It has been over a week since the world was shocked by Russia's attack on Ukraine. For over a week, we've seen the Ukrainian Army defend their country against the Russian attacks with thousands of casualties from both sides so far.
While we in Malaysia might think that since it's happening in Europe which is quite far from us, it doesn't directly affect us, here are some of the ways the Russian invasion of Ukraine could negatively impact our country according to Dr Ong Kian Ming, MP for Bangi and Assistant Political Education Director for DAP :
#1 Oil & energy prices may increase
Since the Brent crude oil price is expected to remain high as long as the Russian invasion of Ukraine continues, Petronas will gain higher profit which will increase the petrol subsidies that must be paid by the Finance Ministry.
Besides that, if the Russian oil and gas supplies face disruption to its key markets in Europe, then the demand for non-Russian energy supplies will increase. This will cause the global prove of gas and coal to increase, which would increase the costs of operations of the Malaysian power plants.
So, we need to start learning how to save electricity now just in case our electricity tariffs increase again~
#2 Commodity prices may increase
In conjunction with the Russian invasion of Ukraine, commodity prices have also increased over the past week. This is good for the palm oil producers in Malaysia but it has a negative impact on food prices.
Since Russia and Ukraine are important producers and exporters of wheat and corn in the global market, which are the main ingredients for animal feed, like chicken feed.
This war could cause the price of animal food to increase which then causes food prices in Malaysia to increase too. So, maybe cut down on the café hopping for a bit.
#3 Domestic and imported inflation may increase
Malaysia is no stranger to the global phenomenon of inflation as part of the economic recovery from COVID-19.
The rise of global prices in commodities and other products that are normally imported into the country will contribute to the inflationary pressures in Malaysia. This is expected to continue throughout the war in Ukraine.
This means that the prices of construction materials, auto parts, machines and machine parts are expected to be affected by it. So this is not a good time to drive recklessly on the road.
#4 Local companies & multinational companies operating in Malaysia could be affected due to the global supply chain disruptions
Russia's invasion of Ukraine does not make it easier for the global supply chain disruptions to be fixed.
Since Malaysia is an open trading nation, these disruptions will continue to affect local companies and companies that are part of Malaysia's global manufacturing supply chain.
#5 Global and domestic interest rates
If the Federal Reserve, European Central Bank and other central banks increase their rates then, Bank Negara will be pressured to follow causing our interest rates to increase to prevent a depreciation of the Ringgit.
Anyone or any business in the country with bank loans and mortgages will be able to feel the impact of these rates. Maybe that's why people are saying that now is not a good time to buy a house!
#6 Lower economic growth
The conflict in Ukraine will cause economic uncertainties, dampening the global economic recovery. Companies will be less willing to invest and people would be less willing to travel or spend.
Since Malaysia's second-largest export market is Europe. we can't escape the decrease in demand in that market which means our economic growth will be negatively impacted.
#7 Loss of Malaysian lives
In 2014, Malaysia lost 43 lives as a result of the shooting down of the MH17 plane in eastern Ukraine. Not to forget the other 255 individuals of other nationalities too.
While the thought of losing Malaysian lives in the Russian invasion of Ukraine might not have crossed our minds because of how far away it is, remember that this kind of conflict has resulted in the loss of Malaysian lives in the past.
