The Implications of 1MDB on Malaysians

I was asked in Parliament on the costs of 1MDB to the nation. In his supplementary question, Sdr Chong Chieng Jen, MP for Stampin, asked could the cost be higher for Malaysia if there was no change of government in 2018.

My reply:

First, the total obligation of 1MDB is RM51.4 billion. If there was no change of government in 2018, the chances would be that the government-of-the-day led by Datuk Seri Najib Razak would not put in effort to recover assets, thus the costs could have been RM51.4 billion.

Second, currently, after relentless efforts by the Treasury and many others who have devoted their professional time and efforts since 2018, RM31.3 billion of assets has been recovered. But, as the more significant parts of the 1MDB assets have been recovered, most of the remaining RM20.1 billion is unlikely to be recovered, which, in other words, is likely to end up as losses to be borne by the people of Malaysia.

Third, opportunity cost. If there was no 1MDB scandal, the efforts, including many legal brains and finan in cial expertise, would not have to be wasted to recover the money. More importantly, if the money was not siphoned off, it could be used for a lot of productive purposes, and would not have to spend the time, energy, and money to handle the scandal. For instance, in March 2023, the MADANI Government was forced to pay RM13 billion from the Development Budget to pay back a USD3 billion bond that the Government had guaranteed. The amount was 13.1% of the total Development Budget of 2023.

Fourth, reputation cost. For a decade, Malaysia was mentioned in international news mostly for the wrong reason because of the 1MDB scandal. Many Malaysians who travelled overseas or who had met foreign investors in Malaysia had to bear the brunt of shame because of such a global scandal. It is the MADANI Government led by Dato’ Seri Anwar Ibrahim that managed to repair the reputational damage, and thankfully Malaysia is now seen as a respectable nation internationally.