Mohamed Aslam

Feasibility of a Monetary Union in the East African Community: A Structural Vector Autoregression Model

The aim of this paper is to assess the suitability of a monetary union among the East African Community (EAC) members. EAC consists of five neighbouring countries situated in the eastern part of Africa, which include Burundi, Kenya, Rwanda, Tanzania and Uganda. The methodological approach of this paper is based on AD-AS framework. The study focuses on the symmetry and asymmetry of shocks affecting EAC countries; a four-variable structural vector auto-regression model was used to identify four types of shocks: global supply shock, domestic supply shock, monetary supply shock, and domestic demand shocks. After identifying the shocks, we considered cross country correlation analysis, analysis of variance, and impulse response analysis. The results of correlation shock analysis revealed that domestic demand shocks and external supply shocks were dominant in the region, while domestic supply shocks and monetary shocks were less correlated and asymmetry in the region. In conclusion, the study results did not show strong support for the formation of a currency union in the region at present, but nevertheless gives some hope to a successful monetary union in the future.

The Possible Role of Waqf in Ensuring a Sustainable Malaysian Federal Government Debt

This paper attempts to investigate waqf as a possible instrument to reduce the Malaysian Federal Government debt. The latest Malaysian federal government debt to gross domestic product (GDP) ratio is 54.47%; more than the 50% threshold for developing economies. This increasing debt level will hurt the economy in the long run. In an effort to reduce the debt, the Malaysian government is presently selling government assets and reforming the taxation system i.e. by introducing Goods and Sales Tax (GST) on 1st April 2015. We however notice that there is an alternative solution from Islamic economics which complies with the Shari’ah law. The alternative is waqf. This paper provides a conceptual framework of the possibility of waqf with respect to its role in federal government debt sustainability. Firstly, the aspect at which waqf can contribute to federal government debt reduction is presented. Secondly, the study discusses the Shari’ah law of waqf, its contemporary issues and the management of waqf in Malaysia. Since Malaysia is a multi-religion society consisting of Muslims and non-Muslims alike, we also analyse the Shari’ah law of waqf pertaining to the non-Muslims. Finally, this paper offers suggestion of a waqf model that may be able to manage and control the federal government debt from ballooning.

Trans-Pacific Partnerships Agreement Diluting China’s Ascendency in Southeast Asian Regionalism?

Political and economic development over the past 10 years reveal that the close allies of the United States of America (USA) were unable to “limit” China’s growing domination in the Southeast Asian region. The TPPA that was led by the US was believed as a counter measure to check China’s growing power in Southeast Asia. This paper attempts to answer (i) what is the motive of the US government involvement in TPPA, (ii) what the possible implication of TPPA to China, and (iii) what would happen to China’s role in the region.

Political Economy of the Budgetary Process and Public Expenditure in Malaysia

A nation’s ruling political party has the right to draft and implement economic policies, including budgetary policy. In the case of Malaysia, budget policy and expenditure is associated with medium- and long-term economic development plans, the current thinking behind economic policies, and any additional measures related to major economic events such as the impact of global economic crises. Also, the budget includes economic policies according to the ruling party’s manifesto. Even though the allocation of the budget is the ruling government’s privilege, the government’s financial plans, spending, taxation and borrowing are subject to laws, rules and procedures. The ruling government cannot simply utilise economic resources for its particular political interests, as the discussion illustrates.

Financial Crisis - US Versus Asian: Factors and Policy Response

The financial crisis which erupted in the United States of America in 2007 drove the real economic sector into a crisis that has diminshed the world’s economic growth thereafter. There is no single theory that can explain what has happened in the US. Eventhough there were a few financial crises models, however all the models are “meaningless”. Traditional macroeconomic policies were used to restore the distress economy but the policies seemed to be ineffective. In this regards, heterodox economic perspectives may provide some answers in dealing with such economic crisis that have been experienced by the US. The financial crisis experienced in Asia in 1997-98 could provide some ideas for economic crisis solutions. The aim of this paper is (a) to discuss the financial crisis in the US and East Asia 1997/1998, and (b) to look at unorthodox economic policies that could possibly be considered in dealing with the financial crisis.

Information and Communication Technology and Economic Development in Malaysia

In 1991, the Malaysian government launched Vision 2020, with one of its main goals for Malaysia to become a fully developed nation by the year 2020. En route to achieving this goal, the information and communication technologies had been identified as one of the key sectors to realize this goal. This sector has been regarded and emphasized as a new sector of future economic growth and development. The sector had been included in the Sixth Malaysia Plan (6MP) for development abStract