Malaysia is facing a perfect storm of alleged deep-seated corruption, a currency falling to levels last seen in 1997, proliferating political protests and a sharp deterioration in its international trade prospects.
Given those negatives, it is no surprise that Malaysia's stock market was down 3% last year.
In November, thousands of protestors gathered in Malaysia's capital city, Kuala Lumpur, to once again call for Malaysian Prime Minister Najib Razak to resign. This is mostly due to his alleged role in the continuing 1Malaysia Development Berhad scandal.
Razak set up that development fund also known as 1MDB in 2009. The purpose of the fund was to promote economic development in the country.
Instead, the prime minister and numerous associates allegedly used it as a personal piggy bank.
The last time we discussed 1MDB, the U.S. Department of Justice had just moved to seize more than $1 billion in assets that were allegedly purchased using money laundered from 1MDB. The U.S. is just one of at least five countries investigating the fund.
The Justice Department thinks that more than $3.5 billion was misappropriated.
Swiss authorities said that it is more than $4 billion.
Amid the scandal, Najib's government remains in power. And it is likely to stay that way until next year, as he continues to deny any wrongdoing.
Yet somehow, $681 million wound up in his personal bank account a few years ago. It was supposedly a "donation" from the Saudi royal family.
One person -- a private banker -- was recently linked to the fraud and convicted in Singapore. He was charged with forging documents and not disclosing suspicious transactions from a Malaysian client linked to the 1MDB scandal.
In many countries, a political quagmire such as 1MDB would have caused far more officials to lose their jobs including Najib.
But ironically, the prime minister seems more secure. He removes people who oppose him from their positions in government and carries on.
So far, Malaysia's attorney general and deputy prime minister are the most notable figures to be sacked. Both officials publicly raised questions over Najib's misconduct in 1MDB.
The attorney general reportedly planned to announce misappropriation charges against Najib. Unsurprisingly, the newly appointed attorney general has cleared Najib of any unlawful activity.
In early November a member of Malaysia's parliament was sentenced to 18 months in prison. His crime was disclosing classified information related to 1MDB.
A Malaysian human rights organization said that the conviction "will create a dangerous chill on free speech and result in a more repressive, opaque and unaccountable government."
Given the scope and complexity of 1MDB, the investigation is likely to carry on for some time.
Najib has endured the worst of the fallout from 1MDB and will probably continue in his post. Ironically, his continued reign is likely to provide some certainty to investors and financial markets.
The Kuala Lumpur Composite Index is down 3% and the MSCI Emerging Markets Index is up 3% over the past 12 months. But the Kuala Lumpur Composite Index has been the less volatile of the two over the long term.
That index is a defensive market. Malaysia has a large share of companies that operate in industries such as food, health care and telecommunication.
People will buy products and services from these sectors, regardless of market fluctuations.
That is what makes them defensive. And they help explain the index's relative lack of volatility.
The country also has enough domestic investment from local pension funds to keep the market afloat.
Although political scandals tend to keep investors away, the Malaysian market is proving resilient.
In September, political risk analysts Global Risk Insights said that "there are signs that the country has seen off the worst of its downturn," and that "the risks of doing business in such a climate continue to be outweighed by the attractive tax incentives offered by the government, Malaysia's strategic proximity to the primary Asian markets and its consumers' growing spending power."
Malaysia appears to have weathered the political storm. This will become definitive, as we have said before if the country's market withstands the entire 1MDB affair.
That could signal that all the bad news is already priced into the market.
Unfortunately, the country's greatest threat to its market isn't indigenous. It comes from abroad.
The World Bank projects that Malaysia's economy will grow 4.3% this year, compared with 4.2% for 2016.
But this upbeat projection from late June was based in part on "a new generation of regional [trade] agreements including ... the TPP."
The Trans-Pacific Partnership is a trade agreement among 12 Pacific Rim countries that was meant to foster trade, reduce tariffs, strengthen economic ties between member countries and support economic growth. It also included regulations on competition, the environment, intellectual property rights and state-owned enterprises.
U.S. President-elect Donald Trump dragged the TPP through the mud during his presidential campaign.
He has said that on the first day of his presidency, he will "issue a notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country."
If the U.S. withdraws from the TPP, the deal will be dead.
For the TPP to take hold, it requires ratification by at least 6 of the 12 members. The ratifying parties must make up 85% of the group's economic output.
Without U.S. involvement, remaining countries will need to renegotiate the original agreement.
No TPP will hurt Malaysia's economy. All anticipated growth in trade from the agreement won't come to fruition.
Trump's isolationist position will be particularly damaging for emerging Asian economies as a whole.
The U.S. is Malaysia's third-largest export destination, after Singapore and China, as shown below.
Malaysia's economy benefits from free trade. Exports are equivalent to 71% of the country's gross domestic product.
Malaysia's largest trade partner and TPP member, Singapore, has export figures equivalent to 176% of its GDP.
The Malaysian ringgit was one of the world's worst-performing currencies in 2015. Trump's election coincided with it dropping down to 2015 lows against the dollar.
It is nearing levels last seen during the 1997 Asian financial crisis.
A weaker ringgit is good for exporters. It makes it cheaper to export goods and services when priced in foreign currencies.
But a currency that is too weak hurts Malaysia's economy. That is why the country's central bank has suspended all offshore ringgit trading.
This kind of decision indicates that funds had been leaving the country at an accelerating rate.
Even in an economic slump, Malaysia still has time to avoid its perfect storm.
Malaysia's stock market can survive if it holds steady or rallies during the next round of scandal revelations.
But Trump, and his aversion to trade deals, adds uncertainty to Malaysia's economic outlook.
For more on how Donald Trump's policies might hurt Asia, click here for our free special report.
This article is commentary by an independent contributor.
Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.