Bsplindia

Many political and market watchers (politics and markets are interlinked anyway) are surprised at the shocking defeat of the 6th Prime Minister Najib Razak in Malaysia, especially since his UMNO (United Malays National Organisation) party has not lost an election in decades. What is even more surprising is that Razak lost to a 92 year old politician who was all but written off by the political pundits - Dr Mahathir Mohamad. M. Mohamad still a charismatic figure in Malaysia, stands tall in the Malaysian political landscape. His political party Parti Pribumi Bersatu Malaysia was incorporated as late as 2016. Dr Mahathir Mohamad is known for his outspoken demeanor and blunt talk many a times. Old timers like me still remember the choiciest of abuses Mahathir rained on currency speculator George Soros who expressed his opinion that the Malaysian Ringgitt was a good short selling candidate. Soros is a fearsome trader especially after he "broke the pound sterling" single handedly. Mahathir led Malaysia through the South East Asian currency crisis and was often suggesting a greater co-operation between Asian nations towards free regional trade, adopting Asian currencies for their trade and reduced dependency on the US$. These ideas made Mahathir popular. His first tenure as the 4th PM of Malaysia witnessed rapid modernisation and playing catch up with bitter rival Singapore. Unfortunately, Mahathir's political career was not always controversy free. His blue eyed boy of one time Anwar Ibrahim was jailed by Mahathir himself on charges of corruption, homosexuality and sodomy. Ironically, Mahathir has joined forces with Anwar Ibrahim in the polls of 2018.

PM Najib Razak on the other hand has displayed fierce ambition towards retaining power and spreading his political sphere of influence. His political accord between the Roman Catholic majority and the Moro Islamic Liberation Front (MILF) in Philippines in October 2012 was one such incidence. Razak deliberately sidelined the constitutionally elected King of that time Abdul Halim of Kedah in that accord and kept the palace out of the negotiations process. This sowed the seeds of discontent against Razak's regime. It was something I frequently mentioned on my facebook wall in the months preceding the accord, after I had returned from a trip to Malaysia, to learn about the crude palm oil trade there. The MILF was awarded southern Philippines as their area of occupation and Razak hoped to get discounted natural resources like rice, zinc, copper, coconut oil and other commodities. Unfortunately, the Chinese beat Razak to it and secured better terms on many counts. This eroded Najib Razak's popularity and sowed the seeds of a united front forming against his UMNO party. The allegations of receiving slush money from the middle east nations, accusations of swiss bank accounts and corruption grew exponentially after 2016. Mahathir Mohamad forming his own party and joining hands with Anwar Ibrahim sort of kicked off a countdown.

In one of his recent press interviews, Mahathir Mohamad has expressed strong hope that his political ally Anwar Ibhrahim would get royal pardon soon from the present king Muhammad V of Kelantan, and be released from prison soon, to take up a cabinet position in the new government. What remains to be seen is whether Mahathir pursues legal prosecution of Najib Razak (if we know Mahathir of the SE Asian era, he probably will) or has age withered his political will. Mahathir's legacy is likely to be a lasting impression on Malaysian real politik - the only PM to have served two terms, the oldest PM in the world and an outspoken votary for trade protectionism whenever the situation demanded. He is unlikely to tolerate currency speculators and hot money players. Also worth watching will be his political equation and comfort with Philippines President Rodrigo Duterte and his firebrand style of governance. Mahathir will be a tough negotiator with the Indonesians who are the only other major contemporary in the global crude palm oil export market (Indonesian stocks sold off after Mahathir's win). Mahathir is likely to leverage the Kalimantan / Borneo forests as a resource rich asset in the export revenue arena. He will try to prop up Malaysia's revenues and encourage tourism, yet adhere to his core conservative Islamist values at the same time. Overall, he is expected to try and strike a balance wherever possible. As a market / political watcher, I expect Mahathir's term to be largely positive for India's relationship with Malaysia. It is often said that the mood of an average Malaysian can be gauged by observing the crowds at Merdeka Square at Kuala Lumpur. Similarly, the Indian community's mood is gauged by visiting little India, a short distance from Merdeka Square. Friends tell me that the mood is upbeat at both locations. There is optimism in the air.