SINGAPORE (Dec 31): The arc of great stories often traces a glorious rise, a dramatic fall from grace, followed by a bittersweet redemption. Malaysia’s general election on May 9 was arguably its day of redemption, after rapid economic develop­ment in the 1980s and 1990s, followed by a long period of social and political malaise in the wake of the Asian financial crisis (AFC). After nine years under former prime minister Najib Razak, who presided over the misappropriation of billions of dollars, Malaysian voters defied political pundits and polls and booted out the Barisan Nasional (BN) coalition that had ruled the country for more than six decades.

Malaysians were jubilant at having overcome the bribery, race-baiting and gerry­mandering that many were convinced would keep Najib and BN in power despite their excesses. It seemed like the political fabric of the country had changed overnight, and that Malaysians would be less susceptible to being manipulated by their leaders. Within days of the elections, the Malaysian Auditor General’s report on the scandal-ridden 1Malaysia Development Bhd was declassified, and the police were seizing bags of cash, jewellery and luxury handbags from residential properties linked to Najib and his family.

On the other hand, foreign investors were nervous about the return of Dr Mahathir Mohamad, with the ragtag coalition of political parties he led to victory. Mahathir and the so-called Pakatan Harapan coalition had loudly promised to abolish the much-hated Goods and Services Tax (GST), and halt mega projects such as the High Speed Rail link from Kuala Lumpur to Singapore. For investors, this potentially spelt a bigger government budget deficit and slower GDP growth. Indeed, in the immediate aftermath of PH’s victory at the polls, Malaysian stocks and the ringgit suffered a knee-jerk bout of selling.

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