If crippling sanctions were imposed, the US government will freeze, seize and forfeit Malaysia’s US$ deposits abroad in forex, Petronas will be the most affected!

 

Commentary and Analysis . . . 

Washington can have no objections if Malaysia extends helping hands for the people in the Gaza Strip, probably part of the future Palestinian state, but provided such aid was through legitimate charities. 

 

The aid, in cash and kind from the government and people, must reach the recipients directly. There can be no two ways about it.

 

https://murrayhunter.substack.com/p/malaysian-trade-under-a-trump-presidency?publication_id=347364&utm_campaign=email-post-title&r=7va4z&utm_medium=email

 

If crippling sanctions are imposed on Malaysia, for allegedly funding the Hamas purchase of weapons in the black market for extra-judicial killings, the US government will freeze, seize and forfeit Malaysia’s US$ deposits abroad in forex, and Petronas will be the most affected.

 

 

SabExit And SaraExit . . .

Sabah and Sarawak will exit Malaysia immediately if America imposes crippling sanctions. Washington will back the exit at the UN Security Council (UNSC). 

 

Penang and Johor may exit too. It would be case of the more the merrier.

 

We can’t rule out Confederation, based on the rule of law, emerging from the ruins of Malaysia viz. Sabah, Sarawak, Penang, Johor, Negri Sembilan, Malacca, Selangor and Pahang as individual Federation. 

 

Brunei as sultanate and Singapore as Republic may join the Confederation. More on the crippling sanctions later.

 

Ironically, the Malaysian Common Market may remain. It was being denied access that eventually forced Singapore’s exit from Malaysia in 1965. 

 

Then, there’s the Asean Common Market as well which does away with the need for Malaysia.

 

The former British Borneo territories, already the poorest in the “Equal Partnership” since Malaysia, cannot weather crippling sanctions especially if Petronas was affected.

 

 

Crippling Sanctions . . .

Malaysia argues that Hamas isn’t terrorist organisation and that the 7 October attack last year was justified by Israel’s occupation of the West Bank and blockade of the Gaza Strip. 

 

Anwar has also been quoted as saying that Iran’s drone attacks on Israel were justified.

 

Intially, in the wake of comments on Hamas and drone attacks, individuals and companies in Malaysia may probably be sanctioned before too long. The US has weaponised the US$.

 

Otherwise, there’s no point in two US Treasury officials visiting Malaysia.

 

Crippling Sanctions means Malaysia can’t use US$ even as cross trading currency for exchange rates. RM would become virtually worthless outside Malaysia where it’s legal tender.

 

The SWIFT and IBAN international banking codes are controlled by the US which created them.

 

Malaysia can of course sell in India and China and accept rupees and yuan as payment. 

 

These currencies can be used for imports from the two countries or investing there.

 

That’s what Russia does. Now, Russia will be using the rupees piled up in India, for investment and imports.

 

UN sanctions are different from that imposed by the US.

 

UN sanctions, if binding, are imposed by member nations. UN sanctions are not about the US$, forex market, SWIFT and IBAN.

 

US$ remains the international reserve and cross trading currency for exchange rates in the forex. The value of the US$, contrary to public perceptions, was calculated in gold. Gold can only be bought with US$.

 

Again, Washington controls SWIFT and IBAN which tracks international money transfers.

 

If the US imposes crippling sanctions, Malaysia will be cut off from the forex market and international financial market. The RM would collapse and implode. It has happened in Russia.

 

Russia, fortunately, has the support of India, China, Iran and probably Saudi Arabia as well.

 

If the US imposes crippling sanctions on Malaysia, the country can only survive by trading with Singapore, India, China, Russia and Iran. 

 

Malaysia would be accepting the S$, rupee, yuan and the Iranian currency for exports. The same currency can be used for imports from those countries. 

 

Tourists would come only from these countries and Brunei.

 

The RM can only be used in Malaysia. It would be cut off from the forex market and the credit rating and credit risk would plunge and hit rock bottom. Foreign lenders would call in loans.

 

No one would invest in Malaysia.

 

All investors would pull out. The foreign workers would leave.

 

The stock market and property market would collapse and implode.

 

Malaysian would transfer their assets to Singapore, Australia and other countries.

 

Many companies will go bankrupt. Petronas would go bankrupt.

 

It’s only matter of weeks before the government collapses and implodes.

 

Then, Malaysia will turn up at the World Bank and IMF with begging bowl in hand. 

 

-- Joe Fernandez, Editor in Chief CPI website, Council Member of the newly-revived Borneo-centric Center for Policy Initiatives (CPI).

 

 

DISCLAIMER: The views expressed by the author/contributor do not necessarily represent those of the Center for Policy Initiatives (CPI).