Interview with the Financial Times – 5 Nov 2019


FT: I’m here in Bangkok on the sidelines of the Asean Summit. And I’ve just finished speaking to Mahathir Mohamad, Malaysia’s prime minister. We talked about his change in stance on China, as well as the succession saga in Malaysia. But we started off talking about Jho Low, the fugitive financier who allegedly is at the heart of the multi-billion dollar embezzlement scandal involving 1MDB.

The US Department of Justice has reached a settlement with Jho Low. Did this deal come as a surprise to you?

DrM: Well, the amount is much bigger. If he had said the full amount we would be very happy indeed. But this is really a part of the money that was made use by Jho Low to buy properties, et cetera. So we are still going after the rest of the money that has been made use of by Jho Low.

FT: In light of this settlement, is Malaysia also negotiating with him directly?

DrM: No, we have no contact with him. We don’t even know where he is.

FT: Malaysia has said repeatedly that it would like Goldman Sachs, which has arranged 1MDB bonds, the proceeds of which allegedly were used to then obviously be part of the embezzlement of 1MDB. And Malaysia has always said that Goldman should return $7.5bn. Is that a realistic sum in your view?

DrM: The amount is not beyond what their role is worth. Goldman Sachs has offered less than $2bn.

FT: Less than $2bn.

DrM: So we are not satisfied with that amount.

FT: Do you have a sum in mind of an alternative?

DrM: No, I’m not supposed to say that.

FT: The DoJ alleges that also other international banks were apparently involved in helping, unknowingly. Are there concrete plans of going after these banks as well?

DrM: Where we can prove that it is our money, we would make requests for the banks to freeze the account.

FT: Can you give us some names?

DrM: I think the Deutsche Bank was mentioned, and UBS.

FT: You have said in the past that freedom is not absolute. And now we are seeing the rise of populism in many western countries. Is this a sign that western democracies are doomed?

DrM: Western democracy, I think, you have taken things too far. There must be limits and you must recognise the limit. And accept that as part of the democratic process.

FT: There seems to be a retreat from the US under the current Trump administration from the region. What does this mean to you as a southeast Asian country, also in light of the potential of China’s rise and China filling this gap?

DrM: For Malaysia, the current trade war between China and US has resulted in lots of people who invested in China wanting to move away from China. And Malaysia is one of the destinations.

FT: In terms of your relationship with Beijing, it seems like there’s been quite a reversal since the very beginning of your latest term as prime minister. It seems to be quite a 180. Why did this occur?

DrM: Well, I was reminding not only China, but other countries that there is such a thing as new colonialism. We should avoid this idea that you can colonise through economic power. So that was what I was saying, and it’s not directed at China alone.

FT: In the China context of things, when you first came back to power you mentioned that, for example, some of the infrastructure projects symbolised unequal treaties between China and Malaysia. And obviously if one does believe in the national security threats that the US, for instance, outlined with Huawei, I mean, are those two risks not a potential form of colonialism?

DrM: We are not worried about the Chinese. We have been very friendly with the Chinese, even during the first time I was prime minister. But the previous government entered into agreements to consult this railway line, which is not really necessity at the moment. In the future, maybe. But the cost was horrendous. It comes to about 60bn Malaysian ringgit. We cannot afford that. So, if possible we thought it was simply just dropping the project. But we found that we are obliged under contract that if we unilaterally drop a project we have to pay compensation. And the composition amount is huge.

FT: Speaking of your relationship with them, I wanted to talk to you a little bit about Khazanah Nasional, the sovereign wealth fund of which you are chairman. Now earlier this year there was the announcement that the founder of Chinese tech firm SenseTime and a senior executive of Tencent joined the Khazanah board. Why did Malaysia decide to include these two Chinese executives?

DrM: Well, these people are obviously very smart. They have been able to manage their companies well and we thought that the injection of their ideas into Khazanah would be very useful, especially as we had to deal a lot with Chinese foreign investment.

FT: Would it also potentially help Malaysia to sell the around $33bn worth of assets that Khazanah has potentially to Chinese investors?

DrM: We have no plans to sell to foreign companies. As far as possible, we would like to sell to the locals. But, of course, if we need the money and we need the money to repay loans and all that. We will consider the necessity for disposing of certain assets to foreigners.

FT: What do you think about some of the Asian leaders, such as Indonesian President Joko Widodo or Pakistani leader Imran Khan, in terms of their relatively weak responses and stances versus how China is dealing with and treating Uighur Muslims in Xinjiang and what is your stance on that?

DrM: Well, our people have been there. They are – perhaps they were not shown the whole thing, but any – what they saw did not show that the Chinese were very badly ill-treating treating the Uighurs. But we are aware of the Uighurs’ desire not to be part of China.

FT: Turkey, which is a strong partner for Malaysia in terms of the economy and defence, has come out and given a stance with regards to the Chinese treatment of Uighurs saying that it is a shame on humanity. And you, yourself, have spoken up in defence of Muslims across the world. So do you have anything more to say about what is happening in Xinjiang?

DrM: We would like to know more about what’s happening before we make our stand. But with Turkey, of course, these are Turkic people – the Uighurs are Turks.

FT: But also Muslims.

DrM: Yes, they are Muslims, but everywhere else Muslims are oppressed. In Europe, in America. There are oppressed. This is something that is almost the norm at this moment.

FT: The United Nations has said and confirmed that… they claim that about 1m Uighurs are now kept in what they have described as internment camps. This, obviously, is an extremely problematic situation and one that has been well documented also by the UN. So do you think that this is enough information for you to take a stance as, obviously, a leader of a Muslim majority nation in the region?

DrM: There are so many problems with Muslims. Why, the Rohingyas are being expelled from their own country. This is a much bigger problem than the Uighurs.

FT: What’s further evidence would you need, apart from an institution like the UN confirming that this is happening, in order for Malaysia to stand up against this.

DrM: Well, if we see massive emigration of the Uighurs there because of the ill-treatment, as happens in Myanmar, then, I think, the world must take notice and I… we’ll join the world in protesting.

FT: Another very topical and important issue concerning Malaysia and Malaysian politics, obviously, the issue of succession. Will you step down in 2020 as originally planned?

DrM: No, there was no actual date or time mentioned. But the actual time I will be there depends on the problems that we face. I’ve had some experience resolving financial problems, so they want me to solve their problem before I sit down.

FT: At the beginning of this latest term, you mentioned that Anwar Ibrahim would be your successor. Is that still the case? Will he succeed you?

DrM: Yes, it is. It is a promise that I made.

FT: What do you respond to the theory that there is a potential that you might not step down at all.

DrM: I’ve made many mistakes in appointing my successors, so I don’t mean too make another mistake this time.

FT: So do you think that at the moment Mahathir Mohamad remains maybe the only person that is able to run Malaysia right now?

DrM: At the moment, maybe.


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