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Showing posts with label United States. Show all posts
Showing posts with label United States. Show all posts

Sunday 20 August 2023

Recession unlikely for global economy but challenges linger on

 

THE global macroeconomic picture is still more sluggish than investors would have liked, particularly when viewed from the gross domestic product (GDP) growth perspective for the first half of 2023 (1H23), although it remains a stretch to say the world is heading for a recession.

A quick glance across the Causeway to Singapore sees the city-state registering a 0.5% yearon-year (y-o-y) growth rate for the second quarter of the year (2Q23), extending marginally from the 0.4% expansion it charted for the preceding quarter.

Elsewhere, such as in major markets like the United States, China and the eurozone, economists are of the opinion that growth has been sturdy during 1H23 but stiff hurdles still remain on the horizon.

While acknowledging that global GDP growth has been slower so far in 2023 due to several familiar factors such as higher interest rates and elevated cost pressures, newly appointed Bank Negara governor Datuk Abdul Rasheed Ghaffour is also not expecting the global economy to slip into recession.

He says resilient domestic demand in advanced economies is providing sufficient support, while also anticipating worldwide trade to improve towards the end of 2023.

Most notably, he perceives China’s slower-than-expected recovery to have limited impact on Malaysia’s own economic expansion and improvement.

“Malaysia’s economy is well diversified in terms of products, services and trade partners, which would cushion the Chinese impact,” says Abdul Rasheed.

According to Bernard Aw, chief economist at Singapore’s Coface Services South Asia-pacific Pte Ltd, although the global economy has been resilient year-to-date, growth outlook in the second half remains challenging, not the least from increasing signals of weakening Chinese economic activity.

Forecasting global GDP expansion to be at 2.2% y-o-y for 2023, and anticipating a similar growth rate of 2.3% growth for next year, he says: “We expect Asean GDP growth (2023: 4.3%; 2024: 4.6%) to be generally faster than advanced economies – at 4.3% and 4.6% for 2023 and 2024 respectively – as tourism recovery and domestic demand drives economic activity.”

Continuing subdued external demand for the region would imply that domestic demand has to continue to partially offset some of the slack, Aw, tells Starbizweek.

“However, the challenging economic environment worldwide, relatively high inflation and interest rates means that even growth in domestic consumption and investment may fall short of expectations,” Aw opines.

Commenting on the overall global interest rate environment, he believes that the trend of disinflation would continue into 2H23, mainly driven by lower energy prices, coupled with China’s deflation having fed into lower export prices, which has also moderated global price pressures.

On the flipside, Aw thinks underlying inflation will remain fairly sticky, despite not being severe enough necessarily for central banks to revert to hiking rates.

“Having said that, they will likely maintain the current restrictive interest rates for a longer-than-expected period,” he says.

Earlier in July, it was reported that the United States economy had grown 2.4% y-o-y in 2Q23, up from the 2% it posted for the first three months of the year and bringing 1H23 GDP to a commendable 2.2%.

“The improved expansion rate had been driven by consumer spending, on top of increases in non-residential fixed investment, government spending and inventory growth.

At the same time, China had registered a 6.3% 2Q23 y-o-y GDP growth rate, which was also an improvement from the 4.5% charted in the previous quarter.

The acceleration however was slower than the expected 7.3% forecast by economists on a Reuters poll, dragged back by tepid demand and sinking property prices which has sapped consumer confidence.

On the same note, chief executive of Centre for Market Education Carmelo Ferlito feels that China’s post “zero-covid” recovery has been fragile since the beginning.

“The economy is not an engine to be switched on and off, but rather it is a living emergent order.

“As such, China is paying the price to a degree with its severe, nation-wide lockdowns while it was implementing the zero-covid policy,” he says.

The decelerating growth in China, says Ferlito, is evidenced by the People’s Bank of China unexpectedly cutting a range of key interest rates on Tuesday, which is seen as an emergency move to reignite growth after new data showed the economy has decelerated further last month.

With Chinese officials from its National Bureau of Statistics also suspending reports on youth unemployment, he says the move would deprive investors, economists and businesses of another key data point on the declining health of the world’s second-largest economy.

Divulging more numbers, Ferlito says the twin moves of cutting rates and holding back unemployment data from the Chinese government has coincided with new data showing a slowdown in spending growth by consumers and businesses.

“Concurrently, factory output grew much less than expected, adding to a recent raft of worrying signals. For the first time since February, China’s headline measure of unemployment rose, climbing to 5.3%.

“The jobless rate for people ages 16 to 24, meanwhile, had marched steadily higher for six consecutive months to hit a series of record highs, culminating in a reading of 21.3% in June,” he says.

Ferlito says an economic trichotomy is emerging on the global scene, before adding: “The United States is still fighting inflation, but countries like Germany and Holland are starting to experience technical recession, while China is facing challenges of its own.

“It is that post-lockdown crisis that the CME predicted two years ago.”

Echoing Bank Negara governor Abdul Rasheed, he re-emphasises that it is important to look beyond GDP figures, making his case that if the GDP of a country declines because of a cut in impractical government spending, that would be positive for a country.

Conversely, he argues if GDP growth were to accelerate due to an increase in spending financed by debt, it ultimately would be a bane to the government’s coffers and the national economy.

Meanwhile, the International Monetary Fund (IMF) is predicting a 3% GDP global growth rate for this year and the next, receding from the 3.5% achieved in 2022.

It says the rise in central bank policy rates to stave off inflation has continued to weigh on economic activity, but the good news is that global headline inflation is expected to fall from 8.7% last year to 6.8% in 2023 and 5.2% in 2024.

“The recent resolution of the US debt ceiling stand-off and strong action by authorities to contain turbulence in the US and Swiss banking earlier this year reduced the immediate risks of financial sector turmoil. This moderated adverse risks to the outlook,” the IMF says.

However, it cautions that the balance of risks to global growth remains tilted to the downside, as inflation could remain high and even rise if further shocks occur, including those from an escalation of the Russia-ukraine conflict.

Moreover, the IMF warns that China’s recovery could slow further, partly due to unresolved real estate problems, with negative cross-border spillovers.

On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient

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Tuesday 12 October 2021

Singapore and Japan passports tied for most powerful in the world, Vaccination rates for Asean

 

Holders of Singapore and Japan passports can travel without a prior visa to 192 destinations.PHOTO: ST FILE


SINGAPORE - Singapore and Japan have the most powerful passports in the world, according to the latest update of a global index.

Holders of passports from the two countries can travel without a prior visa to 192 destinations, it noted last week.

This is a change from April, when Japan outstripped Singapore in having the world's most powerful passport, with Japanese passport holders able to travel to 193 destinations without a prior visa, while Singaporean passport holders had such access to 192 destinations.

In the latest update, South Korea and Germany are tied for second place, with such access to 190 countries. The two countries had been tied for third place in April, with access to 191 destinations.

Finland, Italy, Luxembourg and Spain are in third place, with access to 189 nations; while Austria and Denmark are in fourth, with access to 188 countries.

The index, administered by Henley & Partners and updated throughout the year, ranks passport power according to how many destinations their holders can travel to without a prior visa.

The global citizenship and residence advisory firm noted that the gap in travel freedom is at its widest since the index was started in 2006, with Singaporean and Japanese passport holders able to visit 166 more destinations than Afghan citizens, who can travel to only 26 nations worldwide without acquiring a visa in advance.

Britain and the United States have been facing eroding passport strength since they held the top spot in 2014. Both remain tied in seventh place, but have a score of 185, down from 187 in the first quarter of the year.

Egypt is ranked 97th, with its citizens having access to 51 countries without a prior visa, while Kenya is 77th, with access to 72 destinations visa-free.

Meanwhile, Singapore will be allowing vaccinated travellers to travel to nine more countries and return without quarantine, the authorities announced last Saturday (Oct 9).

From Oct 19, vaccinated travellers from Singapore will be able to fly to Canada, Denmark, France, Italy, the Netherlands, Spain, Britain and the US.

The scheme will be extended to South Korea from Nov 15, it was announced last Friday.

These are in addition to Brunei and Germany, which Singapore had already approved for quarantine-free travel for those fully vaccinated.

In total, there will be 11 countries that Singapore approves for quarantine-free travel.

 
Based on data from the International Air Transport Association, the index showed that countries in the global north with high-ranking passports have enforced some of the most stringent inbound Covid-19 travel restrictions.

On the other hand, many countries with lower-ranking passports have relaxed their borders without seeing this openness reciprocated, it noted.

Henley & Partners chairman Christian Kaelin said: "It is pivotal that advanced nations consider revising their somewhat exclusive approach to the rest of the world, and reform and adapt to overcome the competition and not miss the opportunity to embrace the potential."

 
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Mothership.SG.
S'pore & Japan have most powerful passports for visa-free travel to 192 countries

 

Vaccination rates for Asean (%)

Source: Centre for Strategic & International Studies, Aminvestment Bank
 

Malaysia is ranked the 3rd highest among Asean countries. 

 This paves the way for more economic activities to resume although it may not be a full recovery, matching that of pre-covid times.

Analysts are positive on this as the high vaccination rate is a leading indicator that economic activities should recover faster in Malaysia as compared to most countries in Asean.

 

Sunday 3 October 2021

Should we be worried about debt?

 According to Bank Negara’s Financial Stability Review report for the first half of 2021, Malaysia’s household debt to GDP has declined to 89.6% from 93.2% as at end of last year. Although a small achievement,the household debt level remains elevated.

With a current debt-to-gdp of about 125%, the US is not the only country with a huge mountain of debts.

IN recent weeks, global markets were roiled by the mere mention of a four-letter word, debt. From China’s Evergrande Group’s near collapse, as it sat on a mountain of liabilities, to the United States government’s need to raise its debt ceiling.

In Malaysia’s case, we too have not much choice either but to raise our debt ceiling as we look at ways to re-generate the economy with a higher debt room of 65% of gross domestic product (GDP) from 60% currently.

It seems like debt has become one dirty word for investors for the time being, as we all know there is a price to pay when it comes to debt as there is no such thing as a free lunch.

For the US, there is no doubt that they have constantly raised their debt ceiling over the years to ensure they do not default on their obligations.

According to the US Treasury website, since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the nation’s debt limit.

Currently suspended, the US debt ceiling was reset on Aug 1, 2021, to US$28.4 trillion (RM118.9 trillion). For the US, failure is not an option as it will lead to a catastrophic chain reaction to not only the financial market but to the economy as a whole.

According to Treasury Secretary and the former Federal Reserve (Fed) chairperson, Janet Yellen, (pic) the US has never defaulted on its debt before and she was “confident” that the issue would be addressed, despite warning the Congress that the deadline for the debt ceiling is “around Oct 18”.According to Treasury Secretary and the former Federal Reserve (Fed) chairperson, Janet Yellen, (pic) the US has never defaulted on its debt before and she was “confident” that the issue would be addressed, despite warning the Congress that the deadline for the debt ceiling is “around Oct 18”.

According to Treasury Secretary and the former Federal Reserve (Fed) chairperson, Janet Yellen, the US has never defaulted on its debt before and she was “confident” that the issue would be addressed, despite warning the Congress that the deadline for the debt ceiling is “around Oct 18”.

For now, while a nine-week stopgap funding bill has been endorsed by the President on Thursday, which in all likelihood will avoid a government shutdown at least up to Dec 3, 2021, the threat of a US defaulting on its debts remains.

While the US is able to continue to print money by simply passing the law to keep borrowing, the US, just like any other country, cannot go on borrowing forever. With a greater supply of money, sooner or later, interest rates will have to rise as the increase in money supply will likely fuel inflation.

After all, the Fed too expects rates to start rising in 2022 and much more in 2023 onwards.

In the last Federal Open Market Committee just over a week ago, the 10-year and 30-year US benchmark rates have already moved 17 basis points (bps) and 21 bps to 1.50% and 2.06% respectively – as the market begins to price in expectations of the Fed’s tapering move as well as worries if there is going to be lengthy impasse between the Democrats and the Republican or grand old party (GOP) to raise the debt ceiling.

Having said that, as the US has been running budget deficits for the longest time, it would not be too far-fetched to assume that given time, the US will need to raise the debt ceiling yet again in the future.

Hence it was also of no surprise when Yellen commented on Thursday that the debt ceiling ought to be permanently abolished.

In any government’s financial management, it’s either shortfall or revenue, mainly due to inadequate tax collections or excessive spending, which are also a function of debt service charges, and to a certain extent, over-priced development spending or operating expenditures.

With a current debt-to-gdp of about 125%, the US is not the only country with a huge mountain of debts.

So is the rest of the world. In fact, according to the Institute of International Finance (IIF) in its Global Debt Monitor report published on Sept 14, 2021, global debt, which includes government, household and corporate, and bank debt increased by US$4.8 trillion (RM20 trillion) to reach a new alltime high of US$296 trillion (RM1.24 quadrillion).

In essence, over the past six quarters, as the pandemic has caused significant damage to the global economy and unprecedented response from governments, total global debt has expanded by US$36 trillion (RM150.7 trillion) or 13.6% from just about US$260 trillion (RM1.09 quadrillion) as at end of 2019.

Money has to go somewhere

When a debt is raised, be it by the government, a company, or a household, it has to go somewhere. For most governments, debts are mainly raised for development expenditure, and if it is allowed by the constitution, on operating expenditure too.

Debts raised due to the pandemic perhaps has become the norm globally as well, as the government has no choice but to raise the required funding to support the economy.

In the US, the Fed also buys US treasuries and agency mortgage-backed securities and this effectively makes its way into the financial markets.

So while the Fed has expanded its balance sheet by more than 100% since the pandemic, the liquidity it has provided has caused significant gain not only in traditional asset classes but into everything else. Home prices are rising, commodities have boomed and markets are buoyant and cryptos have soared.

In the case of Evergrande Group, many are left wondering if it was a case of a “too-big-to-fail” company. Evergrande became a property developer largely by borrowing.

As a group, they also ventured into other businesses, which among others include electric vehicles, Internet and media production, theme park, football club, and even into mineral water and food production.

Evergrande’s massive business empire, grown out of debt means, while it has substantial assets, it also had huge liabilities. As Beijing has been strong in putting its house in order in the form of new regulations and guidelines for many industries, Evergrande too was not spared.

As early as August last year, the Chinese government had introduced a “three red lines” test for developers to meet if they wanted to borrow more.

This was firstly, liability to asset ratio of not more than 70%; secondly, net debt to equity ratio of not more than 100%; and thirdly cash to short-term debt ratio of more than 1.0.

Hence, the writings were already on the wall on Chinese developers more than a year ago that the regulators were serious in addressing debt-driven growth pursued by these companies. In Evergrande’s case, the debt hit the ceiling.

Why do we go into debt?

Debts taken by individuals are rather straightforward. Of course, there are good debts and bad debts. For most of us, it is for the purchase of big-ticket items like a roof over the head, and for mobility purposes, where most of us own a car.

Of course, we also indulge ourselves with material stuff, either from our savings or credit cards that we will pay off when the time comes. Some of us, due to lack of income or due to financial mismanagement, take on bad debts and that’s where the trouble starts as we are unaware of the consequences of rising personal debts and high-interest cost.

Stories of debts owed to money lenders are common within our society while Bank Negara statistics also show that one of the fastest-growing debt profiles among individuals is personal loans.

This has remained relatively high and has increased by 87.4% over the last five years alone to about Rm73.7bil as at end of August 2021, while its share of the banking system loans outstanding has increased from 2.7% to as much as 4.0% now. 
 
According to Bank Negara’s Financial Stability Review report for the first half of 2021, Malaysia’s household debt to GDP has declined to 89.6% from 93.2% as at end of last year. Although a small achievement, the household debt level remains elevated. For a company, debts should be part of capital management as companies need to not only sustain their business operations but look at opportunities to grow and expand their market share, either via acquisition or via borrowings. However, similar to what we have seen in Evergrande’s case, companies too must observe their own “three-red-lines” to ensure they have the right mix and remain vigilant of its exposure.

Does Malaysia have the room to borrow more?

For Malaysia, with a higher debt ceiling of 65%, the government is effectively allowing itself to have some headway to borrow an additional Rm75bil to support the recovery momentum that most economists now expect will be much stronger in this fourth quarter period and 2022 and as we prepare ourselves for the post-pandemic period.

While we have created this room to enable us to borrow more, we must be mindful to borrow responsibly as debts that are taken today will be borne by future generations.

We also need to chart our way out of this debt-dependency black hole that we have been in since the Asian Financial Crisis of 1998 and get out of this conundrum.

While debt-to-gdp is just a denominator that is divided by a numerator that is steadily growing, we must find ways to manage our overall federal government debt and plan to reduce them post-pandemic.

That is a whole new topic altogether, and next week, this column will explore strategies that Malaysia can deploy to reduce its debt dependency.

  PANKAJ C. KUMAR Pankaj C Kumar is a long-time investment analyst. The views expressed here are his own.   Source link
 

 US federal debt crisis uglier than Evergrande trouble

 
 
 There is much buzz amongst global investors recently about two possible debt defaults, though they are of different proportions in their would-be impact on global equity markets. One is the US federal government's rivers of borrowed money running dry and in urgent need of replenishing. The other is a major Chinese property developer which has run into financial trouble, because the company veered off the road by squandering too much on making electric cars and sponsoring a football club.

As US federal debt default looms, US Treasury Secretary Janet Yellen is facing her biggest test in her eight-month tenure to convince reluctant Republican lawmakers to agree to raise the US' national debt limit, which is currently set at $28.5 trillion. The stakes are high, because if Yellen's effort fails, the US financial system will collapse.

Yellen has called Republican leaders to convey the economic danger which lays ahead, bluntly warning that the Treasury Department's ability to stave off default is limited, and the failure to lift the debt cap by late October would be "catastrophic" for the country and the world.

Six former US treasury secretaries last week sent a letter to top US lawmakers, warning them a default would roil financial markets and blunt economic growth. According to US media reports, Yellen last week also warned the nation's largest banks and financial institutions about the very real risk of a default. She has spoken to chief executives of JPMorgan Chase, Bank of America, BlackRock and Goldman Sachs, briefing them the likely disastrous impact a federal default will produce.

To make things worse, both Democrats and Republicans in the US are at each other's throats now over US President Joe Biden's new $3.5 trillion spending bill, which proposes heavy tax raises on rich families and corporations, and has met fierce opposition from Republican lawmakers. Whether they will compromise on the debt limit, by making a last-minute deal with the White House to reduce Biden's giant spending plan remains to be seen.

Market analysts say if the US government defaults on its colossal debt, a financial system crisis of a magnitude larger than the 2008-09 debacle could occur, which is estimated to lead to an evaporation of $15 trillion in wealth and loss of 6 million jobs in the US. The capital market is now on tenterhooks facing a potential financial time bomb.

Last week, the US' major media outlets also focused their reportage on a possible default of a leading real estate developer in South China, but by all metrics, it is a risk of much smaller scale. The case is being closely watched by China's financial authorities and will never be allowed to develop into a systemic risk.

With regard to the privately-run property developer Evergrande, many fear the knock-on effects of the company's imminent difficulty to pay back principals and interests of borrowed money, including corporate bonds and bank loans. But, even if the city of Shenzhen with its deep pockets, where the company is headquartered, refuses to bail out Evergrande, one bankrupt company can hardly impact the stability of China's financial system, and the risks linked to this possibility have been widely overblown by a hyperventilating media.

Executives at Evergrande are launching a last-ditch rescue effort, trying to sell the company's electric car subsidiary and other assets in China and abroad, including the Guangzhou Evergrande Football Club. It is also selling its housing projects scattered in dozens of Chinese cities at a discount to speed up its cash flow. Whether the company is able to stave off a debt default remains unknown.

Evergrande said on Wednesday that it would make an interest payment on an onshore bonds due Thursday, but the company didn't say whether it had plans to make a $83 million coupon payment due on its US dollar bonds within a month.

The city government of Shenzhen, or the central government in Beijing, has not rushed to bail out Evergande most likely in the belief that the company itself is to blame for the predicament - too much leverage and squandering of borrowed funds ploughed into auto making and other fringe businesses and budgeting largesse. Authorities probably want the case to serve notice to investors at home and abroad, that they need to do their due diligence and enforce accountability on debtors.

However, the central government is almost certain not to tolerate a possible bankruptcy of Evergrande to spill over to draw down the broader Chinese economy, as the central bank has done numerous pressure tests since the 2008 global financial crisis, which was caused by the sub-prime housing debts in the US. Last year, the central bank required property developers to bring down their debt levels below certain thresholds before they are able to borrow more money from financial institutions. And, many Chinese commercial banks have ascertained their exposure to Evergrande is restricted.

So, debt-beleaguered Evergrande is unlikely to produce a firestorm and disrupt China's financial system. In addition, both the government and the central bank have plenty of policy tools, including easing overall monetary policy, to tide over Evergande if it goes under. But of course, the last resort is to bail it out and restructure the company, as China has done with other troubled corporations like HNA, Huarong and Baoshang Bank.

The author is an editor with the Global Times. 
 
 
 
Related:
 
 

 

 Government to table motion on raising statutory debt limit to 65% of GDP 

 https://www.thestar.com.my/business/business-news/2021/09/30/government-to-table-motion-on-raising-statutory-debt-limit-to-65-of-gdp

 

Wednesday 11 August 2021

United States, terrorist in virus origins tracing



Illustration: Xu Zihe/Global Times   Source link

 

 

United States, terrorist in virus origins tracing

Sunday 1 December 2019

The ‘deep state’ is hard to dismantle

In the United States, President Donald Trump alleges that the “deep state” was in play to undermine his presidency. Towards this end, he blamed the “deep state” for the scandal involving Ukraine where he supposedly told his counterpart to step up the investigation into the affairs of his political rival Joe Biden and his son in that country
THE term “deep state” is new to many. However, one thing is becoming clear – it is a tool that politicians are increasingly using as an excuse to camouflage their short-comings.

In the United States, President Donald Trump alleges that the “deep state” was in play to undermine his presidency. Towards this end, he blamed the “deep state” for the scandal involving Ukraine where he supposedly told his counterpart to step up the investigation into the affairs of his political rival Joe Biden and his son in that country.

In Malaysia, politicians of Pakatan Harapan contend that the “deep state” is in play and was sabotaging the efforts of the government to carry out its plans and promises.

For all the negativity that the “deep state” has invoked in Malaysia, this informal group of senior diplomats, military officers and civil servants have earned the praises of the masses in the United States. This comes hot under the heels of the testimonies of Trump’s former advisor on Russian affairs, Fiona Hill and Ukraine embassy political counsellor David Holmes in the impeachment hearing of Trump for his role in Ukraingate.

In many ways, Malaysia has its own hero in Nor Salwani Muhammad, one of the officers who worked for former Auditor General Tan Sri Ambrin Buang.

Nor Salwani told a court hearing how she secretly left a tape recorder to capture the conversation of Malaysia’s top civil servants, in a meeting called by former Chief Secretary to the Government Tan Sri Ali Hamsa, on doctoring the audit report of 1Malaysia Development Bhd (1MDB).

The audit report deleted four important points before it was tabled to the parliamentary Pubic Accounts Committee (PAC).

People such as Nor Salwani, Hill and Holmes are part of the executive who have played a pivotal role in checking the wrongs of politicians when they run the country. Trump has described the testimonies of Hill and Holmes as the workings of the “deep state”.

In Malaysia, Nor Salwani is regarded as a hero. However, she comes from the executive wing of the government that some politicians regard as the “deep state”. In the United States, Trump feels that the military, diplomats and some from the private sector were working together to undermine him and has labelled them as the “deep state”.

But does the “deep state” really exist as a formal structure or is it just some loose alliances of some segments of unhappy people serving the government?

Nobody can really pinpoint what or who actually are the “deep state” in Malaysia. It is not an official grouping with a formal structure. It generally is seen as a movement that is a “government within a government” pursuing its own agenda that runs in contrary to what the ruling party aspires.

It is said to largely comprise the civil service working well with the police and the different arms of the judiciary. Some contend that the “deep state” is closely aligned to Barisan Nasional.

The term “deep state” was coined in Turkey in the 1970s and it primarily comprised the military and its sympathisers who are against the Islamic radicals. In recent times, even the powerful President Recce Tayyip Erdogan complained that the “deep state” was working against him.

Which raises the question – if the “deep state” was so influential, how did the Turkish president get himself re-elected in 2018?

In Malaysia, the ruling Pakatan Harapan party has blamed the “deep state” for some of the incidences such as the arrest of several people, including two DAP state assemblymen, under the Security Offences (Special Measures) Act (Sosma). Deputy Rural Development Minister R. Sivarasa contended that the “deep state” was responsible for the arrest and it was done without the consent of the top leadership.

Other ministers have blamed the movement as sabotaging their efforts to deliver on their promises to the government. Towards this end, speculation is rife that there would be a round of changes in the civil service to dismantle the “deep state”.

Some have even pinned the commando style abduction of pastor Raymond Koh and the disappearance of social activist Amri Che Mat on the “deep state”.

If the “deep state” was really in the works, it seems like the government would be facing a humongous task to dismantle it.

Firstly, nobody is able to pinpoint who these people are except that they apparently have tentacles at every level of the executive and in the police and probably military. Secondly, if the so-called `deep state’ is essentially made of the civil service, then they have done some good work to help uncover the cover up work of senior members of the executive wanting to hide the 1MDB scandal.

In reality, it will be hard to dismantle the much talked about `deep state’ in Malaysia. Many do not look out for riches or fame. It is likely that they are more driven to seeing what is best for the executive branch of the government.

A more practical approach would be to work together with this movement of individuals, if they can be identified, and find out the root cost of them being unhappy with the government.

Only 18 months ago, the “deep state” was very much against former prime minister Datuk Seri Najib Razak and his efforts to cover up the massive debt that 1MDB accumulated. The money was largely raised outside Malaysia and diverted to entities under the control of fugitive, Low Taek Jho better known as Jho Low.

There were countless reports on 1MDB that were leaked through the social media. From banking transactions of money going into the account of Najib to pictures of him on holiday with his family and Jho Low were made available on the social media.

Isn’t this also the work of some clandestine movement within the executive that some deem as the “deep state”’?

Consider this – even in Turkey, where the word “deep state” was coined, many believe it is still in works, protecting the country’s interest. In the United States, there is a view that the “deep state” is the gem in the government.

The government can make as many changes as it wants on the civil service or agencies under its watch. However, it is not likely to wipe out the “deep state” movement.

The views expressed are the writer’s own.  Source link

Read more:


Deep state - Wikipedia


Deep state in the United States  

'High cost of living due to weak ringgit'

Malaysia's lost strength

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Graduate's 'Nazi salute' convocation picture goes viral


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