Malaysia's Prime Minister Anwar Ibrahim greets people as he leaves Putra Mosque after prayers in Putrajaya in this file photo. (Photo: AFP)
Pressure is mounting on Malaysian Prime Minister Anwar Ibrahim to scrap the government’s airport management deal with the world’s largest asset manager, US-based BlackRock, over its links with Israel.
Anwar is being pushed to clarify his commitment towards Palestine by a strong section of Muslims, made up mainly of politicians from both sides of the political divide, and groups like the Boycott, Divestment, Sanctions Movement’s Malaysian chapter.
“If this deal is not scrapped by the prime minister, it basically means the PM is complicit in the genocide in Palestine,” former cabinet minister Khairy Jamaluddin, one of the strongest critics of the deal, reportedly said at a public forum on June 20.
Anwar’s move to allow BlackRock-linked Global Infrastructure Partners (GIP) to be in a consortium to take public-listed Malaysia Airports Holdings Bhd (MAHB) private has been perceived to be inconsistent with Malaysia’s non-recognition of Israel, especially in the wake of the ongoing Israel-Hamas conflict, which started on Oct. 7 last year.
GIP is to have a 25 percent stake and the Abu Dhabi Investment Authority 5 percent, while 70 percent is held by two of Malaysia’s largest state-controlled funds Khazanah Nasional and the Employees Provident Fund. Both funds are under the finance ministry, where Anwar is the minister.
New York-based BlackRock Inc.’s acquisition of GIP is expected to be completed in the third quarter of this year. BlackRock invests heavily in weapons manufacturers that supply arms to Israel, among others.
The privatization deal would value the airport operator at US$3.9 billion.
Opposition to the consortium and the selling of strategic national assets to foreign entities have been building up since mid-May when the consortium was announced. MAHB owns 39 of the country's 40 public airports, with Kuala Lumpur International Airport as its prized asset.
On June 24, some 22 civil society organizations, mainly Muslim and pro-Palestinian groups, called on Anwar to cancel the plan to sell MAHB's shares to GIP.
The opposition is now reaching a feverish pitch with one of Anwar’s cabinet ministers distancing himself from the decision. Mohamad Hassan, foreign minister and Umno deputy president said the cabinet ministers from his party had objected to the MAHB takeover.
The youth wing of his party is urging the government to immediately halt the sale of MAHB shares to GIP, citing solidarity with the Palestinian people.
However, Umno president Ahmad Zahid Hamidi said the position taken by his deputy Mohamad Hassan was not of the party and said Anwar had the full support of Umno. He made no mention of the position taken by his youth wing. Zahid is the deputy prime minister.
Conflicting statements are coming from Umno, the party Anwar invited to partner with his Pakatan Harapan (or Alliance of Hope), when the bloc needed the numbers to form the present government in 2022.
There is a clear split in Umno's top leadership, which means Anwar does not have the full support of the Muslim-Malay Umno. Support from this party is crucial in keeping his government politically stable.
This latest anti-Israel protest in Malaysia is one of Anwar's biggest challenges in his 18 months as prime minister.
According to a news report quoting finance ministry sources, Anwar cannot renege on the decision because a formal offer to GIP has been made.
On June 25 when addressing parliament, he defended his decision and said that canceling all trade with companies that have some Israeli interests would be acting “more Hamas than Hamas itself.”
It is unlikely that this will quell the fierce opposition from not just Muslim Malays and non-Muslims who are supportive of the Palestinian cause, but also those who are questioning its business rationale.
Analysts say there is no financial justification for privatizing the lucrative state-run MAHB. They question the value that GIP, with its lackluster track record in airport management, can bring to the company and say that GIP-managed airports do not rank highly in international rankings.
Former prime minister Mahathir Mohamad also questioned the move. “Mungkin ada udang di sebalik batu? (Is there a hidden agenda?)” he asked on X (formerly Twitter).
He said that MAHB was a profit-making company, and it made no sense to sell part of it. Last year, MAHB posted a net profit of RM543 million (US$115 million), an increase of 188 percent.
The government is now aggressively campaigning to discredit critics. One counterargument was that BlackRock already has investments in Malaysia and that these investments were made under previous administrations.
As of May 2024, BlackRock has equity investments in 100 listed companies in Malaysia amounting to RM 24.7 billion, and government and corporate bonds worth RM 7.9 billion.
What is also causing apprehension among many is the sale of a state asset that involves national security, such as airports, to the global funding giant BlackRock, which has major investments in firms closely allied to Israel’s arms industry.
One of them is Chandra Muzaffar, a prominent political analyst who was one of Anwar’s earliest and strongest supporters when Mahathir sacked him as deputy prime minister in 1998.
Airports are not restaurants or supermarkets, he was reported to have said in trying to show the magnitude of the security risk the government was taking.
This is probably Anwar’s way of trying to strike a balance in Malaysia’s relationship with rivals the US and China.
China is Malaysia's largest trading partner for the 15th consecutive year and its top investor. The two countries celebrated the 50th anniversary of establishing diplomatic relations with Chinese Premier Li Qiang’s first visit to Kuala Lumpur in April 2024.
China's investments in Malaysia include a US $16 billion rail project that cuts across the peninsula. The project has been heavily criticized for risking national security by allowing a foreign company to have a huge stake in a major infrastructure project. It is expected to be completed by the end of 2026.
There is always a price to pay when making decisions that involve projects of such magnitude, and the Muslim-Malay support for Anwar is starting to wane even within his ruling coalition.
It is seen as much more than a stand-in global geopolitics because it involves the Muslim Brotherhood, which has been Anwar’s battle cry since his student days in the late 1960s.
This is why his government’s attempts to defend the airport deal seem drowned by massive waves of anger and disappointment.
*The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.
