What is the Thucydides Trap?

 

The Thucydides Trap is a political theory stating that when an emerging power threatens to displace an established ruling power, the resulting structural stress makes armed conflict between them highly probable.  This was what Xi Xin Ping told Donald Trump in Beijing recently. 

The concept is based on a famous observation by the ancient Greek historian Thucydides regarding the Peloponnesian War. He noted: "It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable." 

The term was popularised by Harvard political scientist Graham Allison to analyse great power dynamics.

 

https://en.wikipedia.org/wiki/Thucydides_Trap

The Dynamic: The anxiety and paranoia felt by the ruling power (e.g. Sparta) as the rising power (e.g. Athens) gains economic and military strength often leads to strategic miscalculations and a catastrophic conflict. 

Primary Example: It is most frequently used to describe modern U.S. – China relations, where China’s rapid ascent is viewed by many as threatening longstanding American global hegemony. 

While Allison’s historical analysis showed that 12 out of 16 past power transitions ended in war, he and other scholars emphasise that conflict is no inevitable. Both emerging and established powers can consciously manage their rivalry through diplomacy, compromise, and establishing new structural rules to coexist peacefully. 

The importance of recognising it is that markets, economies are all impacted. The current trade issues with the U.S. is part of this political theory. A declining power is flailing about just to remain dominant. Hence, the war on Iran and the Straits of Hormuz. What can we do? Large (or even small) companies may need to work around the games of both superpowers. That is why Tim Cook, Jensen Huang and Elon Musk went to China with Trump. They may have not secured anything of value but paid “homage” to ensure their businesses could survive the near future. For ASEAN, we are closely aligned with China and entertain U.S. investments which has no borders. Malaysia must continue to work on its AI, semiconductors and data centres to ensure growth and provide employment. Are we “future proof” whichever way the Thucydides Trap falls? You can answer that!

 

What is the Right AI Tool for Your Task?

 

When to Use Which AI Tool? AI tools are powerful — but choosing the right tool for the right task is what actually boosts productivity. Here’s a quick breakdown:

ChatGPT Best for: Reasoning, brainstorming, creative writing & problem-solving ✅ Idea generation ✅ Content drafting ✅ Learning & explanations

 

Claude Best for: Long documents & deep analysis ✅ Large file summarization ✅ Detailed reports ✅ Compliance & structured writing

 

Gemini Best for: Google ecosystem & research workflows ✅ Workspace collaboration ✅ Multimodal tasks ✅ Research assistance

 

Perplexity Best for: Real-time information & cited research ✅ Fact-checking ✅ Market research ✅ Up-to-date answers

 

Grok Best for: Trends & social insights ✅ Trend analysis ✅ Social listening ✅ Real-time discussions 

Pro Tip: Don’t rely on one AI tool — build an AI workflow stack based on your task.

 

Reference:

Choosing the Right AI Tool for Your Task, Credit to Rakesh Kumar, this title was summarized by AI from linkedin.com, AI For Leaders

Malaysia Needs US$32b for Disaster Resilience!

 

Malaysia is projected to require US$32.56 billion (RM128.81 billion) in spending for disaster risk reduction and resilience measures. This is part of broader climate adaptation needs over the coming decades, according to the World Bank. These measures include strengthening land use planning, enforcing stricter building standards, investing in flood-resilient infrastructure, and restoring natural ecosystems that can better absorb and retain water.

 

In its Country Climate and Development Report (CCDR) for Malaysia, the World Bank said additional financing needs are even larger in other critical areas, with US$69.8 billion required for water supply infrastructure and US$33.5 billion for irrigation over the next 25 years.

 

Source: https://en.wikipedia.org

 

Overall, total climate adaptation investment could reach between US$852 billion and US$1.13 trillion in nominal terms by 2050, encompassing the cost of upgrading infrastructure, strengthening disaster response systems, and protecting key economic sectors.

 

Flooding remains the most significant natural disaster in Malaysia, accounting for 85% of all disasters since 2000, with more than a third of towns and cities projected to face flash flood risks by 2100. Urbanisation has compounded these risks, with built-up areas expanding rapidly and reducing natural flood mitigation capacity, thereby increasing exposure to flash floods and landslides.

 

The report highlighted that over 5,496 flood hotspots have already been identified nationwide. Climate change is expected to increase flood risks across most river basins by about 15% by 2100.

 

Sea-level rise poses another major threat, particularly to coastal economic hubs such as Port Klang, Penang and Johor, with a one-metre rise potentially resulting in the loss of around 180,000ha of agricultural land and up to 20% of mangrove forests.

 

The agriculture sector is also at risk, with rising temperatures and erratic rainfall expected to reduce crop yields by up to 6% by 2050, affecting key commodities such as rice, rubber and palm oil.

The tourism sector could also decline significantly by the 2040s, with international tourism revenue projected to fall by between 12.2% and 21.3% due to rising temperatures and degraded natural attractions.

 

At the macro level, climate change could shave up to 8.3% off Malaysia’s GDP by 2050 in a worst-case scenario, driven largely by heat stress and flood-related disruptions. Heat stress alone is projected to reduce labour productivity, with agricultural output potentially declining by as much as 18% by mid-century while overall productivity losses could affect all sectors of the economy.

 

The report noted that climate risks are already materialising, with heavy rainfall between 2015 and 2024 estimated to have reduced firm revenues and productivity by about 3% on average, equivalent to around US$7 billion (RM27.68 billion) in GDP losses.

 

Smaller firms and startups are particularly vulnerable, experiencing declines up to eight times larger than bigger companies due to limited access to finance and weaker resilience capacity.

The report added that around 23% of Malaysia’s population is already exposed to climate shocks, with poorer households more likely to suffer long-term economic setbacks.

 

Despite the risks, the World Bank said proactive adaptation measures — including improved infrastructure, climate-resilient agriculture and stronger disaster management systems — could offset up to half of the projected economic losses.

 

Reference:

Malaysia needs US$32.6b for disaster resilience as climate risks mount — World Bank, Emir Zainul, theedgemalaysia.com, 4 May 2026

Malaysia Semiconductor Map by 2030

 

Map on semiconductor is a simplified illustration based on public data. Locations may not reflect full operational footprint.

 

Reference:

Malaysia Semiconductor Map: 350+ Factories, 60,000 Jobs by 2030, post by Ariff Fathi on linkedin

Can Filial Responsibility Be Legislated?

 

The proposed senior citizens bill is problematic because it turns filial responsibility into a legal obligation. Cases of elderly abandonment are serious. Nobody wants to see old people abandoned at hospitals or left uncared for. But laws affecting millions of families should not be created based on knee-jerk reactions. 

Official statistics showed that around 2,144 elderly persons were abandoned at hospitals nationwide between 2018 and mid-2022. In 2025, Malaysia recorded roughly 2.7 million elderly persons aged 65 and above, while senior citizens aged 60 and above stood at about 4.1 million. Of these, 18.8% lived alone.

 

Source: https://www.wikihow.com 

The bill appears intended for a very small number of cases, working out to less than 0.1% of the elderly population, yet its emotional and psychological effect extends to all families. If the government cannot handle less than 0.1% of abandonment cases through healthcare, welfare and support systems, then the problem lies with the short-sightedness of policymakers, not within ordinary families. 

The biggest flaw in the bill is the assumption that all parents are good parents. In many cases, parents who fulfil their responsibilities do not need to force their children through legislation to care for them. In many cases, parents who failed to uphold their parental responsibilities are also the ones demanding legal financial support from their children. Furthermore, there are also no statistics showing how many parents who were genuinely loving and responsible were abandoned by their children. 

While Singapore’s Maintenance of Parents Act is often mentioned as an example Malaysia could follow, it is also evident that the act has not been very effective. During parliamentary discussions there, an MP reportedly stated that about one in four cases at the Office of the Commissioner, and one in three tribunal cases involved children alleging abuse, neglect, or abandonment by their parents. That alone exposes the weakness of a blanket maintenance law. Some parents abused their children. Some neglected them emotionally. Some abandoned their families. Some treated children as future retirement plans instead of human beings. Family relationships are complicated. Legislation cannot assume all parents deserve care simply because they are parents. 

In healthy families, children usually take care of their parents willingly. They do so out of gratitude, love and respect for the people who raised them. Taking care of parents should be a blessing, not a burden. The bill makes caring for parents a burden. Once filial responsibility becomes a legal obligation, the relationship changes and becomes transactional. What normally comes from love and willingness becomes compliance with the law. The bill also gives the impression that responsibility for elderly care is being pushed onto children instead of strengthening healthcare, retirement protection and support systems for senior citizens themselves. 

If this bill gets approved, parents suing children may slowly become normalised in society, making the problem worse. Malaysia should focus on building stronger support systems for the elderly instead of legislating family relationships. 

Reference:

Filial responsibility cannot be legislated, Carolyn Khor, Newswav, 28 May 2026

Why Target the Rich?

 

The Malaysian government is trying hard to find a solution to the petrol and diesel subsidy bill that has exploded tenfold. The most attractive political targets are “the rich”. Taking away subsidies from the wealthy feels socially equitable and satisfies public envy with “Robin Hood” economics. The political quick fix is rarely the most effective economic solution.

 

T20 = the top 20% of Malaysian households by income. Nationally, that starts somewhere above RM12,679 a month. But that’s a national cutoff; each state has its own income distribution, which means the bar is different depending on where you live. The most reliable state-level number DOSM gives us is the D9 median; the midpoint income of households in the 9th decile, which is the lower half of T20. If your household earns around this amount, you’re solidly in the top 20% of your state.

 

Source: https://www.wikihow.com

 

So what’s the number for your state?

 

State	“You’re T20 here if you earn around…”
W.P. Putrajaya	RM21,570
W.P. Kuala Lumpur	RM19,494
Selangor	RM18,105
Johor	RM14,590
Pulau Pinang	RM14,016
W.P. Labuan	RM13,316
Melaka	RM13,241
Negeri Sembilan	RM11,348
Sarawak	RM11,150
Terengganu	RM11,015
Sabah	RM10,709
Perak	RM9,567
Pahang	RM9,167
Perlis	RM9,135
Kedah	RM9,107
Kelantan	RM8,296

Based on D9 median household gross income, DOSM Household Income Survey 2024.

 

Selangor’s D9 median is RM18,105. Kelantan’s is RM8,296. That means the income that makes you top 20% in Kelantan is less than half of what you’d need in Selangor for the same status. Same country, very different reality.

 

KL and Putrajaya sit even higher, but they’re a bit of an outlier; small populations heavily skewed towards senior civil servants, executives, and corporate professionals. Not really representative of a typical state.

 

T20 isn’t one thing. It splits into two halves; D9 and D10 and the gap between them is significant. Take Selangor. D9 median is RM18,105. D10 median? RM28,901. That’s a RM10,000 jump between the two halves of the same bracket. In KL, D10 hits RM31,816. This is why you’ll often see T20 averages quoted much higher than medians; a layer of very high earners at the top of D10 pulls the average up. The median is the more honest number for most people. These are household numbers, not individual salaries. It’s gross income.

 

You cannot target the “rich” efficiently or effectively. Relying on the T20 classification is flawed because a household may fall into the T20 bracket collectively but the individuals within it, stay-at-home parents or children, have little or no personal income. Second, the MyKad, technology cannot identify these individuals at the pump and the Padu system is incomplete. Third, factoring in net disposable income shrinks the “no subsidy” group significantly.

 

If the goal is fairness and efficiency, tiered pricing, like we have for electricity is better. Instead of a binary “yes or no” based on income brackets, we should make the transition to a use-based model where the more petrol you use, the less subsidy you receive. For instance, a full subsidy could apply to the first 100 litres per month. The next 50 litres could be subsidised at 50% and the next 50 litres at 25%. Above 200 litres, the market rate would apply. This system is naturally progressive. Low-income groups, who typically buy less fuel, would enjoy full subsidies. Wealthy individuals with high-consumption vehicles would pay more but importantly, they are given the choice to economise.

 

If a T20 individual chooses to drive a fuel-efficient car or drive less, they can benefit from the baseline subsidy too. This solves the identification problem and focuses on consumption behaviour rather than flawed income data.

 

Remember, the top 15% of earners contribute 80% of total individual income tax. In contrast, those earning below RM100,000 annually contribute only 14%. When you factor in consumption taxes and investment taxes, the wealthy are already the primary contributors to government revenue. High taxes act as a disincentive to work and drive talent and entrepreneurs toward low-tax jurisdictions. We risk losing the very human capital needed to make Malaysia a high-income nation.

 

It is time for a fresh look at revenue that moves beyond the “Groundhog Day” debate of SST versus GST. The latter, while transparent, is often preferred by businesses because they can reclaim it, ultimately leaving consumers, especially the poor, to bear the cost. Instead, we should look at the modern reality of our economy.

 

Over 80% of transactions are now electronic, totalling RM1.4 trillion annually. A tiny electronic payments tax (EPT) of just 1% on both buyers and sellers could raise RM14 billion. The rate is low because the tax base is so massive. It is easy to collect at the point of sale, nearly impossible to evade and so small that it does not distort consumer behaviour or punish hard work in the way income tax does. If not as I have said before, do a Tobin tax, which levies a fraction of the forex transaction value each day and that accumulated will pay for the subsidies. Try to be creative, not roll-out measures that only irritate people!

 

References:

Why targeting the rich is not the silver bullet, Geoffrey Williams, Free Malaysia Today, 16 May 2026

 

Here’s How Much Malaysians Need to Earn to Be Considered T20, According To DOSM, WeirdKaya, 15 May 2026

Will New Regulations on Fully Imported EV Spur Growth?

 

The Ministry of Investment, Trade and Industry (Miti) has announced that all completely built-up (CBU) EV imports will be subject to two key conditions: a minimum cost, insurance and freight (CIF) value of RM200,000, and a revised minimum motor power requirement of 180 kilowatts (kW) and above, down from the previous 200kW threshold. 

Is setting a higher minimum vehicle value for imported EVs to encourage development and strengthen localisation and domestic EV manufacturing in Malaysia? After over 40 years of operation, Proton's impact on developing a self-sustaining Malaysian automotive vendor ecosystem remains mediocre to poor. Proton did bolster vendor confidence, shifting toward high-tech, localized production (e.g., in Tanjung Malim) and increased RM3.2B in local sourcing in 2025 but all these happened post the Geely partnership.

 

Source: https://en.wikipedia.org

Proton, established in 1983 as Malaysia’s national carmaker, started ahead of China's domestic automotive boom, launching the Proton Saga in 1985. The initial objective for the set up of Proton was for the establishment of a fully competitive, local automotive industry. Since its inception, Proton was protected and had a price advantage that was unfair to the other car manufacturers and importers. That being so, Proton could possibly have felt that it was too strong, too well-placed, too invincible and so became callous in their approach towards long-term marketing. Or for that matter on R&D. 

Proton then drifted off tangent. It did not focus and meet the quality requirements of the market, what the consumers want. The cars it sold had a lot of issues. Realising that they couldn’t do it on their own, they entered a partnership with China's Geely. Geely only started making passenger cars in 1997. 

It has been over 40 years, but Proton has remained a bonsai! It has become common now that if we can’t compete in any industrialisation projects, the government will introduce new regulations to protect the failing project. 

Just take a look at those few big GLC banks and see how they work. Lackadaisical. Yes, they report huge numbers in its profitability, but they are operating in a near `monoplistic’ environment in Malaysia. Open up the banking sector and see how they perform. A service transaction that needs only 10 minutes can take more than an hour! 

Local manufacturers must be proud of the quality of the goods or services that they sell. They need to be committed not only to customer satisfaction but to customer delight. When that happens, the hope for efficient automotive vendor ecosystem that produces world class products will then evolve. And stop this ‘protectionist’ measures for a 40-year-old baby. It is either a bonsai or suffering from “Down Syndrome” (my apologies to those who unfortunately suffer from it). If you want to thrive, you must compete. Ask Geely or BYD. How do they do it? The Chinese government gives them subsidies for R&D and related areas. So, we should support in R&D through a National R&D Fund? 

References:

PMX, do you really believe the new regulations on fully imported EV will spur growth of the local automotive sector? Opinion, FLK, Newswav, 16 May 2026 

Malaysia raises entry bar for imported EVs from July 1, sets RM200,00 minimum price threshold, Syafiqah Salim, theedgemalaysia.com, 6 May 2026