MALAYSIA–Parliamentary Approval for 2016 People’s Budget

November 17, 2015

COMMENT: The fight for change continues. The much anticipateddin-merican-and-dr-kamsiah1 move to reject Malaysia’s 2016 Budget did not materialise since the Opposition failed to garner biparisan support to defeat it. 128 votes in favour of it were convincing enough and our country is spared a fiscal crisis. It is  relief that our government can continue to function with money approved for its programmes in 2016.

While I have been critical of the Prime Minister’s misdemeanors, especially the USD 700 million that went into his personal bank, his lack of transparency and accountability on 1MDB, and his lavish spending ways, I am never comfortable at the prospect of our public administration and security services (defense and police) grinding to a halt at a time of global terrorism just because a disgruntled opposition is trying to use us Malaysians as pawns in their desire to cause the collapse of an elected government.

My message to our Prime Minister cum Finance Minister is that he must be be prudent and smart in spending our taxes. May I also remind him that every tax dollar spent must produce a satisfactory rate of return which is equal to the cost of our sovereign debt. Otherwise, we as citizens will be burdened with  more taxes. That is Fiscal 101 and pure common sense.

Confidence in our Prime Minister’s leadership may not return any time soon. However, if he comes clean on the 1MDB financial scandal, ceases using draconian laws against his critics and stops playing race and religion for his political ends by pandering to racist pressure  groups and religious extremists within and outside UMNO, there is a possibility for the ringgit to bounce back and for much-needed capital inflows to return. –Din Merican

MALAYSIA–Parliamentary Approval for 2016 People’s Budget

by Arfa Yunus

MOF Najib Razak

Prime Minister Najib Razak may still have the support of Barisan Nasional (BN) lawmakers, evident from the success of the vote on Budget 2016 last night, says UMNO veteran Tengku Razaleigh Hamzah.

He said he himself, voted for Budget 2016 to go through despite talks of him being part of a movement to bring Najib down.Tengku Razaleigh, speaking to reporters at the Parliament lobby here today, said that he had voted in favour of the Budget as he “believed in the government’s plan for the year.”

He, however, was coy when asked if his vote meant that he also supported Najib as the nation’s Prime Minister.“No, that means we support the government programme for the (next) year (as) it was presented by the Minister of Finance, who is also the Prime Minister,” said the Gua Musang Member of Parliament.

“Why these questions? You decide for yourself ok,” he added, refusing to comment further. The UMNO veteran has been linked to a group allegedly led by former Prime Minister Dr Mahathir Mohamad, who aims to have Najib removed from his top post.

Budget 2016 passed the policy stage last night after successfully garnering 128 votes. All BN legislators present, including former Deputy Prime Minister Muhyiddin Yassin voted in favour of it.

This came as a surprise to most as both Razaleigh and Muhyiddin were rumoured to be on the list of seven UMNO leaders currently under the party’s watch for openly criticising Najib.

Malaysia’s Politics of Survival by Elimination

October 23, 2015

Malaysia’s Politics of Survival  by Elimination

by stratfor


  • In the near term, Malaysian Prime Minister Najib Razak will survive efforts to oust him over mounting corruption allegations.
  • Whether or not Najib holds onto power longer, the years leading up to the next general elections will be turbulent ones.
  • Political stability, crucial to Malaysia’s economic rise, will be challenged by demographic changes that stress the country’s delicate ethnic balance. 



A deepening political crisis in Malaysia is highlighting the country’s longstanding ethnic divides and its uncertain road ahead. Since early this year, Prime Minister Najib Razak has been caught in a scandal surrounding the heavily indebted 1Malaysia Development Berhad (1MDB) sovereign wealth fund. Among other points of controversy, Najib is struggling to explain the source of nearly $700 million deposited in his personal account.

This week, with Malaysia’s Parliament back in session, the opposition is renewing its efforts to oust the Prime Minister through a no-confidence vote — a measure that will succeed only in the unlikely event that Najib’s tightly consolidated party apparatus comes apart. Indeed, Najib is likely to remain entrenched in power for the foreseeable future. In the process, however, the political crisis in Kuala Lumpur will both expose and exacerbate broader challenges confronting Malaysia, particularly regarding divisions between the politically influential “Bumiputera” (the umbrella term for ethnic Malays and indigenous groups) and the economically powerful ethnic Chinese and Indian populations. At risk is the carefully balanced status quo that has enabled the Malaysian economy to flourish without communal disruptions.

A Well-Entrenched Man

On the surface, at least, the hits keep piling up for Najib: A steady drip of leaked documents has magnified scrutiny on the Prime Minister and spawned official investigations both in Malaysia and in countries where 1MDB has been active, including Switzerland and the United States. Najib, who also serves as Finance Minister, has come under fire from the country’s central bank chief, powerful figures from within his own ruling United Malays National Organisation (UMNO), and Malaysia’s nine state sultans — whose power is largely ceremonial but who are perceived as guardians of Malay heritage and religion. Most notably, longtime Prime Minister and UMNO boss Mahathir Mohammad, Najib’s former mentor, has gone on the warpath. Since publicly withdrawing support for Najib in mid-2014, Mahathir, who governed for 22 years, has called for more intensive probes, joined a major opposition rally in August, and urged his former adversaries in Malaysia’s long-beleaguered opposition to table a no-confidence vote. (Najib’s predecessor, Abdullah Badawi, resigned in 2009 at Mahathir’s behest.)

But the Opposition, with just 87 of the Parliament’s 221 seats, does not have the numbers to muster the two-thirds majority needed to remove Najib, even if it peels off disaffected lawmakers from the ruling Barisan Nasional coalition’s ethnic Chinese and Indian parties. Moreover, the opposition alliance collapsed this summer, and certain factions are noncommittal at most about ousting Najib — particularly the conservative, Malay Muslim-dominated Pan-Malaysian Islamic Party, which sat out the anti-Najib rally in August.

UMNO is similarly divided. Several powerful party leaders who have publicly criticized Najib’s role in the 1MDB scandal and expressed concern about damage to the party’s credibility still oppose the no-confidence vote. Even with the opposition at odds with itself and its charismatic leader, Anwar Ibrahim, behind bars, UMNO does not want to chance a snap election with the 1MDB affair still unresolved. It narrowly held onto power after losing the popular vote in 2013, after all. Whatever the Prime Minister’s sins, UMNO lawmakers naturally do not want to see the party fall as a result. The leaked documents have implicated essentially Najib and his wife alone, largely sparing other major UMNO figures. This suggests an orchestrated effort designed to oust the Prime Minister without sinking the entire party.

An internal putsch against Najib is more likely sometime after the parliamentary session ends. But even this is unlikely. Earlier this year, Najib postponed the next party elections to 2018 and purged some of his most powerful detractors. An emergency vote would take two-thirds of UMNO’s Supreme Council or a majority of the party’s 191 divisional chiefs, and Najib reportedly maintains strong support in both of these blocs. Nearly all UMNO lawmakers and leaders have benefitted from his largesse, and the fact that Najib’s political machine has proved resilient testifies to the power of his patronage network. Party dissent will need to reach a much higher pitch to oust him. Despite Mahathir’s best efforts, this has not happened — yet.

Economic Complications

The crisis in the capital comes at a particularly bad time for Malaysia. With or without Najib at the helm (but particularly if he holds on), the years leading up to next elections, currently expected to take place in 2018, will be turbulent. In particular, an array of challenges is threatening Malaysia’s economic dynamism and the delicate ethnic balance that has undergirded the country’s remarkable rise. The political uncertainty is likely to exacerbate both issues, and vice versa.

A leading concern is that the scandal is diminishing Malaysia’s credibility with investors and driving down the value of its currency, the ringgit, which hit a 17-year low this month. Investors reportedly pulled around more than $4.5 billion from Malaysian stocks and bonds in the third quarter of 2015, while approved foreign direct investment declined by more than 40 percent through the first half of the year. Currencies have been racing downward across Southeast Asia, but the ringgit has performed worse than its regional counterparts — despite Malaysia having generally more favorable economic fundamentals and substantial foreign exchange reserves available to buoy it.

The country’s economic woes cannot be blamed solely on the political uncertainty. Even without the political crisis, Malaysia is facing economic headwinds because of low commodity prices and a looming interest rate hike by the U.S. Federal Reserve. But the scandal is certainly playing a role. Malaysia’s once globally esteemed financial institutions are now in question, and 1MDB is involved in nearly every key sector of the Malaysian economy, including energy, agriculture, tourism and real estate. Meanwhile, Najib’s influence over those purportedly investigating the sovereign wealth fund (in July, for example, he fired the Attorney-General) has raised questions about regulatory transparency and rule of law in the country.

UMNO in Power

Moreover, Malaysia’s reliance on semi-conductors and commodities such as oil, natural gas and palm oil leave it fairly vulnerable to global shifts. State investment funds like 1MDB and Khazanah Nasional Berhad (which Najib also chairs) were designed, in part, to give Malaysia additional economic buffer and allow it to use capital in a manner similar to neighboring Singapore. The success of such investment vehicles will become particularly important as China begins to focus on higher-value exports such as semi-conductors. Inversely, the economic woes have magnified the scandal. The commodities collapse, for example, has inflated 1MDB’s debts and shrunk the revenues available for UMNO to dole out to keep the coalition more firmly intact.

There is reason for optimism. Malaysia has relatively low debt and inflation, as well as a healthy resource base on which it can continue to build. Its membership in the Trans-Pacific Partnership would, at minimum, help the country diversify, gain an edge over rising regional competition, and position it at the center of global trade flows. So Malaysia’s economic slump alone may not be prolonged enough to sink the ruling party — UMNO survived even the 1997 Asian financial crisis. Nonetheless, Malaysia’s underlying strengths have given traction to the opposition’s assertion that graft and mismanagement must then be playing a singular role in dragging down the economy. This argument will gain strength if the slide continues.

UMNO’s Ethnic Gamble

More problematic over the long-term is the ongoing shift in Malaysia’s ethnic demographics. As in Singapore, Malaysia’s favorable investment climate has long relied on the country maintaining at least superficial political harmony. This is an innate challenge for a geographically fragmented country where the Bumiputera, or “Sons of the Soil,” have stood in contrast to the ethnic Chinese and South Asians, who wield economic influence disproportionate to their numbers.

Malaysia’s political stability has revolved largely around the dominance of the UMNO-led coalitions that have ruled every year since independence in 1957. These coalitions have ensured high-level representation from all major ethnic groups and the farther-flung regions of Sarawak and Sabah on the island of Borneo, facilitating flows of patronage to all corners of society and preventing a repeat of the 1969 communal riots or revival of pre-independence racial strife. The effective one-party rule has generally enabled policy continuity and targeted infrastructure and industrial development, minimizing uncertainty for investors and giving Malaysia a leg up over regional rivals. This environment, combined with Malaysia’s resource abundance and fortuitous position as a trade hub in a high-growth region, fueled a steady economic rise and the growth of a robust middle class.

Petaling Street 2

Tan-Sri-Mohd Ali Rastam

But the prospect of ethnic strife and resentment fueled by Malaysia’s affirmative action policies has continued to pose a risk to the country’s economic success. Mahathir, when still in power, tried unsuccessfully to peel back these policies, and it is unlikely that others will be able to do so. And throughout Southeast Asia, economic turmoil tends to lead to a push back against the ethnic Chinese populations. In Indonesia, for example, this has often led to violence. This issue is part of why Singapore is not still a part of the Malay Federation.

The ethnic balance underpinning Malaysia’s stability began to noticeably unravel in the 2008 general elections. Ethnic Chinese and Indian voters began to defect from the ruling coalition, upset with ossifying policies meant to cement the pre-eminence of Malays in political and economic life, as well as anti-minority rhetoric and occasional violence. Barisan Nasional lost 58 seats and its seemingly perpetual two-thirds majority. The shift became more pronounced in 2013, when a multi-ethnic opposition coalition won the popular vote. Today, the main Chinese party in the ruling coalition, the Malaysian Chinese Association, holds just seven seats (down from 31 in 2008) and no Cabinet posts. The main Indian party holds four.

Najib has increasingly sought to frame the 1MDB affair in ethnic terms. In this he has taken a cue from Mahathir, whose own rise was fueled by exploiting Malay and indigenous fears of, for example, “the Chinese tsunami.” UMNO has funded and helped organize the Malay nationalist “Red Shirt” movement, whose mass rally in September was narrowly prevented by police from storming a prominent ethnic Chinese business district in Kuala Lumpur. As political strategies go, this may appear exceedingly base, but it also reflects a recognition that Malaysia’s fundamental demographic makeup is changing, most notably among the Chinese. Since 1983, their share of Malaysia’s total population has dropped more than 8 percent, and birthrates among ethnic Chinese are by far the lowest of Malaysia’s main ethnic groups. For political purposes then, rather than wooing back minority voters, UMNO will increasingly work to secure its base and keep the opposition divided along ethnic lines.

This heralds a widening of ethnic divisions — punctuated by growing public unrest more common to Malaysia’s northern neighbors Myanmar and Thailand — that will challenge the core integrity of what is a particularly manufactured form of the modern nation-state. Lacking geographical or ethnic coherence, Malaysia’s solidarity has long stemmed from shrewd, inclusive policy making, with plentiful resource wealth available to grease away any frictions. A broad remaking of this political system — if it fails to preserve the ties binding Malaysia’s far-flung and disparate parts to the state — would thus prove unsustainable. To a degree, this risk will limit how far Najib and UMNO will be willing to push their ethnic advantage. But with the 1MDB scandal and the economic stresses drawing the ruling party into a protracted fight for survival, Malaysia is likely to slip further into an environment of new uncertainties.

The Reality of the Falling Ringgit

September 7, 2015

COMMENT: I went to the local grocery in Phnom Penh to buy someDin MericanY food items three weeks ago, and proudly took out a RM50 note signed by Bank Negara Governor Zeti Aziz to pay for the bill of US 10 but the counter lady apologised for not accepting it. She asked me if I had Riels (Cambodian currency) or US Dollars. Of course I did.

But I was embarrassed all the same when she told me that she could not accept the Ringgit because she did not know what the exchange rate would be the following day. Ah, uncertainty is always a killer as in all things.

Then recently (September 1) at the Pochentong International Airport, Phnom Penh, when I arrived from Kuala Lumpur after a university business trip, which also enabled me to participate in Bersih 4.0, I exchanged RM50 to pay taxi charges  and I got US 10 Dollars. (1 US Dollar =5 Ringgit). For this kind of insult and hurt, I am expected to be grateful to Prime Minister Najib Razak, who is already infamous in Phnom Penh for his RM 2.6 billion corruption scandal.

Apandi AliNo way. In stead, he deserves to be removed unceremoniously from his 0ffice by the security guards, and then charged in our courts for corruption and abuses of power. For that to happen, we have to give the new Attorney-General Apandi  Ali the boot.

Prime Minister Najib has betrayed us with his failed economic policies. Many of us, businessmen and academics alike here, think he is bad for Malaysia and the sooner he disappears from politics  and resigns  his premiership , the better it will be for Malaysia. He is pure toxicity for our country, to put it mildly.

Fellow Malaysians brace yourself for tough times. Expect more taxes ahead since our Treasury is almost empty. Soon Prime Minister Najib in his capacity as Finance Minister is going to have to sell bonds to the EPF, Amanah Raya, Perkeso, Tabung Haji, PNB,  and the local banks forcing interest rates to rise, if he cannot raise new taxes.

Crony contractors can expect to be paid late. Retailers will have to downsize and retrench staff since sales have dropped by at least 40 per cent compared to 2014. Government servants should also wake up since the Najib government will not have the money to pay their salaries and allowances on time. This is the price these “saya yang menurut perentah” (I obey orders) types have to pay as accomplices to his mismanagement of our economy.–Din Merican

The Reality of the Falling Ringgit: Everyone feels the pinch except the Politicos

by Kalpana M@www,

Najib TerokHis Economic Policies are hurting us

While Malaysians are grumbling about the sharp fall in the value of the ringgit, foreigners who are working in this country are likewise feeling the pinch.

Fueled by the fall in crude oil prices and political uncertainty, the ringgit has lost almost 30 percent of its value compared to a year ago, now at around RM4.2 to 1 US dollar – its lowest since 1998. This is worrying enough to many Malaysians – even without considering the implementation of the Goods and Services Tax (GST) – but for foreigners who need to send money overseas, the problem is worse.

An estimated 2.3 million foreigners are working in Malaysia and they too have to tighten their belts. Genevieve F Dipolog-Ubanan, a 53-year-old English language assistant professor at a local university, said that she has had to make many changes in the face of the fallen ringgit.

She came to Malaysia from Mindanao, Philippines, at the encouragement of a friend who was working at the same university. When she arrived three years ago, a ringgit could buy around 13 pesos. Now it is only worth 11 pesos.

“Before GST and the ringgit depreciation, my shopping bag was a lot heavier from a RM150 shopping trip.I used to send half of my salary to my two sons in the Philippines, but after (the GST and the falling of the ringgit), I send two-thirds of my salary instead.

“Before, I would send them RM3,000, but now I have increased it to RM4,500,” she added.

She says that her sons are aware of the state of the Malaysian economy and her parents and siblings have advised her to return to the Philippines.

I’d leave, if not for contract’

The Sick RinggifThe Sick Ringgit

Yin, a 45-year-old lecturer, would be considering the same option but she has to serve her contract.

“I have to bear it, because I am committed to my degree programme and it would be unethical to quit now,” said the medical doctor who only wanted to be known by her surname.

She hails from Yangon, the former capital of Myanmar, and said that the exchange rate between the ringgit and the Burmese kyat has fluctuated, making it necessary for her to cut back spending.

“I need to send about 40 percent of my earnings home because I am in the process of building a house for my mother.

“My husband lives in Canada, so he is not affected.However, we’re paying for a mortgage in Canada, which I need to pay a bit of, and that is affecting me more than it affects him.Every country has some sort of tax to pay, so the GST does not bother me that much.The ringgit, however, is worrying,” she said.

Yin and Dipolog-Ubanan have both had to trim down their expenses in Malaysia in order to send home a more or less fixed amount of money in their home currency.

Blue collared workers less hit

Interestingly, the fall of the ringgit has been less of an issue for blue-collar foreign workers compared to professional expatriates, as their families tend to accept any amount of money without question.

Sundari, 47, is an Indonesian who has been working as a domestic helper in Petaling Jaya for the past 15 years. She said that out of her monthly pay of RM1,000, the amount of money she sends home fluctuates, depending on her expenditures for the month. “Sometimes it’s RM700, sometimes it’s RM500. I send to my three children, and they quietly accept whatever I give them.They have jobs so they do not depend on me,” she explained.

Another Indonesian domestic helper, who only wanted to be known as Sri, said the same even though she has three family members. “I don’t think they have noticed much of a change,” she said. However, she noted that the fall of the ringgit was a relatively recent phenomenon, and that it may be too soon to tell if those receiving money from outside the country will start to feel the pinch.

Lifestyle changes required

For certain, Malaysians who have sent their children overseas are already feeling the pinch. Raymond Chan Fook Kong expects a significant increase in spending on his daughter’s education by the time she starts her third year at university.

The 57-year-old – a Malaysian whose daughter studies in the United Kingdom – said that he has had to fork out an extra 20 percent compared to before to maintain the amount of British pounds he has allocated for his daughter.

“The combination of GST and depreciation of the ringgit is a double whammy. I have noticed a change in my disposable income,” he said.

This has translated to changes in the lifestyles of both parents and child, as Chan has advised his daughter to watch her spending. “If the ringgit does not rise soon, we will have to continue to be thrifty and defer expenditure on durables like cars and renovations for the house.“We need to save for a rainy day,” he said.

A Momentary Respite for the Ringgit and Malaysian Stocks as 1MDB remains the No.1 Problem

July 2, 2015

A Momentary Respite for the Ringgit and Malaysian Stocks as 1MDB remains the  No.1 Problem

by Bloomberg

MalaysiaLooking Great from the Outside but Rotting Inside

A rally in Malaysia’s currency and stocks after the nation avoided a Fitch Ratings downgrade may be short-lived if it doesn’t clean up an indebted state investment company and reduce threats to its current-account surplus.

The ringgit will probably still weaken to 3.8 against the dollar by the end of this year, according to Credit Suisse Group AG and United Overseas Bank Ltd Malaysia would be among the most fragile nation’s in the region should a recovery in the euro area stall because of Greece, Credit Suisse says.

“Continued weakness in the ringgit is perhaps the best barometer of sentiment towards Malaysia and the ringgit continues to hover near its post Asian Financial Crisis peg of 3.80,” Weiwen Ng, an economist at Australia & New Zealand Banking Group Ltd, wrote in a note Wednesday.

“Malaysia continues to be caught in changing domestic and external cross-currents.”

Before Wednesday’s market rebound, foreign funds had been cashing out of the Malaysian stock market at the fastest pace in Asia this year, while the ringgit had weakened to the lowest level in a decade.

Investor confidence has been battered by growing scrutiny on Prime Minister Datuk Seri Najib Razak’s management of debt-ridden 1Malaysia Development Bhd (1MDB), as well as faltering export and state revenue after commodity prices slumped.

The challenge is to ease investor concerns quickly enough to prevent an exodus of funds whenever the US Federal Reserve starts to raise interest rates.

‘Adverse developments’

“Foreign investors will likely be uninterested in Malaysia until we see improvements in the negative factors” which include 1MDB and weak corporate earnings growth, said Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management, which oversees about US$112 billion (RM421.58 billion). He spoke a day before Fitch affirmed Malaysia’s credit rating on June 30.

“It’s a maelstrom of adverse developments.” Malaysia has taken steps to pare down 1MDB’s debt of RM42 billion (US$11 billion) as of March 2014 and is winding down the company’s operations through possible sales of land and power assets. The government has explicit guarantees for RM5.8 billion of 1MDB debt, and Fitch said there is a “high probability that sovereign support for 1MDB would be forthcoming if needed”.

“Malaysia will need to better control its off-balance sheet liabilities and improve its governance standards,” Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore, said before the Fitch decision. “Having a public debt ceiling of 55% of GDP is pointless, if the limit is sidestepped with government guarantees and support letters.”

Domestic procurement

Najib chairs 1MDB’s advisory board and has resisted calls from former Prime Minister Tun Dr Mahathir Mohamad to step down as the country’s leader over the debacle.

Keeping the current account in surplus will also be key to boosting confidence in Malaysia, said Wellian Wiranto, a Singapore-based economist at Oversea-Chinese Banking Corp. With Southeast Asia’s third-largest economy running a fiscal deficit starting from 1998, Najib in January tried to pre-empt concerns about the possibility of a current-account gap as well.

He unveiled measures that may keep more money in the country including encouraging government-linked companies to invest domestically and increasing local goods and services in government procurement.

“Investors realising that Malaysia will not go into twin deficits is likely to lead to a recovery in the currency, international reserves and funds flow,” said Gerald Ambrose, who oversees the equivalent of US$3.6 billion as managing director of Aberdeen Asset Management Sdn in Kuala Lumpur.

A possible complication: this year, Indonesian and Malaysian governments and companies have sold more foreign-currency debt than they did in the whole of 2014 as a global bond rout pushes up yields and their currencies weaken. That raises concern it will become costlier for them to service foreign-currency debt as the dollar gains.

The ringgit fell to 3.7887 per dollar Monday, near the 3.8 level the currency was pegged at from 1998 to 2005. It closed 0.7% higher Wednesday after Fitch also raised its outlook on the sovereign to stable from negative.

The Ringgit down to a 10 -Year Low

June 29, 2015

The Ringgit down to a 10 -Year Low

By Elffie Chew, Bloomberg
The ringgit fell to a 10-year low as investors weighed whether Fitch Ratings would downgrade Malaysia and a worsening situation in Greece deterred risk-taking.

The MSCI Asia Pacific Index declined for a fourth day as Greece imposed capital controls and shut lenders Monday to avert the collapse of its financial system. Fitch, which ranks Malaysia at A- with a negative outlook, the fourth-lowest investment grade, will review its assessment before the end of June, Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, said last week. The country is “more than 50 percent likely” to be downgraded, he said in March.

“Concern’s over Fitch’s action continues to weigh on sentiment,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd in Singapore. “The external risk-off environment sparked by Greece also doesn’t help.”

The ringgit dropped 0.4 percent to 3.7830 a dollar as of 9.13am in Kuala Lumpur, data compiled by Bloomberg show. It fell to 3.7843 earlier, the weakest since July 2005, and has lost 7.5 percent this year in Asia’s worst performance.

Fitch’s Colquhoun cited Malaysia’s worsening trade balance and concern about the ability of 1Malaysia Development Bhd, a state investment company, to meet its debt obligations, when he warned of a downgrade in March. Exports fell 9 percent in May from a year earlier, following a 8.8 percent decline in April, according to a Bloomberg survey before data due July 3.

Malaysia’s government bonds fell. The yield on the five- year notes rose two basis points to 3.65 percent, while that on the 10-year securities was steady at 4.04 percent, according to data compiled by Bloomberg.