KUALA LUMPUR — Prime Minister Datuk Seri Anwar Ibrahim has reaffirmed the government’s commitment to combatting corruption, highlighting its significant impact on foreign investment in Malaysia.
Ahead of the second anniversary of his administration, Anwar told CNBC that addressing corruption and promoting good governance is vital for the country’s economic progress.
He acknowledged the major challenge of eradicating corruption while seeking to attract more foreign direct investment.
“We have to save the country. To my mind … the major problem is poor governance and endemic corruption,” he told CNBC’s JP Ong.
He stressed that both domestic and foreign investors are more likely to invest when they see consistent transparency and a strong commitment to tackling corruption.
“Without that trust [and] confidence, nobody will invest in a big way. Unless those people who have some corrupt arrangements — they will still continue. But that has to stop. And fortunately, it has stopped,” he stated.
Despite ongoing efforts, Anwar recognised corruption’s systemic nature, asserting, “Although we are still carrying on this mission… the crusade against corruption has got to be full force.”
In 2023, Malaysia recorded foreign direct investment inflows of US$9.7 billion (RM40.4 billion), a notable decline from RM48.1 billion in 2021. However, data for the first half of 2024 showed improved performance, with foreign direct investment reaching RM74.6 billion (US$18.2 billion), up 16.7% from the previous year.
From 2018 to 2023, corruption is estimated to have cost Malaysia around RM277 billion in economic output, according to official figures.
When asked about the government’s tough stance against corruption, Anwar remarked, “damn it … I would just go after them without mercy.”
However, he acknowledged the need to work with his coalition to find effective solutions, warning that a “too slow and ineffective” approach could impede recovery.
While he did not mention specific corruption cases or former leaders, corruption remains a prevalent topic in discussions about governance in Malaysia, notably the 1Malaysia Development Berhad scandal involving former Prime Minister Najib Razak.
In May, the government launched its new national anti-corruption strategy, aiming to place Malaysia among the top 25 countries in Transparency International’s Corruption Perception Index within the next decade, currently ranked 57th.
In the first half of 2024, Malaysia’s GDP grew by 5.1%, following a 3.7% expansion in the previous year, down from 8.7% in 2022, according to CNBC.
To attract foreign investment and boost the economy, two economic zones are under development. Agreements for the Johor-Singapore Special Economic Zone are expected to be finalised by year-end to enhance cross-border trade and investment.
Additionally, Malaysia is seeking investments in its Forest City special financial zone, aiming to establish Iskandar Puteri as a hub for high-skilled talent. The government recently announced that Forest City would be the first location in Malaysia to offer zero-percent tax rates on family offices.
