Business, politics as usual

1MDB's debts - Graphic from the defunct The Malaysian Insider
1MDB’s debts – Graphic from the defunct The Malaysian Insider

Coming to a week now since the US Department of Justice filed its complaint to seize some US$1 billion in assets from the Wolf of Wall Street movie and its producers Red Granite Pictures – as the financing for both were allegedly pilfered from Malaysia’s debt-laden 1Malaysia Development Bhd (1MDB).

Prime Minister Najib Razak, who is Finance Minister and formerly chairman of the 1MDB advisory board, is without any doubt despite being unnamed, the Malaysian Official 1 described in the DoJ’s 136-page complaint to seize the assets.

His step-son, Riza Aziz, and pal, young businessman Jho Low, has been named in the documents together with a couple of top executives from Aabar, the Abu Dhabi state firm involved with 1MDB. Apart from Malaysian Official 1, three other 1MDB officials have only been referred to as 1MDB1, 1MDB2 and 1MDB3.

But in the aftermath, Malaysia continues to plumb new levels of inertia. Or as Bloomberg put in succinctly yesterday in an article, it is business as usual.

“The market is quite clear that Najib is fairly secure at this stage and there isn’t too much of a political challenge to him,” said Vaninder Singh, a Singapore-based economist at Royal Bank of Scotland Plc. “As a consequence, what we’ve seen is that the impact from any 1MDB-related news stories on financial markets has come off significantly over the last few months.”

Najib himself yesterday defended 1MDB, saying it has contributed a lot to Malaysia particularly through its corporate social responsibility programmes, including sponsoring some 4,600 to perform their Haj since 2011.

He handed out 1MDB’s Haj sponsorships to 1,100 village chiefs and mosque imams yesterday.

“Many have forgotten 1MDB has contributed a lot to CSR,” he said. “This is just one of them. Hundreds of millions were spent repairing homes, helping fisherman, youths, women and in flood relief efforts.”

While his government and party goes on an overdrive to show that the DoJ complaint has no bearing on Malaysia, the country’s opposition and activists are stuck on ways to move forward to get Najib to step down over the financial scandal.

A proposed Ber5ih rally by Bersih 2.0, the electoral reforms group, is being stymied over fears that it will not get the crowd it wants and threats of counter-protests that could spark a racial clash. Political parties have backed a street protest but have not made plans to organise one themselves.

Najib’s mentor-turned-critic Dr Mahathir Mohamad has said Malaysians were “timid people” and not prone to street protests. Under his 22-year rule, Dr Mahathir put down street protests against the sacking of his then deputy prime minister Anwar Ibrahim.

“They are not violent. They don’t express themselves openly,” he said.

In the interview with the ABC, Dr Mohamad said other nations, including Australia and the US, should name and shame the prime minister, who he said was behind the embezzlement scandal.

“I know most foreign countries are rather reluctant to come out straight and say that the prime minister is the one who is guilty of all of these things,” Dr Mohamad said.

Meanwhile, Najib remains in power, and 1MDB has not lost any money. But it no longer owns a power and water utility business and has had to sell a large stake of its Bandar Malaysia land and is involved in arbitration with Abu Dhabi’s IPIC over interest payments for a US$3.5 billion bond.

Yes, it is business as usual.

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