The economic liberalisation

I feel that these issue must be commented on as this decision is part of Najib's reform agenda, so let's asses whether it had been done in a proper manner or ad hoc in nature. First I will say I'm not an economist so the use of economics theories is minimal to none, as these thought goes out to the common people, meaning what it means for everyday people.

Taking into consideration the economic crisis, liberating the financial sector is imperative if one wants to see the disdain economic condition improve. The opening of the sector means that more foreign capital can now flow into Malaysia. This will benefit the business community as the availability of capital is key for a business to expand, thus promoting overall economic growth.

However one must wonder whether enough thoughts have been given by the government on the banking sector of this country. Local banks have enjoyed protection from government thus the sudden opening of the industry can result in local bank losing their hold in the local banking sector. This may result in reduce profit for local banks which will stun their phenomenal growth.

The presence of foreign banks mean that the Malaysians who deposits their money to these banks may end up exposing their deposit to risk associated to western made derivatives such as the sub-prime mortgage that cause the global economic meltdown. This means that Malaysian economy may be expose to these unsafe securities, although Bank Negara it's said to keep an eye on these foreign bank, sometimes the central bank may miss danger signs due to the bureaucracy of the Central bank, just like what happened in the Asian Financial crisis when Bank Negara failed to detect the currency bubble that is happening to the RM due to intense speculation, which resulted in the bubble bursting, plunging Malaysia into economic crisis.

Nonetheless, Malaysia must start to scrap economic protectionism policies in order to encourage competition that will spur innovation that will eventually benefit the consumers. Malaysian companies must be trained to compete so that they can participate in the global economy as they can stand to gain more profit due to the size of the global market. However reform in the structure of the Malaysian economy is key so that Malaysia will be able to absorb the risk associated with the integrated global economy, besides having a blueprint in handling economic crisis. The local businessman must be carefully prepared to compete in the global market, once they are equip with the know how, then we can safely liberate our economy in line with the demands of globalisation.