KUALA LUMPUR: As Malaysia’s new government wrestles with the economic legacy left by its predecessor, it has turned to a former finance minister for guidance.
Daim Zainuddin, 80, was appointed chairman of the Council of the Elders (CEP) with a mandate to advise the government on a number of matters, including economic and financial issues.
And while Finance Minister Lim Guan Eng highlighted last month the economy’s fundamental strength, Daim told Channel NewsAsia in a recent interview that there are significant challenges to overcome.
“It’s far, far more difficult and complicated this time because it’s the (previous) government that had created the problem; lots of money was wasted and stolen," he said.
"I was asked to look into figures, analyse and send back to the prime minister. It will take some time before we can put the economy back to shape," he added.
Daim has plenty of experience assessing the country’s economic challenges: He was appointed as finance minister twice when Dr Mahathir Mohamad was Malaysia's fourth prime minister - first in the 80s and again during the 1997 Asian financial crisis. He is seen as having helped steer the country out of economic difficulties both times.
This time round, Daim will be scrutinising Malaysia's budget for 2019, which will be tabled by Mr Lim on Nov 2. Many are forecasting a cut in spending as the government faces slowing economic growth while targeting a reduction in debt.
One option to help shore up finances could be listing some of the government’s assets on the stock market, said Daim.
“At the CEP, we have studied the proposal submitted to us on monetisation. We don’t advise to sell these assets directly to the market. Where companies are profitable, we recommend them to go for an initial public offering (IPO), create value and let Malaysians invest in these companies," he said.
Given the current state of finances, Daim understands that the government will be hard-pressed to fulfill some of the electoral promises that were in its manifesto. He suggests that the government should be honest about this.
“Malaysians are very kind, patient and understanding. If you explain to them, they will understand and accept. Deliver what you promised in the manifesto and if for any reasons you cannot, explain clearly. The people are reasonable if you are honest with them," he said.
He also urged the government to make the CEP’s recommendations available to the public.
“PEOPLE WERE SILENT”
One of the challenges the government would like to resolve is the recovery of billions of dollars that were allegedly siphoned off from the 1Malaysia Development Berhad (1MDB) state fund.
Key to that may be the apprehension of businessman Jho Low, said to be at the heart of the scandal. However, he remains a fugitive, and Daim claimed that part of the problem in apprehending him is that moles within the civil service and enforcement agencies continue to feed information to members of the previous government.
As part of its look into government finances, Daim said that the CEP had interviewed more than 300 individuals, including bankers, businessmen, civil servants, civil society members and union officials. These conversations have revealed a culture of turning a blind eye to corruption.
“They were bold and blatant in their corruption no one dare to raise it, for to raise it means you are out. So people were silent, no backbone and no principled stand," Daim said.
Some 17,000 so-called political appointees in the civil workforce and government-linked agencies have been removed since the new government was formed.
According to Daim, Low had reached out to him to help locate assets linked to 1MDB. He also requested that the government should grant him immunity.
“I don't know what role he’s playing. I said why don't you come back and discuss with me first," said Daim. "With the assets, he said he can help us to get back the assets and give us one or two names (of people involved). I said (to ask) them to come see me."
Regarding the immunity request, Daim said: “I told him ‘no’. If he wants to help, better come back first so that we can discuss. He claimed he is innocent, so if you are innocent you come back here. Why you are running away?"
JHO LOW HAS “GOOD ADVISORS”
Speculation has arisen about how a financier like Low could have fooled not just Malaysia but the world banking system as well. For pulling such a complex scheme, Daim believes that Low did not act alone.
“He has good advisors. He paid them," Daim said, adding that the advisors were bankers that Low paid handsomely to execute the plan and help cover his tracks.
Asked whether Malaysia would go after the bankers, Daim said the government only wants to get the people's money back.
Despite the warrants and red notices by Interpol against Low, he has somehow managed to remain at large.
On the eve of Eid celebrations earlier in July, Daim said he received a tip-off that Low was at a hotel overseas with his family. But Low disappeared from the hotel within an hour.
“He has his people everywhere - using taxpayers’ money. He was able to hire the best lawyers in town," Daim said.
"I was told he spent more than US$40 million on legal fees alone."