Malaysia's Prime Minister tells Fortune about attracting investment from Elon Musk
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]