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Malaysian Lawmakers Call For No Confidence Vote Against PM Amid Goldman Slush Fund Probe

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Back in August, it became readily apparent that the scandal surrounding Malaysia’s 1MDB threatened the political career and even the legacy of the country’s Prime Minister Najib Razak. 

Street protests in Kuala Lumpur emboldened by loud calls from highly influential former PM Mahathir Mohamad suggested that, much like Brazil and Turkey, Malaysia is yet another example of an emerging economy wherein deteriorating fundamentals are set to conspire with idiosyncratic political risks to create the conditions for a descent into full-on crisis. 

As a reminder, the development bank at the heart of the scandal benefited from early financing provided by Goldman, which used its connections with the PM to help secure deals that saw the bank effectively write 1MDB several large checks while simultaneously taking newly-issued debt onto its own books at a discount to par.

The outsized underwriting “fees” have been the subject of some debate, but the real questions revolve around how some $700 million ended up in personal bank accounts linked to Najib. 

The premier’s government has been variously accused of obstructing domestic investigations into 1MDB and now, the FBI is not only looking into the fund, but also into Goldman’s role in the financing, while authorities in Switzerland are asking their own questions.

Meanwhile, the UAE has begun to look for billions in collateral payments that a subsidiary of an Abu Dhabi wealth fund supposedly received from 1MDB but which have apparently disappeared. 

In short, it looks as though this was nothing more than a slush fund that everyone was dipping into and now, the whole thing is about to unravel. 

On Sunday we learn that the opposition in Malaysia has called for a vote of no confidence against Najib. Here’s Bloomberg

Malaysia’s opposition escalated pressure on Prime Minister Najib Razak over a multimillion-dollar funding scandal, seeking a no-confidence vote against him as parliament resumes after a four-month hiatus.

 

While the motion faces obstacles even getting heard, let alone voted on, the opposition is looking to gain momentum from the vocal criticism of former premier Mahathir Mohamad, who has called on Najib to step aside.

 

Najib retains the support of many divisional heads in his ruling party and in the budget is expected to increase handouts to the poor, many of them rural Malays, a core support base. Even so there are signs of discontent, including from former deputy premierMuhyiddin Yassin, whom Najib fired in July.

 

People’s Justice Party lawmaker Hee Loy Sian said he filed the no-confidence motion over Najib’s failure to address claims he received funds linked to debt-ridden state investment company 1Malaysia Development Bhd. in his bank accounts. Najib has denied any wrongdoing, and he and investigators have both said the funds were political donations from the Middle East.

 

“Najib has tarnished the country’s image in the world and caused investors to lose faith in the government,,” Hee wrote in the motion that was posted on the parliament website on Saturday. “Malaysians do not believe in this prime minister.”

 

The opposition needs the support of 25 Barisan Nasional MPs in order to pass a no-confidence vote. However, the opposition alliance has itself been wracked by infighting for months over issues including one party’s push for Islamic criminal law in a state it governs. It remains divided after former leader Anwar Ibrahim was jailed for sodomy, a charge he denies.

 

The no-confidence vote will be for “BN MPs to rebel if they would want any move against Najib to result in a new BN/UMNO majority government,” said Wong, referring to Najib’s United Malays National Organisation. “They will want the cake and eat it too, which then makes the mathematics of getting a rebellion much tougher.”

Here's a bit of color on the budget announcement (via Citi):

PM Najib will announce Budget 2016 on 23 Oct. To mitigate elevated political risks, the focus will be on cushioning the pain to lower and middle income voters from fiscal reforms, whilst continuing with a more gradual path of fiscal consolidation to avoid risk of sovereign ratings downgrade. The 3.2% of GDP deficit target for 2015 announced in January will likely be reiterated, as stronger than expected GST and corporate tax revenues should offset a slump in petroleum income taxes, whilst allowing for flexibility for some overshoot in operating expenditure. The smaller 3% of GDP deficit target for 2016 will be predicated on higher GST collections, which will both offset a lower dividend from Petronas and be used to fund larger direct cash transfers to the poor. BR1M handouts are likely to be expanded to RM5.5-6bn from RM4.9bn, but still significantly less than the RM10-11bn of fuel subsidy savings. Though there are calls for cuts in tax rates, it would be more prudent to offer one-off personal tax rebates and targeted tax/GST reliefs instead. Likewise, any minimum wage hike should be accompanied by productivity-enhancement measures so as to preserve competitiveness. Reducing EPF employee contribution rate is likely the most cost-effective way of boosting disposable incomes and shielding domestic demand without burdening employers or the fiscal position.

So ultimately, Najib will try to bribe poor voters with the budget in an effort to mitigate the political risks of the 1MDB scandal. 

As we've said before, this is exactly what Malaysia does not need as it attempts to grapple with a ringgit that's down 16% on the year and as the fundamental picture for the world's most important emerging economies continues to deteriorate. The market hates uncertainty and the spectre of a no confidence vote certainly falls into the "uncertainty" category.

 

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Sun, 10/18/2015 - 16:10 | 6682646 Stainless Steel Rat
Stainless Steel Rat's picture

Their debt is merely a fraction of their GDP and it is even less than their reserves of gold and foreign exchange!!!  When are the banksters going to do something about this?!?!?!

Sun, 10/18/2015 - 16:49 | 6682740 Occident Mortal
Occident Mortal's picture

So Goldman set up a slush fund to control Malaysia akin to the sort of thing the Sicilian Mafia used to do with Police Departments?

I am shocked. Shocked!

I can only imagine the kind of punishment that will result under U.S. Law from Goldman bribing foreign officials in this way.

Bwahahahahahahahahahahaha...

Sun, 10/18/2015 - 21:04 | 6683088 Ignatius
Ignatius's picture

Next door neighbor Indonesia has become a complete shithole post CIA sponsored coup in '65 according to Andre Vltchek.  Maybe there are forces afoot to do the same for Malaysia.  A former PM put on an excellent international 9/11 Truth conference with the Perdana Peace Foundation a few years ago, maybe this is payback.

Sun, 10/18/2015 - 16:16 | 6682649 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Funny. Just said Malaysians shouldn't believe in any pm/gvmnt.

Conscidering Stainless Steel Rat 's comment they are not so bad after all.

Sun, 10/18/2015 - 16:25 | 6682676 Stainless Steel Rat
Stainless Steel Rat's picture

Thanks. :-)  Don't get me wrong, you couldn't pay me to live there.  I would be promptly put to death for heckling the King.

Sun, 10/18/2015 - 16:17 | 6682666 XitSam
XitSam's picture

Don't worry Goldman Sachs, the FBI is there to protect your interests.

Sun, 10/18/2015 - 17:03 | 6682772 22winmag
22winmag's picture

Isn't Malaysia the place with the government that declared Bush, Powell, Rice and everyone else War Criminals?

Sun, 10/18/2015 - 17:15 | 6682796 HowdyDoody
HowdyDoody's picture

Israel too.

Malaysia also wanted a proper independent investigation of MH17.

Fortunately, evidence of corruption, acquired by the US-sponsored opposition party, came to light just in time.

 

Sun, 10/18/2015 - 18:22 | 6682979 Oldrepublic
Oldrepublic's picture

Malaysia has a lot going for it, could be a good place to visit or to live, I have visited the place many times, ZHers might want to check it out for themselves

Sun, 10/18/2015 - 17:22 | 6682823 Joebloinvestor
Joebloinvestor's picture

What makes anyone think a Muslim government isn't any less corrupt then any other?

Sun, 10/18/2015 - 17:24 | 6682831 css1971
css1971's picture

The UK's previous prime minister; Tony Blair, engineered one of the largest credit booms in the UK's history. Then when he left office, he joined JP Morgan, as an "advisor", earning 2 million GBP a year; ~$3million.

 

e.g.http://www.telegraph.co.uk/news/politics/labour/1575247/Tony-Blair-to-ea...

So... Governmental corruption etc.

Sun, 10/18/2015 - 19:00 | 6683142 Flybyknight
Flybyknight's picture

Looks to me like some one was paid to not ask too many questions about MH17. Probably was also presented with some negative consequence for Malaysia if he didn't play ball, so it felt like he was doing it for his country

Sun, 10/18/2015 - 19:17 | 6683216 earleflorida
earleflorida's picture

selling 'ringgit' and buying dollars would seem the prudent course to follow once the 'asian-pivot' begets itself later this week...[?]

Sun, 10/18/2015 - 20:23 | 6683443 kaboomnomic
kaboomnomic's picture

In Malay? Not gonna happens! Have you been in Malay?
Bwahahahahaha...

Sun, 10/18/2015 - 22:33 | 6683869 nathan1234
nathan1234's picture

Goldman Sachs is one of the owners of the Fed,

The Fed knew about these transactions involving Najib a long time ago. Remember the NSA is also run by the Fed.

Virtually every corrupt country's politicians wealth and bank balances are known to the NSA & the Fed.

It appears that Najib has fallen foul or been found wanting in some respect.

Goldman will of couse be fined some amount for the media publicity. But they will make this money back in other ways along with the Fed's connivance. Just a book entry.

The above is a fact of life. The world needs to understand that they are being run by one Bank owned by the Zionists.

The sooner the dollar is disconnected can other countries regain control of themselves

Mon, 10/19/2015 - 00:12 | 6684062 onmail1
onmail1's picture

Why 2 Malaysian planes were downed by Goldman Sachs err USA allies.

Becuz they wanted another oil nation go Ka-Boooom

Install a puppet & gobble all its oil

Cabals 

as usual

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