PM: Diversified trade can ride out US recession

Malaysia ‘s strategy diversified trade links will shield it from a slowdown or recession in the United States. In fact, we should export more to Arab countries, besides China, India and ASEAN, as our country is the leader of the Islamic world.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said, Malaysia's strong fundamentals and diversified trade links would shield it from a slowdown or recession in the United States.

"Yes, at one time we were very dependent on the US, but following our diversification efforts, Malaysia has started to export to other countries and is not as dependent on the US as before.”

Fears of a recession in the US sent shock waves through global markets in the days leading up to the annual World Economic Forum (WEF) and overshadowed talks which were supposed to centre around the theme "The Power of Collaborative Innovation".

Bursa Malaysia was not spared, but fared better than other markets in Asia and has since recovered, closing on Friday at 1,405.40 points, after a roller-coaster week.

The prime minister said Malaysia's trade with Asean was much bigger than that with the US, and it continued to expand trade links with China, Japan, South Korea and India.

"Our economy is also showing signs of resilience. Total trade is more than RM1 trillion, we have large reserves of US$101 billion (RM327 billion) and some 86 per cent of our GDP (gross domestic product) is from the strength of the domestic economy."

Abdullah said Malaysia's services sector was growing, the ringgit stable and the stock market strong with a market capitalization of more than RM1 trillion.

"Our economy is strong due to our forward-looking policies. If indeed there is a recession in the US, we can withstand it. And for this, we need a strong government.