The moderate pace of Malaysia’s economic growth shows investors are not beating down the doors to invest in the country, according to the Nikkei Asian Review.
The Japanese economic publication reported on Tuesday (Jan 14) that this is because of the unresolved power struggle at the very top of the government, which it says threatens the Malaysian dream.
Prime Minister Mahathir Mohamad stormed back to power with the Pakatan Harapan coalition in May 2018 and promised to leave power this year or at least after the Apec Summit in Malaysia in November.
But he is refusing to set a timeline or fix a date on which he will make way for Mr Anwar Ibrahim.
Nikkei says that in 1991 Dr Mahathir introduced Vision 2020 — a plan to build a self-sufficient industrialised nation. This was enhanced under Najib Razak with the goal to achieve high-income status.
From 2010 to 2018 under Najib, Malaysia’s economic growth rate ranged from 4.5% to 7.4%.
“The government was optimistic about clearing the World Bank’s high-income benchmark of US$12,235 per capita; as of 2018, the latest year with available data, the figure was up to US$10,590,” according to the publication.
After taking power again in May 2018, Dr Mahathir called for more well-rounded development, hoping the country could leave the “tiger cub” status to rise as an “Asian tiger” again. But the plan to make Malaysia great again is easier said than done.
According to experts, Dr Mahathir’s government is not replicating past successes because the new government overplayed its hand in blaming Najib for all the country’s economic ills.
It painted a negative picture of the economy and finances to keep the population fuming at Najib, according to the publication.
Nikkei adds that the government overamplified the 1MDB scandal without thinking it could backfire. Its strategy raised fears of a potential default and gave investors a reason to think twice.
At the top of the list of woes hitting the Mahathir regime, however, is the transition tussle, according to experts.
The lack of a specific timeline for the handover has fuelled a guessing game, called the Malaysian Game of Throne, and it worries existing and potential investors alike. “The guessing game, whether or not the transition will be smooth, is keeping capital away from Malaysia,” an economist told Nikkei.
There are those who are saying it is not reasonable for the PM not to set a date for his departure but he says he will look like a lame-duck PM if this was done.
This has led to critics from PKR, a Pakatan Harapan coalition member led by Mr Anwar, to point out that in 2002, Dr Mahathir and Mr Abdullah Badawi, who was then the Deputy Prime Minister, had agreed on a date for the transition of power.
The transfer was set for Oct 31, 2003. The critics note that Dr Mahathir was not at that time seen as a lame duck Prime Minister and that, during the transition period, there were no disturbances.