Analyst reveals secret why 1MDB scandal won’t affect foreign investments

(FMT) – Oh Ei Sun says foreign investors ‘welcome’ a degree of corruption in any country, and they know that corruption in Malaysia is not as bad as in some neighbouring nations.

International investors do welcome some form of corruption and, therefore, the 1MDB scandal is unlikely to dissuade them from investing in Malaysia.

This is the view of Dr Oh Ei Sun, senior fellow at the S Rajaratnam School of International Studies in Singapore.

Oh, who was Najib’s political secretary from 2009 to 2011, told CNBC in an interview that if one were to “go into the minds of international investors,” one would find that “a degree of corruption for businessmen is very common and in fact they will welcome and embrace that”.

Oh said he was being “very realistic” in saying this.

He noted, too, that if international investors were to look at corruption among Malaysia’s neighbours, they would find the same degree or more there. He said it was a question of comparison.

In fact, he added, with the exception of Singapore, Malaysia was better than most of its neighbours.

Transparency International’s corruption perception index would show that this is so.

He quickly added, however, that he was not saying that it was all right to engage in corruption.

Oh told CNBC he expected the Barisan Nasional to win the next general election despite the 1MDB scandal and other corruption issues. This was because corruption found no traction among the majority rural voters, he said.

Oh said concerns over 1MDB and other irregularities were mainly confined to urban voters and that most urban voters were already voting for the opposition.

He said, in contrast, the issue of corruption had made little inroad in rural areas because rural folk were mainly concerned about development and infrastructure.

“As long as the government ensures these amenities, they will vote for the BN,” he said.

Individuals close to Prime Minister Najib Razak have been linked to the 1MDB scandal. It has been alleged that billions of ringgit have been stolen from the state investment fund.

Several countries have started investigations into suspect transactions of 1MDB, with Singapore jailing several people and closing units of financial institutions suspected of involvement in the shady transactions.

The US’ Department of Justice has categorically said that money has been embezzled from 1MDB. However, 1MDB has insisted that no money is missing from it.