Publication

This paper discusses the external factors that are having a negative impact on Malaysia’s economy as well as the implications of the political crisis created by debt problems of the government’s 1Malaysia Development Bhd (1MDB) fund, which aimed to turn Kuala Lumpur into a financial hub. More specifically, the author contends that Malaysia's economic has been hit by three external factors; the fall in global oil prices; China’s economic slowdown; and the increase of flows of foreign capital out of the country. She then discusses 1) the problems facing Malaysia’s foreign reserves and currency following the emergence of the 1MDB’s debt troubles; 2) inflationary pressures and private debt in the country; and 3) how the 1MDB has developed from a political issue for Malaysia into an economic one.