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The Star
2 days ago
- Business
- The Star
Between the eagle and the dragon
NO TACO Theory was on his table, but renowned economist Prof Jeffrey D. Sachs thinks that when it comes to the crunch, US President Donald Trump will backtrack on his tariff policies. 'TACO' stands for 'Trump Always Chickens Out', and like the Wall Street traders trading the acronym for laughs, Prof Sachs believes that the US president cannot keep his trade policy as he had announced it on April 2. 'You know, all of the world is confronting this sudden change of the United States' trade policy. But I personally don't believe that the tariffs are going to stick the way that they were announced. Already a lot has been rolled back,' he explains. For one, he adds, he is confident that the courts in the US will find some of the trade policy illegal because it was 'based on declarations of emergencies that don't really exist.' Last Wednesday, the country's Court of International Trade ruled that Trump had overstepped his authority and blocked his tariffs from going into effect. According to the trade court, the emergency law invoked by Trump did not give him unilateral authority to impose tariffs on the world's countries. And although the court then allowed the US administration to keep collecting tariffs while the White House appeals against the ruling, many investors, as AFP reported, feel that Trump 'does not have a very high tolerance for market pressure and will be quick to back off when tariffs cause pain.' For Prof Sachs, the question lies on whether Trump has the authority to introduce tariffs all by himself; in his view, that is the job of the US Congress. Good neighbours Prof Sachs was in Malaysia to speak in a special dialogue titled 'Asean amidst the shifting global order', hosted by Sunway University founder and chancellor Tan Sri Sir Dr Jeffrey Cheah ahead of the 46th Asean Summit last week. The dialogue was attended by ambassadors, high commissioners, senior bankers, corporate leaders as well as political and government leaders such as Housing and Local Government Minister Nga Kor Ming and Subang Jaya state assembly person Michelle Ng. The dialogue was attended by ambassadors, high commissioners, senior bankers, corporate leaders as well as political and government leaders such as Housing and Local Government Minister Nga Kor Ming and Subang Jaya state assembly person Michelle Ng. During his keynote address, Prof Sachs underscored Asean's pivotal role as a regional bloc in navigating geopolitical uncertainties, highlighting the urgency of regional cooperation in areas such as climate action, economic resilience and multilateral diplomacy. Calling on leaders to harness Asean's collective strength to foster peace, sustainability and long-term prosperity, the Sir Jeffrey Cheah Honorary Distinguished Professor in Sustainable Development at Sunway University and president of the United Nations Sustainable Development Solutions Network (UN-SDSN) says: 'Asean needs to do two basic things: one is to strengthen the relations within the Asean group, and the second is to strengthen Asean's relations as a group with other partners. 'China will be a major partner, and the GCC (the Gulf Cooperation Council), will be a major partner. So, these are two major economic partnerships for Asean.' He notes that Asean is not alone in the tumult of the changing global trade. 'Every place I travel to, I hear the same question. And most of the world simply wants to go on with a rule-based trading system under the WTO (World Trade Organisation) and get the US to go back to that rule-based trading system. 'Most importantly, whatever actions the US takes, which will be detrimental to the US itself, should not impede trade among the rest of the world's countries. No other region should follow the US into this kind of protectionism,' he says. Crucially, he stresses, the US should not try to make Asean choose between it and China. 'That would be unfair, but if Asean were forced to choose, you would choose your neighbour, China, obviously. 'Of course, Asean countries should have good relations with all parts of the world. The goal should be openness to all. So the idea should not be an alliance. The idea should be that Asean, which is a very open region in terms of trade, should be able to trade with the US, and with Europe, with China, and so forth. 'But Asean cannot do without good economic relations with China. That's not even imaginable. So the US should not force or try to force Asean into making choices. 'And if the US tries to put on secondary sanctions that impede Asean's economic relations with China, they would have to be resisted, actually.' As Prof Sachs puts it, 'neighbours need to trade with each other and neighbours need to have common infrastructure.' 'So, at the same time, Asean should work closely with China on physical infrastructure and connectivity. 'The Belt and Road Initiative is a very important, positive initiative. It says, put in fast rail, put in renewable energy, put in digital systems. That's to everybody's mutual benefit.' Ultimately, we need to keep calm, he stresses. 'Keep calm. Don't get into a conflict. We don't want to be in the middle of any conflict. 'There is no reason for a conflict at all, fundamentally. It's a waste of time.' Prof Sachs fully believes that despite the disruptions, turmoil and risks, there are reasons to be optimistic. 'The world is disrupted and changing rapidly, and it is changing in frightening ways on the surface. But I want to argue that below the surface, the deeper trends are positive. And not only positive, but powerful as well. 'For one, the notion of sustainable development, which Sunway University champions, is on the right track. 'There is a lot of work to do, but we are on the path that I believe the world is going to achieve the goals. The world needs to achieve it; it can achieve it, and that combination of both need and capacity, to my mind, suggests that we are going to find our way forward.' 'A cultural revolution' At the core of the shifting global order is an important fact, Prof Sachs stresses: Asia has ended a long period of domination by Europe and the US in the global economy, and the world is now multipolar. 'Asia has restored its place as the centre of gravity of the world economy – the place that Asia has had for most of the last 2,000 years, actually, with the interruption of the period during the Industrial Revolution and Western imperialism. 'Because what has happened is that a world that was profoundly divided by power and technology is now truly a multipolar world; one in which the US and Europe, no doubt, remain very sophisticated and powerful societies, but no longer the dominant societies of the world. 'We've entered the age of multipolarity. That's a big challenge, but it's also a wonderful fact and great opportunity.' Prof Sachs says the US is going through a 'Cultural Revolution', which he believes could last around 20 years. As he points out further, the US market for imports is only about 13% of world imports now. 'So you could close off the US market entirely, and the rest of the world would figure out how to get along pretty well. China, in the meantime, will play a huge, important and positive role for this region, he notes. Still, it is not the end of US' role in the world, says Prof Sachs. 'We are in what I call America's Cultural Revolution. That's not a good thing. Cultural revolutions do not go well. They set back China for 20 years. 'But the US is not lost lost forever. We just need to get through our cultural revolution.'
BusinessToday
7 days ago
- Business
- BusinessToday
ASEAN Centrality A Key Cornerstone For Regional Diplomacy, Jeffrey Sachs
A special dialogue titled 'ASEAN amidst the Shifting Global Order' was hosted by Sunway University founder and chancellor Tan Sri Dato' Seri Sir Dr. Jeffrey Cheah KBE AO ahead of the 46 th ASEAN Summit and was attended by esteemed guests such as Minister of Housing and Local Government Nga Kor Ming, Subang Jaya state assembly person Michelle Ng, as well as ambassadors, high commissioners, senior bankers and corporate leaders. Renowned economist Professor Jeffrey Sachs, the Sir Jeffrey Cheah Honorary Distinguished Professor in Sustainable Development at Sunway University and President of the United Nations Sustainable Development Solutions Network (UN-SDSN), engaged in a dynamic discussion moderated by Sunway University pro-chancellor Professor Dato' Sri Dr. Idris Jala, on ASEAN's strategic direction and Malaysia's chairmanship. Sachs, who has advised three UN Secretaries-General including His Excellency António Guterres, outlined the importance of preserving ASEAN centrality as a cornerstone of regional diplomacy, enabling Southeast Asia to shape cooperation and security amidst major power rivalries. During his keynote address, Sachs also underscored ASEAN's pivotal role as a regional bloc in navigating geopolitical uncertainties, highlighting the urgency of regional cooperation in areas such as climate action, economic resilience and multilateral diplomacy. He called on leaders to harness ASEAN's collective strength to foster peace, sustainability and long-term prosperity. 'ASEAN needs to do two basic things: one is to strengthen the relations within the ASEAN group, and the second is to strengthen ASEAN's relations as a group with other partners. In this week's summit, China will be a major partner, and the GCC, the Gulf Cooperation Council, will be a major partner. So, these are two major economic partnerships for ASEAN. I think a lot of deals will come forward from the diplomacy that's underway in the next few days,' said Sachs. In his welcoming remarks, Tan Sri Sir Dr. Jeffrey Cheah said: 'The challenges that stand before us are immense and formidable, but our shared aspirations in ASEAN for a more inclusive, prosperous and sustainable future is a source of hope and positivity in these times of turmoil and turbulence. I am a firm believer in the proposition that the world works best when it works together.' 'From a relatively young age, I adopted my conviction that every individual must have a higher purpose in life. For me, that higher calling is a commitment to give back to society in a meaningful and impactful manner and nation-building through quality education and knowledge sharing. Today's presentation by Professor Sachs is a prime example of our mission to bring cutting-edge research and world-class expertise to Malaysia and the wider Asian region,' added Cheah. Related
BusinessToday
25-05-2025
- Business
- BusinessToday
ASEAN 25: Shaping The Future Of ASEAN Through Education, Innovation And Sustainability
Career-ready from Day One: Sunway students work on real-world industry projects, not just assignments. Education stands as one of the most powerful forces for transformation in the lives of people across ASEAN. Recognising this, the bloc has made inclusive and quality education a cornerstone of its vision for sustainable regional development. ASEAN acknowledges that quality education not only leads to improved health outcomes and greater social capital but also fosters peaceful, gender-equal societies and opens the door to decent employment opportunities. Importantly, it helps build a resilient, competitive, and future-ready workforce—one equipped to navigate the complexities of a rapidly evolving world. Beyond its role as a driver of social and economic advancement, education serves to heighten collective awareness and foster a shared ASEAN identity. To realise these goals, the region is focused on key priorities: advancing future-ready education across all levels—from basic to higher education and technical and vocational training; ensuring inclusivity; strengthening the capacity of educators; and mobilising resources through strategic partnerships with a wide range of stakeholders. As Malaysia takes on the role of ASEAN Chair in 2025, one institution that exemplifies this commitment to regional cooperation and forward-thinking education is Sunway University. With a strong foundation in sustainability, innovation, and global collaboration, Sunway University is not only transforming higher education in Malaysia—it is helping to shape the future of learning across the ASEAN region. The education hub situated in the dynamic enclave of Sunway stands at the forefront of ASEAN's goal to ensure lifelong learning, equity, inclusion, and quality education. In line with ASEAN's Education Agenda, the university offers a holistic model of learning that goes beyond academics. Students are empowered with subject expertise, digital fluency, strong values, and a deep sense of purpose that prepares them to contribute meaningfully to society and the planet. To ensure graduates are future-ready, Sunway University has implemented a pioneering Generative AI Guiding Framework and Institutional Policy—one of the first of its kind in Malaysia. Every student is required to complete a 'Fundamentals in AI' course, while AI literacy is seamlessly embedded across disciplines. Coupled with mandatory programmes on integrity, sustainability, and community service, this approach develops socially responsible, innovative, and globally competitive individuals. With increasing enrolments from ASEAN countries, Sunway's appeal lies in its dual-degree collaborations with world-renowned institutions like the UK's Lancaster University and the Arizona State University in the US. These partnerships enable students to access globally recognised qualifications at an affordable cost, right from Malaysia—making Sunway a magnet for international students across Southeast Asia. Most universities have a campus, only Sunway University has a city. Malaysia's chairmanship of ASEAN in 2025 arrives at a pivotal moment. In an increasingly complex and competitive global environment, Sunway University recognises the opportunity to shape regional direction and integration, particularly in science, technology, and sustainable development. The institution believes that a more harmonised and connected ASEAN offers immense opportunities. For Malaysian firms, this means building regional supply chains, entering new markets, and enhancing innovation capacities. Sunway University supports these ambitions by advocating for stronger industry-academia collaboration, particularly in shaping Malaysia's 13th Economic Plan and the New Industrial Master Plan 2030. At the regional level, the university urges more cross-border collaborations in strategic sectors like transport, energy, agriculture, and education—sectors that can drive shared prosperity and regional resilience. It also calls for deeper SME engagement and greater visibility into ASEAN's regulatory frameworks to empower Malaysian and ASEAN businesses alike. Sunway University also plays an active role in shaping ASEAN's future through partnerships with policymakers and institutions across the region. The university's researchers have co-led the 'ASEAN Science, Technology & Innovation (STI) Ecosystem Foresight 2035' with the Academy of Sciences Malaysia. This landmark study analyses the STI landscape in ASEAN, offers future-ready scenarios, and recommends strategies to build collective resilience and shared prosperity. Taking a step further, it also launched collaborative research programmes with leading ASEAN universities, offering seed grants, PhD scholarships, researcher mobility funds, and regional symposiums. These initiatives align with the United Nations Sustainable Development Goals (SDGs), and aim to solve shared challenges from biodiversity to food security and climate adaptation. By hosting the United Nations Sustainable Development Solutions Network (UN-SDSN) Asia, the university is serious and committed to the sustainability agenda to the extent that students can obtain a Master's in Sustainable Development Management at Sunway University. Sunway University is a private, not-for-profit institution rooted in a deep commitment to planetary health and sustainable development. Anchored by flagship centres like the Jeffrey Sachs Center on Sustainable Development and the Sunway Centre for Planetary Health, the university combines global thought leadership with local relevance. In just three years, the university has grown from 7,800 to 11,700 students, and is projected to reach 20,000 students by 2029, with up to 30% international enrolment. A series of new facilities—including a state-of-the-art Sunway Business School, a Net-Zero Engineering building, and the Sir Jeffrey Cheah Performing Arts Centre—will support this rapid expansion. Plans are also underway for a new building for the Sir Jeffrey Cheah Sunway Medical School, reinforcing Sunway's role in healthcare education. Sunway's research excellence is also gaining global recognition. The university will publish over 2,200 scientific articles in 2025 alone, with a marked rise in quality through the recruitment of top 2% global scientists (as ranked by Stanford/Elsevier). This focus has catapulted Sunway into the Top 400-500 bracket of the Times Higher Education (THE) Global Rankings, making it the only private ASEAN university ranked across QS, THE, and ARWU/Shanghai. For two consecutive years, Sunway has also been ranked #1 in Asia by AppliedHE among ASEAN private universities. With its strong regional partnerships, future-focused curricula, and relentless pursuit of excellence, Sunway University isn't just preparing graduates for the future — it is helping shape the future of ASEAN itself. Related
The Star
19-05-2025
- Business
- The Star
Growth likely to moderate this year
PETALING JAYA: While downside risks to Malaysia's growth linger, factors such as resilient private consumption, a diversified trade base and continued demand for electrical and electronics (E&E) goods, are expected to continue to lend support to the economy. All eyes, however, are still on how trade negotiations will unfold between economies, including Malaysia, with the United States, following the major easing of tariff levels between the latter and China. Sunway University economics professor Yeah Kim Leng said the outcome of the country's ongoing trade negotiations remains relevant to this year's growth outlook despite the anticipated slowdown, as a successful resolution could help cushion the impact from tariffs. 'If the 24% reciprocal tariff on Malaysia's exports to the United States is not reduced substantially, the impact on the Malaysian economy will be moderately severe, especially for the affected small and medium-sized industries. 'With exports to the United States amounting to 15% of total exports, a successful outcome of the ongoing trade negotiations will not only ensure a positive contribution of exports to Malaysia's growth prospects this year, but also add clarity to its investment outlook given the sizable US investment stock and pipeline in the country,' he told StarBiz. HSBC Asean economist Yun Liu said while the trade negotiations are still up in the air, at least the direction of a trade de-escalation is moving in a positive direction. 'For Asean, in particular, the focus is likely to be on the sizeable trade surplus with the United States, and its connection to regional and global supply chains. Overall, we expect Malaysia's growth to be around 4.2% for 2025,' she said. With escalating trade tensions and associated uncertainties, Bank Negara expects growth in 2025 to be slightly lower than the 4.5% to 5.5% range forecast it announced in March. Real gross domestic product (GDP) growth moderated to 4.4% in the first quarter of 2025 (1Q25), in line with the advance estimate. In 2024, GDP registered an expansion of 5.1%. 'This was supported by sustained household spending amid positive labour market conditions and policy measures; steady expansion in investment activities; continued export growth supported by E&E exports as well as vibrancy of tourism activities,' chief statistician Datuk Seri Mohd Uzir Mahidin said at a recent press briefing on the release of the 1Q25 GDP data. While Bank Negara governor Datuk Seri Abdul Rasheed Ghaffour acknowledged the need to revise the GDP growth forecast for 2025, he noted a revision should not be made based on assumptions. 'This is important because we do not want to come up with a revision knowing that we need to revise it again the next day. This may also not be positive for businesses because it will add further uncertainty to the already heightened uncertain environment. 'While we do have an internal view, the global environment is still very fluid – trade negotiations are still ongoing and the outcomes remain uncertain, although we have seen positive outcomes, this can affect our outlook. As we get more clarity on the outcomes of the ongoing trade negotiations, we will finalise the new forecast and announce it in one to two months time,' he said. In 1Q25, exports expanded by 4.4%. The central bank expects exports to see some moderation this year amidst the uncertainties. Nevertheless, Yeah said the country's exports to the United States grew by 36.5% in 1Q compared with the same quarter last year, significantly higher than the 4.4% rise in the country's total exports. 'The export pick-up is likely to continue in the following quarter before the end of the 90-day pause on the United States' 24% reciprocal tariff hike imposed on Malaysia,' he said. The central bank warned Malaysia, as a trading nation, will not be spared from the impact of US tariffs. There are, however, factors like the front-loading of exports and tariff exemption on key products like semiconductors that will help to cushion the impact from tariffs. 'About 32% of our exports to the United States are exempted from tariffs, including key products such as semiconductors. Further, 83% of our exports to the United States are price inelastic, which means the quantity demanded for our exports will not drastically change in the short term when prices increase due to tariffs. Examples of these products include electrical machinery, computer hardware and optical and scientific equipment,' Abdul Rasheed said. Front-loading activities, particularly in E&E exports, have supported growth in 1Q25, as firms try to soften the impact of tariffs. Abdul Rasheed expects demand for E&E to continue, supported by the country's entrenched position in the global value chain and AI-related demand. Nonetheless, he foresees that 'there could be some normalisation happening'. Following the special parliamentary session on May 5, the government pledged to provide up to RM1.5bil in additional loan guarantees and financing for small and medium enterprises (SMEs) affected by US tariff measures. Yeah said the early response in providing financing access for SMEs is 'laudable'. However, the further rollout of specific and targeted support from the government will need to be assessed after the conclusion of the negotiations, notably on the economic impact of the tariff levels and the nature of trade concessions and restrictions. 'Rather than mounting a major fiscal stimulus needed to offset a global slowdown, Malaysia's policy makers can focus on targeted support for affected industries while rolling out the initiatives planned for this year to sustain growth, strengthen fiscal resilience, improve wages and productivity and enhance administrative efficiency and social support systems,' he said. Yeah also concurred with the central bank that it is important to double down on reform measures to further strengthen the resilience of the economy. This will not only signal the resilience of the economy but also establish the competitive foundations for the country to sustain its high-income, inclusive growth trajectory. 'With implementation the overriding policy focus in the mid-term of the current administration, a greater urgency is observed in the various ministries to implement the initiatives spelt out in the various development plans and sectoral blueprints,' he said. In the face of President Donald Trump's negotiated trade regime, Yeah said the structural reforms to strengthen fiscal resilience, accelerate structural upgrading, raise productivity and competitiveness, improve human capital development and fortify social safety nets are expected to continue regardless of any changes in response to the said regime. 'The refinement needed is to reduce dependency on the United States where feasible while taking steps to reduce friction and avoid conflicts in order to forge a 'win-win' economic relationship with a superpower, be it the United States, China or other economies,' he said.
The Star
19-05-2025
- Business
- The Star
Experts: 2025 GDP growth set for 4-5% range
PETALING JAYA: With the national economy expanding at 4.4% in the first quarter of the year and amid uncertainties surrounding the US-China trade tension, experts expect the country's GDP growth for 2025 to be within the 4.0%-5.0% range. Sunway University economics professor Dr Yeah Kim Leng said the first quarter GDP was lower than last year's 5.1% due to stronger global challenges resulting from the shocks to global supply and demand. This was caused by the continuing uncertainties over US President Donald Trump's tariff policies despite a truce with China. He said the GDP growth for the second quarter was expected to be at about 4.6%, driven by rising exports, sustained domestic consumption and investment spending. 'Exports to the United States picked up by 36.5% in the first quarter compared with the same quarter last year. 'Front-loading ahead of the end of the 90-day pause of 24% reciprocal tariff imposed on imports from Malaysia into the United States is expected to underpin Malaysia's exports which grew by 4.4% in the first quarter. 'The gradual resumption of US-China trade following the 90-day truce achieved on May 12 is also expected to lift Malaysia's exports through trade linkages.' On Friday, the Finance Ministry said the GDP forecast of 4.5%-5.5% would be revised after US reciprocal tariffs stabilise and the situation becomes clearer. It also acknowledged the presence of downside risks in the form of global demand, heightened geopolitical tensions and the rising prevalence of protectionist trade policies. Yeah said the lessened fear of a US recession and a milder Chinese economic decline further boosted the growth outlook for the world's top two economies. 'This in turn has improved Malaysia's growth prospects given its high exposure to both economies amounting to a quarter of its total exports. 'Moody's downgrade of US sovereign rating is expected to trigger a shift away from US debt securities and assets. 'It signals higher credit risk and the accompanying lower demand for US dollar assets will likewise result in a weaker dollar,' he said. On May 16, credit rating agency Moody's downgraded the United States' sovereign credit rating from its top-tier 'Aaa' to 'Aa1', on the back of rising debt burdens and higher interest costs, which would affect the country's standing as a pre-eminent destination for global capital. Economist Geoffrey Williams said although the 4.4% in Q12025 was lower than 4Q 2024 due to domestic production disruptions rather than global headwinds, it was a strong performance given the uncertainties. 'There was a stronger-than-expected 6.8% annual rise in exports in March, when shipments to the United States rose by 50.8% to a record RM22.66bil (US$5.14bil). 'The front-loading from the effect of US tariffs has helped to push Malaysia's growth, showing a benefit from the reciprocal tariff process announced on Liberation Day on April 2. 'The tariff issue is under negotiation and we expect them to be resolved following the example of the UK and China,' said Williams. 'This will mean that the outlook for the second half of the year will be better if there is a good negotiation outcome.' On the domestic front, Williams said there was no better time to pursue the RON95 subsidy rationalisation, adding that this would benefit in terms of long term growth. 'A commitment to this will support confidence in the government's commitment to reform. 'There may be some front-loading effect into 2Q but we would expect net exports to be lower later in the year because production and exports have been pushed forward into the last two quarters. 'We are likely to see growth within the underlying potential of the economy between 4.0% and 5.0%,' he added.
