Mahathir’s first appointments reveal strength and make economic reform a priority

Mahathir Mohamad addressing the United Nations General Assembly (September 25 2003)Mahathir Mohamad addressing the United Nations General Assembly (September 25 2003) PHOTO: public domain

Mahathir Mohamed has achieved the first democratic transfer of power in Malaysian history. His early selections offer an insight into future policy.


Malaysian Prime Minister Mahathir Mohamed has begun filling cabinet positions. On May 12th he named Lim Guan Eng as Finance Minister. He also named Mohamad Sabu as Defence Minister and Muhyiddin Yassin as Home Minister. As well as the cabinet appointments, Mahathir created a Council of Elders. He suggested the council would serve as an advisory body and shape government policy.

Mahathir initially said he would serve as Malaysia’s education minister himself. He later dropped the idea in favour of his colleague Maszlee Malik. Deputy prime minister Wan Azizah Wan Ismail will become minister for women’s affairs and welfare. DAP members hold four cabinet positions. PKR also has four, including the deputy prime minister position. Amanah and Beratsu have three positions each.

The appointments demonstrate confidence from Mahathir. He has not shied away from grasping contentious issues early in his term. He has also managed to strengthen his position as head of the coalition.

Mahathir is building strength through consensus

The appointment of Mohamad Sabu and Muyhiddin Yassin comes as no surprise. Both have extensive experience in government. They were strong candidates for top cabinet positions. However, the appointment of Lim Guan Eng is a signal of bravery and confidence from Mahathir.

During the election campaign, Barisan Nasional (BN) stoked anti-Chinese sentiment. Key figures in Najib’s government criticised Chinese-Malays, like Robert Kuok. The Chinese-dominated DAP also came under fire. They suggested that ethnic Malays would be worse off with the DAP in government. For BN voters, a Chinese-Malay Finance Minister is the realisation of BN’s warnings.

DAP’s strong election performance meant Mahathir could not overlook it for a key post. Lim’s successful terms managing Penang’s budget make him well-suited for the role. His appointment demonstrates political confidence from Mahathir. It shows his conviction that BN did not sway the public with its divisive rhetoric.

Source: Aniletto

It appears Mahathir has a consensus behind his appointments. Mahathir met with Anwar Ibrahim before he announced his first cabinet appointments.  Each party also submitted names for consideration for the remaining cabinet positions.

Consensus politics cements Mahathir’s position at the top. It creates an atmosphere of unity within Pakatan Harapan (PH) and strengthens its hand. The DAP, Amanah, and Parti Bersatu are all represented in the top jobs. Anwar is also intimately involved in decision-making. This has been essential for the smooth transfer of power.

The Council of Elders provides the strongest indication of Mahathir’s priorities

Mahathir has used his cabinet appointments to strengthen his position. But he has used his Council of Elders appointments to drive initial policy.

The council will allegedly shape policy and help PH implement its campaign promises. Their involvement over the first three months will be fundamental to government.

The council appointments signal that economic reform is a priority. This is most evident in the appointment of Jomo Sundaram. He was a critic of Mahathir’s economic policies when Mahathir was prime minister. He is also a very capable economist. Jomo’s inclusion indicates prioritisation of strong economic policy over personal politics. Jomo was also a staunch critic of expensive megaprojects. His involvement casts more doubt over the survival of Najib’s infrastructure projects.

Hassan Merican, the former chief of Petronas, is also on the council. If Mahathir rescinds the goods and services tax (GST), he will need to plug a US$11 billion hole in the economy. The PH manifesto proposed setting up a sovereign wealth fund to plug the hole. The plan would see Petronas contribute at least 10 billion ringgit (US$2.5 billion) annually to the fund. Hassan Merican will be a useful tool in establishing such a fund. He possesses insider knowledge of the oil industry and can liaise with Petronas as a former boss.

Zeti Aziz is the former Bank Negara governor. She retired in 2016, while investigations into the 1MDB scandal were at their peak. Her inclusion on the council may be to shed light on the 1MDB case and help put Najib behind bars.

Mahathir should be wary of overplaying his hand

In the spirit of “new beginnings” Mahathir’s cabinet is small, reflecting the small cabinet of 1957. But Mahathir does not have the luxury of starting with a clean slate. The country needs a comprehensive evaluation of the planned infrastructure projects. He also has a hole to plug when he removes GST, and there is the pressing matter of bringing Najib to justice.

Placing himself in ministerial positions was a step too far. He wants to keep the cabinet small, but Malaysia just removed one family dynasty from power. The public will not want to replace it with another. He will benefit far more from keeping himself detached from the cabinet. From his elevated position, he could promote competency and transparency among ministers. The U-turn was the right move. But he must be wary of overplaying his hand gain.

However, Mahathir’s early appointments have already achieved the stability he craved. He has overseen the first democratic power transfer in Malaysia’s history. He achieved a smooth transition of power by chasing consensus and balance. It is no small feat for 92-year old whose party only won 13 seats in the coalition.

His early appointments have set out his stall for the rest of 2018. It may not be Malaysia’s new beginning he hoped for. But his unique blend of old guard and new life puts Malaysia in a strong position for economic reform.