Politic Bites!

The key index had violated the critical support of 1,157.47, essentially threatens to open the window for a prolong downtrend going forward. The Composite Index already in 54 weeks low. Market breadth was negative. Bursa Malaysia saw 561 losers versus 47 gainers with a volume of 469.58 million shares worth RM225.49 million. Is there a connection between angry public protests and stock market declines?

Businesses are finding it difficult to lure foreigners in and investors remain wary against the backdrop of such uncertainty. Foreigners have been gradually slashing their exposure to Malaysian equities since March.

Politic is becoming a dangerous game. Since 1957, ethnic issues have dominated Malaysian politics and with the weaker political base of Barisan Nasional (BN) as seen in the latest election, this sets the scene for future political turmoil. Failure to respond to the message from the electorate is proving to be disastrous for UMNO and the BN. Talk of potential defections to the opposition, particularly from the BN’s historically fickle component parties in Sabah and Sarawak can be taken lightly.

Political pluralism can spell economic disasters. It cannot be denied that the non-Malays (especially Indians and Chinese) have become increasingly aware of the negative effects they suffer as a result of the government’s discriminatory policies. The question that has been frequently raised is: How long can this continue without seriously disrupting inter-ethnic relations in Malaysia? There are growing unease about the direction of the country with a slowing economy, a slumping stock-market, and political uncertainty stoked by divisions among Malays, who form 58% of the population. If the current situation is not carefully managed, the economic slowdown may take its toll on inter-ethnic relations between ethnic Malays and ethnic non-Malays, especially from the lower income categories.

Another reality of post-2008 election politics is that UMNO cannot realistically hope to perpetuate its 54-year old Malay supremacy model if it no longer enjoys a monopoly of Malay support — which is now shared by PAS and keADILan. Maintaining Malay dominance on the strength of non-Malay support is a contradiction in terms that seriously undermines the ethnic framework of Malaysian politics.

The blood and fire of 1969 seem far away from the prosperity of modern Malaysia, but after all, it may not be too far away from us as now that deal has to be reshaped into something less unfair to the minorities. In short, Malaysia can do it the easy way, or the hard way. It may choose the hard way after all.