Mahathir’s subversion of the ringgit


The Third Force

Five weeks ago, on the 13th of May, Tun Dr. Mahathir Mohammad came out to brag about the Citizens’ Declaration, a so-called memorandum opposing the leadership of Prime Minister (PM) Dato’ Seri Najib Tun Razak. Standing erect with his chin held high, Mahathir told reporters that the signature-collection drive had chalked up commitment from over one million people, well ahead of the scheduled year-end deadline.

“These people who signed our declaration, they signed fully knowing that they are committed because they included their IC number.”

That’s right – according to Mahathir, if you have a document bearing signatures and IC numbers, it is enough to convince Rulers that those whose names appear on the document are authentic human beings, who had signed the document with their eyes wide open. Going by his logic, the King would have to force a resignation from the Prime Minister once he received the declaration, because it was what the people truly desired. Well, at least that is what Mahathir wanted us to think.

But the fractured ex-premier is now more fractured than ever, consumed by allegations that almost one million names appearing on the document are forgeries. Ever since a young computer programmer came out three weeks ago to pour cold water on Mahathir’s announcement, the police have been in hot pursuit of evidence to substantiate claims that most of the names were ripped off the youth’s computer database for a fee.

All of a sudden, talk of submitting the so called Citizens’ Declaration to the Yang di-Pertuan Agong dissipated into nothingness, which is a sharp contrast from the tone Mahathir had used just over a month ago. Back then, the ex-premier was adamant that Najib could be forced to step down if the people so desired, because according to him, the needs of the many outweighed the needs of the few.

There’s a nice ring to it – “the needs of the many outweigh the needs of the few.” While that may have been the philosophy, he never really provided us the finer-points to his game plan. For instance, Mahathir told us that plans were afoot to hand over the declaration to the King, but left out the part about getting the King to sack Najib. Could it be that he knew what every constitutional expert in Malaysia already knows, that the country’s supreme law lacks provisions to empower the King to sack a Prime Minister?

If so, then, what in blazes was the Citizens’ Declaration for?

Well, it seems that Mahathir had intended to use the Declaration to convince 50 Barisan Nasional Members of Parliament (MPs) to sign Statutory Declarations (SDs) against Najib. Once the deed was done, and together with SDs that a certain MP was tasked with procuring from other MPs, Mahathir had intended to present a case to the King by arguing that the Prime Minister did not command the majority confidence of House representatives.

In other words, Mahathir had attempted to subvert the government by using forgeries to bug the eyes of House representatives. And he almost got away with it, had it not been for a young computer programmer who came out to spill the beans on a conspiracy to fabricate a Citizens’ Declaration against the Prime Minister.

But this is not the first time that Mahathir had tried to subvert the government. Last year, in a desperate attempt to topple the Prime Minister, Mahathir did what no other Prime Minister in history had done before – he tried to subvert the Malaysian ringgit and hurt the Malaysian economy.

Ever since a report by the Wall Street Journal insinuated that Najib had siphoned funds from state investment firm 1MDB, Mahathir charged the Prime Minister with impropriety and criminal malfeasance by accusing him of dissipating funds worth RM42 billion into thin air. To date, none of the allegations have been corroborated with hard evidence of any sort, let alone testimonies from credible witnesses who were in the thick of things.

Yet, the former premier kept hammering in the idea that Najib was morally perverse and lacked the integrity to run government – every time Mahathir opened his mouth, major news channels from abroad would roll out editorials and call in controversy, stretching every little thing the ex-premier had to say with added guesswork and hearsay. But none of this was a random occurrence.

As a matter of fact, it was all part of a carefully contrived plan to artificially plunge the ringgit below the anticipated baseline value against the US dollar. In effect, Mahathir was trying to trigger panic among investors, who were already feeling wrong-footed owing to the economic uncertainty that countries around the region were facing.

Investors began to worry that the instances of massive corruption by the government, if true, would threaten to bleed the nation’s treasury dry. Riding on fears that the Malaysian economy would crumble under a venal and corrupt regime, Mahathir floated the idea that a regime change was necessary in order to resolve the ‘fiscal ills’ that Najib had plagued the country with.

But none of this would have been possible without the help of foreign news outlets. Some time in December 2014, Mahathir solicited funds worth RM2 billion from four crony capitalists, RM600 million of which was shelled out in world media coverage and to bribe bloggers and journalists in the west.

Under the terms of an agreement, several UK and US based media corps were required to roll out as many editorials as possible hinged on controversies that surrounded 1MDB, while a significant portion of the remaining RM2 billion was used to grease the palms of politicians and MPs to wage a war of perception against the Prime Minister.

Anyway, the bottom line is, the Tun had more than enough funds to work his guile throughout the year 2015, and rumour is, an additional RM3 billion was pledged by some tycoons late last year for the Tun and his son to set up a new political outfit to outmanoeuvre UMNO come the 14th general election.

Back to the story – in a bid to topple the Prime Minister, Mahathir needed Malaysians to believe that the PM had plunged the country into a state of economic uncertainty, such that it caused the people hurt and suffering. In order to do that, he needed investors to pull their funds out from government linked companies by having them believe that Najib was corrupt and involved in scams to dissipate funds into ‘thin air’.

The plan worked like a charm. As the UK and US based media corps worked their magic, investors became more and more anxious seeing that such problems could afflict a government-linked company. That caused 1MDB’s credit rating to dip to levels that were far below pristine and forced the firm to pay higher than usual yields to bondholders.

As a result, the talk among investors was that the government was trading funds through bogus intermediaries that fronted as offshore trustees and government subsidiaries. To make matters worse, Mahathir began to fuel speculation that RM42 billion worth of funds had somehow dissipated into thin air due to the way the funds were traded. Of course, none of this was true.

But that didn’t matter, because the damage was done. The abrupt and sizable depreciation in the ringgit led investors to believe that the state of affairs plaguing 1MDB would cause the currency to depreciate further. With that, some investors began to pull out from the country, and that actually did cause the ringgit to depreciate further than it should have.

All said and done, that is exactly how Mahathir had plunged the ringgit below its anticipated baseline value against the US dollar. Once the deed was done, the former premier charged Najib with having destroyed the economy and accused the latter of burdening the people by staying on as PM.