Fortune's Alyson Shontell sat down with Malaysian Prime Minister Anwar Ibrahim to discuss fallout from the 1MDB scandal, Ibrahim's long journey to his current role, and more.
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00:00 Prime Minister, it is a pleasure to be here with you today.
00:03 Nine months ago, you won a historic election here in Malaysia to become the 10th Prime
00:07 Minister of the country.
00:09 Congratulations.
00:10 And two weeks ago, there was another set of elections that some said was going to be your
00:14 first big test with your new administration.
00:17 How do you feel the results went?
00:18 No, thank you, Alison.
00:20 We managed to sustain the level of support, particularly in the key states, the three
00:27 economically thriving states, as opposed to the more rural hinterland that we lost to
00:34 the more conservative Islamic party.
00:39 So I thought that is a clear signal that the government is stable and we are here for the
00:47 next four years, given general elections.
00:51 And that in and of itself is significant, as you know better than anybody.
00:56 It's been a tumultuous past few years for Malaysia.
00:59 Stability is very much needed.
01:01 It's been a tumultuous path for you to be in the seat that you're in today, about 25
01:05 years in the making, about a decade of that spent in jail for things that you did not
01:10 do, that would not be crimes, frankly, in other parts of the world.
01:14 I mean, you're here in the seat today.
01:17 What from that experience has prepared you to be Prime Minister and how did it change
01:21 you as a person?
01:23 We have had some experience in the past, then the 25 years in and out of jail, that the
01:28 learning curve, I think you become more mature, I should say patient and saner in this world
01:43 full of insanity.
01:45 And I think I've learned immensely about freedom, about patience, about economic policies.
01:52 And I think I would like to therefore focus effectively how to contribute to this country
02:00 and make it vibrant and great again.
02:04 And there were moments that you didn't feel like you would survive and friends even told
02:09 you why would you go back into government?
02:11 You might be thrown back in jail.
02:13 It could be disastrous.
02:15 Why?
02:16 You know, why in that moment did you decide, I'm going to give this another shot and I'm
02:20 going to go be Prime Minister?
02:22 It's interesting because I had a long conversation after I was released at the invitation of
02:30 Nelson Mandela.
02:31 We were talking about how mad or quite insane we are or crazy.
02:37 So we reached a consensus.
02:39 We were not insane, but certainly we were quite crazy because we believe we have a sense
02:44 of conviction, believe what's best for our people, for our country and the country deserves
02:50 better.
02:51 And essentially that, I think, propelled us to work harder and be really determined
02:58 in the face of adversities.
03:00 I'm not exaggerating, it was a tough period.
03:04 It's not just for me, but I think my wife, my family, my colleagues suffered immensely
03:09 too.
03:10 But after all this, I mean, this is probably part of the tribulation one has to accept
03:14 because we are talking about affecting change.
03:19 I'm against a system with endemic corruption, with authoritarian threats.
03:29 So it's not going to be an easy feat.
03:32 And you accept the fact that you are actually trying to change the system, how things should
03:38 be different, naturally it would be at the expense of those ruling clique or elite.
03:48 But now at least we can see there's a ray of hope for the country.
03:52 There is stability, there's clarity in economic policy and a general acceptance by the general
03:58 public that in order to evolve as a successful country, we must affect real change and reform
04:08 in this country.
04:09 And as you mentioned, and you've said before, corruption has been endemic to this country
04:15 and a big opening to allow you to be in the prime minister's seat today was the 1MDB scandal
04:21 that prior administrations had been caught up with and that you're now trying to settle
04:25 with Goldman still.
04:27 How much of a setback for Malaysia do you feel that that incident was and how do you
04:32 plan to get the money back from Goldman?
04:36 In a sense, it was a major setback because the perception always had been negative.
04:42 I was in New York some years back and the only thing they ask is about Malaysia and
04:46 1MDB or Malaysia is essentially a very corrupt country.
04:51 So we have to really look, we have a different set of leaders, different set of policies
04:59 and we are quite determined to change and rid the country of corruption.
05:07 And I should say, given just about more than eight months, we were quite successful.
05:13 No negotiated tenders, which has been the practice, no issue of commissions through
05:20 procurements of military equipment from foreign countries.
05:25 I mean, this can be done, but you have to be really tough and at times quite unpopular.
05:31 But if there are clear signs of determination and policies follow through, I think generally
05:41 the international community can accept, they know, they follow.
05:44 It's just not occasional views of the media, but they do analyse, they see things and when
05:51 they come in, they see how we work.
05:54 And this is why in the last, say, three, four months, because suddenly there's a mushrooming
05:59 of investments from the United States, from Europe and from China, huge numbers coming
06:05 in and they see there's a change, ease of doing business, clarity of policy and transparent
06:14 in terms of our implementation.
06:16 So I want to dig into that a bit more.
06:20 You've outlined a big plan for Malaysia over the next 10 years, your Medani economy.
06:24 It has a number of parts to it.
06:28 But the overall picture in a recent speech, you said, the fact is we're caught in a vicious
06:33 cycle of high costs, low wages, low profits, and a lack of competitiveness.
06:37 Where do you start?
06:38 What steps do you need to make today to reach the ambitious goals you have for Malaysia
06:42 in the next 10 years?
06:43 First, there must be clarity in the policy.
06:46 You see, for example, we're talking about the industrial master plan.
06:54 Must it be the old approach of sectoral or mission approach?
07:00 Do you have to see Malaysia as one entity or geographically different?
07:05 These issues will be addressed.
07:07 If there's clarity and then ease of doing business.
07:11 In the last few months, I don't find difficulty in getting investors to come in.
07:16 And I see no agents, no commissions.
07:20 And you get to the key personnel, particular agency, and we will facilitate the approvals.
07:28 So if that can happen, then naturally the issue of the issue we talk about, you know,
07:34 wage, low productivity will be resolved.
07:37 Of course, it will take time and effort.
07:42 You ask most of these companies, American companies from the IT companies, from Dell
07:50 in the past or Elon Musk, the present, or the Geely's, Rongshan in China, all of them
07:56 almost without exception will say that we have first class professionals and engineers.
08:03 What we lack is probably the issue of governance, issue of clarity and issue of ease of doing
08:09 business.
08:10 So it is partly the responsibility of the authorities, the government to make the necessary
08:16 changes, accelerate the process of approvals, and at the same time to give the additional
08:23 niche training to what is being required in that area that we are still deemed to be rather
08:31 lacking.
08:32 A big one was Elon Musk committing to doing quite a bit here with Tesla, Starlink.
08:38 Those negotiations were relatively...
08:41 It seemed fast.
08:42 I mean, Indonesia had been courting Musk for a long time and yet he chose Malaysia.
08:46 What did you say to Musk?
08:47 How did you get that done?
08:48 And was it just great terms?
08:49 Well, I was...
08:50 And I say, "Please, as much as I know about him, he knows a bit about me."
08:57 So I said, "Look, I've suffered immensely in the process.
09:02 Now I'm given the opportunity.
09:04 I'm in business.
09:06 I want to affect the change and I want to do it now.
09:09 And whatever is necessary will be done.
09:13 I love my country and I think it has huge potential and capacity."
09:18 And I make it rather clear and blunt to him to say that he does not need to worry about
09:25 all the other nitty-gritties, bureaucratic encumbrances that he may face in dealing with
09:33 some other countries.
09:35 So I thought that may be one issue.
09:38 But the other thing is that he knows the history of this country.
09:42 And even in SpaceX, he has three major companies engaging in the operations of Space Musk in
09:52 terms of the spare parts.
09:54 So he can gauge our potential.
09:58 What was lacking then is a clear policy and commitment by the leadership.
10:06 And we have complemented that.
10:08 I mean, of course, I'm exceedingly pleased they could come up with a very fast decision
10:14 and set up the regional office here.
10:17 And are there other deals like this in the works?
10:18 I assume you're talking to many Western companies.
10:21 Yes.
10:22 So, Union, for example, came in with a decision a month and a half ago by the board, five
10:29 billion euros to expand in Malaysia.
10:33 And the biggest single investment outside Germany.
10:38 And then Rongshen, I'm sorry, Geely from China, they come in and they are starting
10:43 a automobile city in this state, in this province, in the south of this province, which is ongoing.
10:50 And they have brought in about a thousand of the Chinese professionals in the operations
10:54 already.
10:57 And they know how, it's just not me alone, the whole system, the team to say, look, once
11:03 we are committed, we cannot give the impression that we are laid back or, I mean, not doing
11:11 anything or whatever is necessary to make sure that this process goes at a fast pace.
11:19 So, there's a bit of a dilemma, I suppose, if part of the goal is to get more foreign
11:26 companies to come into Malaysia, but then China is also a big partner.
11:31 And of course, China and the US are not quite getting along.
11:35 How do you plan to position Malaysia when you're sandwiched between the two and you
11:39 need both?
11:40 Thus far, we don't have that much of a problem.
11:44 We may engage and we maintain China as a major player in terms of investments, in terms of
11:53 neighbourly relations, trade, is a major player.
11:58 And I'd explain to my colleagues in the States, look, it's an important neighbour.
12:02 It's not a zero-sum game as far as we're concerned.
12:06 And States have a long tradition of cultivating friendship for decades.
12:14 And also, they know the track record of our country.
12:18 I mean, some of the big major players have been here, even the traditional ones like
12:23 Motorola, Intel in the past, and they know our capacity.
12:30 And I think we should then utilise this to our advantage.
12:35 We are a small country.
12:36 We are not here to try to broker a deal between the United States and China.
12:41 We know that.
12:42 And they know, we make it very clear.
12:44 I mean, I have engagement with Blinken and Kerry recently, and of course, with Xi Jinping
12:54 and Li Qiang in China, and continue to communicate.
12:59 We make it very clear, our priorities and what is of the imperative in this country,
13:08 in Malaysia.
13:10 Another tenant of the Medani economy is getting more women in the workforce.
13:15 You have a goal of getting about 60% participation.
13:20 How do you plan to do that?
13:21 Is it overhauling education?
13:22 Is it systemic?
13:23 How are you going to improve those numbers?
13:27 It is a clear, I would say, beyond moral persuasion, it's a clear policy against any form of subvert
13:37 discrimination that happens to be taking place.
13:42 In universities, at least we have more than 50% women, female students.
13:47 There's no reason why they cannot be accommodated.
13:48 Of course, I'm a bit biased.
13:50 I have six children, five girls.
13:53 And a very powerful wife.
13:54 Yeah, and a powerful wife.
13:57 But I think to be fair, it will be of immense help to the country.
14:03 This vote of people has not been fully utilized.
14:09 Many brilliant professional qualifications are not given the opportunity.
14:14 So there must be a clear policy to encourage it, in politics, in management, in the private
14:20 sector, and more so in the government service.
14:23 What about within your own administration?
14:25 There's only a few women.
14:26 Do you have plans for them at worst?
14:27 But of course, in the cabinet, we started off now, relatively smaller, although in terms
14:38 of the historic intercedents, it's quite prominent and given key positions in the past, women
14:45 affairs and welfare.
14:47 We, education, health, women, which to me is very, very key.
14:54 One of the two key ministries are held by women.
14:59 But I agree, I concede the fact that we need to then expose and give opportunity to more
15:07 women, not only in political leadership, but in the professional managerial positions.
15:14 So quite a bit to do.
15:17 As we said at the beginning, you've been 25 years in waiting for this, and now is your
15:22 time to take Malaysia where you want it to go.
15:26 What do you worry about failure?
15:28 What does failure look like to you now that you have this seat?
15:30 It's interesting, Alison.
15:32 I didn't actually think a bit too much about possibility of failures.
15:39 I think we are here, we have failed in the past and we have learned and have the humility
15:47 to acknowledge our limitations in the past.
15:51 And I think now is the time for us to execute.
15:55 And if you do the right thing, and you mean well, and you know what's rotten about the
16:01 system, you need to correct them.
16:03 I think there's no reason, no cause to be unduly worried about the possibility of failure.
16:11 And what about your legacy?
16:12 What do you want your legacy to be when people remember you in this position?
16:16 And what do you want global leaders to think of Malaysia now?
16:19 Again, I would reiterate the same point.
16:23 I'm not too concerned about that.
16:25 But I think what is important is you do your best.
16:28 And this country has this immense capacity to emerge as a viable, successful, you know,
16:41 developing economy or emerging economy.
16:45 And I think we should just focus on that.
16:48 And I'm quite realistic.
16:52 I'm not crazy.
16:53 Although, as I've said earlier, that we with Mandela do acknowledge that both of us are
16:59 quite crazy.
17:00 But I'm quite realistic to say that the capacity is huge, enormous.
17:05 You know, we have been here, say, eight months, but I think effectively just six months.
17:10 And you can see the trend, you know, the focus, the interest of the general public, the general
17:19 affinity, discipline among the public, the interest by foreign investors, and even, you
17:29 know, on general issue of governance.
17:31 I mean, there is a shift.
17:34 And I think if we can continue and sustain this effort, we can thrive.
17:40 Thank you so much for your time.
17:41 Thank you.
17:42 Thank you.
17:42 [BLANK_AUDIO]