Malaysia's Anwar Ibrahim on Goldman and 1MDB
The prime minister in waiting has been the leading opposition politician for more that two decades. He talks to the FT's Stefania Palma about 1MDB, Chinese investment and his own future
Filmed by Mohd Dzuha Zamedin, produced and edited by Tom Griggs. Additional footage by Reuters.
Malaysia's prime minister in waiting says Goldman Sachs was used as cover for the corruption scandal at the 1MDB state investment fund. And Anwar Ibrahim now wants the investment bank to pay back the fees it earned. The world's biggest financial scandal also brought down Malaysia's government in May elections. I asked Mr Anwar about how the country intends to deal with Goldman.
The probe into 1MDB is reaching a new stage with trials looming for bankers, but also former prime minister Najib Razak. What is Malaysia prepared to do against Goldman Sachs, which has been dragged into the scandal, and what is next in the investigations into 1MDB?
The complicity of Goldman Sachs has in actual fact been used by 1MDB to give some sort of credits to them, and therefore is a cost to the country. So a possibility of litigation or some sort of negotiations where we can recoup a substantial amount of the losses to be given back to the people of Malaysia.
Do you think it would be possible to recoup even more than the $600m in fees, and how would you go about that?
It has to be more than the commission that they took, but I think we will leave it to the team to negotiate.
China's Belt and Road Initiative has led to massive infrastructure spending across Asia. But as a result countries are building up huge debts to China. On taking power Malaysia's new government immediately put a series of these big China-backed projects under review. I asked Mr Anwar about the fate of the biggest of these, the $20bn rail line linking Malaysia's less developed east coast to southern Thailand and Kuala Lumpur.
Our decision vis-a-vis the Chinese major infrastructure project is mainly due to our own financial constraints, and the cost is exorbitant. We really need to re-look at it. So the initial decision was to cancel as announced but then there are efforts to try and re-look at the subject, if it seemed to be economically feasible and if the cost is not exorbitant. Looking at the bigger picture, the trade investments really shows China is pivotal to the growth of the economy and that cannot be disregarded. Whether it is outright cancellation or renegotiating, I think that has to be discussed.
Mr Anwar was not able to stand in May's election, as he was still in prison. A pact with current Prime Minister Mahathir Mohamad got him pardoned, and in exchange for his support in May's election, Mr Anwar is poised to be the country's next leader.
The deal with Mahathir was always that he would hand over power to you. But obviously you two have a long history of confrontation. Is there any reason to doubt that he will stick to this promise?
Well, if you look at the past, there were times that we were extremely cordial together, working brilliantly as a team, and of course there was these rancorous exchanges. Now we have entered to this arrangement for the sake of the country. And the agreement was to resign all the coalition leadership. I have no reason to doubt that he is committed to the agreement and that he would honour it. He has said it a couple of times. And our relations have been rather cordial and the working relationship has been good.
So you are 100 per cent confident that in a couple of years' time you will be the new and next prime minister of Malaysia?
For now, God willing, I will say here things should be smooth, we could see a smooth transition. Because we need political stability in these difficult times and we need to focus our efforts to revive the economy.
So I guess you would say that you fully trust prime minister Mahathir in this transition of power to you in the future?
There's no reason for me to doubt.
Thank you very much.