‘Malaysia’ dreams the impossible dream

March 17, 2018

‘Malaysia’ dreams the impossible dream

by Manjit Bahtia
Published on
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    Prime Minister Najib Razak met Mel at Taxpayers’  Expense

COMMENT | “When you know someone is a thief, you stay away from him,” Dr Mahathir Mohamad told Beverley O’Connor, host of “The World” programme by the Australian Broadcasting Corporation (ABC) on Thursday.

Mahathir, of course, was referring to Prime Minister Najib Abdul Razak, who is spending a long-weekend junket in Sydney at the ASEAN Heads of Government hot-air talk-shop – again at the expense of Malaysian taxpayers.

Thief isn’t the only label Mahathir used to describe Najib. He also called him a “monster”. There are far better labels for Najib and for UMNO-BN members. “Monster” is an appropriate enough metaphor. But beyond labels, Malaysia has a serious international image problem.

There was a time when Malaysia was known to the world for Mahathir’s neo-nationalist Malay brand of loud-mouthness. That’s whenever he railed against, say, Singapore, his racist rants against Jews and Malaysia’s British colonial masters – the very lot who taught him how to “divide-and-rule” his own multiracial citizens. Mahathir single-handedly made the term ‘citizen’ a profoundly dirty word.

Malaysia became even more famous after Mahathir cooked up “facts” to jail his then protégé Anwar Ibrahim and chucked him in prison. When top cop Abdul Rahim Noor black-eyed Anwar in jail, Mahathir merely shrugged in the “saya tidak peduli” manner.

Now Anwar and Mahathir have become bosom buddies in a double-act to exorcise from Malaysia’s ripped-asunder soul Najib.


The Mahathir hypocrisy hasn’t gone unnoticed, as O’Connor reminded Mahathir.  Mahathir responded sheepishly, with the tiniest regret. He said it is more important to look forward to the future to overthrow the great big thief in their midst and an Umno that has moved so far to the right of its 1946 “objectives” that both the party and its president are rotten to its core.

Mahathir said UMNO has been destroying itself from within, that Najib “has destroyed” the original UMNO and that the party exists solely to support its President and an authoritarian regime.

Note that Mahathir never mentioned any of UMNO’s coalition partners-in-crime. Nonetheless, the mission now, as everybody knows, is for the Mahathir-led Pakatan Harapan cavalry to lead the charge and rout UMNO before Najib and his band of crooks rob the country blind.

Nothing new in all this. The lineage and the so-called discourse (whatever discourse means) and the battle-cries go right back to 1969 – the year democracy in Malaysia died after a long-simmering brain snap.

My friend S Thayaparan, a Malaysiakini columnist – whom I’ve never met – has been at great pains recently to make the case that “Malaysian voters” must stand up and save the country. If there’s a certain urgency in Mahathir’s determination, there’s equal stridency in Thayaparan.

But there’s also a problem. In fact more than one problem. First, the electoral system, run by the Election Commission, is not chartered to ensure full and fair elections; it remains chartered to ensure fully foul elections.


It’s also chartered not to uphold democracy, even democracy with Malaysian characteristics, but to maintain a Malay-led kleptocratic authoritarian regime that thinks it is above the constitution, therefore above the law. The regime is the law since rule of law has ceased to exist for nearly half a century.

Second, Mahathir had for 22+ years presided over just such a regime when he led it. He – more than Abdul Razak, Hussein Onn and Mahathir’s successor Abdullah Ahmad Badawi – had every time turned a blind eye to every skin-flake of known or rumoured corruption within his UMNO, his regime, his Malay-dominated bureaucracy and Police, and among the coterie of Malay, Chinese and Indian cronies or oligarchs he’d nurtured.

Those accused or nabbed, like Perwaja Steel’s Eric Chia, “somehow” managed to get off scot-free. It doesn’t take a genius to work out how.

Not when the separation of powers between the legislature, executive and judiciary, as a democracy would like to have it, disappeared virtually overnight under Mahathir. Yet here he is crying that Najib has violated everything decent and, worse, he’s getting away with it.

‘Muhibbah’ only in name 

Something else is worth remembering. What Najib is doing – centralising structural and institutional power in his hands through what I’ve called the UMNO-Leninist state – is very much the same thing Mahathir was doing when he ran the place like a dictator. Or close enough to one. The hypocrisy is stunning.

Third, the desperation among “Malaysians” opposed to the regime is perfectly understandable. The desperation for the coalition of opposition parties, Pakatan Harapan, is also perfectly understandable.

To go as far as enlisting Mahathir is one thing; to make him the leader of the pack and, more, Prime Minister if Harapan should win, is unthinkable.


The man who created the 21st century monster of Malaysia, among the many other monsters who clutter the regime from across the ruling coalition, was Mahathir. He gave each one of them long enough rope to enrich themselves, heeding Deng Xiaoping’s dictum. Najib too embraced the licence. Najib’s “living the good life,” Mahathir put it on television. So are Mahathir’s cronies and nepotists.

Mahathir can’t have it both ways. He needs to own up to the past wrongs when the rot started to really set in. Mahathir now says Malaysia needs to reset good governance by ridding the country of Najib et al. Fine.

But (a) what good governance did Mahathir bring to Malaysia when he was Prime Minister? And (b) he must not become Prime Minister a second time, not even as a seat-warmer for Anwar.

The King of Malaysia has a duty to the country. All the Sultans do. The King knows Najib has been ripping off Malaysia; he cannot continue to sit on his hands and wait for ridiculously pointless protocols before pardoning Anwar – if he dares to pardon Anwar at all. But he must if he does not want his country monster-ised further.

Anwar at the helm gives Harapan the legitimacy it needs to fight the elections. This is not to suggest Anwar (photo) is unproblematic. Even with Anwar at the tiller isn’t a sufficient condition to rule.

Thayaparan says “all Malaysians” must vote, that they must do their bit. I would agree if I knew just who “all Malaysians” were – another point Thayaparan missed in my letter. Show me one “all Malaysian”.

Here’s what I see. Here’s what I’ve always seen. And on my last visit to Malaysia very recently I saw this much more clearly.

There’s no “all Malaysian”. There are no “all Malaysians”. There are Malays, Chinese, Indians and so on – discrete ethno-tribal, sociological, economic and political units separated by competition between race, religion and ideology.

The old story. I don’t need to tell you this. The ruling coalition is also dominated by similar units separated by race and religion. So, too, Pakatan Harapan.As we do in primary math addition, this will be carried over into the future.

Therein lies Malaysia’s core problem. The country might be able to solve some of the economic divisions that rift the people, but it can’t and it won’t solve every one of them or every other accompanying problem until competition between race, religion and ideology is resolved.

“Muhibbah” exists but only in name. Always has since 1969. Najib, UMNO and their BN clan know this and they’ll play this up to the hilt, no matter what the fallout.

There are many other problems that will inevitably be brought into general election No 14 from GE13. Many are beholden to UMNO-BN. Some are also evident, again, in the opposition.

Like it or not, Harapan is divisive because it is itself divided. In fact – and I agree with Thayaparan – Harapan looks woefully inadequate. It hasn’t learnt from its mistakes from GE-13. Those mistakes were fundamental, starting with its rather lame manifesto.

Harapan may have done better than expected in that election but it can’t hope for the same lucky streak in GE-14 to break the proverbial UMNO-BN camel’s back once and for all.

It would be wonderful if it does but UMNO has some things on its side, and a certain important – no, critical – momentum that Harapan would wish it has too. It won’t if it keeps carrying on like it has. But Mahathir isn’t the answer.

MANJIT BHATIA, an Australian, is a US-based academic, researcher and analyst specialising in Asian and international economics, political economy and international relations. He lives in Hanover, New Hampshire.

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


Malaysia: 1MDB– A Major GE-14 Issue

March 14, 2018

Malaysia: 1MDB– A Major GE-14 Issue

by P. Gunasegaram@www.malaysiakini.com

Image result for najib razak in a fix over 1mdb

QUESTION TIME | They say rural Malays and other deprived Malaysians don’t care about 1MDB and that their major concern is only with the higher cost of living. I say, utter rubbish.

I refuse to believe that any Malaysian, rural or urban, is unconcerned that effectively as much as over RM40 billion was stolen from 1MDB and of this, over RM30 billion was borrowed money.

The problem may be that the magnitude and significance of what has been allowed to happen by BN – that means all of them from Ministers to MPs to state assemblypersons to delegates from all BN parties but particularly UMNO – has not been explained to all of the Malay masses.

And the only person who seems able to explain it in an understandable manner to Malays is Dr Mahathir Mohamad in his own inimitable style.

But make no mistake about it – if 1MDB is still not an election issue it has to be made one. Essentially, 1MDB borrowed money and most of the borrowed money was allegedly stolen by transferring it out through a convoluted process into accounts controlled by an associate of the Prime Minister, Jho Low (photo).

A total of US$681 million (RM2.7 billion) came into Prime Minister Najib Abdul Razak’s account before US$620 million (RM2.5 billion) was transferred back. These are facts.

It is unprecedented in the annals of Malaysian history. Never before was money “stolen” from a government-owned company (100 percent owned by the Minister of Finance Inc) in such a manner and tens of billions of ringgit at that.

It is much bigger than the Bumiputra Malaysia Finance (or BMF) scandal (RM1.8 billion) and much more blatant and audacious.

There is a hole in 1MDB which at some time will show itself, despite all the denials by the government simply because one cannot hide the movement of international funds.

The government is already engaged in desperate moves to try and fill up these holes such as getting into lopsided contracts with others, including companies from China.

Such things are a double-whammy as more and more money is thrown away through overpriced contracts and the like to try and return money into 1MDB accounts and to perhaps steal some more. No matter what they do, such flows can eventually be traced through the international financial system.

It is through identification of international flows that the US Department of Justice (DOJ) has managed to obtain an overwhelming amount of evidence that money was stolen and laundered for the purchase of luxury assets including a US$27 million pink diamond necklace.


If we don’t collectively get rid of this government and hold it to account for all the losses incurred at 1MDB, the future of this country is very bleak indeed.

If anybody needs a recap of what 1MDB is, and we all need one from time to time, here it is 10 points:

1. RM40 billion or more ‘stolen’ from 1MDB. It’s allegedly the biggest theft by a government (kleptocracy) the world has ever seen. Malaysian officials like world records and this is truly a world record but of the very wrong kind. It has made Malaysia rather notorious and infamous.

2. US$7 billion (RM28 billion) unaccounted for. Press reports quoting the Auditor-General’s Report on 1MDB, a report which is kept unrevealed to the Malaysian general public by using the Official Secrets Act, say this. If it was untrue, all the government has to do is unveil the auditor-general’s report which it has not done so far. The figure amounts to most of the long-term bonds of RM31 billion at current exchange rates.

3. Interest, asset and fees over-payments could cost over RM10 billion. The under-pricing by 1MDB of long-term bonds through needlessly high-interest rates, excessive fees to Goldman Sachs which arranged the bonds and over-payment for power assets, which now belong to a China entity, would have cost over RM10 billion more.

Image result for Equanimity


4. US$4.5 billion (RM18 billion) stolen, according to DOJ. This is the definitive figure given by the DOJ which is now in the process of recovering US$3.5 billion (RM14 billion) in assets. The yacht Equanimity belonging to Jho Low costing US$250 million or RM1 billion was the latest large asset to be seized, to be handed over to the FBI in Bali by the Indonesian authorities.

5. US$681 million (RM2.7 billion) of the money went to Najib. It came from an account which the DOJ says was controlled by Jho Low, a family friend of Najib’s.

6. US$238 million (RM952 million) went to Riza Aziz, Najib’s stepson and Rosmah’s son. Riza is a close associate and friend of Jho Low and reportedly did a deal with the US recently – the company that Riza (photo) is associated with, Red Granite Pictures, last week agreed to return to the US government US$60 million (US$240 million).

7. Najib must be aware of 1MDB deals. According to Section 117 of 1MDB’s memorandum and articles of association, Najib had to be informed of all of 1MDB’s major decisions. Najib was and is Finance Minister and the highest officer of Minister of Finance Inc which owns all of 1MDB. He was also chairperson of the advisory board. It is highly unlikely he did not know and the fact that he does nothing now is a sure sign of a cover-up.

8. Authorities maintain all is well at 1MDB. Despite overwhelming evidence in a number of countries that money was stolen from 1MDB, the authorities, including the Police and Attorney-General maintain nothing wrong was done. 1MDB has not even reported the loss of the money to the police.

9. US$4 billion (RM16 billion) of ‘stolen’ money can’t be returned. The Malaysian government steadfastly and ridiculously continues to insist that 1MDB did not lose money, making it impossible for various governments to return money and assets bought with allegedly stolen 1MDB funds which they have seized or are seizing in the course of their own investigations.

10. Desperate measures and a weakened ringgit could further aggravate the situation. The government is aggressively doing deals which may raise illegal money through contract overpricing to plug the holes in 1MDB such as the RM55 billion East Coast Rail project with China companies and others. These will have deleterious effects on the future of the country. Meanwhile, the weakened ringgit has resulted in the latest rounds of price increases (not GST whose full impact finished at the end of 2016) as confidence evaporates, to price in a risk premium for the ringgit.

There is more but that pretty much sums up the main points. So whoever wants to do the messaging for the rural and other folk needs to focus mainly on the below three points, using the 10 above to add colour and illustration:

1. 1MDB lost RM40 billion. 1MDB borrowed over RM30 billion money through long-term loans which were “stolen”. A further RM10 billion was lost through high-interest rates, paying too much for things bought and to advisers.

Image result for Shahrir Samad admits to receiving R1 million from Najib Razak

2. The current Prime Minister, government and all major BN politicians were aware of this, and some even benefited from the “loot” with UMNO division heads admitting they received money from the Prime Minister e.g Shahrir Samad ( pic above). UMNO still supports its leader.

3. If this government is not changed, even worse things will happen to this country as more and more money could be stolen.

How can anyone even think that 1MDB is not a major issue in these elections? If it is not, isn’t it time it was made one?

If anyone was aware of the facts, would they actually think 1MDB is a non-issue? It will be a major mistake to underplay the issue of 1MDB in the forthcoming elections.

P GUNASEGARAM is sceptical of surveys which claim to show this and that when they clearly go against plain old common sense. E-mail: t.p.guna@gmail.com


Corruption is a Serious Matter, Mr. MACC

March 12, 2018

Corruption is a Serious Matter, Mr. MACC

by R. Nadeswaran@www.malaysiakini.com

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COMMENT | In May last year, under a blaze of publicity, six police officers including an OCPD and district crime chiefs in Malacca were arrested by the MACC for running a protection racket involving gambling dens. The big news was that anti-graft officers seized RM186,000 in cash and froze the bank accounts of all the suspects, totaling more than RM459,000.

Almost a year later, there has hardly been a whimper from MACC. In July last year its Deputy Chief Commissioner (Operations) Azam Baki, in denying the files have been closed, said investigations against a few Malacca police officers “are still in progress” without interference from the “higher-ups”.

In September last year, two brothers, who hold “Datuk” titles and are top officials of a family-run group of companies, were arrested by the Malaysian Anti-Corruption Commission (MACC) over an ongoing probe into a land deal between a group of settlers and the Great Alonioners Trading Corporation Bhd (Gatco).

The suspects, who are aged 54 and 58, were picked up by MACC officers in separate operations. Also arrested was the 68-year-old accountant who, in his capacity as a liquidator, had detailed knowledge of the land deal. Five days later, they were released without charge and it was business as usual.

On March 7 – less than a week after allegations were made, the MACC cleared UMNO supreme council member Abdul Azeez Abdul Rahim of allegations that he had received an RM3 million bribe to help ‘cover up’ a probe into the Penang undersea tunnel project.

Azam (photo) said the Commission’s investigation showed no evidence of Abdul Azeez’s involvement in the matter, and that the accusations were deemed as ‘baseless.’ He added that the commission had retrieved documents to assist in its investigation and its subsequent probe had cleared Abdul Azeez.

“Based on our investigations, Abdul Azeez did not have any direct links to the Penang undersea tunnel project or those closely related to the project’s construction. MACC has verified the documents gathered pertaining to the case, before arriving at the decision,” Azam said.

These three contrasting scenarios are telling indeed and offer a glimpse of how the MACC treats offences and offenders. The public exoneration of Abdul Azeez shows how efficiently and speedily it can “close” a case and why it takes sometimes months to even years to produce the offenders in court or publicly absolve them of any wrongdoing.

Gatco case: No corrupt dealing

In the Gatco case, the MACC, after holding the trio for five days, found that the sale of the land was done in accordance with the law and there was no corrupt dealing, that the land was sold in an auction. Subsequently, even the courts deemed that nothing sinister or illegal was done.

How many of those arrested by the MACC have been accorded the same treatment given to Abdul Azeez? How many people have been publicly exculpated after being arrested and detained? How many people have been photographed in the orange suit, only to be released without charges?

Our law enforcement agencies, especially the police and the MACC have often lamented that the people are not coming forward with information on criminal activities. No one should blame them because of the different rules being applied, based on the position and status of the accused person.

Why should one come forward with information when he or she knows that the case would be classified as NFA (No Further Action)? Why should one bother when some people are immune from prosecution, let alone be arrested for purposes of investigations?


Without accusing or insinuating that there has been wrongdoing on the part of Abdul Azeez (photo) or anyone else, this whole case is shrouded with an air of mystery and leaves a bad taste in the mouth. When someone sends a demand letter, what is expected is a reply. For all intent and purpose, it was a civil case, where one party is demanding the return of monies paid. There’s nothing criminal about this transaction. Instead, Abdul Azeez lodged a police report on the demand of RM3 million which Consortium Zenith Construction Sdn Bhd had supposedly paid as consultancy fees.

Abdul Azeez denied ever having any dealings with the company – the special purpose vehicle (SPV) of the mega Penang undersea tunnel project – or its Senior Executive Director Zarul Ahmad Mohd Zulkifli.

Both Zenith and Zarul Ahmad have avoided the media and we have to take Azeez’s word that Zenith has apologised. Then, a very important question arises: “If Abdul Azeez claims someone used his name and Zenith had apologised, why in the first did the company send a demand notice without verifying facts?”

Hopefully, we don’t have to wait long. The Penang State Secretary has written to Zenith seeking explanation on the course of events that had taken place. Chief Minister Lim Guan Eng, too, wants the truth from the horse’s mouth. This report should be put in public domain for the rakyat to decide who was wrong and who was right. Is that asking too much?

R NADESWARAN has worked with the MACC and its predecessor, the Anti-Corruption Agency for more than 30 years. He also served on MACC’s advisory board two years ago. Comments: citizen.nades22@gmail.com

1MDB: ‘Kleptocracy at its worst’ in Malaysia

March 11, 2018

1MDB: ‘Kleptocracy at its worst’ in Malaysia

So says US Attorney General Jeff Sessions as global investigators seize assets and tighten dragnet on premier Najib Razak’s 1MDB scandal

Image result for Najib Razak in a Fix over 1mdb
Malaysian Premier Najib Razak aka MO1 is in a Bind over 1MDB

“Kleptocracy at its worst” is how US Attorney General Jeff Sessions recently characterized dealings at 1Malaysia Development Berhad (1MDB), a heavily indebted state development fund currently under investigation for fraud by the US Department of Justice (DoJ).

The fund, created and until recently oversaw by Malaysian Prime Minister Najib Razak, has been at the center of ongoing embezzlement probes in multiple countries since 2015. But while the embattled premier plays down the evolving scandal in an election campaign season, new overseas asset seizures are keeping it in the headlines.

Image result for US Attorney General Jeff Sessions on 1MDB


Investigators believe US$4.5 billion was misappropriated from the fund by high-ranking Malaysian officials and their associates since 2009, making it one of the world’s largest ever financial fraud cases and the biggest action ever brought under the DoJ’s Kleptocracy Asset Recovery Initiative.

Najib, believed to be the unnamed “Official 1” in the DoJ’s ongoing case, has avoided scrutiny and charges at home by sacking critics, including his former deputy, appointing an Attorney General who has exonerated him of all wrongdoing, and clamping down on probing media.

The Malaysian Premier has consistently denied involvement in any corruption and claimed the US$681 million discovered in his personal bank accounts was a “gift” from a Saudi royal family member rather than pilfered 1MDB funds.

While opposition parties have staged anti-kleptocracy rallies centered on 1MDB, it’s not clear yet the scandal will be Najib’s undoing at the polls, which must be held by August. But a new string of foreign asset seizures and developments are bringing the issue back to the fore as elections draw near.

Last week, Indonesian authorities and US Federal Bureau of Investigation (FBI) agents seized a US$250 million luxury yacht belonging to fugitive financier Low Taek Jho, a central figure in the 1MDB scandal.

A seized a luxury yacht sought by the U.S. Department of Justice (DOJ) as part of a multi-billion dollar corruption investigation is seen off the shore of Banoa, on the resort island of Bali, Indonesia February 28, 2018 in this photo taken by Antara Foto. Antara Foto/Wira Suryantala/via REUTERS

A 1MDB-linked seized luxury yacht sought by the US Department of Justice (DOJ) seen off the shore of Banoa, Bali, Indonesia February 28, 2018. Photo: Antara Foto via Reuters/Wira Suryantala

Also known as Jho Low, DoJ documents describe him as “a Malaysian national who had no formal position with 1MDB but who was involved in its creation and exercised significant control over its dealings.”

Low, known for his flamboyant displays of wealth, is believed to have acted as an unofficial adviser to 1MDB, brokering the state fund’s largest business deals and allegedly siphoning the proceeds to purchase luxury items, including museum paintings and expensive jewelry.

Low has denied any wrongdoing and his current whereabouts remain unknown.

Mohamed Azmin Ali, a senior opposition parliamentarian, called Indonesia’s seizure of the Cayman Islands-registered vessel a “milestone” in the 1MDB investigation, while lambasting the “failure of Malaysian authorities to act in the cause of justice.”

Low’s spokesperson dismissed allegations against him as “deeply flawed and politically motivated” and characterized the DoJ’s asset recovery efforts as a “pattern of global overreach.”

Other assets allegedly purchased by Low with 1MDB funds include a private jet, a New York hotel and real estate, and a US$107 million interest in EMI Music Publishing.

Malaysia-Jho Low-1MDB-Scandal-AFP copy


The DoJ has also sought to recover proceeds from the blockbuster film “The Wolf of Wall Street” made by Red Granite Pictures Inc, a production company co-owned by Riza Aziz, the Malaysian premier’s stepson and a friend of Low.

Leonardo DiCaprio, the film’s lead Hollywood actor, has cooperated with US investigators, turning over artworks and gifts worth millions of dollars reportedly given to him by Low.

On March 7, Red Granite Pictures announced a settlement with the DoJ that requires it to pay US$60 million in a civil forfeiture suit covering rights and interests claims to “The Wolf of Wall Street”, as well as two other films, “Daddy’s Home” and “Dumb and Dumber To”, also suspected to have been financed with siphoned 1MDB funds.

Though the settlement does not constitute “an admission of wrongdoing or liability on the part of Red Granite,” according to the court filing, analysts widely regard Riza’s compliance with the DoJ’s asset seizure demands as an admission of guilt.

The Wall Street Journal (WSJ) recently reported that Elliott Broidy, a top Republican Party donor close to US President Donald Trump, and his wife Robin Rosenzweig, an attorney, had been in negotiations with Low, who had apparently approached the well-connected couple in the hopes of influencing the DoJ’s investigation.

The fugitive Malaysian financier, according to a cache of emails reviewed by WSJ, was prepared to award Rosenzweig’s California-based law firm a US$75 million fee if it could persuade the DoJ to drop its civil asset forfeiture lawsuits within 180 days. It is not clear whether the agreement was ever finalized.


US-Elliot Broidy-Robin Rosenzweig-1MDB-Youtube Screen Grab

Elliot Broidy (R) and Robinn Rozenzweig (L) have been linked to Malaysian businessman Jho Low. Photo: Youtube



Broidy, previously Vice-Chairman for Trump 2016 election campaign’s joint fund with the Republican Party, had also prepared talking points for Malaysia’s premier ahead of his controversial September 2017 visit to Trump’s White House, in which Najib expressed his willingness to assist US efforts to isolate North Korea.

It is not clear whether Malaysia’s position was influenced by Broidy’s talking points. Lawyers for Broidy and Rosenzweig said the latter’s law firm had been engaged by Low “to provide strategic advice” and neither had discussed Low’s 1MDB case with President Trump or DoJ representatives.

Low’s purported efforts to influence the DoJ’s investigations, however, have failed to bear fruit, as evidenced by recent asset seizures and forfeiture settlements.

While similar 1MDB probes are underway in at least six countries, including Singapore, Switzerland, Luxembourg, and Hong Kong, Malaysian authorities have quietly started to wind down the scandal-plagued fund.

Mohd Irwan Serigar Abdullah, Malaysia’s Treasury Secretary General, announced last week that 1MDB would be permanently closed once it settles all outstanding debts. 1MDB paid US$603 million last December to settle a debt with Abu Dhabi’s International Petroleum Investment Company (IPIC).

Observers believe the sale of two land parcels from 1MDB-related entities to firms linked to Chinese state enterprises last year rescued the beleaguered state fund from defaulting, extending a political lifeline to Najib in the process.

1MDB and IPIC are still in a dispute over US$3.54 billion in cash advances that 1MDB claimed it made to several Abu Dhabi-controlled entities as part of obligations under a 2012 bond arrangement. IPIC denies ever receiving the monies.

Treasury Secretary Irwan Serigar projected it would take more than a decade for the state fund to settle its debts, which are slated to be repaid from revenues generated from government mega-projects, including the soon-to-be-launched Tun Razak Exchange commercial skyscraper and returns on high-speed rail infrastructure.

Malaysian officials have said 1MDB’s eventual closure is a business decision and have not apportioned blame for the fund’s indebtedness or mismanagement, conceding only “weaknesses” in its administration.

However, emergency motions to discuss recent 1MDB developments raised in Parliament by the opposition have been denied. Opposition parliamentarian Gooi Hsiao-Leung recently called on Najib to clarify whether Malaysia would seek to recover assets seized by the US DoJ and why the government did not intend to claim Low’s confiscated yacht.

Attorney General Mohamed Apandi Ali maintains the government has no ownership claim over the 1MDB-linked yacht. Speaker Pandikar Amin Mulia, meanwhile, denied discussion of Gooi’s emergency motion on grounds that such queries would be prejudicial to police investigations into Low.

Malaysia’s Police Chief, Mohamad Fuzi Harun, has since said that his investigations revealed no link between Low and 1MDB.

“One of the strangest things surrounding the 1MDB and the DoJ’s accusations is that the Malaysian government has shown no interest at all in regaining any of the assets the DoJ says it is trying to recover,” Ooi Kee Beng, executive director at the Penang Institute, told Asia Times. “This is despite the huge sums involved.”

Putrajaya has also shown apparent disinterest in seeking restitution of 1MDB-linked funds seized overseas. Swiss financial authorities seized US$102 million from banks last year after sanctioning now defunct local bank BSI for its involvement with 1MDB.

Lawmakers in Switzerland will soon debate whether those sums should be absorbed into state coffers as no party has claimed or sought to repatriate the funds.

Singapore is the only country to have jailed or brought charges against financial sector workers for cases linked to 1MDB. The city-state, which enjoys close bilateral ties with Putrajaya, could ruffle feathers by bringing charges against individuals close to the premier, says Chandra Muzaffar, a Malaysian political scientist.

“Singapore has already acted against some 1MDB linked individuals, but it does not seem to have affected Singapore-Malaysia ties,” he noted. “However, if Singapore or the US pressed concrete charges against Jho Low or Reza Aziz, Najib’s step-son…Najib may take it as a personal affront and retaliate.”

As 1MDB investigations move ahead, some involved with its alleged illicit dealings have faced charges and fines overseas, though high-profile Malaysian figures and high-ranking politicians continue to maintain their iron-clad denials while thwarting calls for transparency and responsibility.

“It is unlikely that as long as the leading figure Najib Razak is in power that there will be any meaningful accountability,” said Bridget Welsh, a Malaysia expert at Italy’s John Cabot University. “The most tragic dimension of this scandal is that the burden has been passed onto ordinary Malaysians, who have had to pay for the abuse of power by their leaders.”


Thanks to MSNBC for the Update on 1MDB

March 11, 2018

Thanks to MSNBC for the Update on 1MDB

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The sad truth is that the Malaysian Prime Minister Najib Razak does not seem to care about this bad publicity. In fact, he seems to enjoy it.  We Malaysians are embarrassed being associated with corruption and  grand thievery.–Din Merican


IMF Article IV Consultations with Malaysia

March 11, 2018

IMF Article IV Consultations with Malaysia

The Economic News is not bad for Malaysia.  But the politics is something we as Malaysians must worry about. The regime in power is playing with race and religion to keep Malay votes and retain power. As a result, Malaysia is today a divided nation. Corruption is also at an all time high. Understandably the IMF scrupulously avoids commenting on  the state of politics –Din Merican

A New Landmark  under construction in Kuala Lumpur

The IMF Executive Board has recently concluded the Annual Article IV consultations with Malaysia. The Fund has issued a number of documents relating to the consultations. These highly nuanced documents are in a sense a report card on the performance of the Malaysian economy. They also highlight areas in which policy reforms are recommended. In the current round, there were a few issues on which there was no convergence of views.


International Monetary Fund. Asia and Pacific Dept

Publication Date: March 7, 2018

Electronic Access:

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The full report and related documents can be downloaded from the above site.  Additional documents are listed below:


MF Executive Board Concludes 2018 Article IV Consultation with Malaysia

March 7, 2018

On February 9, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Malaysia.

 The Malaysian economy has shown resilience in recent years despite external shocks and has continued to perform well. Progress was made toward achieving high income status and improving inclusion. Median household income has risen further and the already-low national poverty ratio declined. Real GDP growth has surprised on the upside in 2017, and is estimated at 5.8 percent for the year, driven by domestic demand and robust exports. While headline consumer price inflation went up to 3.8 percent in 2017 due to higher oil prices, core inflation and credit growth are contained. On the external side, the current account surplus is estimated to increase to 2.8 percent of GDP, helped by strong exports.

Growth is projected to start to decelerate from its 2017 peak, remaining above potential at 5.3 percent in 2018, and converging to its potential rate of close to 5 percent in the medium term. In 2018, headline inflation is expected to moderate to 3.2 percent, as the response of core inflation to a positive output gap is partly offset by lower contribution from oil prices. The current account surplus is expected to soften to 2.4 percent of GDP in 2018, as export growth normalizes.

Risks to the growth outlook are balanced. On the external side, downside risks include a global retreat from cross-border integration, structurally weak growth in advanced economies, and a significant China slowdown, while a speedy approval and implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and possibly lingering strong global demand for electronics are upside risks. Domestically, the confidence effects related to the cyclical upturn could be stronger than anticipated, while exposures in the real estate sector pose a downside risk.

Executive Board Assessment[2]

Executive Directors commended the authorities for the strong and resilient performance of the Malaysian economy, underpinned by accommodative monetary policy and gradual fiscal consolidation. While growth will likely remain above potential in 2018, inflationary pressures appear contained, and risks to the outlook are balanced. Going forward, Directors emphasized the importance of supporting economic growth while maintaining stability, as well as raising productivity through structural reform.

Directors agreed with the planned pace of fiscal consolidation in 2018, noting that it will help build buffers while maintaining financial market confidence. Going forward, they supported a gradual consolidation path consistent with the authorities’ fiscal anchor, which would help build additional fiscal space. Directors advised that fiscal consolidation should prioritize higher revenue, to facilitate the adoption of fiscal measures to support external rebalancing. They encouraged further progress on the fiscal structural agenda, including efforts to strengthen fiscal transparency and risk management.

Directors supported the January increase in the monetary policy rate, and agreed that the current policy stance is appropriately biased toward less accommodation while remaining supportive of demand. Noting that Bank Negara Malaysia’s monetary policy framework has served the country well, Directors recommended that monetary policy and exchange rate flexibility remain the first line of defense against shocks.

Directors welcomed improvements in the depth and liquidity of onshore financial markets during 2017 following the Financial Markets Committee (FMC) measures that liberalized and increased the flexibility of onshore hedging instruments, as well as a general rebound of capital inflows to emerging markets. They supported the consultative and inclusive approach adopted by the FMC in developing these measures, and encouraged the authorities to build on these successes to address any further gaps in financial market development. Some Directors urged the authorities to phase out—in a manner that preserves financial stability—the measures assessed by staff as capital flow management measures. A few other Directors, however, were of the view that there should be a greater openness to other approaches to promoting the authorities’ development objectives. Directors urged the authorities to continue a constructive dialogue with staff on these issues.

Directors agreed that financial sector risks appear contained, with sound bank profitability and liquidity, and low nonperforming loans. Nonetheless, they noted that vulnerabilities in household mortgages and the property development sector require vigilance, and recommended taking any necessary steps to mitigate risks. They encouraged the development of a rental real estate market. Directors welcomed the authorities’ commitment to take further actions to address deficiencies in Malaysia’s AML/CFT framework.

Directors commended the authorities’ emphasis on raising productivity and investment and encouraged further labor market reforms. Priority should be given to measures that encourage female labor force participation, improve the quality of education, reduce skills mismatches, and bolster public infrastructure and the regulatory framework to further encourage private investment.

How is the economy doing?

Image result for Malaysia: Selected Economic and Financial Indicators

Malaysia’s economy is showing resilience and is performing strongly. Growth is running above potential, driven by strong global demand for electronics and improved terms of trade for commodities, such as oil and gas. On the domestic front, Malaysia’s strong employment is boosting private consumption, and investment is also helping to drive growth.