Malaysia: Potential US Sanctions.

Malaysia: Potential US Sanctions

Part A

The stunningly unexpected US Hamas International Financing Prevention Act, targeting countries, entities and individuals supporting Hamas, the terrorist arm of Palestine, takes immediate effect.

The Hamas Act’s broad-sweep objective to “prevent Hamas and affiliates [sic] from accessing its international support networks,” (Section 2, Statement of Policy, US government , November 3 2023) necessarily includes in its hit-list, Msia, a staunchly vocal and long avowed supporter of Hamas as the governing authority of Palestine (post on Msia in the News: Wrong Reason Again, Oct 17 2023 refers).

The Msian Foreign Minister has flagged nervous anxiety over the Hamas Act that could impact Msia in innumerable and unpredictable ways, implicitly or explicitly, succinctly or strikingly, justly or unfairly, as sanctioned countries from Russia to Hong Kong have learnt.

As revealed by the Msian PM, Msia has been served three US “dèmarches,” a diplomatic “please explain, please re-consider” notice on its intractable Hamas stand that effectively guarantees Msia’s placing on the sanctions hit-list. That it was three “warning” notices, not one, not two, is very telling of Washington’s displeasure.

What bestows on the US the right to “warn” Msia for its strident Hamas support? Simple: the US is a top three investor and trading partner of Msia, rendering as well educational, security, cultural, human trafficking, health, research, cross border crime etc benefits (US State Department, April 2022). No country in the world does Msia holistically benefits as much from the US. None. Nada. Zilch.

As much as Msia has the unequivocal right as a sovereign nation to exercise its foreign policy stance, and rightly so, its bold and blaring support of a Western labelled terrorist organisation is the disproportionate price and pain it has to bear. To date, there have been no consequences to Msia for its Palestinian cause, but the Hamas Act changes the complexion entirely: life in Msia may no longer be the same as examined in Part B.

LBV

November 3 2023

Malaysia: Potential US Sanctions

Part B

Assuming Msia is tagged a Hamas Act offender, an unease expressed by its Foreign Minister (Part A), what repercussions are likely?

First, funds of Msian origin, political or humanitarian, with Hamas as the ultimate beneficiary would activate punitive measures such as restricted access to the US banking system which Msian banks, local and foreign, are hardwired into for Msia’s trade, investment, business and individual transactions in dollars.

Msia lives on trade with the rest of the world in dollars, and seeks foreign investments in dollars to power its open economy, and therefore unfettered access to dollars is oxygen for growth and survival. BRICS currency? A cruel hoax, a wet dream.

As the world’s reserve currency and the most widely transacted globally, dollar access restrictions of any kind, regardless of scope, scale, and size, would be a crushing blow to Msia as the fallout for the economy and financial markets - currency, stocks, bonds, securities, foreign reserves, including business and investor confidence - would be devastating at a minimum.

Second, if designated a Hamas Act offender, US visas for tourists, students and businesses, etc would be more discriminating against Msians, meaning higher rejection rates, or with restrictive conditions attached. A little-known fact: a US visitor visa, generously valid for 10 years, is highly advantageous for visa and permanent residence applications to English-speaking and EU countries.

The 10,000-odd pro-Palestinian Msians protesting at the US embassy in KL recently are begging for lengthy visa delays or rejections, with their identities likely captured by the embassy’s facial recognition technology for blacklisting purposes. In general, Msians can expect frustrating difficulties in accessing US visas of any kind, with US relations currently strained over Hamas.

As explained in Part A, the US is Msia’s most significant benefactor, making it dead easy to “punish” Msia in many ways, overtly or covertly.

Third, the Hamas Act will likely be replicated by the EU and the UK, sworn US allies, to deny Hamas material and financial support, meaning Palestinian-leaning countries like Msia with trade and investment relationships with those countries risk even more restrictions plus those of the US.

Lastly, the reputational damage as a terrorist supporter if designated a Hamas Act offender is irreparable and a major roadblock to foreign investments, compounding the dwindling foreign funds in Bursa Msia, and the wider implications for the economy bereft of foreign investors, with the drowning ringgit as collateral damage.

[Digression: a weak currency signifies more problems with a country than one without. Put simply, the foreign exchange rate summarises the prospects and future of a country]

If Hamas Act penalties are imposed, how would Msia respond? Easy answer. As Msia is too deeply invested in the Palestinian cause, there is no Plan B exit, but to suffer the Hamas Act penalties, if guilty, and the damaging consequences identified above.

Still hugging ringgits or ringgit assets? Still in love with Bursa stocks? No 10-year US visa? Good luck.

LBV

November 5 2023

Caveat: the post-Hamas Act scenarios above are for discussion purposes, tongue in cheek in parts, and not action suggestions that are left to the reader’s better imagination or judgment

Indonesian News

Malaysia is in the Target list

Israel IDF is given the green light to target all HAMAS operatives area, that includes both in Gaza and out, including Turkey Iran, Qatar and Malaysia

Malaysia not being a rich country with already RM1.5 trillions in debts. In comparison to other Middle East Countries that are rich, and they have the capacity to engage in wars or economic sanctions with or against Israel.

Malaysia is the only Asian country getting involved with no real beneficial reasons