Without any doubt, the world was shocked by yet another black swan event after the Brexit referendum and Trump’s presidential victory a few years back.
But unlike these two events, the Malaysian General Election (GE) outcomes occurred in the Southeast Asian region — a region known to host authoritarian regimes controlled either by long-standing political parties or the military.
The opposition coalition, Pakatan Harapan (PH), swept into power on May 9, decisively beating the 61-year old Barisan Nasional’s (National Front) rule. They were in power since Malaysia’s independence in 1957.
Historical as it is, the election outcome was unexpected by most observers in the first place. It
ran contrary to many of the international and even domestic analyses which favoured the BN and believed any regime change was impossible, largely due to the coalition’s structural power and agential control exerted in every corner of the Malaysian society.
But nevertheless, the PH pulled out an upset victory, ended the old BN regime and a new Alliance government headed by the former prime minister, Tun Dr Mahathir Mohamad is installed a day after the election.
What is notable, however, is the fact that the PH was given a decisive victory by the 48% voters who voted for the coalition. By extension, this would mean that majority of voters voted for an end to the previous Najib administration’s controversies — high cost of living, corruption allegations, uncontrolled racist discourses and perceived lack of effective governance.
And it is due to such strong backing by the 5.8-million voters that the present Mahathir 2.0 administration must show its credibility, capacity and resolve to implement the 100-day promises it made during the campaigning period. Now that the clock is ticking, let us re-examine what actually happened in the past 12 days and what will be enveloping in the coming 86 days.
Consolidation of power
First, consolidation of power to ensure the stability of the government after the power transition. After sworn-in as the prime minister, Mahathir’s priority is to take full charge of all government affairs.
For one, he was quick to designate and reveal the PH’s leaders who will take charge of the three core ministries, namely, Ministry of Finance, Ministry of Defence and Ministry of Home Affairs.
Understandably, such deliberation is to facilitate the coalition’s control of the three most crucial ministries that deal with the country’s finances and national security affairs. Hence, the Mahathir 2.0 administration is on a strong footing to prevent any disruptive post-election situation —certainly, the domestic political instability risk identified by the independent think tank, Anbound China, that will deter foreign investors to the country.
With 10 other Cabinet members revealed and sworn-in as of now, the PH administration is in full force to implement their reform agenda.
Also, for the past week or so, the new government is initiating incessant ‘cleaning-up’ efforts in those government agencies or government-owned media believed to be compromised by the Najib administration. To date, the Attorney-General (AG), Treasurer-General and former Chief Commissioner of Malaysian Anti-Corruption Commission (MACC) — those that featured highly in the 1MDB corruption case — are either put into forced leave, transferred to other departments or resigned altogether. And alongside these high public officials, the former Inspector-General of Police (IGP), Khalid Abu Bakar, also became the latest personnel to be barred from leaving Malaysia and may soon face investigations for his roles during the previous administration.
More than that, the pro-BN media with the likes of Media Prima and Utusan Malaysia, also saw their managing editor and several board members resigning from their posts, and all these occurred in a matter of six days after Mahathir is sworn-in as the seventh Prime Minister of Malaysia. Perhaps it was due to the ‘witch hunts’ in the government agencies that alerted these media’s top management personnel to vacant their posts in order to avoid any confrontation (as happened in the past) with the new government. By all means, more of such cases will continue until all those who are known to be assisting the previous government are fully eradicated from the bureaucracy.
Council of Eminent Persons
Second, with the bureaucracy gradually under the control of the new government, the push for the socio-economic reforms will be next on the line. This, in turn, is very dependent on the Council of Eminent Persons (CEP) which started its works less than a day after its announcement by Prime Minister Mahathir himself.
Among all, the five-member (including Robert Kuok) council worked in urgency in examining not just the 1MDB case and mega projects, but also how to end the Goods and Services Tax (GST) and return the fuel subsidy without incurring heavy burden to the country’s finances.
As disclosed by Zeti Akhtar Aziz and Daim Zainuddin, two of the council members, the group seemed to have found a strategy in abolishing the GST and reinstating the fuel subsidies without adversely affecting Malaysia’s fiscal situation, international debt ratings and the overall economy. And this was echoed by the Mahathir 2.0 administration which announced the zero-rating of GST (starting June) and the return of fuel subsidy, days after the CEP’s recommendations.
Before the end of the 100th day, it is expected that the Mahathir 2.0 administration will swiftly implement more of the recommendations made by the CEP to send a clear message (to the voters) of its conviction to the 100-day promises. To name a few, the strategy may encompass prioritising public projects, increasing the productivity of the public sector, and reining in wastages in public procurements and expenditures.
Ending mega-projects started by Najib
Third, re-evaluating mega projects which have been awarded to foreign firms, mainly Chinese giants operating in Malaysia. Whilst the Council has yet to evaluate these mega projects in their meetings, the PH government is leaning towards the decisions of full revision or termination of these projects within 100 days.
Among all, the East Coast Rail Link (ECRL) is tipped to be the first to be assessed for its sustainability questions and the procedural issue on how the project is awarded by the previous government. Sustainability questions in that whether the project is still suitable given Malaysia’s dire fiscal situation, apart from the huge debt that the country will incur through the Chinese Exim bank’s soft loan (85% of project costs). The Procedural issue, on the other hand, refers to the absence of an open tender exercise throughout the bidding process — a point repeatedly criticised by the PH’s leaders, well before the dissolution of the Parliament last April.
Then, there is also the KL-Singapore High Speed Rail (HSR) project which Singapore is also the stakeholder for such venture. But unlike the ECRL, this project invited stiff competitions from the Chinese, Japanese, Korean and European conglomerates for their proposals slated this June. Nevertheless, the fact that this project has not started made it relatively easier for the new government to terminate it and allocate such funds to the Pan-Borneo railway proposal that cut across Sabah and Sarawak states in East Malaysia. This is unlike the ECRL project which has started its construction, and thus, any termination will not be as easy as the HSR’s.
Relations with Singapore
Coupled with the fact that the two east coast states of Terengganu and Kelantan are under the rule of the Islamist party (PAS) and expecting to see the fruition of the ECRL project, a substantial revision of the project is likely to be the final outcome. Nonetheless, such project will be moulded into a cheaper and wholly different version than the originally envisioned. But again, the biggest risks of changing the status quo of these projects come from the impacts on the bilateral ties between Malaysia and China (as well as with Singapore).
Whereas any deteriorating relations with Singapore will be relatively manageable, the same does not apply to China which is expecting the new Malaysian government to honour the bilateral agreements inked during the Najib administration. How to prevent maximum damage to ties with China while reducing the public costs and debts for these projects, will obviously be an arduous challenge to the Mahathir 2.0 administration. The good news, nevertheless, is that Robert Kuok, who sits in the Council, might very well play a pivotal role in mediating workable solutions between Putrajaya and Beijing.
By all means, the magnitude and speed of the Mahathir 2.0 administration in pushing its agenda nationwide is a clear demonstration of its resolve to deliver what it promised to the voters within 100 days. As a strong man in politics, make no mistake that Mahathir’s return to the prime ministership is bound to send shockwaves to both internal and external fronts, at least in the short-term.
Any political and corporate watcher should not underestimate the new government’s credibility, capacity and resolve to ‘rebuild’ Malaysia from scratch and return Malaysia into the ‘Asian tiger’ status as repeatedly highlighted by Mahathir during the campaigning period.
Karl Lee Chee Leong is PhD Candidate at the School of Arts and Social Sciences, Monash University (Malaysia Campus) and the Visiting Scholar at the School of Politics and Public Administration, Guangxi University for Nationalities (GXUN). This article is part of the collaboration effort with Anbound Malaysia, an independent think tank with its headquarter in Beijing, China.