Opposition open to Mahathir's proposal to topple Najib

Opposition open to Mahathir's proposal to topple Najib

Mahathir Mohamad, former Malaysian prime minister, walks in the venue of the International Conference on "The Future of Asia" in Tokyo, on May 22. © AP

HONG KONG/KUALA LUMPUR -- The head of Malaysia's largest opposition party said Friday he is prepared to sit down with former Prime Minister Mahathir Mohamad -- the man who once jailed him -- to explore options for squeezing the country's current leader Najib Razak from power.

"We should be willing to discuss because of the dire straits that are happening in Malaysia now," said the chief minister of Penang, Lim Guan Eng, who is also secretary general of the Democratic Action Party. Malaysia, he said, was embroiled in a political and economic crisis. 

Lim, who was speaking in Hong Kong at a talk organized by the Asia Society, a New York-based cultural organization, was responding to a question about a blog post by Mahathir -- a strong critic of Najib -- that called on parliamentarians of the ruling alliance to join hands with the opposition to table a no-confidence vote against scandal-plagued Najib.

While Lim said he had "strong reservations" -- there remained some doubt as to the real intentions behind the former prime minister's suggestion -- Lim said "national interest takes priority." Malaysia is grappling with ongoing political scandals surrounding Najib's involvement with the state-owned investment fund 1Malaysia Development. The prime minister has come under fire over deposits into his bank account of around $700 million, which investigators discovered from bank remittance forms had come from a "donation" originating in the Middle East.

The controversy has spilled over to the cabinet, with the sacking of ministers critical of Najib's handling of the debacle, including the deputy prime minister, Muhyiddin Yassin.

Lim said Malaysia had sunk to new lows citing the country's economic problems and the depreciation of its currency, the ringgit, falling to what he termed "unimaginable depths."

The ringgit fell to a fresh low since 1998 on Friday to 4.18 against the dollar, despite reassurances in recent days from both Najib and the central bank governor, Zeti Akhtar Aziz, that the government has no intention of reintroducing capital controls or pegging the ringgit.

Malaysia is also facing severe economic challenges as the price declines of oil and other commodities take their toll. Its gross domestic product in the second quarter grew 4.9% year-on-year, according to data from the country's central bank. Growth in the first quarter had been 5.6%.

The country's foreign reserves fell to $94.5 billion at Aug.14, from $97.6 billion two weeks before. Analysts suspect reserves were used to defend the ringgit, in addition to the outflow of foreign money from the equity market. The benchmark stock index declined 2.74 points to 1,574.67 on Friday.

There was hope for the country, Lim said. "Malaysia is not yet a failed state and it can still be saved," he said, adding that the "stage is set" for a transition to new political leadership, with the DAP and other opposition parties taking the helm.