Malaysia Analytical Update: Mahathir Begins Forming New Government

Mahathir Begins Forming New Government
Authors: Tina Jamaluddin, Emma Tabatabai, Alex Nguyen and Kim Yaeger  | May 16, 2018

New Prime Minister Dr. Mahathir Mohamed outlined his immediate plans for Malaysia in a briefing session after being sworn in on the evening of May 10. He noted the most pressing objective was to form a new government which will be decided by him and the leaders of the four parties that formed his coalition, Pakatan Harapan (PH): the People’s Justice Party (Parti Keadilan Rakyat, PKR), Democratic Action Party (DAP), National Trust Party (Parti Amanah Negara), and the Malaysian United Indigenous Party (Parti Pribumi Bersatu Malaysia).

Prime Minister Mahathir said 10 ministers would be selected in the next week with plans to have 25-30 ministers form his full cabinet. He has added that the cabinet will include representatives from all four parties that make up PH, with each party currently proposing cabinet members to the Prime Minister. In addition to Wan Azizah Wan Ismail, PKR leader and wife of Anwar Ibrahim, being named the Deputy Prime Minister, Prime Minister Mahathir has announced three minsters which include: 

  • Lim Guan Eng - Minister of Finance (Secretary General of DAP and former Chief Minister of Penang);
  • Tan Sri Dato’ Muhyiddin Yassin - Minister of Home Affairs (former Deputy Prime Minister under Najib); and
  • Haji Mohamad Sabu - Minister of Defence (President of the National Trust Party).

Before the markets returned after the two-day public holiday and weekend, Prime Minister Mahathir sought to reassure the business community by saying Malaysia will be business friendly under the new government. He stated “On the economy, we do not want to see too many laws which curb the freedom to do business. We want all parties to conduct their businesses freely and easily. We welcome investment whether domestic or foreign direct investment.” However, he added that FDI should be limited to companies that offer to bring funds and technology into the country, construct factories, and produce goods for the local or export markets while infrastructure development should be open and prioritized to the local Malaysian companies except in cases where foreign expertise is needed.

Advising Prime Minister Mahathir on economic matters and expected to weigh in on cabinet selection, is the newly formed Council of Elders (also called the Team of Eminent Persons), which includes: 

  • Tun Daim Zainuddin - Former finance minister under Mahathir’s previous administration;
  • Tan Sri Zeti Aziz - Former Bank Negara Governor appointed by Mahathir and served until 2016;
  • Tan Sri Hassan Marican - Former President and Chief Executive of Petronas;
  • Tan Sri Robert Kuok - Malaysia’s richest person, owner of Kuok Group, which has billions in  property, sugar, & palm oil; and
  • Professor Jomo Kwame Sundaram - Prominent scholar at Malaysia’s Institute of Strategic and International Studies and the former Assistant Secretary General for Economic Development in the United Nations’ Department of Economic and Social Affairs (DESA).

To compliment the Council’s expected economic and financial advisement, a committee on institutional reforms has been established which will report up to the Council of Elders. In a statement, the Council of Elders said economic reforms on its own cannot bring about change, if not paired with institutional reforms. The committee on institutional reforms is made up of: 

  • Datuk KC Vohrah - Retired Court of Appeals judge;
  • Datuk Mah Weng Kwai - Retired Court of Appeals judge and Human Rights Commissioner;
  • Brigadier General (Rtd) Datuk Mohamed Arshad Raji - National Patriot Association President;
  • Datuk Dr. Shad Saleem Faruqi - University of Malaya Tunku Abdul Rahman Professor of Law Emeritus; and
  • Datuk Ambiga Sreenevasan - National Human Rights Society (Hakam) President.

Additionally, Prime Minister Mahathir pledged to build a government anti-corruption movement, which will include prosecuting officials that have committed corruption, returning money that was illegally collected, and managing procurement activities through an open tender process. He stated the intention was to “clean up the country and reduce the economic problems facing our country.” 

Lastly, on Wednesday Anwar Ibrahim was granted a full pardon by Yang di-Pertuan Agong Sultan Muhammad V and released the same day. Now that his convictions have been expunged, Anwar is eligible to run for political office. Following his release on Wednesday, Anwar gave a press conference at his home, stating that he plans to rest, spend time with his family and travel before returning to politics, adding, "I will be kept informed but I don't need to serve in the Cabinet for now."

USABC will continue to track and update members on the new government as it continues to be formed. We are holding 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.