As Malaysia ends its Asean chairmanship, international observers are scrutinising the country more, and often they do not see good news behind the political and economic wins.
Amid continued global economic headwinds, the Madani government has pushed hard to attract foreign investment and deliver record trade to support economic growth.
Unfortunately, the hard work of ministers and their teams may be wiped out by the growing misuse of Malaysia as a centre for international and cross-jurisdictional litigation through what are known as strategic lawsuits against public participation, or SLAPP actions, which restrict freedom of speech.
SLAPP actions are baseless, abusive lawsuits aimed at intimidating, harassing and silencing critics. They are often used by governments to silence policy dissent but are also increasingly used by other organisations to silence critics of products, services or management failure.
The aim is to repress people rather than to win damages. They do this by imposing massive legal defence fees for defendants, often damaging their reputation simply by publicising that they are being sued and forcing them out of work. They terrorise people, imposing huge emotional damage on defendants and their families and creating a chilling effect among their associates.
Anti-SLAPP laws are emerging in many US states, the European Union and the UK which aim to provide procedural safeguards to dismiss SLAPP cases quickly. The UK Solicitors Regulation Authority has issued practice rules prohibiting lawyers from pursuing such cases, calling them an abuse of the legal system.
Unfortunately, such cases are commonplace in Malaysia against not just public figures but also private citizens who often suffer in silence. In fact, some Malaysian lawyers appear to specialise in SLAPP actions, even across borders in other Asean countries.
Nobel laureates in economics from Milton Friedman to Ronald Coase have long argued from different economic perspectives that free speech and economic success are intimately linked.
Free speech goes hand-in-hand with transparency and the rule of law, avoiding arbitrary justice and protecting property rights and contracts which are the foundation of markets.
From an international perspective, investor sentiment and confidence is deeply affected by perceptions of freedom of speech and the protection of whistleblowers. This is why the risks of SLAPP actions can have a big impact on trade and investment.
Having been a student leader and later a political prisoner, Prime Minister Anwar Ibrahim has spoken strongly in favour of freedom of speech. The danger is that his genuine concern for free speech might appear inconsistent when Malaysia still allows SLAPP actions that suppress free speech.
Inconsistency in political rhetoric and the reality of SLAPP actions cause confusion among investors in the short-term which spooks markets, causes funds outflows and increases volatility. It attracts attention for the wrong reasons.
In the long term, the risk and ease of SLAPP actions will send a chill among investors, expatriate employees and tourists alike and damage Malaysia’s credibility. When used for transnational repression (TNR), it also affects international relations.
Investment will move to countries with a more stable policy environment, making the damage irrecoverable and harming Malaysia’s competitiveness against regional peers. Singapore ranks first in the Heritage Foundation Economic Freedom Index compared to Malaysia at 44th and rated only moderately free.
On the other hand, poor quality investors who are willing to pay for “blind-eye” enforcement and easy, low-cost access to SLAPP actions will find it attractive, as we see in many countries around the world. This attracts criminal activities which have very damaging long-term implications.
As its leadership of Asean comes to an end with the visit of US president Donald Trump, Malaysia should be looking forward to a major win on international relations boosting trade and investment.
Unfortunately, this may well be overshadowed by the growth of SLAPP actions and TNR across Asean under Malaysia’s chairmanship.
The views expressed are those of the writer and do not necessarily reflect those of FMT.