Malaysian Leader’s Second Act Could Be Just What the Nation Needs

(Bloomberg Opinion) -- The style and substance of Malaysia’s seventh prime minister sure look familiar to anyone who knew him as its fourth prime minister. Good. Mahathir Mohamad’s political comeback — at the age of 92 — could be just what the nation needs.

Mahathir’s approach is well suited to this moment of nationalism, skepticism about global integration, and rivalry between the U.S. and China. You might even call it a blueprint for how a nation can get most of what it wants without shutting the door to investment and needlessly antagonizing allies and great powers.

During his first 22-year stretch in office, ending in 2003, he was combative and a reliable critic of Western or free-market orthodoxy. I observed this firsthand reporting on his government from Kuala Lumpur. Now, he seems moderate and sensible. But he hasn’t changed. The world has, in this era of Donald Trump, Brexit and open antipathy toward free trade. 

Observing now-93-year-old Mahathir at events in New York last week, I saw that his approach to issues has not evolved a lot. His economic thrust is: Foreign direct investment is welcome, not because we love it, but because we need it. It helps Malaysia. Caveat: We don’t like de facto foreign colonies on our soil and hate being ripped off.

We want infrastructure but can’t borrow more than the nation can afford. He still views currency trading with disdain and its proponents a motley group of people moving numbers on a screen to no productive end.

Mahathir acknowledges China’s ascendancy and isn’t fazed about China’s growing military presence in the South China Sea. China can make all the claims it wants to the waters. Malaysia’s interest is whether shipping can pass through unimpeded. We are a small country, he said. Implicit is that there is no point resisting tectonic geopolitical and economic shifts, especially when you can’t or won’t do anything about it.

Mahathir’s consistency is not unalloyed. Many in the West can’t forget his broadsides against Jews. Nor should they; he restated those opinions as recently as 2016, and I haven’t heard him disown them.

His views on economic integration are striking these days. Mahathir still promotes his idea for an East Asian Economic Caucus, a regional free-trade zone he sought during his previous premiership.

That zone would link the 10-member Association of Southeast Asian Nations with Japan, China and South Korea. There would even be a quasi-single currency, a token used for trade. In the end, Japan balked because the zone didn’t include the U.S. That outcome was not a total disaster in Mahathir’s estimation, because the Asean-plus-three group subsequently agreed to strengthen cooperation. 

Put Mahathir down as a champion of muscular regionalism, which might even be called the new face of globalization. North America’s last-minute deal to salvage Nafta, albeit in tweaked form with lots of histrionics, is consistent with this. (More on all that in another column soon.)

It’s early days for Mahathir 2.0. For now, he is the toast of New York. His secret? Never retire.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Daniel Moss writes and edits articles on economics for Bloomberg Opinion. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.

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