PETALING JAYA: While Prime Minister Tun Dr Mahathir Mohamad has rushed ahead with his daunting to-list list, the country still has much to prove to the global markets still shocked by the corruption and incompetent of the previous government.
In an opinion piece, Nikkei Asian Review said on the job for less than a month, Dr Mahathir had already ordered an investigation of 1Malaysia Development Bhd, the state fund former Prime Minister Datuk Seri Najib Tun Razak created in 2009, his first year in office.
Najib denies wrongdoing but the US$4.5bil missing from 1MDB, and the US$700mil mysteriously found in the former prime minister’s personal accounts, have sealed his political fate.
“Clawing back those billions will come in handy as Mahathir grapples with a much bigger debt load than was expected. Turns out, the 50% debt-to-gross-domestic-product ratio Najib claimed is closer to 80%. A transparent accounting of what Najib and his enablers did might restore Malaysia’s image in markets,” Nikkei Asian Review said.
Dr Mahathir is cancelling big-ticket infrastructure projects, including a high-speed rail link between Kuala Lumpur and Singapore. Fiscal watchdogs warned that the project -- costing between US$15bil and US$25bil -- would be a boon for graft on its way to white-elephant status. Team Mahathir is reviewing many big Chinese investment deals signed during Najib’s tenure.
The report, however, said Dr Mahathir has yet to articulate plans to overcome the biggest challenges facing Malaysia.
“The most immediate is impressing investors. Mahathir’s initial priority is reining in government finances he says are in a “horrid state.” How, though, can he reconcile the bevy of populist handouts he promised voters with his fiscal disciple pledge?” Nikkei Asian Review reported.
It noted that Dr Mahathir also would face difficulties instilling financial discipline within his Pakatan Harapan coalition, which is ruling for the very first time. The new government is being creative in launching a crowdsourcing effort to reduce national debt.
“Bringing the top executives of state-owned enterprises to account and tightening corporate governance must be priorities. Open tenders in public procurement should come as soon as possible.
“The push for transparency and efficiency would also get a serious boost by listing state oil company Petronas. It would be a vital first step toward reducing the role of state companies, paying down debt and signaling to investors that Malaysia is pro-business,” it opined.
Nikkei Asian Review said Dr Mahathir must reverse steps he took in the 1990s to weaken the judiciary, water down parliament’s powers, jail critics and neuter the media. Sadly, Najib learnt from his former mentor and deepened the assault on institutions that hold leaders accountable.