Malaysian PM Najib Razak named Asia Pacific's worst finance minister

Malaysian PM Najib Razak named Asia Pacific's worst finance minister

Malaysian Prime Minister Najib Razak is under pressure again after Switzerland authorities revealed that US$4 billion (S$5.69 billion) may have been misappropriated from state fund 1Malaysia Development Berhad (1MDB).

But today, he got yet another unwanted accolade when he was named as the worst finance minister in the Asia Pacific region by business publication FinanceAsia.

The Hong Kong-based magazine said that 2015 had been a challenging year for the Malaysian economy, with a "double whammy" of the 1MDB scandal and the collapse in oil prices.

1MDB first attracted attention when it emerged that the fund was struggling to finance its debts. Then in July, the Wall Street Journal revealed that nearly US$700 million from the fund had been transferred into Mr Najib's personal bank accounts.

Malaysia's Attorney-General later revealed that the money was not from 1MDB, but a gift from Saudi Arabia's royal family.

"The long-running political crisis has taken up time that could have been better spent addressing the country's acute economic troubles and made Malaysia appear even less attractive as an investment destination," FinanceAsia said.

The magazine highlighted that in the third quarter of 2015, foreign investors had withdrawn about RM24.5 billion (S$8.29 billion) from Malaysia, while the ringgit depreciated to its lowest level since 1997.

Meanwhile, Mr Najib's move to introduce a goods and services tax to lessen its reliance on oil export revenues was also noted. The magazine also pointed out that the tax had hurt consumer confidence by affecting the spending power of Malaysian households.

According to FinanceAsia, Mr Najib's main task this year will be whether he can manage down Malaysia's budget deficit amid a further slowdown in the Chinese economy and low oil prices.

This is the second time that the magazine has ranked the finance ministers of the region's 12 largest economies. In last year's rankings, Mr Najib was ranked 8th out of 12, while Philippines finance minister Cesar Purisima was named the region's best finance minister.

"The vast withdrawal of capital from emerging markets makes it all the more imperative for Asia's finance ministers to pursue good governance, sensible structural reform, and sound finances. Unfortunately, the overall quality of the governments we cover has mostly deteriorated," FinanceAsia said.

It added that several factors were considered to determine the rankings.

"Each minister contributes to fiscal policy and the budget, accesses capital markets, regulates financial institutions, and drives reform. Investor perceptions are one way to view how good a job they are doing, particularly when times are tough.

"But the hardest criterion is independence. Their ability to get things done requires political deftness, mastery of policy, sway over the bureaucracy, and the will to fight for the public interest," the magazine explained.

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