Malaysian political icon Anwar Ibrahim, who is widely expected to become prime minister in around two years’ time, is confident his country can rid itself of corruption in the wake of a multibillion dollar financial scandal — and regain the interest of foreign investors in the process.
“We’re on the right track,” he told CNBC’s Akiko Fujita on the sidelines of the CLSA Investors’ Forum in Hong Kong. He added that he was satisfied with the now four-month-old government’s “profound” commitment to governance and institutional reforms that include implementing an independent judiciary and impartial law enforcement agencies.
Those constructs were missing under the rule of former leader Najib Razak, who is facing criminal charges for his alleged role in misappropriated funds from state investment vehicle 1Malaysia Development Berhad. Many believe that it was Najib’s hold over state structures that enabled him to stay in power long after reports of financial misuse were first reported in 2015.
“1MDB is clearly an example how the entire system failed,” said Anwar, a former deputy prime minister. Once independent civil services, judiciary and legal systems are established under the new administration, it won’t be possible for another case like 1MDB to occur, he forecast.
In an environment with credible agencies and efficient services to rid the county of graft — elements that will not only make business more efficient but also cheaper — incoming foreign investment is sure to rise, Anwar said.
“I’m very optimistic because once you have a transparent system and you have democratic accountability in place, people will see this is not something you can manipulate,” he told CNBC.
The 71 year-old is considered a hero by many in Malaysia, where he has been jailed twice on charges that his supporters dismissed as false. In May, he received a full pardon by the same man who imprisoned him in 1998: Prime Minister Mahathir Mohamad, whose electoral victory earlier this year was partly based on a promise to release Anwar and eventually pass him the prime minister role.
But even with democracy in place, the Southeast Asian nation still faces daunting economic challenges.
Hefty national debt — $251 billion, or 80 percent of gross domestic product — is a concern, but Anwar said he doesn’t expect the situation to deteriorate any further.
That figure is “alarming, but it’s nowhere close to a problematic area of a failed state or a failed economy,” said the former political prisoner, who leads the People’s Justice Party, the largest faction in the coalition government. “It would depend primarily how the leadership, particularly those manning the economy, handle this issue and I think they are doing relatively well.”
Malaysia will continue to seek fair terms on Chinese investment, he said, following Mahathir’s suspension of three China-backed projects worth around $22 billion that were signed under the previous administration. Kuala Lumpur had deemed the deals too expensive, which Anwar indicated he agrees with. Given the current state of the economy, Malaysia simply can’t afford Chinese projects with “phenomenal” price tags, he said.
For Anwar to lead the country, he first needs to become a member of parliament, which requires that a parliamentary seat be vacated. That “should happen very soon,” he told CNBC. His wife, Wan Azizah Wan Ismail, currently deputy prime minister, recently confirmed that a seat is being selected for her husband to contest in a by-election. Anwar is likely to win under that scenario.
“If I win, God willing, I will focus on parliamentary reform,” he said. Members of parliament must “make sure that they look at core issues of what it means to have proper, independent procurement policies,” he added.
For now, though, the politician said he’s enjoying his newfound freedom, particularly debating and discussing issues — something that he said was sorely lacking during his prison days in solitary confinement.
“I can virtually do whatever I like for once in my life, the only problem is that my wife says, ‘Please stay at home more often.'”
Share this video…