COMMENT | An A rating from the Fitch credit rating agency, at any given time, should be lauded. But credit rating agencies do get things wrong. Often badly.

Prior to the Asian Financial Crisis in 1997-1998, for instance, all credit rating agencies such as Fitch, Standards and Poor's and Moody's, proceeded to give a thumbs up to the entire East Asian region, with the exception of Cambodia, Myanmar, Laos and Vietnam then.

Yet, when their analysis came all unhinged, all three credit rating agencies had to switch their assessment completely. Thailand, Malaysia, Indonesia, and even, South Korea, received an instant downgrade on their economic worthiness.

China was an exception as the Chinese Ren Min Bi was not widely traded in the international market yet. 

It was still in the thick of an infrastructure boom that ended only in 2013, when surplus production in steel, cement and the such, finally compelled Beijing to launch the Belt and Road Initiative in October 2013; first in Astana in Kazakhstan, followed by Jakarta in November 2013.

The moral of the above story is simple: credit rating agencies cannot be trusted, as the key navigator to steer the macro or micro-economy of Malaysia.

What is A now will mean nothing next week, if God forbid, there should be a super spreader event in the numerous Covid-19 outbreaks beyond what Malaysia has currently withstood.

Indeed, one should remember that by early February 2020, the whole world merely had a little over 87,000 cases of Covid-19, 85 percent of which were in China, especially the city of Wuhan.

By the end of March, the epicentre of the pandemic — which could become endemic if seasonality and warm weather are not the defining factors to stop the trajectory of the SARS Cov II virus —- had shifted to the US.

As this is written, some 10.8 million American workers had filed for unemployment benefits; all within a spate of less than three weeks since the outbreak of Covid-19 in various parts of the US continental mainland.

Malaysia's Finance Ministry should not steer the country on the basis of credit ratings for two other reasons too.

To begin with, Moody's had also given the kleptocratic administration of former prime minister Najib Abdul Razak a super optimistic assessment in February 2017 too. CIMB was one of the co-sponsors of the conference with Moody's. 

Three months later, the BN government under Najib suffered an ignominious defeat.

Second, positive ratings are often given on the basis of the assets possessed by the government-linked investment companies and government-linked companies.

Unless Fitch rating has done a full bookkeeping of all these entities, it is impossible for Fitch rating to know how Malaysia can reach a gross domestic growth rate of 5.8 percent by 2021.

Such a growth rate would imply successful handling of the Covid-19 pandemic, not just within Malaysia, but across the region without fail. But to date, no one knows if India, for that matter, if parts of Indonesia, may be further compromised by the spectre of Covid-19.

If the worst-case scenario does come true, in India, and Indonesia, there is no telling that the prices of palm oil of Malaysia will shoot up. After all, if India is down, together with key parts of Indonesia too, where would Malaysia be selling their palm oil to?

European Union (EU) has 26 member states, of which France and Germany are expected to enter a recession this year and the next, if not already. South Korea, China and Japan may face the second or third wave of Covid-19.

In South Korea alone, up to 50 percent of the patients who had recovered from Covid-19, have found themselves to be tested positive again.

To be blunt, there are many unknown in the post-Covid-19 era whether in 2020 or beyond. 

The last thing any government should do is to operate on the basis of the unknown, and the politics of ingratiation; where the western credit rating agencies seek to please the government of the day in order to gain further access into the inner sanctum of the Prime Minister or the office of the Finance Minister.

As Khalifah Abu Bakar (may peace be upon him) once said: "Chastise me if I err for that is your obligation." Prime Minister Muhyiddin Yassin had always affirmed that he is the sort of leader to "take the bull by the horn." 

In the era of Covid-19, one should not be lulled by internal or external agencies to lull Malaysia into sheer complacency.

RAIS HUSSIN is is the president/CEO of EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.