Advice for Malaysia’s Prime Minister


May 16, 2018

 Advice for Malaysia’s Prime Minister

Dear Prime Minister Tun Dr Mahathir,

It’s been a while since I have seen you personally. It seems you have been well, especially since last week when your upstart coalition won control in Malaysia’s first surprising election.

Image result for mahathir and anwar ibrahim
Destiny brought them together for Reformasi towards Democracy and Good Governance. Anwar Ibrahim knows what Freedom means.

During my two years at Bloomberg’s office in Kuala Lumpur, from 1996 to 1998, I regularly attended press conferences you held as Prime Minister. You once chided me for seeking too many details in your answers. That annoyed me, because when one was based in KL — as opposed to stopping by to write a quick dispatch, as most Western journalists did — nuances and details mattered greatly. I’ll give you this: You were very available and ready with an answer to almost any question. You didn’t hide behind mystique, like Suharto in Indonesia. Look what happened to him!

The time I spent in Malaysia was formative. I have an enormous reservoir of fondness for the country and its rich culture and, yes, awe at its political brutality. As one who watched what went wrong 20 years ago (remember when you jailed your finance minister?), let me offer some advice as your team settles in.

First, the cabinet must prove it can govern. This takes priority over the hasty prosecution and jailing of anyone for their role in the 1MDB scandal, egregious though it was. A culture of state cronyism grew up over six decades and won’t be reversed in six days or six weeks. In any case, you weren’t elected just because of that scandal; your predecessor’s party lost the popular vote not just this year but also in 2013, before most people had even heard of 1MDB. The cabinet must disprove defeated leader Datuk Seri Najib Razak’s jibe that your bloc is a “motley” collection. They must prove they can set and execute an administrative agenda that prioritizes decisions affecting the daily lives of people.

Image result for nelson mandela and f.w. de klerk nobel peace prize

Nobel Laureates Nelson Mandela and Frederik de Klerk

Neither of us wants this period of democratic flowering to run aground over perceptions that adults have left the room. Cited in the Wall Street Journal, Paul Wolfowitz likened the born-again alliance between you and Anwar as akin to that between the last apartheid-era South African President, F.W. de Klerk, and the revolutionary Nelson Mandela.Image result for democratic party of japan

Forget Mandela and De Klerk. Just avoid being the DPJ. — Bloomberg Opinion

Here’s another comparison, one you will want to avoid: the short, chaotic rule of Japan’s Democratic Party from 2009 to 2012. That was supposed to be a new era. Instead, it came crashing down in a single term, collapsing under its own weight of inexperience and expectations that were way too high. The Liberal Democratic Party, which dominated the country since the American occupation, came storming back under Shinzo Abe, and nobody has taken the DPJ seriously again.

Don’t be afraid to break the mold. Just because you made mistakes the first time, including centralising power and taming the bureaucracy, you weren’t always entirely wrong. Along with much of the West, at the time I thought you were wrong to buck the free-market, austerity-minded consensus of the International Monetary Fund and the US Treasury. In the end, your capital controls and decision to fix the currency weren’t a disaster, and it’s the IMF itself that engaged in soul-searching about its mistakes.

When you saved important Malaysian companies, you were scolded for bailouts. You were certain the West would do the same thing if it had to. Yep, then 2007-2009 came along and, sure enough, dozens of systemically firms in the US and Europe were certainly bailed out. You were rightly condemned for remarks that had an anti-Semitic feel to them, but sadly those low points have since been matched and exceeded by political discourse on the American right.

Image result for Malaysia's Finance Minister Lim Guan Eng

After Tun H.S. Lee and Tun Tan Siew Sin, Lim Guan Eng is the Non-UMNO Finance Minister of Malaysia. His supporters and friends wish him well

It was a bold move to give the finance ministry to Lim Guan Eng, leader of the Democratic Action Party, one of the key groups within your new coalition. It’s the first time in four decades the job has gone to someone of Chinese descent. Given politics in Malaysia has often been conducted along racial lines, with Malays dominant, this is huge. Lim says he is, above all, a Malaysian. True enough. And exactly what he had to say.

Yet you haven’t quite given him the reins. Until Lim clears up some legal issues that he says were harassment from the former regime, you, Mahathir, will keep finance for yourself. Resist the temptation to make this indefinite. One of the legacies of 1998, starting when you ousted Datuk Seri Anwar Ibrahim, is that prime ministers have been determined never to let the Ministry of Finance become a separate power base. They kept the role for themselves. I get the rationale, but it would be rich in symbolism and would help dispel concerns about your authoritarian instincts if you relinquish this one.

One of the biggest questions, particularly because you are 92 years old, is what comes next. I’ll write you separately on that one. Hint: It all hinges on how you handle the dynamics with your former rival Anwar.

Now in government, the former opposition simply has to get it right. Forget De Klerk and Mandela. Just avoid being the DPJ. — Bloomberg Opinion

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.

6 thoughts on “Advice for Malaysia’s Prime Minister

  1. Daniel Moss makes a point that I have made for years, with the theme “When the Opposition Comes to Power.” After years of corruption and one-party dominance, the people throw the crooks out, and place their hope in the opposition. Whether it’s the PRI in Mexico, the Congress Party in India, the KMT in Taiwan, or the LDP in Japan, the pattern is the same. The opposition becomes the government and then shows that it is incapable of governing. The people become frustrated, so then they hold their noses and vote the crooks back into power at the next election.

    I was always concerned that the same thing could happen in Malaysia. But I am more optimistic this time. That’s because Pakatan now has a number of people with governing experience — not just Mahathir, Muhyiddin, and Anwar, but also Chief Ministers like Azmin, Guan Eng, and Mukhriz. There are others behind the scenes with experience, who are advisers both formal and informal, like Hassan Merican, Daim, Dr Zeti, and Rafidah.

    What I am concerned about is two things. It is hard for people to change, especially when they are 92, and Tun Dr M is used to making decisions by himself, even if he is committed to the reform agenda. And then, as we already have seen, some political leaders (read Rafizi) go public and complain, rather than expressing their thoughts internally. So the key will be to keep pushing Mahathir to be more consensual in his decision-making, and to make sure that PKR especially does not engage in the kind of undisciplined and often self-destructive public airing of disagreements that has been their bane for many years.

    I also am concerned and have seen around the world that when the opposition comes to power, they can be sabotaged by certain interests. What Trump calls the “deep state” — bureaucratic interests that work against the new government, that destroy documents, cover up things, hide information, and so on. But Mahathir is already on top of that situation, although more needs to be done.

    Then there is the problem of capital flight — that the elites in these countries tried to move their money (usually ill-gotten) out of the country or shift assets from their names into proxies. Malaysia already has been ranked as the worst country in the world for illicit capital flight (on a per capita basis). On the good news side, many countries have cooperated in the 1MDB investigation, and perhaps that can be expanded, this time with Malaysia’s cooperation, to track down other assets that have been hidden overseas.

    There is no shortage of capable, competent people in Malaysia and no shortage of ideas about what needs to be done to put Malaysia back on track. I am very sanguine about the future, and I think the last thing the new government needs now is “advice” from foreigners. What they need is support from their friends.

    • Thanks, Ambassador Malott, for being a dedicated friend of Malaysia. I have spent many hours over the years chatting and exchanging views with you. I must admit that there were times when you were more optimistic than I about my country’s democratic change. You write about Malaysia with understanding, sympathy, and concern.

      You have also been a loyal friend of Anwar Ibrahim, Deputy Prime Minister Dr. Wan Azizah, and their family. Thanks for that too. You will a chance to see Anwar again when he comes to Washington DC soon. Please give him my regards.–Din Merican

  2. An excellent piece.
    As for LGE as the MinFin, nothing to worry about.
    When i asked all the old hands who would actually be the best MinFin under the current circumstances – the answer was unanimous: Octo!!! Yup, it came from economists, business folk to bankers.
    LGE is like a preschooler compared to him.
    So i don’t really think LGE will so much as fart, without Octo knowing.
    Maybe not as bad as a puppet, but pretty close to one.
    So time to bury that particular brand of Insular Penang Tokongnism, and bear with the lessons in humility.
    I don’t envy him…

  3. Try again:

    “Along with much of the West … I thought you were wrong to buck the free-market, austerity-minded consensus of the International Monetary Fund and the US Treasury. … and it’s the IMF itself that engaged in soul-searching about its mistakes”

    The IMF’s “soul-searching” was not due to any regret but to the distaste the world had for that organisation and the World Bank for ramming down a formula known to have uprooted societies and destroyed governments by forcing the transfer of corporate assets from the developing nations to what Wallerstein might call the “cosmopolitan centres” of the world. As I said earlier weeks ago, Mahathir’s stance on this issue deserved praise. To those fond of giving advice – except perhaps for Ambassador Mallot who has proven time and again a true friend of Malaysia – I’ll say this: giving advice is easy. Just don’t think you can manipulate the old man with sweet words. Rightly or wrongly, he walks his way. I hated his attitude, but also, I confess, admired him for that.

    • With Octo in control, Diam2 Daim in cahoots and the fiscal situation in shambles due to the fiduciary incompetence/mismanagement of KleptoMo1 – expect a straight-jacket set of economic policies for the interim. Our treasury is actually breathing fumes..

      Since, me no economist – my common sense tells me Malaysia will see a period of epic economic consolidation and fiscal conservatism. Capital flight will escalate in the short-term and FDIs’ as defined by the new Government slow in pickup. A Chinapek FinMin notwithstanding. PRC SOEs’ who are involved in the massive infrastructure projects are starting to sweat blood.

      In other words, many of the social safety nets will require revamping and possibly discarded. For example, an agency called Magick under PMO? Shut down stat, ya? In fact, the PMO has to cut down to bare minimum as it has the largest budget of almost all ministries.

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