Daim's power over Pakatan grows to uneasy proportions

KUALA LUMPUR (July 24) — The Pakatan Harapan (PH) coalition and investors grow concerned about the influence of the informal Council of Eminent Persons (CEP), chaired by Tun Daim Zainuddin.

Singapore daily The Straits Times (ST) reported today that there was potential conflict due to overlaps in decision-making, and differences in opinion between political leaders and the CEP regarding major public projects and the leadership of Khazanah Nasional.

Khazanah’s top management is speculated as having been asked to step down by the CEP, with reports of similar requests reaching other GLC captains.

According to one official, “there is even a cabinet paper on moving Khazanah to the Prime Minister’s Office waiting to be discussed".

“The CEP reduces the Cabinet’s role to some extent, raising the risk of policy confusion and concerns about parallel administrations. Investors want to avoid having two finance ministers and have clarity over who is calling the shots,” Eurasia Group’s Asia director Peter Mumford was quoted saying.

According to ST, Daim had wanted fresh tenders, instead of renegotiation of existing contracts for the mega rail projects for the Light Trail Transit (LRT3) and Mass Rapid Transit (MRT).

Finance Minister Lim Guan Eng recently announced a 47 per cent in cost savings of RM16 billion for the LRT3 project, and ST reported that the MRT2 line’s RM32 billion pricing could also be slashed by some RM8.5 billion.

“The fact that Cabinet approved Lim’s proposal shows that Daim and Mahathir are not totally of the same mind.

“But whether many dare to challenge Daim’s authority remains to be seen,” an unnamed PH leader was quoted saying.

The anonymous leader noted that the Prime Minister's Office and CEP both have teams scrutinising the issue of 1Malaysia Development Berhad.

Originating as an informal body to advise the mostly inexperienced PH coalition government for the first 100 days. Its role, originally conceived of by Prime Minister Tun Dr Mahathir Mohamad, was to make recommendations to the Cabinet. Reports suggest that Daim may have over-stepped those bounds, into decision-making.

This has made time with the Daim-led CEP to be in-demand by businessmen and financial experts, on par with securing meetings with the Finance Ministry and Economic Affairs Ministry.

The full Cabinet met on July 4 to discuss the role of the CEP, reported the ST, where they were assured that the CEP would not be making decisions related to policies. 

Changes to positions in key institutions, has brought growing concerns, such as the recent appointment of new Bank Negara Malaysia governor, the country’s Chief Justice and other top judges, and the new Dewan Rakyat Speaker where a former judge took on the role instead of PKR’s Datuk Johari Abdul, the preferred nominee backed by DAP.

Parti Pribumi Bersatu Malaysia (PPBM) deputy policy and strategy chief Wan Saiful Wan Jan, confirmed that the CEP’s role was discussed “not just among ministers and party leaders, but also senior officials”, reported ST.

But it was also reported that PPBM chairman Dr Mahathir and Daim had assured Wan Saiful that the CEP will only be effective for 100 days.

S. Rajaratnam School of International Studies’ senior fellow Johan Saravanamuttu said, “Mahathir has to be careful about not overplaying Daim’s hand as a troubleshooter, but then again, can Mahathir even stop someone like Daim?”