Saturday, July 19, 2008

Two Battle Fields Confronting Pak Lah

In the wake of the alleged sodomy charge against the de facto leader of PKR Dato' Seri Anwar Ibrahim, the nation is now caught in a wave of of uncertainties. This chill in the air would very likely impact the nation politically and economically, depending on the charge of the allegation.

When the curtain is eventually drawn, more would be unveiled. The nation may surf into an uncharted front, thereby adding more pessimism to the outlook.

Economically, Malaysia seems to be filled with gloom right in the front. MIER in its Q2 review scaled down our growth forecast from 5.4% to 4.6%. This is most disheartening in the midst of all unrest.

Global downturn has certainly dragged Malaysia along, taking our nation to go downhill. External shocks are also impacting our bourse, driving our Bursa Malaysia to turn bearish with a prospect of testing CI at 1,000 in the months ahead.

But the local political unrest also gives our business confidence a good beating. Foreign funds may sideline or even be channelled away to the neighbouring countries. Indonesia poses immense challenge to Malaysia in securing foreign investments due to it being politically stable now. Goldman Sachs has named Indonesia as one of the N-11 after BRIC. As such, Indonesia may outperform Malaysia in time to come.

Both political and economic fronts pose stiff challenges to Pak Lah. As Malaysians, we hope he has the wits to tide the nation over.

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