Global Growth Faces Slowdown Amid Trade Barriers, Supply Chain Risks - Nurhisham
IPOH, July 21 (Bernama) -- Global economic growth could slow to near zero over the next century as rising trade barriers, intensifying geopolitical competition and supply chain disruptions reshape the global economy, Economic Adviser to the Prime Minister's Office Nurhisham Hussein said.
He said the changing environment requires countries, including Malaysia, to integrate national security considerations into broader economic policymaking to strengthen resilience against external shocks.
"So we are in a situation where I believe we're looking at global growth dropping to zero within the next 100 years. Obviously that's way past our time, but that is also the time of our children, grandchildren and great-grandchildren, so it's something that should concern us because it concerns the future of not just countries, but also humanity," he said.
Nurhisham was speaking as a panellist during the session ‘The Economy: Development And Cooperation’ at the 8th World Conference on Islamic Thought and Civilisation (WCIT), themed ‘Everyone Matters: Pride and Unity in Islam’, here today.
He pointed out that while Malaysia benefits from strategic geographical advantages along the Strait of Malacca and a diversified economy, the country still faces significant supply chain dependencies in critical raw materials and food production inputs.
Nurhisham highlighted that Malaysia relies heavily on a single foreign source for nearly 100 per cent of its potash supply and 60 per cent of its coal, while its self-sufficient poultry sector remains reliant on imported chicken feed from countries like Brazil and Argentina.
"So looking at it from a policy perspective, I think one of the things that we're doing now is that we're inserting a national security perspective into economic policy, and that's something that is both necessary and very worrying.
"Because when you talk about adding economic security to what is essentially a free trade construct, you're adding cost, you're adding to prices, right? You're having to accept inefficiencies for the sake of robustness, so that is a price that eventually has to be paid by consumers and that implies, again, slower growth," he added.
He said strengthening energy security, food security, industrial independence and supply chain resilience would remain among Malaysia's key policy challenges over the next two decades, particularly as geopolitical competition intensifies.
Meanwhile, another panellist, former Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said Islamic finance could play a greater role in supporting resilient economic growth because every financial transaction is backed by underlying economic activity, making the system less vulnerable to financial market disruptions.
"I have said at Islamic finance forums that we need to see breakthroughs, we don't want to see incremental growth. And why is it to our benefit? This is because Islamic finance, every financial transaction has an underlying economic transaction, it will drive economic growth," she said.
Zeti, who is also the founding chair and co-chair of the Asia School of Business, said the profit-sharing structure, transparency and disclosure inherent in Islamic finance make it an effective financial intermediation model to cushion the global economy against financial instability.
-- BERNAMA