A recent Grab ride gave me something to think about. I was travelling with a visitor from Singapore when our driver joined our conversation. He was not an economist or market analyst, just an ordinary Malaysian trying to make a living. Yet his view was gloomy. He believes Malaysia could be heading towards a crisis.
His biggest frustration was the lack of meaningful reform. There have been plenty of announcements, speeches and promises, but from his perspective, very little has actually changed. His words were blunt: “All hot air.”I smiled when he said it, but the comment stayed with me.
He went even further. In his view, some of the country’s reforms that may look good to foreign investors are, in reality, simply ways of taxing ordinary people more.
More importantly, this is not the first time I have heard this sentiment. In my conversations with a number of people recently, I have been hearing similar concerns about the economy, domestic spending, political uncertainty and the lack of meaningful change. So it is not simply one Grab driver being pessimistic.
Just look around. He pointed out that condominiums are mushrooming everywhere, many looking less like premium residences and more like vertical low-cost flats. Who is going to buy them all? Shopping malls are also multiplying. Beautiful buildings, plenty of shops and restaurants but where is the buying power going to come from?
He also had his own view on inflation. According to him, the official inflation numbers are “for fools to believe”. His point was that the numbers may look comfortable on paper but ordinary people experience inflation very differently when they pay for food, rent, education, transport and everyday necessities.
Domestic demand is already under pressure. Consumers are becoming more cautious, businesses are watching costs, and even some wealthier locals appear to be keeping more cash on the sidelines. Add political uncertainty and the lack of meaningful reform and it is difficult to see where the confidence for a strong domestic recovery is supposed to come from.
What about the Ringgit and the stock market? He remains sceptical. A stronger Ringgit does not automatically mean a stronger economy, just as a rising stock market does not mean the underlying economy has suddenly become healthier.
After three decades in the markets, I have learned that sometimes the best economic indicator is not another government announcement or market chart. Sometimes, it is what you keep hearing from ordinary people and sometimes, it is a conversation in the front seat of a Grab. When the ride ended, I gave him a tip.