A HORRENDOUS claim has been making the rounds on social media. It says that Malaysia is buried in debt and is the next country, after Sri Lanka, to go bankrupt.

Curiously, many have chosen to believe this is the gospel truth. There have been plenty of rational explanations by economists debunking this myth, but they are buried mainly in the business sections of newspapers. So the general population may have missed the more reliable information.

Meanwhile, social media narratives, unfortunately, move faster and spread wider in the age of “forwarded” messages.

So it’s good that Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has taken to social media to explain these economic issues, including how rising interest rates in the United States affect the ringgit as well as other currencies.

I was informed about a pastor in a particular church who told his congregation that Malaysia is sinking financially, and he, presumably, based his sermon on this false social media news.

He purportedly even said we are the next Sri Lanka. The worshippers were then told to pray for Malaysia. It’s blasphemous because the words of preachers, regardless of their faiths, are often believed wholeheartedly.

We can argue that Malaysia is falling behind, but we haven’t arrived at the point of being a failed or bankrupt nation.

Countries with external debts running into trillions of US dollars include China, Japan, Germany and the United States, and certainly, none of them are failed states even though their debts eat into a large part of their GDP.

Sri Lanka’s economy has collapsed with debt in foreign currencies totalling US$51bil (RM227bil), and they have run out of reserves. According to one report, the country only has US$1.92bil (RM8.5bil) in reserves, which is a pittance to secure imports such as fuel.

Malaysia has a respectable amount of foreign exchange reserves while our debt in foreign currencies is a small percentage of total debt. We had a stockpile of US$116bil (RM516.4bil) at the end of last year while our debt in foreign currencies is US$6bil (RM26.7bil).

“Their [Sri Lanka’s] trade balance was negative US$8bil (RM35.6bil) for 2020, ours was a positive US$63bil (RM280bil) for 2021 – we earn a considerable amount of foreign exchange to purchase our imports, they didn’t, which is why they can’t buy foreign goods,” wrote senior business writer P. Gunasegaram at Malaysiakini.com recently.

“Their debts are 101% of gross domestic product or GDP, the sum of goods and services produced in a year, ours is 68%. Importantly, they don’t have enough foreign exchange to service their foreign debts, we have more than enough,” Gunasegaram wrote.

He rightly pointed out that “right now, it’s really not a fair or reasonable comparison at all” to equate Malaysia with Sri Lanka.

Gunasegaram further wrote that “Malaysia’s is A3 – it signifies that the issuer has financial backing and some cash reserves with a low risk of default. A-/A3 is the seventh-highest rating a debt issuer can receive and is four rankings above the cut-off for junk bonds – not great but not bad either.”

There are also a lot of misconceptions about debt. So we have economists, politicians – and journalists, sometimes – talking about various sums of money, small and large. If the point is about the country’s total debt, then it would run into trillions. It’s nothing unusual since most countries are in similar situations. However, the political agenda on social media wants us to believe that our entire generation will have to settle these debts.

It’s mind-boggling for the common man to digest that Malaysia has a total public sector debt of RM1.36tril.

But this amount includes borrowings by the federal government, statutory bodies and non-financial public corporations. The government also issues debt papers in what is one of the largest and most developed debt markets in the region. These bonds will eventually need to be repaid, too.

The federal government’s external debt is about RM28bil (US$6bil). Again, it seems big, yet it’s very manageable.

The question here is how we’re managing it, as debt is weighed based on a percentage of GDP. Currently, it’s about 63.8% of GDP and it used to be 53% before the Covid-19 pandemic. This merely means we need to be prudent and bring the numbers down over the next few years.

Another big difference between Sri Lanka and Malaysia is that we are net exporters of natural gas, and we can afford to subsidise fuel and keep inflation under control. On the other hand, Sri Lanka’s major exports are tea, garments and textiles.

But that doesn’t mean all is hunky dory down the road for Malaysia if we don’t get our act together. Disturbing signs have already prevailed.

Mismanagement and the results of corruption, leakages and incompetency usually only surface a decade later in most cases.

We are not Sri Lanka, but neither should we be content with what’s happening in Malaysia. We deserve better.

Despite what our politicians may want to say, we must gradually lower our subsidy bills. We are spoilt. We live in one of the most subsidised nations on Earth, yet many are clueless about this.

Given this situation, any reduction can only be done gradually without hurting the people’s pockets too much.

As it is now, Malaysians are already struggling. Had the government stuck to its earlier decision to remove ceiling prices on chicken, eggs and cooking oil, the effects would have been disastrous and could possibly have even resulted in massive street protests.

The central bank’s foreign reserves of US$109.2bil (RM480.9bil) as of June 15, 2022, is reportedly the lowest since early 2021, and the drop of US$3.6bil from May 31, 2022, is also the largest in seven years. While economists don’t think the decline is alarming, we certainly need to recover our revenue.

Our leaders need to talk more about growth. Please stop wasting time on unproductive and contentious issues which divide the nation and bring no value to the country.

What we need to do is to improve our competitiveness, employment, public finance, productivity and efficiency.

To be fair, Malaysia attracted RM42.8bil in approved investments until March this year.

Yes, Covid-19 has caused Malaysia to slip seven notches to 32nd in the 2022 International Institute for Management Development World Competitiveness Ranking, so we need to get back on our feet now.

If we can’t even resolve our labour shortage issue, it means we’re still on the starting blocks while everyone else is eyeing the finish line.

Oil palm fruits are left rotting, restaurants can’t open, and businesses are struggling because of this simple issue – which should have been sorted out in the last two years when we were stagnant.

Billions of ringgit are going down the drain as Malaysia squabbles over hiring methods and protocols.

It’s often said that Malaysia is a lucky country as we have crude oil and palm oil, but it’s a waste when we don’t have people to harvest these fruits, and the peak season is right now, unfortunately.

So we really need to sell the Malaysian story better to ourselves and to the world because we’re ailing from an image problem.

Time to move forward: In less than a year, we will be voting for new Dewan Rakyat members, but some of the current batch of MPs are still squabbling over government leadership posts instead of dealing with the urgent economic problems. – FAIHAN GHANI/The Star.

TALK about being deluded – some of our politicians have turned it into an artform. We surely can’t be blamed for doubting that they’re clued in to our pressing concerns, or worse, even bothered about them.

While the rest of us struggle with the increasing cost of living, we have politicians squabbling over filling the Deputy Prime Minister position.

Realistically, do the rest of us even care if there was indeed a promise made to appoint someone to the post, especially when we’re barely a year away from the “expiry date” for the Dewan Rakyat members?

And even if there was such an agreement, would it even be valid, knowing the minute relevance to a political agreement, where accountability and integrity aren’t top essentials?

Now, that explains why the Yang di-Pertuan Agong has always insisted on meeting the Members of Parliament in person each time they sign a statutory declaration to back a leader.

It’s no longer news that some of them have changed their minds along the way, turning the SDs into worthless pieces of scrap. Conveniently, some have even denied putting pen to paper.

So, if SDs have no value, what more an agreement for a DPM.

More incredible, there are now allegations that the signatories of the agreement had signed it without the knowledge of their party heads.

Either these party leaders have suddenly developed dementia, intentionally or otherwise, or their senior leaders have sealed deals behind their backs.

PAS president Tan Sri Abdul Hadi Awang said he wasn’t aware of the agreement to appoint a DPM from Bersatu while the party’s secretary-general Datuk Seri Takiyuddin Hassan has admitted to drafting the agreement.

Umno leaders said they had no idea that vice-president Datuk Seri Ismail Sabri Yaakob had made his stand on the issue as PM.

If it’s confusing to the rakyat, as a consolation, at least, we know the respective top party leaders are, likewise, in the same boat.

Here’s the point. The rakyat doesn’t give two hoots. After all, we’ve been suffering from political fatigue.

All these political aspirants who want to be PM or DPM have not made any constructive proposals on how they intend to tackle the inflationary trend, depleting foreign reserves and sustaining the subsidy bill.

Perhaps some of us missed their clever speeches.

But have you heard anyone pitch how we can increase our food products, especially from the agri-industry sector, and how we need to strengthen our food security policy and even develop our own food safety law?

Many related issues on food security have emerged, such as food price hikes, and shortage of essential foods including oil and chicken.

Yes, the Prime Minister has said the Economic Action Council has discussed food security, simplifying business procedures in Malaysia and addressing the skilled workers shortage in the electric and electronic sectors.

It was heartening to hear the PM speak about the involvement of Felda in food security last week.

But to ensure food security, Malaysia needs to galvanise the nation. For example, the Singapore Food Agency adopts the strategy of “three food baskets” – the foremost being the diversification of food sources including boosting local food production through funding for agriculture research and technology adoption, creative planning of farm spaces and efforts to drum up community support for local farmers.

Although Singapore is a tiny country with only 1% capacity for food production and over 90% of food imported, it has managed to generate public interest, concern and commitment to food security.

Some may argue that Singapore is hardly a good example as it can’t rear its own chickens and eggs but it has managed to steer national interest and a narrative.

Across the world, the Covid-19 pandemic, disruptions to food supply chains and now, the Ukraine War, have all wreaked havoc on food supplies, and our weakening ringgit can only mean our food import bill will balloon.

Contenders for the Prime Minister’s job in Britain must talk about how they can take the country forward amid high inflation and the tough tax laws there.

They also want to project to their countrymen that they are the ideal candidates to take the nation forward.

It’s fair to suggest that Malaysians don’t see any inspiring, progressive and competent leaders who can promise us a brighter future and take Malaysia to greater heights.

Leadership is surely lacking in Malaysia, although our politicians would like to think they are leaders. Of their own respective political parties, perhaps.

The issue here isn’t filling a vacancy for the DPM post but a void for a leader who can command the respect, confidence and trust of the people – a national leader who can lead us, and one who genuinely represents the interests of all Malaysians, regardless of their race and religion.

Diversity is to be embraced, practised and celebrated every day, and not presented merely as a hollow message drafted, or worse, cut-and-pasted by a press officer for a particular festival.

Perhaps we shouldn’t wait until the next general election before we begin our own elimination process for candidates who don’t even deserve our time.

High prices: The weak ringgit has led to the rising cost of imported goods, especially food. – GLENN GUAN/The Star

THE coming months will be rough. No one knows for sure how long it will last as the world grapples with inflation and the prospect of a global recession.

It has hit nearly every country in the world and Malaysia hasn’t been exempted.

Politicians who’ve called for street demonstrations protesting the rising prices of essential items or to demand a return of subsidies are just being opportunistic.

And it’s not because they have any real solutions to resolve the economic headaches either.

These politicians know the public is upset, even if the people are aware of the effects of the Ukraine war and supply chain disruptions.

Last week, Bank Negara Malaysia decided to increase the OPR (overnight policy rate) by another 25 basis points (bps) to 2.25%.

So, the rising interest rates will make borrowing or loan servicing more expensive, especially for businesses and households with existing loans, but it will be good news for those with savings in banks.

The increase will reportedly ease inflation and help support the weakening ringgit, not just against the US dollar but other currencies, too.

The depreciating ringgit has long been a source of frustration for Malaysians. The weak ringgit has led to the rising cost of imported goods, especially food.

We spent in excess of a whopping RM55bil on our food import bill in 2020.

“The weakening ringgit will have a strong impact on imported inflation. This would result in transfer pricing to consumers as cost of living will rise.

“There is a high risk for some under the M40 group to fall into B40 and more of the B40 sliding further,” revealed Ambank Research last week.

It’s hard to explain to ordinary Malaysians that the weak ringgit is because of the stronger dollar from the super-sized rate hikes by the US Federal Reserve, especially when most people prefer to believe what social media feeds tell them.

When times are bad, especially when the pocket is pinched, reasoning takes a back seat. Economics and business analysis don’t make the sexiest news bites.

Perhaps it’s best that only selected Cabinet ministers who understand the issues be allowed to talk to the media.

Malaysians are sick of incompetent politicians and officials who are incapable of engaging intelligently.

For God’s sake, please don’t advise the public to eat fewer eggs when that’s the cheapest source of protein for most Malaysians.

But that’s what happened when one state official from the Domestic Trade and Consumer Affairs Ministry shared her economic nous. I would suggest that our politicians and officials research how other countries have tackled inflation, with practical austerity ideas, sans being condescending or insulting our intelligence.

I salute Mydin Hypermarket boss, Datuk Ameer Ali Mydin, for uploading a video on social media on what value RM50, RM100 and RM200 can offer at his outlets.

It’s a clever marketing and advertising plan that’s executed simply and cleverly – without having to spend millions of ringgit.

If our ministers lack a proper communication strategy, the fallout will be costly because inaccurate social media messages will only generate negative traction.

Many irate Malaysians only want to know why the ringgit is sliding, even against our neighbours’ currencies.

More importantly, while we struggle, politicians are busy squabbling over who should be Deputy Prime Minister, replacing a Minister who has hopped to another party and worse, indulging in inconsequential issues which make a mockery of Malaysia.

The federal government has now found itself in a bind. The window period for a general election is gone as the predicted inflation has hit home.

If it holds on until July 15, 2023, when the term of Parliament expires, the government better hope the Ukraine War would have ended and the world’s food production has recovered.

Somehow, it doesn’t look likely, especially with most economists predicting tougher months ahead.

Without the subsidies, the biggest in Malaysia’s history, it will be impossible to retain Malaysia’s official inflation rate of 2.3%, which is among the lowest in the world.

Malaysia is one of the most subsidised nations on Earth, a fact which most Malaysians have taken for granted. Unfortunately, that’s also unsustainable in the long run.

“Without subsidies, inflation should be around 11% as opposed to 2.8%. And the subsidy is costing the government over RM71bil. The weakening ringgit will add more to the import bills,” Ambank said.

The central bank’s foreign reserves of US$109.2bil (RM483bil) as of June 15, 2022, was the lowest since early 2021, and the drop of US$3.6bil (RM16bil) from May 31, 2022, was also the largest in seven years, according to Bloomberg calculations, The Edge reported.

However, it said, economists don’t think the decline in international reserves has reached alarming levels yet as the reserves’ position is sufficient to finance 5.5 months of imports of goods and services and is 1.1 times the total short term external debt.

In a nutshell, we are holding well. We are not like Sri Lanka, but we can’t afford to allow the fall in our reserves to continue at this rate.

There are expectations that there will be further increases in lending rates, with Ambank saying “we gather that a 50bps one-off seems highly unlikely.”

“We are of the view that OPR will end at 2.5% – 2.75%, suggesting another 1-2 more rate hikes with another two hikes in 2023 to 3.00% – 3.25%,” it added.

The Edge also reported that a hike is expected in September to 2.5%.

The most effective way to increase our reserves is to simply build up our revenue. Spending is the easy part, but we need to earn more to halt the slide, too.

IF following political news in Malaysia seems like a depressing prospect, it must be worse reading about political figures and their corruption cases, which run into millions of ringgit, or billions in the case of the 1MDB debacle.

Piles of money arrive easily in envelopes, bags or via their accounts, and even include colossal sums, with nary an eyebrow raised at the bank, in one case.

Ordinary Malaysians, who keep checking their bank accounts to see only a depleting balance, must find all these revelations hard to digest.

It’s difficult to comprehend the ease with which cash is exchanged.

Worse still, to avoid running afoul of the courts, since these cases are on-going, specific references can’t be made because it will be sub-judice to do so.

Sub-judice is a Latin legal term which simply means the public or witnesses involved in these cases are prohibited from public discussions because the matters are still under judicial consideration.

Accusations made in an open court would still be subjected to rebuttals, and allegations would need to be proven, if they are credible, in later stages of the court cases.

But for many ordinary Malaysians, the details have been shocking.

Only the fanatical loyalists would still have complete faith in their infallible political idols, although, to be fair, no one is guilty until proven so.

Even then, there are still many layers of appeal, and one judge’s decision may be overturned in the next court.

But the humdinger of the week has to be Datuk Seri Dr Ahmad Zahid Hamidi telling the court that “money isn’t everything, but everything needs money.”

We have also discovered how chats in WhatsApp groups aren’t exactly safe. If the police require forensic proof on people they wish to investigate, the communication platform is a weak link.

No wonder some politicians occasionally insist on using Telegram instead, and at least one top businessman insists that my mobile phone be put away whenever we meet for a chat, saying listening devices can be used to eavesdrop on our conversations, which spooked me to no end.

What some of these corruption cases have proven is that graft has become intrinsic in our society.

We know corruption is bad, as exemplified by the 1MDB scandal, but to hear the full-blown bits is something else. It sickens to the pit of the stomach, really.

According to a 2013 public survey in Malaysia by Transparency International (TI), most of the surveyed households perceive Malaysian political parties to be highly corrupt.

A quarter of the surveyed households consider the government’s efforts in the fight against graft to be ineffective.

And that was in 2013.

In 2020, TI Malaysia released the Global Corruption Barometer for Asia 2020, covering 17 countries with 20,000 people surveyed.

This survey for Malaysia was for the period July 2019 to June 2020, when two different governments at the time were reviewed.

The survey found that 71% of Malaysians think that government corruption is a big problem, and it’s noteworthy that 39% of all respondents strongly believe that corruption is on the rise.

Well, we can safely agree that these findings are not news to us and merely reaffirm what we already know or fear.

Malaysia has come to a point where voters seem to tolerate or even accept that their elected representatives could be corrupt. However, so long as they are competent and not excessively corrupt, they will be embraced.

The concept of a clean politician is almost utopian, especially in a non-ideal world.

So, we’re ready to compromise our standards because we have essentially given up.

Corruption has become entrenched and a culture. That’s the perception, be it fact or fiction.

There’s still light at the end of the tunnel though. Our firemen don’t insist on being paid to put out fires, ambulances still turn up for emergencies and policemen, despite being viewed negatively, still apprehend the bad guys.

In government institutions, work continues at a professional level, and approvals are seen through, although not entirely to our satisfaction.

The TI report said only 7% of surveyed Malaysians have been bribed for their vote in an election, which is lower than the 14% average in Asia.

“A total of 15% of surveyed Malaysians have utilised personal connections when accessing public services, which is lower than the average in Asia of 22%,” it said.

“More importantly, of all Malaysians surveyed, a total of 68% still believed that ordinary people could make a difference in fighting corruption, which is higher than the average in Asia of 62%.”

Well, it’s now 2022, and corruption seems to be a full-blown epidemic. The findings would probably have changed drastically by now, I think.

Political instability, party hopping, allegations of money politics and corruption scandals involving political figures would surely result in a dip in expectations, although TI Malaysia’s findings indicate that Malaysians still think we can fight graft.

It’s important for our leaders to lead exemplary lifestyles to send the right message to our people.

They must show that they’re in politics to serve the people and country, and not to enrich themselves.

It’s a farce to preach about struggling for race, religion and country when the common folks know it’s really about self-serving interests for power, positions and money.

Instead of opting for luxurious clothing or accessories, perhaps one could make do with a modest lifestyle, lest it be misconstrued by the observant public. It’s best to avoid unnecessary criticism at this juncture.

The ill-conceived justifications offered, as usual, are even worse. Surely, as ministers, they can afford designer clothing despite public criticism and ridicule.

No one expects our politicians to be as dressed down, with non-matching shoes, like Indonesian president Jokowi.

But he deserves all the accolades from his countrymen and the international audience for his moderate lifestyle.

We don’t need politicians who post pictures on social media about travelling in economy class when it’s a rarity.

Only their supporters happily swallow these shenanigans. The rest of the time, business class seats are the order of the day.

There’s really nothing wrong with travelling comfortably in business class if it means getting enough rest or being able to work while up in the air.

Malaysians are getting smarter. We can detect professionally crafted video recordings, with multiple cameras and lighting, involving religious figures and politicians doing so-called charity work.

Come on, they are so well scripted that it’s time they re-think and evaluate what they have been doing or risk being exposed as fakes.

Viewers have begun to question the well-being of the people aided in the video clips. What has happened to them, post shooting?

Money is important, for sure, but at the same time, there must be a bigger picture.

Perhaps that imagery is best encapsulated by American author John Hagee’s classic quote that the measure of a man’s greatness is not the number of servants he has, but the number of people he serves.

In the Malaysian setting, it’s certainly not the number of bodyguards, aides and police outriders that serves as a gauge.