Flagging ringgit bodes ill for Malaysia’s Anwar

Local currency tumbles amid rising investor perceptions ‘unity’ government hasn’t kept its word on reforming the economy

Prime Minister Anwar Ibrahim began his tenure with a pledge to enact structural reforms and boost investor confidence in Malaysia. But after eight months on the job, the veteran politician is finding it hard to pull the Southeast Asian nation out of a years-long economic funk.

The local stock market saw foreign outflows of 4.19 billion ringgit (US$920 million) in the first half of 2023, with a benchmark gauge that is among the worst global performers so far this year. The Malaysian ringgit has likewise tumbled, making it among the worst performers in Asia’s currency markets.

On the other hand, Malaysia’s economy grew above market expectations at 5.6% in the first quarter of the year, during which approved foreign direct investment (FDI) reportedly rose 60% year-on-year to 71.4 billion ringgit. Inflation moderated to a one-year low with the consumer price index coming in at 2.8% in May compared to last year, its slowest monthly pace in 2023.

Yet cost-of-living pressures and political dissatisfaction persists, with economic headwinds and external cyclical factors weighing on the government ahead of state elections in August that are seen as an early referendum on Anwar’s “unity” government, a multi-party alliance that sits uneasily with the long-rivaled political camps’ grassroots support bases.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Singapore winning on inflation, losing on growth

City-state contains price surge with aggressive exchange rate policy but likely slipped into a technical recession in the second quarter

Singapore’s central bank this week delivered a sobering economic assessment amid sluggish near-term growth prospects, ongoing inflationary challenges and predictions the economy is already in a technical recession. The Monetary Authority of Singapore (MAS) also emphasized that despite revising its 2023 headline inflation forecast downward, its battle against rising consumer prices is far from won.

The city-state’s trade-reliant economy faces mounting headwinds as external demand weakens amid a global economic slowdown. Earlier this year, there were certain hopes that a post-pandemic economic rebound in China would lift Singapore above its tepid current growth forecast of between 0.5% to 2.5%.

Those hopes have since faltered as China’s economic recovery loses steam, with fewer and fewer independent economists predicting Beijing will hit its 5% economic growth target for 2023. Singapore’s economy contracted in the first quarter, falling to -0.4% from the previous quarter’s growth of just 0.1%.

Economists believe that sluggish trade and industrial performance, driven partly by China’s faltering recovery, likely dragged Singapore into a technical recession in the second quarter, preliminary estimates for which are due later this month. 

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Najib looms large over Anwar’s first electoral test

Malaysian leader faces Faustian choice ahead of state elections his UMNO coalition partner believes could be won by setting jailed ex-PM free

Malaysian Prime Minister Anwar Ibrahim is intensifying efforts to appeal to Malay Muslim conservatives ahead of key state elections, a lurch to the right that risks alienating his ruling Pakatan Harapan’s (PH) multiracial and mainly liberal support base within his months-old “unity” government.

While the ethno-nationalist opposition bloc accuses the governing coalition of going soft on ethnic Malay rights and upholding Islam, progressives increasingly see Anwar as failing to walk the talk on clean governance and reform as his key political ally, graft-accused deputy premier Ahmad Zahid Hamidi, continues to agitate for the pardon of incarcerated ex-premier Najib Razak.

Zahid, president of the United Malays National Organization (UMNO), had been a key target of PH’s anti-corruption messaging on the campaign trail ahead of November’s general election. Though the once-hegemonic party delivered its worst-ever result at the polls, Zahid himself emerged as a kingmaker after agreeing to partner with the party’s decades-old foes in an Anwar-led administration.

UMNO is the governing coalition’s sole ethnic Malay party, but it remains to be seen whether it can muster the support of the key demographic, who account for around 60% of Malaysia’s 33 million people, at state polls expected to be held in August. Having purged detractors, UMNO’s top leadership appears insistent that pardoning Najib for his corruption conviction is the ticket to electoral success.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

US-China handshake but no dialogue at Shangri-La

Superpower rivalry ran on high at Singapore defense forum where everyone agreed that armed confrontation would be catastrophic

United States-China tensions were on full display at the Shangri-La Dialogue, Asia’s premier security summit held in Singapore from June 2-4, with Chinese Defense Minister Li Shangfu refusing a formal meeting with his US counterpart even as he acknowledged the dangers of open confrontation between the two superpowers.

“It is undeniable that a severe conflict or confrontation between China and the US will be an unbearable disaster for the world,” said Li, who was appointed China’s highest-ranking defense official in March. He added in his June 4 speech that bilateral ties were at a “record low” and said the US needed to act with sincerity to prevent a further worsening of relations.

“Attempts to push for NATO-like [alliances] in the Asia-Pacific is a way of kidnapping regional countries and exaggerating conflicts and confrontations,” Li added, echoing long-held Chinese criticism of Washington’s efforts to establish alliances in the region as part of what it views as a containment strategy to thwart China’s geopolitical rise.

Li also struck a moderate tone, though, saying his country sought dialogue over confrontation and that the world was big enough for China and the US to grow and co-exist together. Reports suggest that Li declined a formal meeting with US Secretary of Defense Lloyd Austin in principle as he has been subject to US sanctions since 2018 for his role in procuring Russian military equipment.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

EU-Singapore in a deepening digital embrace

Two sides moving toward digital FTA to facilitate 6G adoption, AI governance and semiconductor supply chain resilience

Singapore hopes to begin negotiations on a digital free trade agreement with the European Union, one of its major trading partners, as soon as this year, building on a non-binding digital partnership agreed between the two sides in February, according to Singapore’s Minister-in-charge of Trade Relations S Iswaran.

Addressing a business outreach event on Monday (May 29), Iswaran said Singapore and the EU are in the process of identifying projects to pursue through the partnership, which aims to strengthen the interoperability of digital markets and policy frameworks between the two sides, with the ultimate goal of enabling consumers and businesses to transact online at a lower cost.

The principles established in the EU-Singapore Digital Partnership (EUSDP) represent “the first step towards a bilateral digital trade agreement between the EU and Singapore [that] will give our citizens and businesses the clarity and legal certainty they need to transact confidently in the digital economy,” said Iswaran, who is also Singapore’s transport minister.

“We look forward to launching negotiations on a digital trade agreement with the EU soon hopefully, during Sweden’s Presidency of the EU Council,” Iswaran added, potentially placing digital trade talks in the first half of 2023 when Stockholm serves as rotating council chair, building on an existing Singapore-EU bilateral free trade agreement that entered into force in November 2019.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Anwar vs Mahathir, always and forever

Ex-premier sues incumbent in $32.4 million defamation suit over ill-gotten wealth quip as the nonagenerian struggles to stay politically relevant

Malaysia’s two-time former premier Mahathir Mohamad will be 98 years old in July, but neither his age nor diminishing influence has diminished his political maneuvering. The nonagenarian former leader has been in opposition to every prime minister that succeeded him, and it is little surprise he views the incumbent – his former protégé – as unfit to rule.

In recent months, Mahathir has labeled Prime Minister Anwar Ibrahim as “oppressive” and accused his government of politically marginalizing the ethnic Malay majority. Mahathir also claims Anwar has pressured venue owners to cancel events promoting his “Malay People’s Proclamation”, a document in which the ex-premier lambasts corrupt Malay leaders and urges Malays to unite to “save” their race.

Most bitterly, Mahathir filed a US$32.4 million defamation lawsuit against Anwar this month after the latter implied that he had amassed personal wealth during his tenure as Malaysia’s longest-ruling premier from 1981 to 2003. Anwar has brushed aside a demand to apologize over the remark and reportedly claimed his predecessor’s wealth is an “open secret.”

Shunning calls to retire and serve as an elder statesman, Mahathir is now attempting to court Parti Islam Se-Malaysia (PAS), an ultra-conservative Islamist party that was politically trampled under his first 22-year tenure, to build a united front against Anwar, who established a “unity” coalition government after a November election that transformed the political landscape.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

The dirty five laundering Russia’s oil

China, India, Singapore, Turkey and UAE are all providing Russia a helping hand in evading Western oil sanctions

Western nations have taken major steps to cut energy ties with Russia by cracking down on imports of seaborne crude oil and refined petroleum products while imposing a US$60 price cap on sales to non-Western countries in a bid to crimp the Kremlin’s ability to finance its war in Ukraine.

At the same time, nations that sanctioned Russian oil have dramatically increased imports of refined oil products from countries that have become the largest importers of Russian crude since Moscow invaded Ukraine last February, according to a recently released report by the Finland-based Center for Research on Energy and Clean Air (CREA).

The organization tags five non-sanctioning countries – China, India, Turkey, United Arab Emirates (UAE) and Singapore – as “launderers” of Russian oil, which is blended with non-Russian origin crude and re-exported globally, including to the very nations enforcing the price cap and embargo in what CREA describes as a “major loophole” in the sanctions regime.

Isaac Levi, an energy analyst at CREA and the report’s co-author, told Asia Times that the EU’s oil ban and price cap, imposed in December and February respectively, have cost Moscow an estimated 160 million euros (US$175.3 million) per day, but were cautiously designed to allow Russian oil flows onto global markets to keep prices down and avoid supply disruptions.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Will Anwar help set Najib free?

Malaysian premier may need to set his self-proclaimed good governance principles aside for the sake of his government’s survival

Malaysia’s Anwar Ibrahim, a politician who went from prisoner to prime minister, must make a decision that will define his long-sought premiership. Will he collude with a graft-tainted coalition partner seen as launching scurrilous attacks on the judiciary in a bid to exonerate its jailed former leader – ex-prime minister Najib Razak – or will he abide by the principles of reform and good governance that he has long-claimed to uphold?

The question has unsettled reform-minded Malaysians who see the Pakatan Harapan (PH) chairman as their last best hope of righting the wrongs of a political system that has for decades been riddled with corruption. Even when Anwar opted to join forces with his long-time nemesis the United Malays National Organization (UMNO) after November’s election, he was given the benefit of the doubt.

But to the dismay of many supporters of his “reformasi” cause, the 73-old-premier has stood by, seemingly reluctant to push back against his UMNO coalition partners agitating for their former leader’s freedom. While Najib’s fate is by no means Anwar’s decision alone, analysts see him wielding significant influence as a member of a committee evaluating his potential pardon.

Those in the jailed ex-premier’s inner circle say Anwar has more to gain than lose politically by acquiescing to UMNO’s demands. “The pardon just makes sense for Anwar’s political survival. And if he really wants to do the things he wants to do in terms of reforming the system, he needs that time and he needs that support,” said a source close to Najib who requested anonymity.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Singapore stops tightening amid faltering growth

MAS latest central bank to hold policy settings steady due to fading global economic growth and US and European bank ills

Singapore’s central bank defied expectations that it would tighten monetary policy for a sixth time since October 2021, announcing on Friday (April 14) that it would keep its policy settings unchanged despite stubborn price pressures at a 14-year-high and amid advance estimates that first-quarter economic growth fell well short of expectations.

The bellwether city-state had been among the first countries to tighten in response to rising inflation, though the latest move suggests the Monetary Authority of Singapore (MAS) has grown more concerned about the darkening global growth outlook in the wake of recent turbulence that has shaken American and European banking sectors.

“Concerns of a growth slowdown seem to be outweighing inflation, despite elevated core inflation in recent months,” said senior economists Chua Hak Bin and Lee Ju Ye of Maybank Investment Banking Group. In a research note reviewed by Asia Times, the pair wrote they had expected a “final re-centering of the [policy] band up to its prevailing level given sticky and elevated core inflation.”

The MAS uses exchange rates, managed against a trade-weighted undisclosed basket of currencies from Singapore’s major trading partners, instead of interest rates as its primary policy tool to manage imported inflation. Pre-announcement polling from Reuters and Bloomberg had put analysts expecting no change to monetary policy at all in the clear minority.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Anwar’s nonalignment pays off big in Beijing

Malaysian leader wins $38 billion worth of investment vows from China all the while maintaining his New Cold War neutrality

Malaysian Prime Minister Anwar Ibrahim has cast his recent maiden state visit to China as a major foreign policy win, securing a record 170 billion ringgit (US$38.6 billion) worth of investment commitments from Beijing all the while asserting his country is non-aligned in the escalating New Cold War pitting Washington versus Beijing.

The billions of dollars of investment promises were spread across 19 memoranda of understanding (MOUs) covering various areas including green energy, electric vehicles and the digital economy, as well as an agreement to expedite long-delayed Belt and Road Initiative (BRI) infrastructure projects in Malaysia.

Anwar praised Chinese President Xi Jinping’s signature development initiative and called for its resumption in Malaysia following a three-year pandemic-caused lull. Previous Malaysian governments had suspended major China-funded projects such as the East Coast Rail Link and Trans-Sabah Gas Pipeline over corruption concerns, but they were eventually reinstated under renegotiated terms.

“Translating lofty ideals into practical reality, solidarity and cooperation is best exemplified in the realization of the Belt and Road Initiative,” Anwar waxed effusive in a speech at the Boao Forum for Asia held in China’s Hainan province on March 30. The forum is often referred to as the “Asian Davos” and is convened annually to promote regional economic integration.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.