ACCORDING to the recently published Trade and Development Report 2019 by the United Nations Conference on Trade and Development, the world economy is heading into troubled waters, with risk of recession in 2020.

Economists have signalled a possible global recession next year partly due to the US-China trade war, which is expected to impact open economies like that of Malaysia.

Going through a period of global economic slowdown is worrying, especially for a country like ours, which is heavily dependent on exports to drive economic growth.

Weak global demand for our goods will cause slowdown in output, risking job losses and we all know that when household debt is at 83% of gross domestic product (GDP), job losses can be stressful.

Bank Negara’s Financial Stability and Payment Systems Report 2018 shows that our country’s household debt stood at RM1.18 trillion in 2018, of which residential housing loans accounted for 53.2% of total household debts, while the remaining 46.8% was for personal consumption including motor vehicles, credit card and personal finance.

This same report also warned there was a growing number of defaults in personal financing.

It further highlights that half of total outstanding personal financing is held by borrowers with monthly earnings below RM5,000 and some households were already showing signs of difficulty in servicing their debt, especially among low-income borrowers with personal financing, and borrowers with larger housing loans who are more dependent on variable income sources.

This report highlights clear risks of a recession, if it actually happens.

Whenever there are signs of a recession, countries immediately activate strategies to stimulate domestic consumption supported by government spending.

Unlike countries with a huge consumer base like India, China or the US where strong domestic consumption can help sustain output, ours at 30 million people is relatively small and worse still when we are divided.

To withstand such economic turbulence it is therefore vital that we stay united and collectively support economic activity to keep things going, or at least minimise the impact of a recession, but the big question is: are we ready?

The current situation reflects that we are more divided socioeconomically and politically now than we have ever been since gaining independence from the British in 1957.

Issues of race and religion are freely peddled by irresponsible politicians to divide us in pursuit of their own shallow political agenda.

Never will we miss negative news in the media where we shamelessly demonstrate to the world the extent of our division and prejudice.

With all this negativity around, it is a wonder if politicians are even aware that instead of attracting, they are shooing away foreign investors from our shores.

Why would an investor invest in a country where the socio economic and political activities are anchored on principles of prejudice?

On the other hand, are we also not killing consumer confidence instead of improving it?

How do we stimulate domestic consumption when the people are divided and not happy?

It is therefore crucial that all of us toe the line, put an immediate stop to political bickering, shift our energy towards key socioeconomic issues such as eradicating poverty, managing high cost of living and increasing the income of people instead of quarrelling over the little economic cake which we have.

If Indonesia can immediately move on as a nation after their own recently concluded general elections, why are we still quarrelling?

* Darshan Singh Dhillon is president of the Malaysia Consumers Movement

* 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.