Mahathir Mohamad was sworn in as Malaysia’s new prime minister on Thursday last week, spelling the end of the rule of Najib Razak and the six-decade reign of the Barisan National party.
Political observers around the world have been caught off guard by the stunning upset pulled by Mahathir, who, throughout the run-up to the election, was widely seen as the underdog.
Without doubt, Najib’s downfall is largely due to the corruption allegations against him and his government’s incompetence.
Also, given that populist and anti-establishment sentiments have taken the world by storm in recent years, including Malaysia, they may have played a role in bringing down the Najib administration.
As the 92-year-old Mahathir and former deputy prime minister Anwar Ibrahim were able to set aside their old grudges against each other and jointly campaign for the Pakatan Harapan (Alliance of Hope), it has proved a huge draw for Malaysian voters.
As a matter of fact, despite being labeled as an autocratic leader by western media and his notorious fondness for grandiose undertakings during his time in office as Malaysia’s prime minister between 1981 and 2003, Mahathir has been leaving a strong impression among his fellow citizens over the years.
It was during his reign that Malaysia underwent remarkable modernization in infrastructure (e.g. the Petronas Twin Towers) and witnessed a surge in foreign investments in its manufacturing sector.
Also, Mahathir is widely remembered and appreciated by many Malaysians for his success in guiding the country through hard times during the Asian financial crisis of 1997-1998 with his impressive leadership and unwavering resolve.
And thanks to his decisive and drastic measures to enforce capital controls and fix the exchange rate of the ringgit, Malaysia managed to ride out the crisis largely intact.
As a result, Malaysia didn’t have to desperately seek help from the International Monetary Fund like South Korea did, or experience the same kind of major political and economic turmoil as Indonesia in the aftermath of the 1997-1998 crisis.
In comparison, perhaps the only thing former PM Najib would be remembered for is his abuse of power and scandals of corruption during his term in office.
Besides, Mahathir has always remained a populist leader who is devoted to defending the interests of the majority population of Malaysia, i.e. the Malays, regardless of dismay among the West or any concern about political correctness.
And that allows him to gain favor with not only voters who are hungry for change, but also with conservative and rural Malays who very much want to retain their privileges.
Nevertheless, Mahathir’s political comeback is only his first step towards a complete power transfer in Malaysia.
It is because under the agreement reached among the various factions within the Pakatan Harapan prior to the election, Mahathir will have to pardon Anwar, who is still in jail, and restore his political rights as soon as possible in order to allow him to assume office as the next prime minister.
Yet even though it is said that the Malaysian monarch has already agreed to grant Anwar a royal pardon, he will have to first win in a by-election and become a parliamentary member again, which may take at least several months to materialize, before he can take the PM post.
As such, we believe political stability in Malaysia in the days ahead will largely depend on when and how Mahathir is going to hand over power to Anwar, whether Anwar will be able to be assume office of the prime minister smoothly and, in particular, whether the Pakatan Harapan can continue to stick together.
As far as foreign policies are concerned, although Mahathir has vowed during his election campaign to lessen the pace at which Chinese investments are pouring into Malaysia, we believe Kuala Lumpur’s policy towards Beijing is unlikely to see any radical change under the new PM.
It is because, politically speaking, over the years Malaysia has always been keeping both the United States and China at arm’s length in order to avoid getting entangled in any great power rivalry in the region, not to mention that the country isn’t a diplomatically active member within the ASEAN or the Association of Southeast Asian Nations.
Then second, Malaysia and China maintain close economic and trade relationships. Moreover, China already has a large number of investments in Malaysia.
We believe it would be in Malaysia’s best interest not to take sides with the US against China, and in particular refrain from actively intervening in the South China Sea territorial dispute in the coming days.
This article appeared in the Hong Kong Economic Journal on May 12
Translation by Alan Lee
[Chinese version 中文版]
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