Why Mahathir’s cronyism is worse than corruption

Sebastian Loh, Malaysia Impact

Last December, a friend working in Singapore asked me why I’m voting for Najib over Mahathir. He said, “Yes, Mahathir practiced cronyism, but at least he didn’t steal like Najib.” Surprised, I told him, “Whoa, there. I don’t think you understand how cronyism exactly works. Mahathir-style cronyism, in particular, is much, much worse than standard corruption.”

Don’t agree? I’ll illustrate what I mean by way of a simple story.

Let’s say you’re a 25-year-old just starting work in 1998. You have to buy a car because Mahathir is obsessed with Proton and can’t be bothered with public transportation. You can’t afford a foreign car because Mahathir’s tariffs make them too expensive – you’d be paying two, three, four times above the actual market price. So, you take a loan and grudgingly buy a Proton – a truly crappy, substandard vehicle that’s also overpriced because there’s little competition.

Proton, Mahathir’s infamous baby, happily takes your money and hands part of it to crony suppliers who sells automotive parts to the company at above-market rates. Score one for cronies. But wait, that’s just the beginning.

Having a car is convenient, but now you have pay road tolls on a regular basis. Mahathir signed outlandishly lopsided agreements in favor of crony highway operators. Many highways, including the North-South Expressway, were originally slated to see their toll fees increase by 10% every three years. Ten percent, my friend. And there was little the government could do – if it didn’t allow for the fee rise, it had to pay massive compensation to the highway operators.

Either way, score two for cronies. And guess who publicly defended toll fees in Malaysia just a few months ago? (You can watch the video HERE.) Yup, the 93-year-old Father of Tolls himself. I’m not surprised at all.

Let’s say you get fed-up with driving and tolls lah. You decide to take the LRT or the bus. Who owned the LRT lines back in 1998 before they were (predictably) bailed out? Crony companies. Who owned the Intrakota bus line back in 1998 before it was also bailed out? Another crony company. Again, your money goes into the pockets of cronies. And as you’ve seen, even if crony companies bungkus, the Mahathir government will step in and rescues their behinds with taxpayer money. Score three, score four, and score five for cronies.

You aren’t safe from Mahathir’s cronies even if you take a cab. We often complain that cab drivers are dishonest – they refuse to use their meters and demand outrageous fares for short rides. (I can’t recall how many times I’ve been asked for RM20-RM30 for a 10-minute ride.) But can we really blame them? They need to keep paying for absurdly expensive taxi permits issued by crony cab companies. The cronies prey on them and so they prey on us lah. At the end of the day, score six for cronies.

It’s worth noting that Mahathir recently claimed that Grab is hurting cab drivers. He promised to review the e-hailing services legalized by Najib if Pakatan comes to power. But who benefits from such a review but crony cab companies? I take Grab daily and I can tell you that I couldn’t be happier with the service. Why should the average consumer continue bankrolling crony cab companies who can’t compete in terms of cost, convenience, and service?

That’s the thing with Mahathir. He can’t (or won’t) back away from the massive ecosystem of cronyism that he created. Call it the ‘Crony Industrial Complex’: Mahathirism means that there’s always a crony hiding around the corner waiting to beat you up and steal your money. And we have only focused on something as basic as commuting / transportation (getting to work and back). We haven’t even explored the other sectors of the economy and national infrastructure that Mahathir carted off to cronies.

You may ask (as you obviously will), but what about 1MDB? Okay, fair question. Even if the allegations against Najib are true (and at this point of time, he hasn’t been charged by any authority despite there being multiple international investigations into 1MDB), how much has 1MDB actually cost the country? Just RM1 million. That’s the seed capital that federal government gave 1MDB at the start.

1MDB raised the rest of its funds by borrowing like a mad man. Granted that was incredibly stupid and reckless, the government’s exposure to the scandal-hit fund is quite minimal. The government did provide a RM900 million soft loan to 1MDB, but that’s already paid back in full. Moreover, 1MDB continues to make its debt payments on time (it has lots of assets to sell and monetize). So, what’s the big deal here? Especially when the shadows of Mahathir’s cronies loom much larger in our day-to-day lives.

When you pay 6% GST today, you’re not paying a single sen for 1MDB. But if you’re a road user (like most Malaysians), you are paying for Mahathir’s tolls. Chances are you also paid way too much for your car thanks to Mahathir’s Proton. How much does all that cost you in the end? Tens of thousands? Over a course of a lifetime, hundreds of thousands? Perhaps millions?

Has anything changed today? Consider the following:

Do you think Proton’s crony suppliers were happy when Najib refused to give more unconditional aid to Proton? Do you think they were happy when Pak Lah and now Najib allowed more foreign cars into the country? Mahathir for sure wasn’t happy – he publicly complained about cheap imported cars outcompeting his beloved Proton. Are you, dear reader, unhappy about CHEAP imported cars? I’m not! I’m 100% on the side of consumers.

Do you think cronies are happy that highway operator PLUS is now controlled by government? Since Khazanah and EPF bought PLUS in 2010, popular highways like the North-South Expressway, the Penang Bridge, and the Second Link have not seen even a single rise in toll fees.

Do you think cronies were happy when Najib kept the MRT project within government-owned Prasarana instead of handing it over to private companies? Do you think they were happy when work on the MRT was awarded via an anonymous tender system? I can imagine them gathering around a smoky table somewhere and lamenting, “Aiya, how to cari makan like that?”

Do you think crony cab companies were happy when Najib legalized e-hailing services? Do you think they’re happy that Grab is grabbing their business and ending their dominance of the cab industry?

Now, there are plenty of rich businessmen supporting Mahathir’s campaign to be PM again. These are the people who Mahathir regularly claims is being harassed by tax authorities. Do you think these shadowy, yet unnamed businessmen are supporting Mahathir out of pure love for country? Or do you think they want something in return? C’mon lah. Kawan-kawan sekalian, this is politics. There is no free lunch.

So, I told my friend: Cronies rindu Zaman Tun the most because that’s when they could rob all us blind. Back then, a select group of businessmen dominated virtually all sectors of the economy, resulting in the indirect and systemic extortion of the rakyat’s money. Like I showed earlier, you can’t run from Mahathir’s cronies even if you tried. And that’s way, way worse than anything that one company like 1MDB has done to us.

In the end, I have no choice but to support the current BN government under Najib – flawed as it is – because it at least has made important progress in fighting this sort of outrageous cronyism. You’re not going to get that with gang Mahathir. My friend acknowledged that I had a point, but was still very skeptical about BN. And that’s fine, I just gave him my honest opinion. To me, the choice we face this election couldn’t be clearer.