The Malaysian Insight

PAKATAN Harapan will gradually scale down cash handouts, given out under 1Malaysia People’s Aid Scheme (BR1M), and roll back the goods and services tax (GST) if it comes into power after the next general election.

In an exclusive interview with The Malaysian Insight, Parti Pribumi Bersatu Malaysia (Bersatu) adviser Dr Mahathir Mohamad said it will take time to change the people’s mindset with regard to BR1M.

BR1M and GST were introduced by Prime Minister Najib Razak in 2012 and 2015 respectively.

“We will do it gently, because you know, Najib has managed to corrupt the whole nation and now the whole nation likes to get free money. If you stop the free money, getting money without working, without earning, then people would be disappointed.

“To change the mindset of corrupt people to become honest people is going to take a little bit of time,” said the former prime minister.

Dr Mahathir also spoke about China’s investment in Malaysia and how it was so different from the type of foreign direct investment he encouraged during his administration.

In the hour-long interview, he shared his views on the current economic situation and how to improve it.

Below are excerpts from the interview:

TMI: What are Pakatan Harapan’s plans to tackle the ringgit’s decline and the BR1M and GST issues?

Dr Mahathir: It is our belief that the removal of Najib alone will help the economy recover. The value of the money would come back and people would actually invest in this country. Because they know they are not going to pay extra for their investment, their investments will be profitable.

There are many of us (within PH) who have a lot of experience in attracting foreign direct investments. Local investors, they know us and they know that when we were holding the reins of the government, they felt comfortable.

So, because of that feeling of comfort that they have experienced before, just by removing Najib, there will be a great contribution towards the recovery of the economy.

But we also have a lot of other ideas which we will only (share) when we are in power. If we say now, they will come up with some counter proposals.

For example, they have completely failed to achieve Vision 2020. And as such, they try to divert the attention by introducing something in 2050, when they would conveniently be dead.

I don’t think Najib knows anything at all about how to make the economy recover. Every step he does is against the growth of this country.

TMI: Will Pakatan remove GST and BR1M?

Dr Mahathir:  Gently, because you know, Najib has managed to corrupt the whole nation. Now the whole nation likes to get free money. If you stop the free money, getting money without working or earning, then people would be disappointed. To change the mindset of corrupt people to become honest people is going to take a little bit of time.

So, we will reduce all these things. BR1M, for instance, is an extension of normal support we give to very poor and disabled people. We used to give money to them monthly, but Najib gives to more people. So much so, the government now does not have money for development.

TMI: You opened a separate subject just now, which is how to tackle the falling ringgit investment by saying that Najib has not been able to bring in the money. But under Najib, he GDP and FDI have gone up, so how is this?

Dr Mahathir: But we have to know what are the components which make up the GDP. You see, if the government spends money or the government brings in foreign investors to buy land in Malaysia, is that included in the GDP as a foreign direct investment?

So, we want to know the components that make up the figure, whether it is really something that is contributing to the development of the country, or not.

Most people complain on the ground that they cannot do business. They find that they have obstructions, bureaucratic procedures and all that, which make it difficult for them to do business. And so, they are not doing business, and therefore not contributing to the GDP and yet the GDP is seen to be growing.

Najib goes to China and gets US$140 billion in investment. Investment in what?

By merely buying land here, I think we can sell this country to anybody we like and have a big GDP. But we want to know what constitutes the GDP. Be clear about it, give the percentage of the contribution, only then we will know whether we are really growing or not.

On the ground the people are not feeling the effects of growth in the economy.

TMI: What is the difference between the FDI that is coming from China and the FDI which was coming under your time, in the partnerships with Japan and South Korea?

Dr Mahathir: Foreign direct investment is about bringing in capital and technologies and setting up productive industries in this country to supply the domestic output to the foreign market.

But now the foreign direct investment is about buying land in Malaysia, and Malaysians don’t even get jobs when this land is developed. It is not even for them to live there.

That is not FDI. People buying land cannot be FDI, in any country. If you sell their country and you call that FDI it would be very big.

We have a lot of land in Malaysia and we can immediately become a very rich developed country, but the land will not belong to us.

TMI: And the difference between the FDI from Japan those days?

Dr Mahathir: FDI from Japan, as I told you, is about setting up industries here, employing Malaysians at management level, exporting the products, earning foreign exchange and also serving local needs.

That is FDI. They were only allowed to buy the land where the factory is located.

But here you are selling huge areas of land for people to develop their own cities for themselves. There is a difference and that is not the FDI that we visualised when we started inviting foreign investors to come and invest in Malaysia.

TMI: You  been linked to the Bank Negara foreign exchange issue, Maminco and Perwaja Steel scandal. What is the difference between that and 1MDB?

Dr Mahathir: They should allow me to bring these matters up in a debate, but they have been making use of the police to stop the debate.

Of course, the government says go ahead and then tell the police not to allow them because it is going to cause trouble. So that is the way the government is not giving me the opportunity to answer all these questions.

1MDB is not the same as BMF.

TMI: Not BMF but Bank Negara forex…

Dr Mahathir:  It’s the same. This is done by Bank Negara and Bank Negara is tasked with managing our reserves. They felt that the money that they put in the bonds that they bought, fluctuates. And so, they wanted to make money out of trading.

In trading of course, sometimes you will lose and sometimes you will gain. When they were making money, nobody complained, but when they lost money, then of course there is a big complaint. But that is a decision of Bank Negara. I’m not involved in running Bank Negara.

They informed me and they said this is good. So, I didn’t tell them “you don’t do this or that”. That is not the way Bank Negara functions as they are almost independent.

Anyway, they have been punished and the governor and the deputy governor of the Bank Negara had to resign. So, action has been taken against them.

It happened during my time but I didn’t do this thing. I didn’t lose the money. Bank Negara lost the money.

Maminco is an attempt to bring back the money and they brought back some of the money. I am open. You can do any investigation or Royal Commission of Inquiry. You can do, but I am not involved.

But Najib is directly involved in 1MDB. No transactions can be made without his approval and, therefore, he is responsible. So, if 1MDB goes wrong, he is responsible. I am not responsible for Bank Negara.

They should allow me to debate this thing, but they are scared. – April 9, 2017.