Malaysia concluded an election on May 9, 2018 with surprising results. Nearly all analysis pointed to a win for the powerful but controversial Najib Razak, but instead veteran Malaysian political leader Mahathir Mohamed won decisively. We ask longtime former General Electric ASEAN CEO Stuart Dean and esteemed Malaysian trade expert and former senior official Rebecca Fatima Sta Maria for their views on what this means for Malaysia and for business.
“What really strikes a chord with (the business community) about this government is their pledge to enhance governance, transparency, rule of law. For the average Malaysian it’s addressing the cost of living issues, bread and butter issues. The immediate concern (by the new government) is to address the cost of living.”
Rebecca points to the new government’s efforts to clean house and eliminate the pools of corruption (check out this article in NYT about how that can work) and has placed a high priority on that for the Council of Elders even at the technical level. She says that one month in, Mahathir looks like a man in a hurry and is staffing his government with “really good people, not cronies.” She says, “If you walk around Kuala Lumpur, you can see the joy in peoples’ faces. They feel so light and free, and that’s something we haven’t seen in a long time.”
Stuart Dean adds that Malaysia dropped eight places in the Transparency International corruption rankings between 2012 and 2017, emphasizing that Malaysia’s business environment was experiencing more than just a perception problem. He notes that multinational companies doing business in Malaysia had lost market share, particularly to the Chinese who have won some of the big mega-projects, as have cronies to the Najib administration, and American companies have been left out of the game because they are beholden to the Foreign Corrupt Practices Act. He sees a more transparent environment as naturally good for foreign companies operating in the country, and for business in general.
Stu cautions against euphoria though saying “It’s not going to be a party right away” and says that there are fiscal issues that need to be fixed and the government needs time to orient itself. He says that there will likely be a much clearer view for business in the country within six months.
For a helpful and thorough backgrounder, check out this piece by Krithika Varagur in the New York Review of Books.
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