Some might say that the fulminations of Malaysia’s born-again 92-year-old Prime Minister Mahathir Mohamad against his successor Najib Razzak sound like the pot calling the kettle black. The 1MDB scandal involving the alleged theft of $4.5 billion (including $700 million by Najib himself and around $30 million worth of jewellery for his wife according to US investigators) cost Najib the election. But the nineties resonated with similar tales against Mahathir.
There were kickback allegations when Mahathir purchased arms (including British-made frigates and Hawk fighters) worth £1 billion from Margaret Thatcher’s Britain. There were reports of “special payments” to senior Malaysian politicians by the British construction company, Wimpey, which was negotiating a £615 million contract. Britain’s £234 million aid for Malaysia’s £397 million Pergau Dam project also produced reports about bribes amounting to £35 million for members of the Malaysian government.
Angrily denying all these charges, Mahathir boasted Malaysia was as rich as Saudi Arabia and as devoutly Islamic. Britain was worried because of the importance of trade with Malaysia’s burgeoning economy which bought 50 per cent more from Britain in 1993 than in 1992. So, it might seem rich that Mahathir should prevent his predecessor and his wife from going abroad in case they fled the country to avoid possible prosecution. Najib must “face the consequences” if any wrongdoing is proved, Mahathir says. Hence, the last-minute ban when a leaked flight manifesto showed Najib and his wife were about to leave in a private jet for a week’s holiday, or so they claimed, in neighbouring Indonesia. “We have to act quickly because we don’t want to be saddled with extradition from other countries” Mahathir explained.
The 1MDB scandal is probably bigger than anything Malaysia has known before. But what matters more is that thanks to the opposition’s vibrancy, it raised a storm with worldwide repercussions. The money trail even touched the Hollywood star, Leonardo DiCaprio, who says he was unaware of the nature of the funding and returned all questionable gifts. According to the US Department of Justice which all but named Najib, $3.5 billion were misappropriated. “The Malaysian people were defrauded on an enormous scale,” says the US Federal Bureau of Investigation.
Nevertheless, the uproar seemed to die down until the opposition Pakatan Harapan (Alliance of Hope) capitalised on it to overturn 61 years of Barisan Nasional rule in a stunning victory. The two main Alliance partners are Mahathir’s Parti Pribumi Bersatu Malaysia or Malaysian United Indigenous Party, which won 13 parliamentary seats and Anwar Ibrahim’s People’s Justice Party (Parti Keadilan Rakyat) which won 47. The 70-year-old Anwar, who was granted a royal pardon, thanks to Mahathir, is clearly the public’s idol. Mahathir may not have returned to power without the partnership of a charismatic man who is seen as a victim of power politics.
Until only recently Mahathir was describing Anwar as morally unfit to lead the country. Yet, Anwar was once his chosen successor, deputy prime minister from 1993 to 1998, finance minister from 1991 to 1998, and an important figure in UMNO (United Malay National Organisation), the major party in the ruling Barisan Nasional coalition, until Mahathir sacked and jailed him in 1999. Western governments and human rights groups criticised his prosecution for sodomy and corruption as politically motivated. His frontal attack against what he called the widespread culture of nepotism and cronyism within UMNO (and the ruling coalition) angered Mahathir, as did his attempts to dismantle the protectionist policies Mahathir had set up. Anwar blamed cronyism for corruption and the misappropriation of public funds.
Mahathir’s public speeches at the time made it abundantly clear that his real objection to Anwar was political, and that in his view, Anwar was too anxious to step into his shoes instead of waiting for his turn as the designated successor. Other Malaysians noted that while sodomy was legally a crime, hardly anyone was ever prosecuted for it. It was also a common complaint that Mahathir had displayed a certain lack of delicacy in making a public issue of such a sensitive private matter. He wouldn’t have done so, it was said, if he had been a true Malay. That was a dig at Mahathir’s never openly mentioned Malayali ancestry on his father’s side, his grandfather having been a teacher of English from Kerala.
Now, Mahathir knows that no matter how incensed voters were about the 1MDB scandal, they are too used to corruption among their leaders for this alone to have made a decisive difference. With Malaysia’s public debt (54 per cent of GDP), one of South-east Asia’s highest, the real grievance is economic. His appointment of an ethnic Chinese, Lim Guan Eng, as finance minister, the first ethnic minority politician to hold the portfolio in 44 years, reflects his appreciation of public priorities. “I don’t consider myself a Chinese, I am a Malaysian” says the 57-year-old Lim, a chartered accountant, who has led the wealthy northern state of Penang since 2008. “I will ensure that the interests of all Malaysians are protected.”
The appointment reflects promised reforms to heal racial divisions that are blamed on decades-old preferential policies and the importance attached to bumiputras, sons of the soil. It is also another indication that Mahathir might be trying to turn over a new leaf for he and Lim were bitter adversaries during Mahathir’s 22 years as prime minister. Like Anwar, Lim too was jailed twice — once during a political crackdown in October 1987 that Mahathir said was aimed at preventing racial riots, and again in 1998 under the Sedition Act. But, the past seems to have been washed out as a smiling Lim stood by Mahathir as his appointment was announced.
No matter how Lim might describe himself, his appointment may have a bearing on Sino-Malaysian relations. As prime minister, Mahathir notoriously championed far closer ties with China than even neighbouring Chinese-majority Singapore. But the popular belief is that Najib used Chinese funds to cover his misdeeds. Responding to that perception, Mahathir has threatened to “review” Chinese investments. That could “put into question the future of a number of planned Chinese-backed investment projects”, warns the research firm, Capital Economics. If so, it would mean a sharp slowdown in investment growth.
But circumspection will probably prevail, Mahathir’s promised special five-member council to advise on economic and financial matters includes Robert Kuok, another ethnic Chinese who is a sugar and palm oil magnate, and Malaysia’s richest man with a fortune that Forbes estimates at $15 billion. Kuok is two years older than Mahathir and based in Hongkong. Until 2015, he owned the reputedly cash-rich South China Morning Post newspaper. With his political contacts, Kuok can be expected to keep the lifeline between Kuala Lumpur and Beijing open no matter what the wily Mahathir chooses to say for public consumption.
Sunanda K Datta Ray is the author of several books and a regular media columnist.