AUG 5 — On July 30, the ringgit fell to a 15-year low against the Singapore dollar. On the 31st, Fitch Ratings revised Malaysia’s credit rating outlook to “negative.”

The same day the ringgit fell to a three-year low of RM3.25 against the US dollar, the FBM KLCI shed 22 points and the yield on government bonds rose to 4.13 per cent.

Overall, government debts to GDP ratios are nearly at the ceiling, household debt has reached worrying proportions, and there are no signs of any fiscal measures such as broadening the tax base or rationalising subsidies to address the budget deficit which has risen to 4.7 per cent of GDP by 2012.

In addition, The Edge Review reports that the much publicised 1MDB fund has accumulated debts worth RM38 billion, all guaranteed by the Malaysian government and are a “potential time bomb” for the country.

Over in the property sector, the dizzying climb in prices fuelled by speculators has worried Bank Negara about the risk of a bubble forming to the point of mulling raising levels of capital gains tax, reducing access to debt for financing and withdrawing DIBS (Developer Interest Bearing Schemes) entirely from the market.

Almost in tandem, crime rates have been going up, certainly in perception if not reality. A series of high-profile murders and the increasingly brazen nature of the attacks have the urban populace concerned.

Are these crimes born out of stagnating real incomes and mounting debt? Is crime the only recourse to shake illegal money lenders off your back? Are people getting so desperate that they are willing to take such big risks for relatively paltry sums of money?

This certainly seems like a critical juncture for governance in Malaysia. If urgent steps to stem the slide at a macroeconomic level are not taken now, the economic and social impact of a perfect storm of sharply falling asset values and ballooning debt could be dire indeed. Not just in terms of crime but across the whole social political and economic spectrum.

What is perplexing is the official response so far. Apart from a few platitudes on the government being aware of the situation and promising to address it in the next Budget, there does not seem to be any sense of urgency.

On the other hand, racial and religious tensions are escalating, with a predictable battle of words over who is disrespecting who in schools, at the movies and at mealtimes. And of course, when there is racial rhetoric it seems that the defining statements always come from Dr Mahathir Mohamad, serving to up the ante even further.

Granted that the political imperative at the moment given the impending Umno elections is one of consolidating power bases on racial lines, there must also be an acknowledgement that when the nation loses economically, the party in power is not going to remain terribly popular.

Playing up racial issues can distract people’s attention from bread-and-butter issues for only so long. For a country with so much going for it, it seems that this downward slide is primarily self-inflicted.

And the deafening silence from the architects of the GTP, ETP and BR1M, all so upbeat just a couple of months ago, is not going to help consumer confidence.

My earnest wish for this festive season is that the gathering storm clouds give us a miss and it remains a time of giving thanks and rejoicing in our good fortune with family and friends.

Selamat Hari Raya.

* This is the personal opinion of the columnist.