Roaming Tiger on the Belt and Road: Is Malaysia the Victim of Politically Motivated Cyber-Attacks?

The unexpected and stunning election victory of veteran politician Mahathir Mohamad in Malaysia this May caught both the Malay elite and international observers off guard, throwing out what many decried as a corrupt long-standing governing class primarily concerned with enriching themselves, a running sore which culminated in the widely reported IMDB scandal which saw billions being stolen from the Malaysian national wealth fund by politicians and their friends.

US justice department investigations of the 1MDB scandal resulted in a breakdown in relations with Kuala Lumpur and Washington as the Malaysian government resented what it saw as unwarranted US intervention.

The Malaysians instead turned north to forge ties with Beijing, who famously make non-interference a cornerstone of their foreign policy. Already a major trade partner, Chinese firms were soon backing major infrastructure projects like the East coast rail line which will have the effect of deepening Chinese economic ties and further cementing political relations.

But the election of Malaysia’s new government threw a major spanner in the works, the new administration in Kuala Lumpur wasted little time in reviewing relations with China and soon suspended several major projects following allegations of bribery and concerns over pricing. Probes into the IMDB scandal were given new life (the previous government had blocked them) and the former Prime Minister Najib Razak was arrested. Low Taek Jho a financier implicated in the scandal remains on the run, allegedly in China.

The affected projects include the multi-billion dollar East Coast rail line which could have transported Chinese goods via Malaysia and a major pipeline project. These have significant commercial and geopolitical implications for China and represent a major pushback of its Belt and Initiative, it also left some wondering how China would react to such a rebuff.

In the last week, cybersecurity firm FireEye identified Malaysia as the target of cyber attacks originating from China as it allegedly sought to punish Malaysia for suspending its projects. The firm suggested that Chinese threat actors were targeting Malaysia through targeted malware in an effort to collect intelligence on infrastructure projects in the country.

If true these incidents highlight the possibility of China using cyber attacks through proxy groups such as Roaming Tiger and TEMP.periscope to target companies, infrastructure or nations that deviate from or backtrack on commercial or diplomatic promises, particularly those concerning its flagship Belt and Road initiative. Using proxies gives China the ability to distance themselves from attacks.

Russia has demonstrated the effective use of cyber warfare in recent years, the release of the Democratic Party emails has shown it can be low cost and highly effective. Compared to an invasion such as Crimea which provoked an international diplomatic and economic backlash.

FireEye identified that Roaming Tiger used malware to attack Western European Foreign ministries (via Toysnake), the Cambodian elections using Litrecola malware, other attacks have been made on Tibetan independence organisations.

There should also be a fear that these developments could be the tip of the iceberg, as Chinese backed threat actors develop their abilities and gain confidence they could go after ever more high profile targets.

A Sino-Malaysian summit this week highlighted strong ties between the two and the desire to increase already substantial trade, but delicately skirted around the issue of the suspended investments. Publicly China has been demonstrating a humble attitude to recent developments and there has not been an outburst of anti-Malaysian propaganda.

Both sides face major losses if the infrastructure projects are called off as preliminary work has already begun. It remains to be seen whether Prime Minister Mahathir has suspended the projects as a bargaining ploy to get a better deal on the projects from China, or perhaps for the Chinese to hand over fugitive Low Taek Jho and help bring a conclusion to the IMDB scandal or does he genuinely see the projects as an unnecessary drain on an overstretched national budget and is just allowing the Chinese to save face by not immediately cancelling the projects.

More broadly China’s use of cyber-attacks on other countries will be a trend worth watching, will Beijing target countries that resist China or attempt to interfere in national elections and how will nations hit by such attacks respond.

Merlin Linehan has worked in development finance within Eastern Europe and Asia, and spends much of his time investigating the risks and opportunities that are created from the ongoing expansion of Chinese businesses that invest overseas in emerging markets.

This column does not necessarily reflect the opinion of the editorial board or Frontera and its owners.

Corruption Allegations Take Center Stage In Malaysian Elections As Mahathir Mohamad Returns

The Malaysian general election campaigning season has been shaken up by the return of Mahathir Mohamad, a former prime minister who intends to challenge the party he once led. His return may be a key factor in uniting the opposition and reviving allegations of corruption against the current prime minister.

Political parties are mobilizing in preparation for general elections which must be held by August 2018. The main coalitions are Barisan Nasional, which has won every election since it was founded in 1973, and Pakatan Haraban, which has been steadily gaining vote share over the past decade. The election is significant because of two factors: the return of Mahathir Mohamad, a former prime minister who has joined the opposition coalition, and the 1MDB scandal which continues to dog the current prime minister Najib Razak. Together these two factors may be able to lead the opposition to an unprecedented victory.

A twisted web

Mahathir was Malaysia’s longest serving prime minister, serving 22 years between 1981 and 2003. Even after his retirement he remained a vocal critic of his successors. Now at age 92 he has come out of retirement to join the opposition coalition alongside the former deputy prime minister he had previously jailed, Anwar Ibrahim, with the aim of defeating the party he once led.

Anwar, the founder of the opposition party, is currently in jail on charges of sodomy similar to, but separate from, those leveled against him by Mahathir. Yet despite their troubled past Anwar has embraced Mahathir’s return to the fray. The reason is that Mahathir could be a unifying figure for the fragmented opposition coalition and an opportunity to win over previously inaccessible rural constituencies. After all, the opposition coalition is currently without a leader, since Anwar can hardly govern from jail and would require a full royal pardon to take part in the upcoming election.

The opposition’s situation has been bolstered by Najib’s association with the 1MDB scandal. American investigators have linked money taken from 1MDB, a government owned development firm, to Najib’s own accounts as well as those of his friends and associates. Najib has dismissed these allegations as politically motivated, though it is not clear what the ulterior motive would be. In 2015 it was unclear if Najib would survive the scandal, but having managed to retain his position as Prime Minister he will now have to face voters.

Corruption and the economy

This election could be a defining moment for Malaysian politics which have been plagued with corruption scandals for decades including the Felda Global Ventures scandal (2017), the 1MDB scandal (2015), the National Feedlot scandal (2012) and the Port Klang Free Trade Zone scandal (2008). Strikingly, no one has been held accountable for the Port Klang scandal or for the 1MDB scandal.

The most recent scandals, however, are occurring at a time when corruption is the mot du jour – from Brazil to Pakistan populations are becoming increasingly frustrated with systemic cronyism, corruption and inequality. The ability for information to be shared and spread online means that groups, and youth in particular, can be mobilized to hold their leaders accountable. In the past strong economic growth, limited information sharing capacity, and a weaker press may have suppressed Malaysian voter concerns about corruption. Better information sharing capacity combined with the opposition’s attempt to weaponize corruption allegations may turn the tide against entrenched groups.

A survey conducted by Transparency International found that 59% of Malaysians felt that corruption had increased in the past year and 62% felt that the government was doing a poor job of fighting corruption. The upcoming election may reveal how these sentiments translate into votes.

A long time coming

The current ruling coalition, Barisan Nasional, has never lost an election since it was founded in 1973 and Malaysia’s top position features an unbroken line of prime ministers from the UMNO, the coalition’s main party.

Their continued control, however, is no longer so certain. Barisan Nasional has gradually lost vote share over the past several elections. In 2004 they won a solid 63.8% of the vote and 51.4% in 2008. In 2013 they won only 47.4% of the popular vote but maintained control of parliament which led to accusations of gerrymandering.

A victory for Pakatan Haraban would be a sign of disillusionment with the status quo among voters. Perceptions of economic well being and representation, not just corruption, will define voter outlooks. If the Malaysian economy weakens voters may turn to Pakatan Haraban. Reforming entrenched interests and cracking down on corruption will continue to be a challenge regardless of who wins the election.

 

 

Peter Hays is an Analyst at Global Risk Insights. Article as appears on Global Risk Insights: http://globalriskinsights.com/2017/08/corruption-allegations-take-center-stage-malaysian-general-election-campaigning/

This column does not necessarily reflect the opinion of the editorial board or Frontera and its owners.