The month of September will mark a low point for Prime Minister Najib Abdul Razak with the forex Royal Commission of Inquiry (RCI) and his US trip. If only he knew that the opposition and the people of Malaysia understand his every move.
In the RCI, Nor Mohamed Yakcop, one of the most important figures in Bank Negara Malaysia (BNM) in the 1980s, affirmed that neither Mahathir nor Anwar Ibrahim were informed of the forex losses. Nor Mohamed explained in a careful but objective statement at the RCI that several key events forced BNM to enter into the fray of forex trading.
First, the Japanese yen had strengthened more than 50 percent after the Plaza Accord in 1986, where members of the G7 allowed the yen to trend upward. Malaysia carried yen loans from various infrastructure projects and BNM entered into the volatile currency market – beyond the preservation of the value of the ringgit, they did so to help Malaysia increase its profits, reduce its losses and consolidate its reserves.
Unlike 1MDB, the forex losses were driven by the higher motivation of saving the country economically from an adverse international financial environment, where even the Bank of England made the wrong bet on its own pound.
Secondly, the statement of Nor Mohamed clearly affirmed that the policy lessons of the absorbed losses were relearned before the Asian financial crisis – at which point Mahathir’s successful handling of it may have saved Malaysia billions of ringgit. Over time, even the World Bank and the International Monetary Fund (IMF) admitted that Mahathir was right.
In this way, the much-heralded RCI is boomeranging to hurt Najib and his government more than he could imagine. Instead of tearing Mahathir’s reputation apart, as it was probably expected to do, the RCI has enhanced it. Nor Mohamed even said that Anwar Ibrahim was not informed of the losses, as there was no banking line of authority to him when he was the finance minister.
The month of September will also see Najib visit the White House as a sidebar to his trip to New York. In fact, there is every indication that Najib is there to attend the 72nd session of the UN General Assembly, which also starts on Sept 12, the same day he is supposed to meet President Donald Trump.
Even if Najib meets with Trump in the White House, it will mean little, if not nothing. Everyone knows that Trump likes to have his most personal and important meetings in Mar-a-Lago or the Trump Tower.
But if the meeting does end up taking place in Trump Tower, Najib and his contingent will pass many buildings in Manhattan that have been seized by the US Department of Justice, inadvertently making it a macabre 1MDB-related tour.
Either way, Najib is cornered, be it with the RCI at home, or his trip to the US.
Clearly, Najib has lost the plot. He seems to be unaware of the whiplash effect of the RCI, nor that his US trip will be seen as nothing more than a regular UN trip.
RAIS HUSSIN is Parti Pribumi Bersatu Malaysia (Bersatu) supreme council member and head of policy and strategy.