THE ringgit is ailing. On this there is no disagreement. But when we get to curing its affliction, we become argumentative Malaysians.
Amidst this madness, there is a method though. The ascent or descent of the ringgit, or any currency for that matter, is due to two factors, says economist Professor Datuk Dr John Antony Xavier.
One is external and the other is internal. Malaysia can do little to control the external factors, but it can do a lot to strengthen the ringgit internally. There are a few things Malaysia can do to put some vibrancy back into the ringgit.
But first, a few words on external factors beyond our control. Global economic growth is one. Whether the developed nations outdo Malaysia is not for us to decide, even if we so desire.
Neither can Malaysia hasten the economic recovery of China, a main trading partner. The other is interest rates, especially those of the United States.
Every time the US Federal Reserve raises the interest rate, almost all central banks will also rush to do the same. In many ways, economics is a domino game. It is an all rise or an all fall story.
So how can Malaysia make the ringgit vibrant again? First, let's dismiss what economists like Xavier say no to: pegging to the US dollar, even though it did arrest the great slide of the ringgit in the late 1990s.
The economists' reasoning is that such a pegging will drive investors away. Professor Dr Yeah Kim Leng, another economist, says there is just no need for pegging as the banking and financial system is healthy, and external surplus is positive.
Plus, he adds, inflation is low, growth is on the uptrend and the country is in full employment.
Now for the injection of vibrancy. Logic will tell us that the trick lies in creating a greater demand for the ringgit. But how? Xavier suggests that Malaysia must make the ringgit the currency of its contracts.
This is an uphill task, but not an impossible climb. Over the years, Malaysia has been adding ringgit to its contracts. If before all our trading was done in US dollars, today 20 per cent of the contracts are executed in ringgit.
According to Xavier, Putrajaya is working hard to denominate contracts in ringgit. Yeah thinks government-linked companies can play a role by repatriating their earnings overseas during bouts of the ringgit's weakness.
This is one such time. Another is to increase productivity. To be sure, there is much news about productivity inching up. But it does not add up enough to charm the ringgit's ascent.
To Xavier, Malaysia's productivity rate should match that of the West, but it has some distance to go. In nominal terms, the country's productivity rate is 3.6 per cent, but this only translates to one per cent in real terms.
Well, with only 25 per cent of our workforce being skilled and 42 per cent of our graduates in jobs that are unrelated to their degrees, a vibrant ringgit can't be a wish away.
On Friday, the ringgit was 4.7760 against the US dollar, a dire signal for rapid-fire action. Now and for the long term.