Malaysians Buy American

The recent story about the Malaysian government paying conservative pundits to attack Anwar Ibrahim is fascinating from many angles. From the U.S. perspective, it’s a little dash of intrigue for debates about partisanship and media capture. For a student of Asia, though, it’s much more interesting. The Barisan Nasional regime thinks that it has to attack Anwar in the U.S. media!

Is this a reasonable fear on the BN’s part? I think so—just imagine a world in which global pro-democracy advocates are made just a little bit more skeptical about Anwar and what he represents by reading about Anwar’s dirty laundry. (Anwar has plenty, having had a long career both in and out of the ruling party, and it is not my purpose here to defend him or attack him.) In all, it seems a rather inexpensive way to tarnish Anwar’s global image among possible fellow travelers abroad.

Many observers may not know, though, that there is also an interesting parallel with the BN regime’s willingness to embrace liberal U.S. academics when doing so is politically expedient. I’m thinking here of none other than Mahathir Mohamad and Paul Krugman.

Let’s go back to 1998 and the Asian Financial Crisis. In what was at the time considered a radical move, Malaysia broke the rules for adjusting to the crisis, imposing temporary capital controls in order to simultaneously stimulate the domestic economy and stabilize the ringgit. It turns out that several months before this, Paul Krugman began arguing in fairly standard economic terms about why Malaysia’s policies might be a good idea (his famous essay “Saving Asia: It’s Time to Get Radical” was in the September 7, 1998 edition of Forbes, and Mahathir’s radical policies when into effect on September 1, 1998). It’s clear that the real motivation for Malaysia’s adjustment strategy was actually political, not economic—I wrote a whole book about this. But it does happen to be the case that Malaysia’s adjustment strategy had the economic consequences that Krugman and other more heterodox economists had anticipated. In other words, the capital controls worked.

If you go down the memory hole that is the internet, you can find a Slate essay by Krugman entitled “Capital Control Freaks,” in which he discusses being flown to Malaysia to have a dialogue with Mahathir. He’s well aware of what’s motivating the trip: “to provide a veneer of respectability to a regime that has lately developed the habit of putting inconvenient people in jail.” But clearly, Mahathir was happy to use Krugman to help him score political points.

The larger message is that Malaysia’s embrace of influential conservative U.S. pundits is not essentially partisan in nature. More likely, their choice to embrace Josh Trevino and the conservative pundits in recent years is that they (perhaps unlike someone like Krugman) would not be so forthright as to divulge their financial interest in saying things that help the BN.