Saturday, July 11, 2015

Malaysia’s history of crisis of confidence

Salleh Said Keruak

Yesterday, the Financial Times said that anxiety regarding the 1MDB bailout has pushed down the Ringgit. The Malay Mail also carried that report and repeated that Prime Minister Najib Tun Razak should not deny that 1MDB had transferred RM2.6 billion into his personal account.

We must note two things about that report. First is that whatever is being done with 1MDB is being called a bailout. Secondly, Najib must confess that he stole RM2.6 billion of 1MDB’s money.

In other words, it is an open-and-shut case and no longer a matter that needs to be investigated. In that case why ask for an investigation to be done if the conclusion has already been decided?

The allegation is that foreign investors have lost confidence in Malaysia because of the many financial scandals. What foreign investors are more worried about is that there is no banking secrecy in Malaysia and all your financial details can be freely distributed and posted on the Internet.

That the investors find even more frightening.

There may be efforts to topple the Prime Minister but when this is done to the extent of sabotaging the reputation of the country then the damage would never be easy to repair.

Take the example of the damage done to the reputation of Malaysia’s judiciary. About 30 years ago Malaysia’s judiciary came under attack from the political masters at that time and until today the Malaysian judiciary has never fully recovered.

Foreign companies that sign a contract with Malaysian companies no longer want any dispute to be settled in a Malaysian court. They will insist that the contract states that the matter be heard in an overseas court or through international arbitration.

The trust on the Malaysian judiciary has been damaged. And now they are damaging the reputation of Malaysia’s banking system. And in both these cases this was because of attempts to remove the Prime Minister.

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