Malaysia PM vows crusade against corruption

Eradicating corruption in Malaysia continues to be a difficult hurdle Prime Minister Anwar Ibrahim needs to overcome if he wants to attract more foreign direct investments into the country.

As Anwar draws closer to the second anniversary since being sworn in as prime minister, he remains strongly committed to this crackdown, and has taken a no-nonsense approach in dealing with the problem, he said.

“We have to save the country. To my mind … the major problem is poor governance and endemic corruption,” he told CNBC’s JP Ong.

Anwar explained that both domestic and foreign investors will garner more confidence when they see consistency in transparent processes and a stronger commitment to put an end to corruption.

“Without that trust [and] confidence, nobody will invest in a big way. Unless those people who have some corrupt arrangements — they will still continue. But that has to stop. And fortunately, it has stopped,” he said.

“Although, we are still carrying on this mission, because I had strongly suggested that when, in terms of corruption, it is almost systemic. When it comes to systemic, which means the mission, the crusade against corruption, has got to be full force,” he added.

Malaysia welcomed foreign direct investment inflows of 40.4 billion Malaysian ringgit in 2023 ($9.7 billion), a significant slide from a peak of 48.1 billion ringgit in 2021.

Foreign direct investment for the first six months of 2024 came in stronger at 74.6 billion ringgit ($18.2 billion), rising 16.7% year-on-year, government data showed.

Meanwhile, the Southeast Asian nation lost around 277 billion ringgit in economic output due to corruption from 2018 to 2023, according to official estimates.

When asked by CNBC if the government is going too fast and hard on combating corruption, Anwar said that if he had it his way, “damn it … I would just go after them without mercy.”

However, he explained that he instead had to appeal to his coalition to have conversations on the best ways to solve this issue, and reiterated that if they continued being “too slow and ineffective … the nation can never be saved.”

“And I think now we have gained enough ground to suggest that this mission will continue,” he said.

Anwar did not speak specifically about any cases of corruption, nor did he name any former leaders during the interview. However, multiple instances of corruption still make headlines when proper governance in Malaysia is being discussed. One of the most infamous cases continues to be the 1Malaysia Development Berhad money laundering scandal, where then-Prime Minister Najib Razak was found guilty of embezzling millions of dollars.

In May, the government launched its new national anti-corruption strategy that aims to propel Malaysia to be among the top 25 countries in the Transparency International’s Corruption Perception Index within the next decade. Malaysia currently ranks 57 on the index.

In the first six months of 2024, Malaysia’s GDP expanded by 5.1%. The country’s economy grew 3.7% last year, slower than the pace of 8.7% in 2022, when the country appeared to recover from the pandemic.

As part of Malaysia’s strategy to increase the flow of foreign investments and propel the country’s economic standing, two separate economic zones have been in the works.

Agreements for the Johor-Singapore Special Economic Zone will likely be finalized by the end of the year, a move that is aimed at enhancing cross-border trade and investment activities.

Malaysia is also seeking investments to its Forest City special financial zone, hoping to increase business activity and push the city of Iskandar Puteri into becoming a business district with high-skilled talent. The government announced last week that Forest City will be the first place in Malaysia to offer zero-percent tax rates on family offices.