused an unprecedented human crisis around the globe. The necessary actions implemented to contain the virus have sparked both economic and social downturn. It shows the fragility and unpreparedness of the economy to face such a pandemic. Significant weakening of economic conditions has escalated the pressure on households, businesses and financial markets. Governments all over the globe are in the process of formulating and implementing appropriate policies to continue economic activities amidst this turmoil. Financial institutions are obligated to respond towards the policies adopted by respective governments.

Islamic banking industry has unprecedentedly witnessed a rapid growth since its inception four decades back in the late 1970s. However, the prospect of this flourishing industry is fast becoming gloomy in recent years. The growth of Islamic banking almost matches the conventional banking, and their products are hardly distinguishable. Although the market growth slows down in the aftermath of the global financial crises in 2008, the Islamic banking market has witnessed increasing competition. Islamic banks become more competitive and they managed to increase their market share meanwhile, conventional banks have successfully responded to the challenge by launching Islamic windows and subsidiaries. The increasing competition is considered as one of the main challenges that face Islamic banks, specifically, their performance.

The slides highlight: 1) the needs of Islamic finance; 2) sources of Shariah; 3) prohibition in Islamic finance.

Shadow economy and tax evasion are two inseparable phenomena. The existence of the former suggests the present of the latter and vice versa. The presence of shadow economy reduces the tax base and thereby eventually reduces government tax revenue. Since the activity of the shadow economy is excluded from the official gross domestic product (GDP) statistics, thus, official GDP statistics will provide wrong indicators for macroeconomic policy decisions. On the other hand, tax evasion is a growing concern to the government as the tax revenue loss has serious economic consequences. By evading taxes the government is deprived from providing adequate financing for public services, infrastructure, human capital development, best health care services and other facilities that would benefit the society. Furthermore, the loss of tax revenue may result in slow economic growth, the proper functioning of the government as the ability to finance its basic expenses is threatened. Thus, fighting shadow economy and tax evasion should be an important agenda for any government. In this study, we propose to estimate the size of the shadow economy and tax evasion for 10 ASEAN economies and further to determine factors affecting both shadow economy and tax evasion.

The Department of Labour in the US recently released their COVID-19 Occupational Risk Score. The statistics are based on their Purchasing Power Parity, the homogeneity of the job description and the risk of exposure to COVID-19. The figure above may be used to depict a more generic occupational risk correlated with salary grades, that are experienced internationally, including Malaysia. The Occupational Risk Score can be divided into four quadrants: i. high income-low risk, ii. high income-high risk, iii. low income-high risk, and iv. low income-low risk. Those with the highest exposure to infection include what is now termed as the 'frontliners'. These include doctors, nurses, and other medical officers and officials, police & army, and volunteers (RELA) entrusted to enforce the movement control orders (MCO). Immigration and other enforcement officers stationed at entry and exit points are also amongst those facing the highest levels of occupational risk.

Finance can be thought of as an engine of transformation and intermediation that bridges gaps between financial surplus and deficit units, between now and the future and between certainty of now and uncertainty of the future. It transforms value through maturity and risk transformation. This crucial function can be considered the reason for existence of finance. It creates incentives for surplus units to postpone the certainty of their financial resources now to the uncertainty of, presumably, higher amount of these resources in the future. It also encourages the deficit units to bring the future uncertain plans forward to the more certain present. Both units take risks. In other words, finance makes both units risk takers. The surplus units risk their resources now for more in a highly uncertain future. The deficit units risk being able to validate their obligations with a higher income stream in an uncertain future. How can finance become sacralised?

Recent statistics released by the IMF (Figure 1) provide a comparative on the significant impact that COVID-19, and the lockdown in fighting and containing the pandemic has on global economies. The IMF forecasts that the impact is expected to be more devastating than the growth experienced in the aftermath of the Global financial crisis in 2009. The Euro area is where the most severe impact is envisaged, with estimates of economic contraction at almost 8%. This is followed by the United States with an estimated contraction of 6% and Japan contracting slightly more than 5%. China and India are expected to post positive growth at 2% and 1% respectively.