GEORGE TOWN: A veteran economist today said Malaysia’s recent inclusion in a United States’ currency manipulators’ watchlist is a subtle American way to discourage trade with China and boost US trade.
Ramon Navaratnam described the move as a “classic case” of protectionism.
He said it was a move to isolate competing trading partners who pose a threat to the US.
The US had recently announced that Malaysia, Singapore, China, Germany, Ireland, Italy, Japan, South Korea and Vietnam be added to a currency manipulator watchlist, bringing the number of nations to 21.
India and Switzerland were removed from the list last year.
Countries found to be currency manipulators can have trade sanctions imposed against them by the US.
Speaking to FMT, Navaratnam said inclusion in the watchlist was a way of applying pressure on countries with typically strong cash reserves and nations exporting more than they import, especially to the US.
He said Malaysia is a major exporter and China is its largest trading partner. As such, it is “mischievous” to include the country in the watchlist.
Navaratnam said Malaysia’s balance of payments was strong. Like Malaysia, many other countries in the watchlist are also having surpluses in terms of balance of payments, particularly with the US.
“It appears they are not only against those who are trading with China but anybody who has built surpluses in their balance of payments, which the US feels is not due to competition but currency manipulation.”
However, he said the US has to give concrete evidence of this so-called manipulation before they put any country on their watchlist.
“They are wrongly putting us on the alert list in order frighten us not to trade with China or maybe push us to trade less with China. This is a crooked, cunning strategy.
“However, all this may cause them to shoot themselves in the foot,” he said.
Navaratnam said the only people who can save the situation were the Americans themselves, especially thought leaders and academics from their famous universities.
“Then they accuse them of manipulating their currency to lower their exchange rate deliberately so they can export more.
“The reality is the balance of payments of other nations is getting stronger while that of the US is getting weaker because of their declining competitiveness, as in the case of Huawei with its 5G technology.
“So they knock us down, putting us in devious watchlists and imposing protectionist measures.
“The academics in the US must bring pressure to bear on President Donald Trump using their influence.”
He said, by and large, unfortunately, these academics have remained quiet, with the exception of Prof Jeffrey Sachs and a very few others, who have come out to condemn the US government for taking this narrow, short-term view of international trade and development.
Navaratnam said the currency manipulators’ watchlist was a form of economic bullying, as part of the US’ larger trade war strategy and this could be dubbed “cowboy economics”.
“This is classic big boy bullying. But today, you can’t just bully somebody.
“When you do, others will be able to retaliate and even gang up against you. The US must accept the world has changed and they must adjust accordingly and become more competitive.
“They think they are top dogs when they are not; they want to be the samseng in the world of economics.
“It is okay if you want to blacklist us. We will keep away from you, and we will trade with countries and regions which are more safe, reliable and fair-minded nations such as Europe, China and other parts of Asia.
“The world is open for business to all and trading should be transparent without any blacklists.
“Indeed, the world is our oyster and we have to cooperate with all rather than become isolationist and protectionist.” - FMT
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