Can the Malaysian PM survive the 1MDB Scandal?

An anti-corruption probe has uncovered documents that appear to link Malaysian Prime Minister Najib Razak to 1Malaysia Development Berhad (1MDB) funds. The allegations have helped push the Malaysian ringgit to the lowest level in over a decade. Can the Malaysian economy survive the political fallout?

On 2 July, the Wall Street Journal reported that Malaysian investigators taking part in the 1MDB anti-corruption probe had traced funds entering into the personal bank account of what they believe to be Malaysian Prime Minister Najib Razak.

Malaysia’s political risk produces mixed performance

While Malaysia’s government has utilized smart policies to counter falling oil prices and diversification challenges, political conflict within the ruling party is harming the business environment and is causing economic instability.

Malaysia scores high in political risk. Since April, its Prime Minister has faced increasing pressure to step down. Clampdowns on civil society are increasingly frequent. Finally, the price of one of its largest exports, oil, has slumped.