Full transcript: Interview with Malaysian PM Mahathir Mohamad

This is a transcript of an interview with Malaysian Prime Minister Mahathir Mohamad in Bangkok, Thailand, on Saturday November 2, 2019. The questions have been lightly edited for clarity.

James Massola: Eighteen months ago on Malaysia's election night in the Sheraton hotel ballroom at about 3am, I asked you what this day meant to Malaysia after 61 years of one party rule and how it would change the country. You joked – the whole room laughed – "I don’t know, we haven’t done this before". You’ve had 18 months now back in the prime minister’s office, how has Malaysia changed so far?

Mahathir Mohamad: We discovered after taking over that the problems created by the last regime were far more than we had expected. So this means that we have to find better ways of dealing with the problem.

What we have done of course is, number one, to make sure that our borrowings are handled properly. We need to reduce our borrowings and we have succeeded in that. For example, the railway project has been reduced in scope and we have saved some 20 billion ringgit ($7 billion) there.

Mahathir Mohamad, who was in Bangkok for the ASEAN and East Asia summit meetings, says Australia will be more Asian than European one day.Credit: James Massola

JM: You’re talking about the ECRL [East Coast Rail Link]?

MM: Yes. And also we found that the previous government had undermined the morality of the public service, the administrative system.

They had become involved in corruption and things which meant we had to purge a lot of senior people, leaving only junior people who had less experience. And this of course requires much more hands on work on the part of the new government. We need to direct the administration to regain its former standards of administration

And then of course the people had been made to depend upon the government, all the time the previous government was giving free money to the people and they expected us to continue, but we don’t have that kind of money, we have not stolen any money, so it’s not possible for us to give this free money to people. But they are still quite insistent that they should be given what they were given by the previous government. That poses a problem for us.

And of course the recovery of the money lost, I mean if the money that was raised by loans and was invested, we could trace the money and maybe take back our money, but the money has disappeared.

It has been given to people, some of the money has been spent, a lot of people are not available for us to check where the money has gone to. So there are many, many problems.

JM: You’re talking about primarily 1MDB, right? There has been a ruling that about $1 billion will come back to Malaysia. Goldman Sachs I read this morning has offered I think $2 billion, you are saying you want 7.5 billion, could you find a compromise with Goldman Sachs, and recover more than $2 billion and perhaps less than $7.5 billion?

MM: We have to compromise, obviously, these people have spent the money and they are not in a position to give back the money because they have spent it.

With Goldman Sachs, we are not satisfied with the offer made by Goldman Sachs, it’s too small, the amount lost was so much bigger, we are still trying to get them to agree to a much larger sum. Maybe not the full amount of $7 billion, but at least something that will help with our recovery of funds which we need to pay off debts.

JM: More broadly on economic reform, you spoke a moment ago about a mentality among some people in Malaysia about free money. It sounds to me like you’re saying the electorate needs to be better educated about Malaysian’s financial position and to understand those days are over, so the government can spend less. But I’d like to know what else you need to do, or plan to do, to improve Malaysia’s economy.

MM:We have to present a country that is attractive to investors, foreign investors in particular. And this is not easy to do, because any news that is not very good for the country will result in an outflow in funds that are invested in Malaysia.

And then there will be no new investment. We depend very much on foreign direct investment. Even locals are unwilling to invest if they feel the situation has not been fully resolved if there are still traces of the misdeeds of the previous government

JM: So in part then you are saying you need to reset the political framework of the country as well. You mentioned public service reform before. What else in the political system needs to change, how should things evolve to build confidence in Malaysia as a destination for foreign investment?

MM: Malaysia has always been ruled by a coalition of parties, the last coalition was 13 parties. But it was dominated by one very powerful party, so making decision was much more easy.

We now have five political parties each equally powerful and we need to do things which are supported by all the five

We need to look into the complaints or dissatisfaction of any one of the parties. But still the fact remains that this coalition has been able to function, it has been able to run the government, and although there was some unhappiness, it’s not at the level of street demonstrations.

So this government is functioning, it is a bit slow in decision making because of the need to satisfy all of the parties.

JM: You were the leader of the party that dominated Malaysia for a long time, 22 or 23 years, it sounds to me in your second term as prime minister you’ve changed your approach. Is that right, have you changed how you do politics?

MM: I am forced to change because I was leading the dominant party in the past. Decision making was much more easy, to the point where people thought that I was running the government all by myself which was not true.

Here I cannot make a decision without consulting all the others, without taking their views into consideration. So this government is rather slow in making decisions.

JM: How are you going to speed it up?

MM: I think over time we already learning how to work together, certainty we are much more able to work together now as compared to the first few months we came into power.

JM: There is a byelection today – how important is that byelection? I know it’s very rare in Australia for governments to win byelections and it [the margin] was, what, 524 votes that Pakatan Harapan won by last time. Are you worried?

MM: I think by the time of the next election lots of things will be sorted out. Byelections as you know normally the government party does not do well, simply because we have to do things, whereas the opposition party now. They don’t’ have anything to do, they are just criticising the government.

They pick up on certain points, certain issues they can play with. For example they pick on racial issues, like the government isn’t doing enough for this community or that community. The strange thing is they complain we are doing enough for all communities and yet each community only looks at its own problems without considering what the others are thinking, what kind of experience the others are having.

JM: Let me ask you this another way. If you were popular in your first year, your second year, there is an argument that you aren’t doing your job properly – that you need to do the difficult things in the first, second and third year, and worry about the polls in year five.

MM: I am leading a coalition of parties which were very much against me before, so I have to be rather careful about how their sensitivities are treated.

We have taken their views into consideration, we have identified some of the past mistakes of the previous government and we have to avoid that. For example the past government were accused of cronyism, it seemed that anyone who succeeded in the past regime must be a crony of the government.

Here we want to avoid that to the point that we delay decisions, we have to ensure that everyone has a chance to make a bid for projects, for example, without limiting the number of contenders to just a few, we now have to deal sometimes with almost 100 different bids and that takes time

But it has resulted in the accusation of cronyism becoming much less.

JM: Let me ask you about the region, and the tensions between the two biggest powers in the region, China and the US. You’ve said that if push came to shove, you would take the economic opportunities offered by China over the unpredictability of the United States. How serious has the impact been of Us unpredictability in the last two and a half or three years?

MM: The US has been a big trading partner of Malaysia, we have a positive balance of trade with them. That’s because many US companies invest in Malaysia produce component parts to be re- exported to the US.

Much of the trade imbalance is due to the investment in Malaysia.

So the only way to get rid of the advantage that we have is to get rid of American companies, but the American companies are already having problems in China and they are looking for places to shift.

But if Malaysia also is subjected to the kind of treatment Chinn is being given, where do the US companies go? I suppose Mr Trump will think they will go back to America, but the reason why they are in Malaysia is because the costs are very low, and they became very competitive. America now has to compete not only with China, but with Japan and Korea. And these people are very good at producing whatever is needed by the market.

America cannot compete in the market because of their high costs.

JM: Let me come back to that question though, what has the impact of American unpredictability been - of the current president, let’s be frank – on stability in the region?

MM: Stability in the region I think is not as much affected as we thought before. For example Malaysia is still growing at 4 per cent, so are the other countries of ASEAN. In fact some are doing better now.

Obviously, Vietnam for example would attract those American companies in China to relocate to Vietnam. So we gain some, we lose some, the same thing with Malaysia

JM: In terms of the South China Sea, countries like Malaysia, Vietnam, Indonesia, there are multiple claimant states lined up against China - how can a mid-sized country like Malaysia, or Vietnam, or even Australia, a near neighbour though it’s not a claimant state – how can they handle China, which in a practical sense has militarised these island?

MM: Yes China has to a certain extent militarised the South China Sea, claiming it is a part of China. It is a big area, normally we claim land that is just within our national ownership of land that is about 3km from sure, and then we have this continental shelf. But here china has claimed the whole place without regard for countries in the region.

What is most important is that despite the claim there has been no attempt to police the area, they don’t stop ships to examine or do anything like that.

Ships can sail freely through the South China Sea and the Straits of Malacca and to that extent the claim is not actually implemented by China as their territorial region, it is true that they had built on some islands, some military installations, but they are not aggressive in other ways.

JM: There is a balance Malaysia has to strike between the security relationship, the five power defence and the trading relationship with China – where do you see that five years from now? Will the same security arrangements pertain, and will trade with China continue to grow?

MM: We have a policy before to free the South China sea from nuclear weapons and the like. But we feel that if you keep sending in warships in order to maintain security, the result will be similar action by the other party. And there may be incidents, accidents, and it may flair up into physical confrontation and that would be bad for the area.

Our wish is to see no big warships coming into the South China Sea, but we do need some policing of the South China Sea and that we can do with small boats, so the risk of confrontation, of accidents, will be far less.

JM: Over the decades you’ve had relationships with Australian prime ministers that have gone up and – and a particular view as well that Australia is an outpost of Europe or the US. You’ve see my question about how many Chinese-Australians there are, Malaysian-Australians, Indonesian-Australians, Vietnamese-Australians – is your view changing about Australia’s place in Asia, how do you conceive of Australia now?

MM: Australia has been undergoing many changes, there was a White Australia Policy where they don’t allow Asians to settle down there. That was discarded and now they allow a lot Asians who stay in Australia, who become Australian citizens, taking part in politics for example.

The number of course at the time when I was talking before was quite small, but now the number has become very big.

I believe that all countries in the future will become multiracial, like Malaysia.

Simply because of the ease of travel. In three hours we can be in China just by flying. And then borders are very porous, you just can’t police the borders, there are so many ways of breaching them.

So people will be moving around the world, seeking better countries to live in. This is happening especially in Europe, because of the conditions in the middle east and in Africa. Millions of Africans and Arabs are now living in Europe.

America of course has always had this inflow of South Americans in to America, they have come in very large numbers. In fact I heard one South American claiming they haven now regained California, because there are so many of them in California

So the mixture of races in countries, in any country, is going to very common, excepting for China. China is so big with 1.4 billion people, it is difficult to dilute. Most people who live in China become Chinese, this is the experience of the past.

JM: You haven’t quite answered. A year and a half ago I interviewed President Jokowi and I asked him could Australia join ASEAN one day and he said "boleh, sure, why not". What’s your view on that?

MM: Now I think it is moving in that direction by force of circumstance. Whatever white Australians might think of it, the fact is geographically they are more in the Asian region. Than in Europe. They can try and sustain their culture, their language, but the inflow of Asians into Australia will certainly change the character and distribution of population in Australia. And in the future, they are going to be more Asian than European.

JM: So is that a yes to ASEAN at some point in the future, or a maybe?

MM: I think it will happen, because there is no way now you can stop people from – because Australia is trying to stop refugees from coming, sending them to islands and all that – but even then there are many who manage to get into Australia, legally as well as illegally.

JM: There are many people in the Australian government who want you to come and visit Australia, now, or in six months time, in 12 months time. Is that something on your agenda? Would you consider addressing parliament?

MM: I think I will visit Australia at some time or other, but at the moment the program for visiting foreign countries is very tight and I think we don’t have much of a problem with Australia. Things are doing quite well, I’ll have to visit many other countries before I go there, even to attend many international conferences like this one.

JM: The summit season is much bigger than 10, 20 or 30 years ago. On that, Malaysia is hosting APEC next year, and you will be the world first leader to host two APECs. How will that help you run the summit next year?

MM: It won’t be too much of a problem, because we don’t have Mr Al Gore telling us to change our government, that kind of thing is not going to happen. But we have some views which are not the same as some of the other countries in the APEC grouping.

But I think this time around we don’t see too many problems, we like to be friendly with all countries in the world. We are a trading nation, we need markets.

To the extent that it brings to Kuala Lumpur a lot of people who may not have enough knowledge about Malaysia, this APEC will give us an opportunity to get to know more people and for other people to know us.

JM: It sounds like you want to be PM until the APEC events wrap up at the end of 2020. In terms of when you might hand over to Anwar Ibrahim, that means you will be Prime Minister for at least 2 ½ years, is that correct?

MM: Well I don’t know when I will step down. At the moment the problems are still there, I need to put things right, I cannot say whether it is two years or three years, but I will certainly step down as I promised.

JM: Will you definitely hand over to Anwar?

MM: Yes, I will. Although there are lots of other people who have been asking me to carry on until the next election, but that is their view. My commitment is to step down before the next election, certainly.

JM: I’ve been living in Jakarta, travelling in the region for about 18 months now. One thing strikes me about Malaysia is that it is an outlier in terms of democratic reform. In other countries we see democracy in retreat. What is secret to Malaysia’s success? How did last year happen?

MM: Malaysians by and large are mild people. They don’t like trouble, they don’t like disorder, and they would choose anything that will render their country stable. So the switch from the 60-year-old government to this new government of the opposition was very smooth. This doesn’t often happen in new democracies. There would be demonstrations etcetera, but here the previous government although it had been in power for 60 years decided that they had lost, and the transition was very smooth.

JM: What lessons can other countries in the region take from transition of power in Malaysia?

MM: I’ve been asked to speak about democracy in many countries, including in Egypt, and I’ve told the new democracies that if you want democracy you must accept losing. Everybody wants to win, and obviously you cannot have everybody winning. Only one party will win. The rest lose but they must accept it and wait for the next election. They can keep on criticising the government but wait for the next election, allow the government to run the country, don’t frustrate it, prevent it from running the country with continuous demonstrations and even violence.

If you want democracy then you must accept that a tick on a piece of paper is sufficient for a government to be put in place.

JM: Around the world we see democracy in retreat – Brexit, Trump, and Russia, Cambodia – has your experience of what happened here restored or increased your faith in democracy?

MM: I’ve always thought that democracy is the best system of government ever devised by man. But, of course, it has its weaknesses. The idea that the majority of people would know what is good for them is flawed. It’s not always true that people know what is good for them because sometimes they are deflected by their allegiance to their tribe, to their parties, to their clans, and things like that. This has distorted the process to the extent that sometimes the wrong people are elected.

JM: Is there anyone currently a world leader who you’d say is the wrong leader?

MM: I wouldn’t name names.

JM: What do you hope to discuss with Scott Morrison when you meet him on Monday? The trade and education relationship? Something else?

MM: you’re talking about ASEAN?

JM: Yes

MM: ASEAN has been a success. If you compare with other regional groupings, including the European Union. We have stayed together but the level of cooperation is still very minimal. We cannot even decide where to locate some big industries because the nations are poor and they can support industries like steel et cetera. So we had at one time identified the industries for each of the five ASEAN nations but it didn’t take off.

ASEAN has got 650 million people – half the population of China. And yet it has not made use of this big population the way China has. China has grown because their domestic market is huge. Of course they are poor but even poor people need certain things, so if you cater to them you can industrialise and enrich a country based on very poor people, and very quickly they become rich.

But ASEAN has the same problem. Lots of very poor people. But if we decide to favour ASEAN countries for certain products I think all the ASEAN countries will be able to industrialise much faster, enrich the country, and go on to become like Japan, Korea or China.

JM: One of the measures your government has promised is to remove the death penalty, to make it not mandatory for certain crimes. How far has that progressed?

MM: When we wanted to abolish the death penalty completely there were protests. People who have lost their relatives through murder, they still feel that murderers should be punished. So we cannot just abolish it. So we decided upon not making death penalty mandatory, even for drug cases and some other cases.

But at the moment we have people who have been sentenced to death - about 1000 of them, still waiting there. There is a moratorium at the moment on the death penalty, so we are trying to consider how to deal with this new problem. You can’t be hanging 1000 people, but on the other hand the cost to government of maintaining these 1000 people is also a drain on the coffers.

JM: There is one specific case, Sirul Azhar Umar, a man involved in a murder case in 2002 who has information, who is in Australia, in Villawood detention centre. He has information about the previous government that could be useful to your government. Do you want to get him back to Malaysia?

MM: Malaysia still has the death penalty and Australia will not send the refugee back to Malaysia because he might be sentenced to death. But he had a partner who is now in jail in Kuala Lumpur. We cannot hang this man without punishing the other man. At the moment everything is held back. We are not going to take any action. Once you kill a person there is no way he will come back.

JM: When you pass legislation that would make the death penalty not mandatory, it is then possible that Australia could send this man back to Malaysia. Is that something that you are hoping for or expecting?

MM: The law itself has not been passed. Until the law is passed… some people are still demanding the death penalty be meted out to certain criminals.

JM: What’s your greatest regret in your career, in the 25-26 years you were Prime Minister, and how are you trying to fix it?

MM: My failure to ensure that all the different races in Malaysia enjoy the same opportunities and are not too much separated in terms of their wealth. For example, there is a great disparity between the Chinese and the Malays. I spent a lot of time trying to bring up the Malays so that they can catch up so at least they’re not too far behind the Chinese.

But I failed. I failed, I must say, because the Malays themselves did not respond to our efforts. We have done a lot of things to bring up but their response is not right. They don’t use the opportunities given to them in the right way. Even now I am still trying. We have just introduced a new policy called Equal Sharing of Prosperity but it needs the Malays to respond to the efforts we are putting in. If they don’t respond and they abuse it then of course we will not achieve our target.