CONSTERNATION overwhelmed Malaysians when they learnt about a “secret meeting” of certain Pakatan Harapan leaders and opposition MPs to persuade Prime Minister Dr Mahathir Mohamad to stay on for a full term. The move to rope in opposition members for their support in the power struggle between rival groups in PH is the latest edging the pact towards self-destruction.

One side is manoeuvring to secure a full term for its preferred leader. The other is pressuring for a midterm handover. When politicians care for nothing else but politicking to secure power, to ensure their own choice of leader is at the helm, it sure tells of greed, selfishness, indifference, and even incompetency. Their mental capacity is limited to the survival instinct. Political “animal” is a term that befits them.

After the hue and cry over river pollution in Johor and Selangor, and the plight of the Orang Asli in Perak and Kelantan, the minimum we expected of politicians was for them to show concern and rally public vigilance against polluters, and help the Orang Asli. Instead, they were politically truant. If acumen permits, they could also contribute ideas to improve our education system, help mobilise the people for the Love MY Palm Oil campaign, or contribute to the defence white paper discourse, which has pathetically failed to attract public participation.

But expecting politicians who are obsessed about the PM’s tenure to comprehend economic issues and their implications for the nation appears to be a tall order. The US-China trade war has escalated and led to a heightened currency war. China has allowed the yuan to drop below 7.0 to the US dollar for the first time since 2008 and halted the purchase of American agricultural products in retaliation to President Donald Trump’s threat to impose a 10% tariff on the remaining US$300 billion in imports from China. In response, the Trump administration officially designated China as a currency manipulator. The trade and currency wars are now at full scale, and the gloves are off.

The “currency manipulator” label against China might mean nothing in terms of further trade action on what has already been achieved through negotiations between the two superpowers. However, with one-upmanship on one side and the other having had enough of being the “sick man of Asia”, the rivalry between the world’s two largest economies can quickly worsen. What started out as a war of words quickly became a trade war, and now, there is a currency war.

The announcement by the US defence secretary favouring the positioning of ground-launched intermediate-range missiles in Asia, and China’s threat of countermeasures, are alarming. Let us pray that the currency and trade wars do not end up in armed conflict, which would prove correct the Thucydides Trap hypothesis.

Even without escalation to armed conflict, or “real” war, the yuan’s sudden devaluation – which sent shock waves throughout the world, causing stock markets to record sharp declines overnight – has serious ramifications. A global economic deflation is imminent. The US will retaliate by devaluing its own currency. Other countries will follow suit, trying to protect their own export trade. The value of assets will decline. The effects will snowball, causing values built up over decades of quantitative easing to plummet. It will be a painful downward spiral before a crash that no one can escape.

Questions abound as to what will happen to us in Malaysia. Among them:

1. With deflating values, an economic slowdown, and possibly a depression, how will the country pay off the national debt of RM1.1 trillion?

2. Our household debt-to-gross domestic product ratio is 83%, the highest in Southeast Asia. Will Malaysians be able to continue paying their house and car loans?

3. The unemployment rate for those aged below 24 remains high at 10.4%. Will youth be able to find decent-paying jobs going forward?

4. The cost-of-living burden for those in the B40 group, especially with regard to essentials like food and housing, is perpetual. How will low-income folk survive in a deflationary economy?

5. Will the East Coast Rail Link and other infrastructure projects be implemented in the face of looming global economic uncertainty, or even chaos?

These are just some of the questions from the World Bank Malaysia Economic Monitor June 2019 report. There are more that tell of serious structural, economic problems, but those will have to wait for another day.

What lies ahead is bleak. Meanwhile, we have among us politicians who are still obsessively wrangling over power, and still trapped in a race-religion mindset. Their base instinct to survive is what’s leading PH to the tipping point of self-destruction. – August 8, 2019.

* Captain Dr Wong Ang Peng is a researcher with an interest in economics, politics, and health issues. He has a burning desire to do anything within his means to promote national harmony. Captain Wong is also a member of the National Patriots Association.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.