Global growth could near zero over next century, PMO adviser warns

 Nurhisham Hussein says the changing environment requires countries, including Malaysia, to integrate national security considerations into broader economic policymaking.

Economic adviser at the Prime Minister’s Office Nurhisham Hussein said while Malaysia benefitted from strategic geographical advantages and a diversified economy, the country still faced significant supply chain dependencies.

IPOH:

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 world economy, said Nurhisham Hussein, economic adviser at the Prime Minister’s Office.

He said the changing environment required 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 discussing the topic “The Economy: Development And Cooperation” at the 8th World Conference on Islamic Thought and Civilisation (WCIT), themed “Everyone Matters: Pride and Unity in Islam”.

He said while Malaysia benefitted from strategic geographical advantages along the Straits of Malacca and a diversified economy, the country still faced significant supply chain dependencies in critical raw materials and food production inputs.

Nurhisham said Malaysia relied heavily on a single foreign source for nearly 100% of its potash supply and 60% of its coal, while its self-sufficient poultry sector remained 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 accepting 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.

Nurhisham 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 intensified.

Meanwhile, another panellist, former Bank Negara Malaysia governor Zeti Akhtar Aziz said Islamic finance could play a greater role in supporting resilient economic growth because every financial transaction was 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 in 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 made it an effective financial intermediation model to cushion the global economy against financial instability. - FMT