JUNE 15 — The squabble between Tun Mahathir Mohamad and Datuk Seri Najib Razak, and between DAP and PAS, has moved the entire nation’s focus to politics without realising that the country’s economy is indeed heading south.

Recent economic data is anything but reassuring. April exports, for instance, fell by 8.8 per cent or RM5.9 billion year-on-year to RM60.4 billion, way below market expectations. Trade surplus, meanwhile, was also sliding by 21.2 per cent.

The local bourse plummeted 70.75 points or 3.89 per cent in May, as net outflow of funds from foreign investors ran up to RM5.75 billion for the first five months this year. The ringgit tumbled 1 per cent on June 8 to 3.7590 against the greenback, a nine-year low nearing its levels during the 1998 regional financial crisis. Although vehicle prices have been generally lower after the implementation of GST in April, vehicle sale for the month was 33 per cent down when compared to March.

Why does the local currency continue to fall despite an impressive 6 per cent GDP growth last year and 5.6 per cent for the first quarter of this year? Why has the local bourse reacted negatively to the PM’s RM260 billion development budget under the 11^th Malaysia Plan? Why are the country’s exports still dampened despite a depreciating ringgit? Does it mean our products lack the competitiveness?

As a matter of fact, our exports, currency and stock market only reflect the generalized situation; more worrisome is how the people feel of the slowing economy, especially in view of the depressed market after GST.

From what I understand, many companies have tightened their belts due to poor business. The Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan even indicated that some of the federation’s members were experiencing up to 30 per cent plunge in their business volumes while 20 per cent responded to the bleak business outlook by means of retrenchment or VSS.

If retrenchment were to go on unabated, the retrenched workers will have problem servicing their housing mortgages or purchasing new properties, and this is poised to take a toll on the banking and real estate sectors and burst the housing bubble now fast taking shape.

Our political leaders should therefore put aside politics to focus on economic revival solutions. The country’s political turmoil is set to be intensified if the economy goes further downhill.

It is imperative for the government to lift the consumer sentiment and alleviate the cost of  doing business (such as immediate reduction in corporate tax rates), boost development expenses by way of trimming redundant administrative costs, and even bring down the 6 per cent GST to more manageable 3 per cent.

Unfortunately our cost of living continues to rise instead of falling. Fuel prices have just been brought up by 10 sen per liter on June 1, and soon we will have to fork out more for tolls along 16 highways.

Meanwhile, the dual setback on the stock and money markets has reflected investors’ lack of confidence in the BN government’s governance.

Take the 1MDB issue for example, the company has deferred submitting its audit reports for three consecutive years while the accounts for the fiscal year ending March 31, 2015 has yet to be audited, thanks to the authorities’ undue leniency.

According to the Companies Act, the directors of any company delaying the submission of annual financial reports can be fined RM30,000 or jailed not more than five years. Prior to this, the PAC summoned 1MDB’s CEO Arul Kanda and his predecessor Shahrul Ibrahim Halmi to a hearing but the duo never turned up. What gives our GLCs such privilege as to defy PAC’s order?

To be honest, 1MDB’s operation not only lacks transparency, the same goes well for other GLCs as well. For instance, Pembinaan PFI under the treasury had more than RM28 billion in debt liabilities as of 2013.

The excessive debt levels have raised the doubts of investors over the government’s ability to service its debts, especially with the dwindling coffers due to plummeting oil prices.

As a matter of fact, our oil revenues have contributed significantly to the national coffers for so many years now, and if we had prudently mobilized the resources, the country would not have to face the dilemma of such smothering debts. It all comes down to mismanagement and inefficiency on the part of our government.

Fitch Ratings has warned to downgrade Malaysia’s sovereign debt ratings and if this were to materialize, the local bourse is set to suffer a further blow.

We pray that we will never have to see another financial storm, or our unpreparedness will easily render us extremely vulnerable.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.