Malaysia will see more autocratic governance

Subject

Malaysia under Prime Minister Mahathir Mohamad.

Significance

The new Pakatan Harapan (PH) coalition led by Prime Minister Mahathir Mohamad has sought to reform drastically the country’s politics. Its focus on tackling corruption has included pursuing former Prime Minister Najib Razak over the 1Malaysia Development Berhad (1MDB) scandal; Najib denies all charges against him.

Impacts

• The government will allow global investigations into 1MDB funds to accelerate.
• A substantially higher debt-to-GDP ratio (80%), as per new calculations, will increase the cost of future borrowing.
• Economic confidence-building measures will secure Malaysia’s international credit rating.
• Contractual penalties may force the government to delay rather than cancel infrastructure deals with Singapore and China.