By Lya Rahman
THE recent political quagmire is a harbinger that Malaysia’s quest towards reform will be a long, winding and – in all probability – endless journey.
Amid the countless U-turns and horse-trading, as political parties jostled for numbers, Bursa Malaysia was dragged down to the lows of the 2008 global financial crisis with tens of billions of ringgit wiped out from the stock market.
The state of political instability following the collapse of the 20-month-old Pakatan Harapan (PH) government – coupled with concerns that the Covid-19 outbreak may mutate from the current endemic level to a global pandemic – offered valid reasons for foreign funds to exit Bursa Malaysia.
The month of February alone saw a foreign net outflow of RM1.97 bil, bringing the year-to-date figure (as of Feb 28) to RM2.11 bil, according to MIDF Amanah Investment Bank Bhd Research.
Last year, foreign investors disposed of RM11.14 bil of local equities from Malaysia as compared to RM11.69 bil in 2018.
All eyes are now on Bersatu president Tan Sri Muhyiddin Yassin who succeeded Tun Dr Mahathir Mohamad as the country’s eighth prime minister on March 1 to steer the country out of the doldrums.
Foremost in the mind of every political/economical observer is how he will spearhead an effective reform agenda (ranging from human rights and education to economic transformation) considering his allies in the Perikatan Nasional (PN) ruling coalition consist of hardcore Umno and PAS leaders.
Pursuit of high-profile court cases
While bracing for major changes in government policies and reform initiatives, the least one can hope for is that he will not abandon his principles for the sake of power (political survival) by allowing those with questionable integrity, racists and religious fanatics to rejoice by making a revengeful comeback.
At the very outset, Muhyiddin has to be aware that the country has already been grossly impoverished by financial scandals such as 1Malaysia Development Bhd (1MDB) or fiascos in government-controlled entities such as the Federal Land Development Authority (Felda), the Federal Land Consolidation and Rehabilitation Authority (Felcra) and Tabung Haji, to name a few.
Muhyiddin should not succumb to pressure by his new political allies to withdraw all pending high-profile court cases, hence ensuring that the judicial body can carry out its legal duty independently.
The same applies to any Cabinet appointment – the candidates must be those without questionable integrity and, most importantly, must not have criminal court cases. The government cannot withdraw cases already filed in court to accommodate them.
This is crucial to address concerns that Umno president Datuk Seri Dr Ahmad Zahid Hamidi, who holds the record of 54 charges against him in court (ranging from criminal breach of trust to bribery to money laundering), will be playing a major role in the new government.
With the resignation of attorney-general Tan Sri Tommy Thomas some three months before the end of his contract, one dreads to imagine the outcome of dozens of criminal charges against ex-prime minister Datuk Seri Najib Razak over accusations that US$4.5 bil was stolen from 1MDB which he co-founded in 2009.
With around US$1 bil already returned to Malaysia and the prospect of another US$3 bil to US$4 bil still to come, Malaysia needs a credible individual who exudes high integrity – and in no way related to the former premier – to replace Thomas.
Unless a capable successor can be identified, the country also stands to lose its various legal suits that implicated Goldman Sachs as well as other global recoveries as there are only a handful of lawyers capable of deciphering the complex issues, extra-territorial legislation and the complicated legal process in the US to institute proceedings, seek trial, put witnesses on the stand and cross-examine.
Other notable ongoing high-profile court cases include the graft charges against Najib’s wife Datin Seri Rosmah Mansor over her involvement in a solar hybrid project; the criminal breach of trust and graft trial involving former Felda chairman Tan Sri Mohd Isa Abdul Samad; corruption charges against former minister in the Prime Minister’s Department Datuk Seri Tengku Adnan Tengku Mansor; and bribery and money laundering charges against Baling MP Datuk Seri Abdul Azeez Abdul Rahim.
The Malaysian Anti-Corruption Commission (MACC) should not be left in a state of limbo following the recent resignation of its chief commissioner Latheefa Koya. Her successor must be accorded a free hand to carry out his/her functions effectively without fear of favour especially in cases involving members of the ruling Perikatan Nasional coalition.
Perhaps the anti-graft agency should be provided with prosecutorial powers instead of continuing to rely on the Attorney-General’s Chambers (AGC) in deciding any prosecution against alleged corruption and malpractices.
Likewise, the numerous offences and penalties provided in Part IV of the MACC Act 2009 should also be reviewed to include other definitions of corrupt practice or malpractice, abuse of position or office, and advancement of one’s aims, status or promotional prospects.
Lifting languishing economy
Against the backdrop of an economy which is growing at its slowest pace in a decade (the country’s gross domestic product expanded 4.3% in 2019 from 4.7% in 2018), Muhyiddin must take cognisance that China’s record-low manufacturing data in February has intensified concerns over the potential impact of the Covid-19 outbreak on the Malaysian economy, given China is currently Malaysia’s largest trading partner.
In February 2020, China’s Manufacturing Purchasing Managers Index (PMI) dipped to 35.7% from 50% in the previous month while the Caixin manufacturing PMI also fell to 40.3, its steepest decline in 11 years from 51.5 in January due to the shutdown of factories and festive holidays.
One way to lift the economy is to quickly extend a lifeline to the RM20 bil stimulus package that was recently unveiled by Tun Dr Mahathir Mohamad just days prior to Muhyiddin’s premiership appointment.
This will not only inject some confidence into the economy but would also enable Muhyiddin to score invaluable brownie points if he is able to follow through with the rendering of financial assistance smoothly and swiftly – by cutting through red tape or by proving that the government is indeed sincere to lend a helping hand.
More broadly, the ultimate wish of every Malaysian at this juncture is for the PN government to look beyond the politics of race and hate by acting rationally and responsibly.
From the human rights perspective, it may want to re-visit “oppressive” laws such as the Printing Presses and Publications Act (PPPA), the Sedition Act, the Prevention of Crime Act, the Security Offences (Special Measures) Act and the Official Secrets Act (which is in the midst of being reviewed).
As per his maiden televised address as prime minister, Muhyiddin has pledged to appoint Cabinet members of calibre, with integrity and who possess a clean track record.
With regard to the general well-being of Malaysians, his administration will focus on realising the Shared Prosperity Vision 2030 which is aimed at boosting growth and narrowing the economic gap of the people.
Business-wise, my hope is that there will not be another round of changes to the head honchos of both government-linked companies (GLCs) and government-linked investment companies (GLICs) with people who are politically-connected.
We have certainly learned the hard way that such disruptive manoeuvring is poised to hurt business given it should never be mixed with politics at all cost (as in the case of water and oil).
Moreover, allowing politics to rear its ugly head in our GLCs and GLICs is bound to adversely impact Malaysia’s corporate governance assessment by the Asian Corporate Governance Association (ACGA).
We can expect our country’s assessment – especially in the sphere of public governance and political environment – to be lowered unless the new government under Muhyiddin’s leadership is able to uphold integrity and act in the best interest of the rakyat.
In closing, I wish Muhyiddin the best of luck in fulfilling the tall order which awaits him. – March 9, 2020
* The views expressed in the article represent the views of the writer and do not necessarily represent the official views of the Institutional Investors Council of Malaysia (IICM).
Lya Rahman is the Adviser to the IICM and was the former general manager of the Minority Shareholders Watch Group. She can be reached at [email protected].
