A MID our current preoccupation with all things political, we may have been ignoring a front that, once breached, will inflict widespread suffering. Sentiment on the economy is no longer just a coffee shop conversation topic. It is now being discussed with increasing urgency even in boardrooms and business meetings.
If what is emanating from these meetings and conversations is to be believed, there is an increasing fear that the economy may be weakening. While such a fear has not yet emerged in the open, it is becoming apparent among those in commerce that we may have been too engrossed with happenings in the political arena, at the expense of defending our economy in the currently uncertain global environment.
On a global scale, one of the most accurate barometers for world growth forecast would be the price of oil, simply because oil is the commodity that fuels a major portion of the world’s industries, which, in turn, fuel the global economy.
The consensus among energy analysts has been out for quite some time. The days when oil fetched more than US$100 (RM406) a barrel are not returning any time soon. At the same time, prices of other minerals, such as iron ore, have dropped to almost half of what they were about a decade ago.
This could mean only one thing — that demand for such commodities has slumped, an early indicator that global industries are slowing down, which, in turn, could mean that the global economy itself is in danger of catching a cold.
We may also look at the global transportation sector to see the pattern of movement of goods in the world market, to gauge the health of global trade. While still debatable, there, too, the numbers are less than encouraging. Shipping rates have gone down by almost half this year and the benchmark China containerised freight index is down by almost the same rate.
These numbers are telling us that global trade growth has weakened in recent times. However, whenever I brought up these numbers in casual conversations, some would always argue that developed economies were still doing relatively well. They are, in fact, but it is not necessarily developed economies that we should be looking at solely.
China devalued the yuan just last week for reasons known best to itself. Some were quick to say that the Beijing government wanted to start a currency war with the West, while others said it was simply a move to keep its currency at a par with those of its trading partners, who have had to grapple with a strengthening United States dollar in recent months.
Whatever reason it was that prompted China to go ahead with the surprise move, the devaluation of the yuan had an almost immediate impact on Asian currencies, the ringgit included.
The phenomena then spread to the securities market, as foreign portfolio investors cut losses on the value of stocks in the ringgit exchange market by selling off and heading for other safer havens.
The ringgit exchange rate with the US dollar is now below even the RM3.80 peg to the greenback at the height of the 1998 Asian financial crisis, while the benchmark stock market index, FBMKLCI, has been dropping by double digits for several days.
Meanwhile, our politicians are going for each other’s neck, with hardly a day passing by without supposed “political bombshells” being dropped.
While none of the accusations flying about in the political sphere has been conclusively proven beyond any shadow of a doubt, the daily dose of sensational political news has somewhat become the staple diet for Malaysians.
The social media scene is very much alive and kicking in Malaysia. The political scene is more talked about now even than any forthcoming grudge match in the English football Premier League.
Our preoccupation with domestic politics has, in turn, painted a very negative picture of the country as a whole. Malaysia is viewed by some foreign analysts as one that is becoming a “failed state”.
Worse, even some of us are gleefully adding more colour to what they say, largely in the name of gaining political popularity. Many, too, have made it very clear, albeit perhaps unknowingly, that the decline in the ringgit exchange rate and stock prices should be celebrated as an indication of the government’s failure. This has dampened sentiment even more.
For the rest of us ordinary people, who want nothing more than an opportunity to lead comfortable lives in peace and harmony, we should be aware that besides our desire for a clean and progressive government, our economic well-being is of equal importance.
The Malaysian economy is still on the growth path and Malaysia is not yet the “failed state” many of those now desiring political expediency want it to be.
But, our preoccupation with only politics will surely consign us there, irrespective of which side of the divide we now stand.
The writer is NST group editor