Malaysian Prime Minister Mahathir Mohamad speaks during a press conference in Petaling Jaya, Malaysia, Monday, May 28, 2018. Malaysian Prime Minister Mahathir Mohamad says a planned high-speed railway that would cut travel time between Kuala Lumpur and Singapore to just 90 minutes will be axed because it isn't beneficial. (AP Photo/Sadiq Asyraf)
Mahathir Mohamad said many large projects and government agencies set up by his predecessor were ‘not necessary at all’ © AP

Mahathir Mohamad, Malaysia’s new prime minister, has vowed to scrap “unnecessary” infrastructure projects and fire thousands of civil servants as part of radical cost-cutting measures to prevent the country “being declared bankrupt”.

“One of the most important priorities of course is the financial situation of the country,” he told the Financial Times on Monday.

As an example, the prime minister said he would cancel a multibillion-dollar megaproject to build a high-speed rail network linking Kuala Lumpur and Singapore — a flagship project of Najib Razak, whom Mr Mahathir defeated at historic elections last month.

He said the scheme, which he estimated would cost $28bn, would “not earn us a single cent”. “That will be dropped,” Mr Mahathir said. “We need to do away with some of the unnecessary projects.”

He also promised to slash spending at government departments and reduce civil service allowances that were “bloated” in an effort to boost Mr Najib’s flagging support. The ruling party’s unprecedented loss marked the first democratic transition to an opposition candidate since Malaysia’s independence in 1957.

Lim Guan Eng, the new finance minister, said last week that total government debt, including liabilities from the corruption-ridden 1Malaysia Development Berhad fund, had spiralled to more than RM1.09tn ($274bn), 80 per cent of gross domestic product.

Mr Najib has always denied any wrongdoing.

Investors are concerned that Mr Mahathir’s government will struggle to curb debts while implementing populist campaign pledges to drop highway tolls, increase fuel subsidies and abolish the goods and services tax, which was set to generate $12bn or a fifth of state revenues this year. 


“Democracy means changes and pressures all the time and sometimes we have to do things to meet the people’s desires rather than what is right,” he said. 

The new government’s mission to reform Malaysia will be even tougher because the civil service has been tainted, according to Mr Mahathir, who said he would sack 17,000 political appointees. 

“The worst part of it is that the machinery of government has been corrupted and we have to rely on that corrupt machinery because we can’t dismiss everybody,” he said. 

During his first stint as prime minister from 1981 to 2003, Mr Mahathir was praised for bringing stability and prosperity to the south-east Asian nation of 31m people but also attacked for his autocratic style and tolerance of cronyism. 

He refused on Monday to admit to any big past mistakes, and said that his government would follow the rule of law and honour existing contracts as it tries to resolve its fiscal dilemmas. 

“We have an agreement with Singapore,” he said of the high-speed rail project, which was scheduled to be completed in 2026, with construction estimated by analysts to cost $13bn-$15bn. “We have to talk with Singapore about dropping that project.”

The 92-year-old prime minister, who has agreed to hand over power to former opposition leader Anwar Ibrahim within two years, added that Malaysia would talk to the Chinese government about renegotiating “unequal treaties”, including the Chinese-backed $14bn East Coast Rail Link. 

He said many large projects and government agencies set up by Mr Najib were “not necessary at all”. “Mostly it was about trying to make the prime minister popular and it cost billions of dollars,” he said. 

To prevent such abuses in future, he promised to implement campaign pledges to repeal draconian security laws and strengthen parliamentary oversight so that one person could not dominate the system in the way that Mr Najib did or that critics accuse Mr Mahathir of doing in the past. 

“It will not be a kleptocratic government, certainly, it will be a more democratic country,” he said.

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