Mahathir’s reforms could put Saudi Arabia and the UAE on the spot

By James M. Dorsey

Newly elected Malaysian Prime Minister Mohammed Mahathir is adopting policies that could reshape the Southeast nation’s relations with powerful Gulf states.

A series of anti-corruption measures as well as statements by Mr. Mahathir and his defense minister, Mohamad (Mat) Sabu, since this month’s upset in elections that ousted Prime Minister Najib Razak from office, are sparking concern in both Saudi Arabia and the United Arab Emirates.

Mr. Mahathir, who has cautioned in recent years against widespread anti-Shiite sectarianism in Malaysia, has questioned together with Mr. Sabu Malaysia’s counterterrorism cooperation with Saudi Arabia.

Mr. Mahathir has also reinvigorated anti-corruption investigations of Mr. Razak,  whom Qatari media have described as “Saudi-backed.”

Mr. Razak is suspected of having syphoned off billions of dollars from state-owned strategic development fund 1Malaysia Development Berhad (1MDB). The fund as well as Saudi and UAE entities allegedly connected to the affair are under investigation in at least six countries, including the United States, Switzerland and Singapore.

Apparently anticipating a possible change in relations, political scientist Abdulkhaleq Abdulla, whose views are often seen as reflecting UAE government thinking, disparaged Mr. Mahathir and the Malaysian vote days after the results were announced.

Mr. Abdullah focused on Mr. Mahathir’s age. At 92, Mr. Mahathir is the world’s oldest elected leader.

Mr Abdulla also harped on the fact that Mr. Mahathir had been Mr. Razak’s mentor before defecting to the opposition and forging an alliance with Anwar Ibrahim, Mr. Mahathir’s former deputy prime minister and an Islamist believed to be close to the Muslim Brotherhood, whom he helped put behind bars.

UAE Crown Prince Mohammed bin Zayed is known for his intense opposition to political Islam, including the Brotherhood.

“Malaysia seems to lack wise men, leaders, statesmen and youth to elect a 92-year-old who suddenly turned against his own party and his own allies and made a suspicious deal with his own political opponent whom he previously imprisoned after fabricating the most heinous of charges against him. This is politics as a curse and democracy as wrath,” Mr. Abdulla said on Twitter, two days after the election.

Similarly, Malaysian officials have signalled changing attitudes towards the Gulf. Seri Mohd Shukri Abdull, Mr. Mahathir’s newly appointed anti-corruption czar, who resigned from the Malaysian Anti-Corruption Commission (MACC) in 2016 as a result of pressure to drop plans to indict Mr. Razak, noted that “we have had difficulties dealing with Arab countries (such as) Qatar, Saudi Arabia, (and the) UAE.”

Those difficulties are likely to recur.

Mr. Sabu, the new defense minister, noted in a commentary late last year that Saudi (and UAE) wrath was directed “oddly, (at) Turkey, Qatar, and Iran…three countries that have undertaken some modicum of political and economic reforms. Instead of encouraging all sides to work together, Saudi Arabia has gone on an offensive in Yemen, too. Therein the danger posed to Malaysia: if Malaysia is too close to Saudi Arabia, Putrajaya would be asked to choose a side.”

Putrajaya, a city south of Kuala Lumpur, is home to the prime minister’s residence and a bridge with four minaret-type piers that is inspired by Iranian architecture.

Mr. Sabu went on to say that “Malaysia should not be too close to a country whose internal politics are getting toxic… For the lack of a better word, Saudi Arabia is a cesspool of constant rivalry among the princes. By this token, it is also a vortex that could suck any country into its black hole if one is not careful. Indeed, Saudi Arabia is governed by hyper-orthodox Salafi or Wahhabi ideology, where Islam is taken in a literal form. Yet true Islam requires understanding Islam, not merely in its Quranic form, but Quranic spirit.”

Since coming to office, Mr. Sabu has said that he was reviewing plans for a Saudi-funded anti-terrorism centre, the King Salman Centre for International Peace (KSCIP), which was allocated 16 hectares of land in Putrajaya by the Razak government. Mr. Sabu was echoing statements by Mr. Mahathir before the election.

The opening of the centre was twice postponed because Saudi Crown Prince Mohammed bin Salman cancelled his planned attendance. Malaysian officials said the kingdom had yet to contribute promised funds for the centre.

Shahriman Lockman, an analyst with the Kuala Lumpur-based Institute of Strategic and International Studies cautioned that Malaysia would have manoeuvre carefully.

“Whether we like it or not, whatever we think of them, Saudi Arabia is a major player in the Muslim world and in the Middle East. Their administration of the haj makes it crucial for Muslim-majority countries to get along with them,” Mr. Lockman said.

The fact that Mr. Mahathir’s election has sparked hopes that he will move Malaysia away from Mr. Razak’s embrace of Saudi-inspired ultra-conservative Islam as a political tool, despite the prime minister’s history of prejudice towards Jews and past anti-Shiite record, is likely to reinforce Saudi and UAE concern that his moves could favour Iran.

Mr. Mahathir has vacillated in his statements between banning Shiism to avert sectarianism and calling on Sunni Muslims in Malaysia to accept the country’s miniscule Shiite minority as a way of avoiding domestic strife.

What is likely to concern the Saudis most is the fact that Mr. Mahathir has said that  accepting Shiites as fellow Muslims was necessary because of the growth of the Iranian expatriate community in Malaysia. Analysts say the presence has sparked a greater awareness of Shiism and Sunni animosity because of Mr. Razak’s divisive policies.

Saudi and UAE worries about the reinvigorated anti-corruption investigation are rooted in the potential implication in the scandal of a Saudi commercial company, members of the Saudi ruling family, and UAE state-owned entities and officials.

The investigation is likely to revisit 1MDB relationship’s with Saudi energy company PetroSaudi International Ltd, owned by Saudi businessman Tarek Essam Ahmad Obaid as well as prominent members of the kingdom’s ruling family who allegedly funded Mr. Razak.

It will not have been lost on Saudi Arabia and the UAE that Mr. Mahathir met with former PetroSaudi executive and whistle blower Xavier Andre Justo less than two weeks after his election victory.

A three-part BBC documentary, The House of Saud: A Family at War, suggested that Mr. Razak had worked with Prince Turki bin Abdullah, the son of former Saudi King Abdullah, to syphon off funds from 1MDB.

UAE-owned, Swiss-based Falcon Bank has also been linked to the scandal while leaked emails documented a close relationship between Yousef al-Otaiba, the UAE’s high-profile ambassador to the United States and confidante of Prince Mohammed bin Zayed, and controversial Malaysian financier Jho Low, a 27-year-old Wharton graduate who helped Mr. Razak run 1MDB.

The Wall Street Journal, citing not only emails, but also US court and investigative documents, reported last year that companies connected to Mr. Otaiba had received $66 million from entities investigators say acted as conduits for money allegedly stolen from 1MDB.

The UAE embassy in Washington declined to comment at the time but admitted that Mr. Oteiba had private business interests unrelated to his diplomatic role. The embassy charged that the leaked emails were part of an effort to tarnish his reputation.

Bank statements and financial documents reviewed by The Wall Street Journal, suggest that  Khadem Al Qubaisi, a CEO of an Abu-Dhabi owned investment comapny, who has also been implicated in the scandal, facilitated the purchase by UAE deputy prime minister Sheikh Mansour Bin Zayed Al Nahyan’s brother of a $500 million yacht with 1MDB funds.

“The impact of this election will reverberate far beyond Malaysia's borders,” said Asia director of the Centre for Humanitarian Dialogue Michael Vatikiotis.

Mr. Vatikiotis was looking primarily at the fallout of Mr. Mahathir’s victory in Southeast Asia and China. His analysis is however equally valid for Saudi Arabia and the United Arab Emirates, where it could also prove to be embarrassing.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario,  Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom