The credit crisis, however, underscores the few benefits of Malaysia being a tortoise. With the financial typhoon now roaring through the US and Europe likely to gather strength, Malaysian policy planners have little cause for complacency.

As a tortoise, Malaysia has been spared the turmoil affecting thousands of investors in Hongkong and Singapore. This is because policymakers like Bank Negara Malaysia emphasise developing ringgit-based lending and ringgit-based investment products while resisting the temptation to be financially trendy.

In contrast, regional hares like Singapore and Hongkong offered investors innovative US dollar investment products, including derivatives. Touted to yield higher returns with minimal risks, these derivatives became virtually worthless when

issuers – like US investment giant Lehman Brothers – became bankrupt.

Derivatives are complicated financial instruments, like options and futures contracts, that derive their value by reference to an underlying asset or index.

Some 43,700 investors in Hongkong bought HK$12.7 billion (RM5.8 billion) of Lehman’s mini-bonds – high-risk, credit-linked derivatives – and HK$3 billion (RM1.4 billion) of similar, equity-linked derivatives while some 10,000 Singaporeans purchased S$201 million (RM482 million) of Lehman-linked products, a South China Morning Post article suggests.

Although the number of investors in both territories is small, their angst is highly visible.

In Hongkong, hundreds held demonstrations recently protesting against banks that sold them these toxic assets. In Singapore, an AFP report says about 600 retirees and middle class investors – angered by a possible loss of their life savings – held an unprecedented rally last Saturday.

Regulators in Hongkong and Singapore, however, face a dilemma. Distressed financially and emotionally, investors must be offered some relief in a manner that doesn’t undermine the involved financial institutions’ financial health. In contrast, Malaysian regulators have been largely spared this agony.

Because Bursa Malaysia is a tortoise, investors experienced less volatility. True, the Kuala Lumpur Composite Index (KLCI) never reached the stratospheric highs of the Hang Seng Index (HSI) last year. On Oct 30 last year, the HSI soared to 31,638.22; last Friday, the HSI plummeted to close at 14,554.21.

This year, all major East Asian bourses, including Bursa Malaysia, entered negative territory. As a laggard, the KLCI suffered a less precipitate decline. Based on last Friday’s closing price, the KLCI has fallen by 37.4% from end 2007, a smaller margin than that experienced by comparable indices in Singapore, Jakarta, Thailand and Hongkong, all of which have tumbled by more than 45%.

Although Malaysian policymakers are having a less stressful time than some of their regional counterparts, there is little cause to celebrate. News reports from the US, Japan and Singapore suggest the worst is yet to come.

In the US, the carnage that decimated Wall Street has now spread to Main Street. Last Friday, Commerce Department data showed US home construction slid for the third consecutive month in September, falling 6.3% to a seasonally adjusted 817,000 annual rate, the lowest level in 17 years.

Additionally, the US jobless rate hit 6.1% in August and again in September, the highest since September 2003. This jump in joblessness prompted Chicago Federal Reserve Bank President Charles Evans to comment publicly that "unemployment rarely goes up this much without a recession following."

To counter a recession in Japan that many economists now see as inevitable, the Diet in Tokyo passed a supplementary budget worth ¥1.8 trillion (RM62.6 billion), a sum that could blow out the government’s already ballooning debt.

Underlining the gravity of the situation, Prime Minister Taro Aso announced a further emergency spending package would be implemented if needed. He said he would rather sacrifice the government’s earlier pledge to restore fiscal balance than allow Japan’s economy to contract.

Across the Causeway, Prime Minister Lee Hsien Loong acknowledged last week Singapore had entered into a technical recession.

Admittedly, Malaysia’s economy is broader-based and probably more resilient than its southern neighbour. And because the direct impact of the credit crisis in this country has been minimal, individuals and corporations in this country may be less anguished and may continue to spend and invest.

What needs to be remembered is financial typhoons are indiscriminate – elephants, hares and tortoises may be thrown off-balance by the gale force winds now roaring through East Asia.