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Imagine a Malaysia, and the world, without 1MDB. Time and time again, the billions of funds siphoned out of Malaysia have been heralded as the ‘downfall of our nation’. Be it an over or understatement, how would Malaysia look like if this fund never existed? 

The social impact, reversed?

Contrasting the flashy diamond rings against the rakyat struggling to make ends meet, Netflix’s Dirty Money episode “The Man at the Top” painted a scathing picture of the then Prime Minister, Najib Razak. At that point in time, a “strategic development company driving new ideas and new sources of growth” in the form of 1MDB, was a welcomed feat – a shining light to the B40 Malaysians. That is, until it’s troubles arised.

The US Department of Justice alleged that US$4.5 billion (RM18.9 billion) was misappropriated from 1MDB between 2009 and 2014. To visualise the scale of the thievery, consider this: Malaysia’s 2020 Budget, detailing expected total government expenditure, is forecasted to be RM297 billion. This means that the siphoned funds from 1MDB would have accounted for a substantial 6.3% of our country’s total government spending. With the RM18.9 billion from 1MDB alone, the government would be able to support the expenditure of the following ministries: 

1. Transport Ministry: RM3.6 billion
2. Youth & Sports Ministry: RM1.2 billion
3. Woman, Family and Community Ministry: RM2.5 billion
4. Rural Development Ministry: RM8.4 billion
5. Economic Affairs Ministry: RM3.2 billion 
   Total Expenditure of the 5 ministries: RM18.9 billion

On the flip side, as the narrative we’re taking here is that 1MDB didn’t exist in the first place, the amount we consider misappropriated from the country should be the initially state-invested amount, and not the total of that plus the fruits of investment. This is because if the fund didn’t exist at all, the gains of investments earned by Goldman Sachs bankers wouldn’t even have existed. Hence, since the state-invested value is undisclosed, it could be well below the amount the rakyat feels like was stolen if 1MDB was not formed.

Further, it is tempting to conclude that the money would have been well spent in the rakyat’s interest without 1MDB. Reality, however, is anything but. While we might dream of a perfectly efficient government with good governance, this was not the case in 2009 (when the fund was just set up). 

According to Transparency International’s Corruption Perception Index (CPI) in 2009, Malaysia only scored a 4.5 with a score of below 5 is perceived to be highly corrupt. While we should not rely on this data entirely, it hints that even if 1MDB was not formed, the state’s money still might have been misappropriated. It could have still ended up in another politician’s pocket, although not in such a lump sum.

On top of that, without 1MDB’s existence, and the fallout that ensued afterwards, the political distrust that arguably led to Barisan Nasional’s collapse in GE14 might not have occurred. Potentially, Malaysia would still be living in a disillusioned state of politics whereby only one party is and can be our ruling party – our founding party.

Impact on other nations?

While it might seem that 1MDB is all bad, it’s occurrence has been a good lesson for our neighboring countries. 

In Singapore, the Monetary Authority of Singapore (MAS) has enhanced its anti-money laundering surveillance and increased enforcement actions against errant institutions and individuals. On a global scale, greater emphasis has been placed in regulation of shell companies and harsher internal control of banks, potentially leading to a more clear-cut money trail.

Where do we go from here?

Although it is a shame that Malaysians have to pay the price (quite literally!) that the 1MDB scandal has brought upon us, we should stop harping on past mistakes that we can’t possibly go back on. Furthermore, some of the money we lost has been recovered as per recent developments:

Goldman Sachs will pay the Malaysian government $2.5 billion, and provide a guarantee that it also receives “at least $1.4 billion in proceeds from assets related to 1MDB seized by governmental authorities around the world”, Goldman Sachs’ official statement

The criminal actions have been prosecuted, the people have spoken. Although this might come off as idealistic, and somewhat dismissive of the potential our country would have reached without 1MDB’s existence, we need to make peace with the “what ifs” and “what nots” to be able to move on.

Let’s lay yesterday to rest, once and for all.