Date of Award

Spring 6-7-2021

Document Type

Honors Project

University Scholars Director

Dr. Christine Chaney

First Advisor/Committee Member

Dr. Doug Downing

Second Advisor/Committee Member

Dr. Hau Nguyen

Keywords

1MDB Scandal, Malaysia, Sovereign Wealth Funds, GE14, Najib Razak, Low Taek Jho

Abstract

In 2015, the former Prime Minister of Malaysia, Najib Razak, was accused of corruption, embezzlement, and fraud of over $700 million USD. Low Taek Jho, the former financier of Malaysia, was also accused and dubbed the ‘mastermind’ of the 1MDB scandal. As one of the world’s largest financial scandals, this paper seeks to explore the political and economic implications of 1MDB through historical context and a critical assessment of governance. Specifically, it will examine the economic and political agendas of former Prime Ministers Najib Razak and Mahathir Mohamad. In 2018, after the crimes of those involved in the scandal were exposed, Malaysia’s General Election (GE14) resulted in an unprecedented outcome. For the first time since the country gained independence, the opposition party won. This coalition party, Pakatan Harapan, won enough votes to defeat Barisan Nasional. The nuances of the general election, its outcome, and its subsequent relationship with the 1MDB Scandal, offer compelling insight to political implications for Malaysia. In addition to the political outcomes of 1MDB, the economic nature of the fund as a Sovereign Wealth Fund (SWF) is significant. SWFs are estimated to be utilized in over 40 countries worldwide, yet draw major attention for issues in transparency and accountability. This paper seeks to understand the political economy of SWFs, and what the world can learn from the 1MDB scandal.

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