PM Mahathir Moves to Stabilize Malaysia’s Debt Outlook

Tun_Dr._Mahathir_-_panoramio, cc CK Tan, modified,


Mahathir Mohamad was elected Malaysia’s new prime minister earlier this year following the shocking defeat of Najib Razak, the head of the powerful United Malays National Organisation who has recently been charged with three counts of money laundering. Mahathir had previously ruled Malaysia from 1981-2003 before retiring from public life. He came out of retirement in order to stand in this year’s elections, allying himself with a previous enemy in Anwar Ibrahim. The 93-year-old Mahathir is expected to step down within the first few years of his mandate to make way for Ibrahim, who had previously been in jail on sodomy charges that he has long decried as politically motivated.

Mahathir was prompted to come out of retirement by what he viewed as pervasive corruption at the highest levels of Malaysian politics. His perception was no doubt fueled by the high-profile 1Malaysia Development Berhad (1MDB) scandal. The sovereign wealth development fund is the focus of ongoing graft investigations. Up to $4.5 billion is believed to have been funneled into private bank accounts since the fund was first established by the Najib administration in 2009.

Another focus for Prime Minister Mahathir is a series of opaque bilateral constructions deals signed between Malaysia and China under the umbrella of the Belt and Road Initiative (BRI). The deals have added to the country’s growing indebtedness, and the nonagenarian prime minister has made a point of revisiting the terms of the contracts, many of which were the result of closed tender processes.

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