How will the defeat of former Malaysian Prime Minister Najib Razak affect us?

Singapore safety and security affected after PM Najib defeated.
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How will the defeat of former Malaysian Prime Minister Najib Razak affect us?

checking blog post using mobile
Singapore safety and security affected after PM Najib defeated.



The election in Malaysia has all the makings of an epic event – a man over 90 returns to politics, to fight against the corrupted party that he once established. We’d be surprised if no one is calling the movie rights to this yet. Amidst the drama however, some voices of concern have arisen: what does this mean for Singapore?

Five ways PM Mahatir Mohamad’s victory could impact us

  • Possible impact on property prices in the Jurong region
  • Potentially tighter compliance issues for banks
  • A potential return to an adversarial relationship
  • His intended replacement, Mr. Anwar Ibrahim, bodes well for us
  • This has probably improved long term, regional stability
  1. Possible impact on property prices in the Jurong region

PM Mahatir is re-examining some of the major deals and infrastructure project, that were passed under his predecessor. One of the key deals is the High Speed Rail (HSR), which was meant to connect Singapore and Malaysia.

The terminus of the HSR was to be in Jurong East, and this caused a rush for Jurong region properties. Even now, developments such as Le Quest are selling like hotcakes, on the presumption of the HSR being built. Due to the large number of Malaysians working in Singapore, it’s presumed that the HSR will provide premium rental rates and good capital appreciation in the Jurong region.

If the HSR is really cancelled, there may be some downward pressure on property prices in Jurong. We won’t see prices come crashing down, mind you – Jurong has a lot going for it besides the HSR, such as the new Jurong Region Line (JRL), and the simple fact that Jurong Gateway / Jurong Lake have transformed the area into a “second CBD”. But we could see a momentary dip, if PM Mahatir pulls the plug on it.

Nonetheless, it’s early days yet, and Malaysia’s new PM hasn’t given a hard “no”. The HSR is expected to boost Malaysia’s economy and provide jobs as well, so there’s still a good chance construction will go ahead (although knowing PM Mahatir, he would want the HSR to use mainly local contractors rather than, say, companies from China. He’s likely to have many such conditions for approving the HSR).

  1. Potentially tighter compliance issues for banks

Under former PM NajibRazak, few questions were asked about the 1MDB scandal. The former PM even sacked the Deputy Prime Minister, four cabinet members, and the Attorney-General, for prying too deep into 1MDB. And yet even then, discoveries about the 1MDB scandal led to local banks being fined.

Now that PM Mahatir is in charge, he has promised that “heads will roll”, and a full inquiry into 1MDB will be conducted. There’s still dirt to be uncovered, and there’s every chance we’ll discover other banks are involved.

If our banks and financial institutions are further caught up, we can be sure the Monetary Authority of Singapore (MAS) and the Ministry of Finance (MoF) will go into overdrive. They could tighten compliance requirements, or step up regulations on the banks.

This will raise the banks’ cost of doing business, and impact their stock performance. Do note that banks are a big part of the 30 blue chip shares on the Straits Times Index (STI), so this could cause a momentary dip in many stock portfolios.

We may also see the cost of financial services go up, if banks pass new compliance costs down to customers.

However, none of this is definite. If we’re lucky, all the involvement between local banks and 1MDB have already been dug up, even with further probes.

  1. A potential return to an adversarial relationship

Singaporeans who are in their 30s or older may recall that, when former Prime Minister Lee Kuan Yew was in charge, he often butted heads with PM Mahatir. Some attribute this to a clash of personality, but that’s a rather shallow view of it.

The issue wasn’t the personality of both leaders, but rather PM Mahatir’s protectionist stance. Then, as well as now, PM Mahatir has always sought to protect Malaysia’s domestic businesses from free market forces.

This is in stark contrast to Singapore’s “sink or swim” mentality – to us, a business that can’t expand or stay profitable needs to close down; it’s simple supply and demand.

PM Mahatir is more inclined to protect Malaysia’s businesses from free market forces; but this causes policies that become tied with issues of race. For example, PM Mahatir has always been blunt about giving ethnic Malays an edge, to catch up with wealthier Chinese residents in Malaysia. Back in PM Lee Kuan Yew’s day, this prompted us to accuse PM Mahatir of stirring up racial tensions, particularly among the Malay community in Singapore.

Now we don’t know if PM Mahatir has softened or changed his views much, but this remains the biggest source of worry. Singapore is a trade-dependent, export-oriented country that always pushes for free market capitalism; if our policies rub PM Mahatir the wrong way, we could see a return to an adversarial relationship.


  1. His intended replacement, Mr. Anwar Ibrahim, bodes well for us

PM Mahatir intends to be replaced by Mr. Anwar Ibrahim. This is likely to improve relationships and business ties across the causeway, when the transfer of power happens in two years.

This is too big a subject for us to get into here, but suffice it to say Mr. Anwar doesn’t have PM Mahatir’s protectionist stance (see point 3 for details). It’s the entire reason the two of them had a falling out in the first place.

If we’re lucky, we’ll see fewer barriers to doing business in Malaysia, and a fairer playing field for Singaporeans businesses trying to operate across the causeway. If our businesses do well, that means higher wages and better employment prospects.

  1. This has probably improved long term, regional stability

While the impact is not visible right now, this whole event has been positive for Singapore and the Asia Pacific region in general. Under PM Najib, Malaysia was a powder keg of political tensions and potential riots. That sort of thing scares away investors, and diminishes capital inflows into the region.

With increased stability, we’re more likely to see more foreign investment. And if PM Mahatir does happen to close more doors to China, that could redirect more Chinese money into Singapore.

Worried about the future implications? Make sure you keep your cash flow and savings fund healthy.

There’s little that you can do to affect national policy-making. But you can make sure to keep a healthy savings fund, and maintain your cashflow for any disruptions ahead.

If you need to make any major purchases, do consider paying it in instalments via a low interest loan, instead of wiping out your whole savings. Sometimes it’s better to pay a bit of interest, than to be left completely without cash. Visit to learn how to use loans intelligently.


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