Mahathir makes a stunning comeback

Former Prime Minister Mahathir Mohamad pulled off a stunning upset in parliamentary elections in Malaysia last week. That win ended six decades of rule by the Barison Nasional (BN), which was headed by his former protege, Prime Minister Najib Razak. The proximate cause of the surprise win was popular anger and disgust over a multibillion-dollar corruption scandal that had hung over Malaysian politics for several years, but economic mismanagement and a sense of malaise after 60 years of uninterrupted rule also contributed. While the win is a victory for democracy in a region that has experienced many recent setbacks in that area, much now depends on Mahathir, a wily politician with a long appreciation of and affection for Japan.

Najib has been in trouble since U.S. investigators charged that Malaysian officials had looted 1MDB, an economic development fund he established in 2009, of at least $4.5 billion, and that $700 million was taken by the prime minister himself. He denied wrongdoing, and was cleared by the attorney general, a verdict that was tainted after Najib dismissed the former chief legal officer.

The scandal prompted Mahathir, who had governed Malaysia from 1981 to 2003, to declare himself “embarrassed” by the allegations, to leave BN and join the opposition Pakatan Harapan (Alliance of Hope). In January, he announced that he would return to the electoral fray. Last week, that about-face produced stunning results: His alliance won 121 seats, 19 more than needed for a majority. The BN won just 79 seats, down from 133 in the previous legislature. Mahathir was sworn in a day after the ballot, after Najib conceded defeat and then stepped down as a head of his party. His first task is forming a government — and he has promised an immediate pardon for opposition leader Anwar Ibrahim, who was jailed in 2015 on sodomy charges that were thought to have been made up by the government to crush the most formidable challenger to its rule.

Those who celebrate a victory for democracy should pause. Najib’s resignation and respect for the popular will are important — there were doubts about his willingness to honor the election results — but Mahathir is no paragon of virtue. It is widely believed that a deal was struck in which Mahathir was allowed to lead the alliance coalition in return for promising to get Anwar released and then succeed him as prime minister. For that to occur, Anwar must win re-election to Parliament, which, given his popularity, should not be difficult, but it will take time. But, it should also be noted that Mahathir first jailed Anwar himself in 1998, after a power struggle between the two men. Moreover, while Mahathir is credited with modernizing his country, his 22 years in office were marked by iron rule: intolerance of dissent, crackdowns on the media and the centralization of power. Optimists say his return to power is an opportunity to make up for past mistakes; realists withhold judgment.

Mahathir’s chief assignment is getting the economy right. He has promised to cancel a goods and service tax imposed in 2015 that is blamed for raising the cost of living. The biggest challenge for him will be balancing his fervent support for the bumiputra — ethnic Malays who have enjoyed a national affirmative action program — with a growing sense that the policy has run its course and must be scrapped.

The election has special importance for Japan. Mahathir has long been a fan and partner of Japan, using it as a model for Malaysia’s development. There are reportedly some 1,400 Japanese firms with a presence in the country, which will be watching the moves of the new leader.

Mahathir can be expected to build on growing defense ties between our two countries. Last month, Tokyo and Kuala Lumpur concluded an agreement on the transfer of defense equipment and cooperation in defense technology. Security planners see strengthened ties as a bulwark against growing Chinese influence in the region. Mahathir seems to agree. He has voiced concern about an increasing Chinese military presence in the region “because a warship attracts other warships.”

Mahathir is worried about other forms of Chinese influence too. During the election, he called for a reassessment of Chinese investment in Malaysia, which is now the fourth-largest recipient of Chinese overseas investment; it was number 20 in 2015. One report estimated that Malaysia would receive over $100 billion in Chinese investments over the next two decades. While Mahathir has said that he supports Beijing’s “One Belt, One Road” initiative, he has said that “unnecessary” mega-projects should be re-examined and the terms of Chinese loans renegotiated.

Mahathir’s hands will be full as he works to put Malaysia back on course. Japan should work closely with him in that challenge — as well as to ensure that his old bad habits do not reassert themselves.