Malaysiaʹs Mahathir targets corruption

Graft links to the Gulf

Newly elected Malaysian Prime Minister Mahathir is adopting policies that could re-shape the southeast Asian nationʹs relations with Saudi Arabia and the UAE. By James M. Dorsey

Since this monthʹs upset in elections that ousted Prime Minister Najib Razak from office, a series of anti-corruption measures, not to mention statements uttered by Mahathir and his defence minister, Mohamad (Mat) Sabu, are sparking concern in both Saudi Arabia and the United Arab Emirates.

Backed by Sabu, Mahathir, who has in recent years cautioned against widespread anti-Shia sectarianism in Malaysia, has called Malaysiaʹs counterterrorism co-operation with Saudi Arabia into question. He has also reinvigorated anti-corruption investigations of former prime minister Razak, whom Qatari media describe as "Saudi-backed".

Najib Razak is suspected of having syphoned off billions of dollars from the state-owned strategic development fund 1Malaysia Development Berhad (1MDB). The fund – as well as Saudi and UAE entities allegedly connected to the affair – is under investigation in at least six countries, including the United States, Switzerland and Singapore.

Apparently anticipating a possible change in relations, political scientist Abdulkhaleq Abdulla, whose views are often seen as reflecting UAE government thinking, disparaged Mahathir and the Malaysian vote days after the results were announced. Abdulla focused on Mahathirʹs age. At 92, the latter just became the worldʹs oldest elected leader.

The political scientist was also at pains to point out that Mahathir had been Najib Razakʹs mentor before defecting to the opposition and forging an alliance with Anwar Ibrahim, former deputy prime minister under Mahathir during his first term of office and an Islamist believed to be close to the Muslim Brotherhood, whom Mahathir himself helped put behind bars. UAE Crown Prince Mohammed bin Zayed is known for his intense opposition to political Islam, including the Brotherhood.

A Malaysian police officer pushes a trolley during a raid of three apartments in a condominium owned by former Malaysian prime minister Najib Razak’s family, in Kuala Lumpur, on 17 May 2018, in this photo taken by The Straits Times (source: Reuters)
Corruption at the highest level: former prime minister Najib Razak is suspected of having syphoned off billions of dollars from the state-owned strategic development fund 1Malaysia Development Berhad (1MDB). The fund – as well as Saudi and UAE entities allegedly connected to the affair – is under investigation in at least six countries, including the United States, Switzerland and Singapore

Cooling of relations on both sides

"Malaysia seems to lack wise men, leaders, statesmen and youth to elect a 92-year-old who suddenly turned against his own party and his own allies and made a suspicious deal with his own political opponent whom he previously imprisoned after fabricating the most heinous of charges against him. This is politics as a curse and democracy as wrath," said Abdulla on Twitter, two days after the election.

Similarly, Malaysian officials have signalled changing attitudes towards the Gulf. Seri Mohd Shukri Abdull, Prime Minister Mahathirʹs newly appointed anti-corruption czar, who resigned from the Malaysian Anti-Corruption Commission (MACC) in 2016 as a result of pressure to drop plans to indict the then prime minister Razak, noted that "we have had difficulties dealing with Arab countries (such as) Qatar, Saudi Arabia, (and the) UAE."

Those difficulties are likely to recur.

Mohamad Sabu, the new defence minister, noted in a commentary late last year that Saudi (and UAE) wrath was directed "oddly, (at) Turkey, Qatar and Iran…three countries that have undertaken some modicum of political and economic reforms. Instead of encouraging all sides to work together, Saudi Arabia has gone on an offensive in Yemen, too. Therein the danger posed to Malaysia: if Malaysia is too close to Saudi Arabia, Putrajaya would be asked to choose a side."

Putrajaya, a city south of Kuala Lumpur, is home to the prime ministerʹs residence and a bridge with four minaret-type piers that is inspired by Iranian architecture.

Sabu continued: "Malaysia should not be too close to a country whose internal politics are getting toxic… for the lack of a better word, Saudi Arabia is a cesspool of constant rivalry among the princes. By this token, it is also a vortex that could suck any country into its black hole if one is not careful. Indeed, Saudi Arabia is governed by hyper-orthodox Salafist or Wahhabist ideology, where Islam is taken in a literal form. Yet true Islam requires understanding Islam, not merely in its Koranic form, but Koranic spirit."

Ihram-clad Malaysian Muslim boys from the Little Caliphs kindergarten circumambulate a mockup of the Kaaba, Islam's most sacred structure located in the holy city of Mecca, during an educational simulation of the Hajj pilgrimage in Shah Alam, outside Kuala Lumpur on 24 July 2017 (photo: MOHD RASFAN/AFP/Getty Images)
The need to tread carefully: "whether we like it or not, whatever we think of them, Saudi Arabia is a major player in the Muslim world and in the Middle East. Their administration of the hajj makes it crucial for Muslim-majority countries to get along with them," says Shahriman Lockman, an analyst with the Kuala Lumpur-based Institute of Strategic and International Studies

Since coming to office, Sabu has said that he is reviewing plans for a Saudi-funded anti-terrorism centre, the King Salman Centre for International Peace (KSCIP), which was allocated 16 hectares of land in Putrajaya by the Razak government. Sabu is thus echoing statements made by Mahathir before the election. The opening of the centre has been twice postponed because Saudi Crown Prince Mohammed bin Salman cancelled his planned attendance. Malaysian officials have said that the Kingdom had yet to contribute promised funds for the centre.

The Sunni-Shia question

Shahriman Lockman, an analyst with the Kuala Lumpur-based Institute of Strategic and International Studies cautions that Malaysia will have manoeuvre carefully. "Whether we like it or not, whatever we think of them, Saudi Arabia is a major player in the Muslim world and in the Middle East. Their administration of the hajj makes it crucial for Muslim-majority countries to get along with them," Lockman says.

The fact that Mahathirʹs re-election has sparked hopes that he will move Malaysia away from Razakʹs embrace of Saudi-inspired ultra-conservative Islam as a political tool, despite the prime ministerʹs history of prejudice towards Jews and past anti-Shia record, is likely to reinforce Saudi and UAE concern that his moves could favour Iran.

Mahathir has vacillated in his statements between banning Shia Islam to avert sectarianism and calling on Sunni Muslims in Malaysia to accept the countryʹs miniscule Shia minority as a way of avoiding domestic strife.

What is likely to concern the Saudis most is the fact that Mahathir has said that accepting Shias as fellow Muslims is necessary because of the growth of the Iranian expatriate community in Malaysia. Analysts say the presence has sparked a greater awareness of Shia and Sunni animosity because of former prime minister Razakʹs divisive policies.

Malaysia renews efforts against corruption

Saudi and UAE worries about the re-invigorated anti-corruption investigation are rooted in the potential implication in the scandal of a Saudi commercial company, members of the Saudi ruling family and UAE state-owned entities and officials.

The investigation is likely to revisit 1MDB relationshipʹs with Saudi energy company PetroSaudi International Ltd, owned by Saudi businessman Tarek Essam Ahmad Obaid as well as prominent members of the kingdomʹs ruling family who allegedly funded Razak.

It will not have been lost on Saudi Arabia and the UAE that Mahathir met with former PetroSaudi executive and whistle blower Xavier Andre Justo less than two weeks after his election victory.

A three-part BBC documentary, "The House of Saud: A Family at War", suggested that Razak had worked with Prince Turki bin Abdullah, the son of former Saudi King Abdullah, to syphon off funds from 1MDB.

UAE-owned, Swiss-based Falcon Bank has also been linked to the scandal while leaked emails documented a close relationship between Yousef al-Otaiba, the UAEʹs high-profile ambassador to the United States and confidante of Prince Mohammed bin Zayed and controversial Malaysian financier Jho Low, a 27-year-old Wharton graduate who helped Razak run 1MDB.

Probing uncomfortable details

The Wall Street Journal, citing not only emails, but also U.S. court and investigative documents, reported last year that companies connected to Otaiba had received $66 million from entities investigators say acted as conduits for money allegedly stolen from 1MDB.

The UAE embassy in Washington declined to comment at the time but admitted that Otaiba had private business interests unrelated to his diplomatic role. The embassy charged that the leaked emails were part of an effort to tarnish his reputation.

Bank statements and financial documents reviewed by The Wall Street Journal, suggest that Khadem Al Qubaisi, a CEO of an Abu-Dhabi owned investment company, who has also been implicated in the scandal, facilitated the purchase by UAE deputy prime minister Sheikh Mansour Bin Zayed Al Nahyanʹs brother of a $500 million yacht with 1MDB funds.

"The impact of this election will reverberate far beyond Malaysiaʹs borders," said Asia director of the Centre for Humanitarian Dialogue Michael Vatikiotis.

Vatikiotis was looking primarily at the fallout of Mahathirʹs victory in southeast Asia and China. His analysis is however equally valid for Saudi Arabia and the United Arab Emirates, where it could also prove to be embarrassing.

James M. Dorsey

© Qantara.de 2018

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom.

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