Thursday, March 19, 2015

World Politics: A Round Up

Israel's elections saw Netanyahu returned as PM for the fourth term and will head one of the most nationalist-religious coalitions ever in Israeli modern history. Will we see the 3rd Temple rebuilt in the near future? Significantly, Netanyahu's first public appearance after the elections was praying at the Wailing wall, the only remaining structure of the Second Temple razed by the Romans in 70AD. The 2-State solution is practically dead as Netanyahu distanced himself from it a couple of days before election day to win over the right-wing camps. Israel will face increasing pressure from EU and US if another Democrat becomes the next President in 2016. The war between Israel and Iran cannot be ruled out though Netanyahu has been warning the world about Iran's nuclear ambitions for the past 5 or 6 years. With ISIS gaining ground and the Syrian civil war in its fifth year, the Middle East is getting more restive and a larger regional war could be on the horizons if the Israel-Iran nuclear standoff does not come to some resolution. Europe is also facing its economic crisis and Greece's troubles are no where resolved and the Euro will face increasing scrutiny as to its sustainability and viability for the whole of Western Europe.
Eastern Europe too with Ukraine's civil war in its eastern region still aflame despite the horrors of the downing of MH17 last July. I wonder why President Putin did not win the Man of the Year award in 2014. His annexation of Crimea was head-spinning in its audacity and caught the West without a response except some political rhetoric. Despite Western sanctions, the fall of ruble and low oil prices, Putin is as entrenched as ever in power and popular still. Even his 10-day absence from the public eye had worked in his favour and frankly there is no politician of his stature now who can bring a counter view to the so-called view or propaganda of the international (read West) community that is not immune to double standards and hypocrisy.

All these Middle East and Western crises for the next few years will play into the hands of China with its peaceful rise and ever menacing presence in South China Sea. With Japan coming out of its pacifist past, it will flex its economic and military power but with a larger and stronger neighbour in China, economically and militarily, Japan will play second fiddle to China in the rising stakes of East Asia and South East Asia.

Indonesia may be weak economically now but it will be another rising tiger and in 5 to 10 years it will forge ahead of Malaysia and Thailand.

Malaysia after 5 or 6 years of impressive economic growth of 5 to 6% GDP enters its most uncertain future. The economic indicators are no good despite the brave front by the Reserve Bank governor who recently won Wharton's School Medal. Fitch, a rating agency is likely to downgrade Malaysia's competitiveness or investment attractiveness to BBB.

With the fall of Ringgit and continual downward pressure on oil prices and its state investment agency owing tens of billions with its ability to repay its debts in doubt, we are seeing one of the most unsettling periods in Malaysia's history. Its political and economic landscape in the next year or two will be difficult to gauge unless there is less politicking and greater transparency from the political elites and across the political divide. With 6% GST coming into effect in less than 2 weeks, the rakyat will likely be burdened further with increasing cost of living.

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