Malaysia Analytical Update: Mahathir Sworn in as Prime Minister

Mahathir Sworn in as Prime Minister
Authors: Tina Jamaluddin, Emma Tabatabai, Alex Nguyen and Kim Yaeger | May 10, 2018


Former Prime Minister Dr. Mahathir Mohamad and his opposition coalition, Pakatan Harapan (PH) won Malaysia’s 14thGeneral Election held on May 9 after defeating the incumbent Prime Minister Najib Razak and his ruling coalition, the Barisan Nasional (BN) which had governed Malaysia since its independence in 1957. Official results so far show PH won 122 of the 222 parliamentary seats that were contested while BN were only able to capture 79 seats, down from 133 won during the last election in 2013. The surprising and overwhelming victory for Mahathir has made him the world’s oldest leader at age 92. He was previously the former leader of UMNO and Malaysia’s prime minister from 1981 to 2003. 

Mahathir was officially sworn in as the new prime minister on the evening of May 10, ushering in a peaceful transition of power. Mahathir has stated he would hand power to Anwar Ibrahim after he is released from prison next month and receives a royal pardon from the King, a process which could take up to two years.

This historic election, leading to the first transition of power in Malaysian history, comes as voters appeared to be dissatisfied with Najib and the Barisan Nasional due the rising cost of living, which many Malaysians have blamed on the recent introduction of the goods and services tax (GST) and lost faith in Najib and BN that began with the 1MDB scandal. Leading up to the election, opposition and critics had accused Najib’s government of trying to tamper the process in their favor by redrawing electoral lines and fast-tracking fake-news legislation to silence the opposition. After the results became clear that BN had lost its majority, Najib conceded the election and said he would honor the “people’s verdict.” He also promised to ensure there would be a smooth transition to a new government.

As Mahathir and the Pakatan Harapan work to form a new government in the coming days, they have pledged to introduce sweeping changes. Between comments from Mahathir’s first press conference as Prime Minister and his “10 Promises in the First 100 Days” which he campaigned on, we can expect changes to include: 

  • Repealing the Goods and Services Tax and returning to a Sales and Services Tax
  • Investigating scandal-plagued institutions which include 1MDB, Majalis Amanah Raykat, and the Federal Land Development Authority
  • Standardizing and increasing the minimum wage
  • Stabilizing petrol prices and reintroducing fuel subsidies for targeted groups
  • Introducing a national healthcare assistance initiative
  • Repealing the recent Anti-Fake News Act 2018

One of the more notable promises by the new government is their intention to initiate a comprehensive review of all mega projects awarded to foreign countries. They are expected to closely review investments from China including projects tied to the One Belt One Road Initiative and determine whether they can provide the necessary economic boost to Malaysians. Also expected to be under review and possibly replaced with new political appointees are the leadership of all government-linked companies (GLC).  To reassure the business community after the surprise result, Mahathir stated they still “intend to build [up the] economy with the help of investors from inside and outside the country.’’ 

However, before any major policy decisions can be made, Mahathir will have to form his government. Mahathir will be convening the first Presidential Council with his coalition partners to discuss the formation of a new cabinet over the two-day holiday he called and the coming weekend. So far, he has identified several officials to fill his cabinet including Wan Azizah Wan Ismail, wife of opposition figure Anwar Ibrahim, as deputy prime minister. It is expected Mahathir will draw upon some of the experienced PH officials who have governed at the state level, as well as professionals with backgrounds from law, finance, and accounting to form his new government.

The Council will continue to track Mahathir’s progress as the new government is established and update members. In addition, the Council will hold a Malaysia Committee Conference Call with a briefing on the political transition by U.S. Ambassador to Malaysia, the Honorable Kamala Shirin Lakhdhir, on the evening of May 29 (DC)/morning of May 30 (Malaysia). Click here to register for the call.