Malaysia: Abu Dhabi-1MDB deal to help clear Najib’s path for vote – 24 Apr 2017

  • Barely two years after he was engulfed in a scandal over a state fund, Prime Minister Najib Razak is set to clear another hurdle to putting the furore behind him and calling an early election.
  • Malaysia is said to have agreed to pay Abu Dhabi USD2.5bn as a partial debt settlement for 1MDB, in a deal that’s expected to be announced on 24 Apr 17 on the London Stock Exchange.
  • The initial resolution of the dispute with Abu Dhabi over the finances of 1MDB could help Najib move toward closure on a scandal that at one point raised questions about his ability to hold onto power.
  • Instead, with an election due by mid-2018 but potentially coming in 2017, Najib’s grip on power is at an all-time high, said Oh Ei Sun, a senior fellow at the S Rajaratnam School of International Studies and former aide to the prime minister. The rural Malay voters who form the support base of Najib’s ruling Umno are very “forgetful and forgiving” and may have put the financial woes surrounding 1MDB behind them, Oh said. The prime minister already moved to consolidate his power in a party purge in 2016.
  • Under the deal with Abu Dhabi, Malaysia will also assume the coupon obligations for two dollar bonds issued by 1MDB and co-guaranteed by Middle Eastern sovereign wealth fund International Petroleum Investment Co, a person familiar with the matter said on 22 Apr 17.

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