CIMB’s Zafrul is Malaysia’s next finance minister

• Bank chief Zafrul Aziz, a non-politician, has been appointed as Malaysia’s new finance minister
• Zafrul will take charge in implementing a $4.7 billion (MYR 20 billion) stimulus package meant to soften the impact of the coronavirus outbreak
• Experts have expressed confidence in the new government’s economic team

Malaysian Prime Minister Muhyiddin Yassin has unveiled his new cabinet on Monday, 9 March, which includes CIMB Group CEO Zafrul Aziz as the next finance minister. The appointment is seen as a move to bring some calm amid the country’s power struggle and economic fears over the coronavirus outbreak.

A non-politician takes the helm

The fact that Zafrul is a non-politician makes his appointment significant. Cabinet positions tend to fall to senior politicians from the ruling party and this is the first time a non-politician has been appointed finance minister.

Finance has always been central to Zafrul’s professional life, having been a career banker for a long time. He has spent much of his career climbing the ladder at CIMB. He also held the chief position at Maybank Investment Bank and Maybank Kim Eng Holdings. He has also been an entrepreneur, serving as main investor and CEO of financial services provider Tune Money, which was acquired by AirAsia in 2015.

At 46 years old, Zafrul has over 24 years of experience in the financial services sector and has a specialisation in investment banking. He holds a bachelor’s degree in economics and accounting and a master’s degree in finance and investment from two universities in the United Kingdom – University of Bristol and University of Exeter, respectively. He completed an MBA from the People’s Bank of China School of Finance as well.

Zafrul rejoined CIMB Group in 2014, taking over as group CEO from Nazir Razak who became the chairman of the group. Nazir is the younger brother of former Prime Minister Najib Razak, who is currently facing trial in the 1Malaysia Development Berhad (1MDB) corruption case. Current Prime Minister Muhyiddin had at one time been the deputy of Najib in the previous government.

Following his appointment as finance minister, Zafrul resigned effective immediately from all board positions at CIMB. He was subsequently sworn in as a senator at the Dewan Negara, the upper house of the Parliament of Malaysia, so he could accept the position.

Muhyiddin’s cabinet at a glance

Apart from Zafrul, Muhyiddin also appointed 30 other cabinet ministers to his government. Many of the posts have gone to politicians from the scandal-ridden United Malays National Organisation (UMNO) as well as the conservative Malaysian Islamic Party – two parties that helped catapult Muhyiddin to power.

Also notable in the Muhyiddin government is the absence of a deputy prime minister, a first in the 63-year history of the country. Instead, the new head of state appointed four senior ministers, each of whom will handle the country’s different portfolios. Azmin Ali will be in charge of international trade and industry. Fadillah Yusof has been appointed for infrastructure, whilst Ismail Sabri Yaakob will take charge of defence and Radzi Jidin for education.

“With these senior ministers, there is no need for the time being for a deputy prime minister to be appointed,” said Muhyiddin at a press conference. “The appointment of these senior ministers will allow the issues raised between the ministries… to be streamlined more efficiently and effectively. I want to form a cabinet that can truly provide the best service to the people – a cabinet that delivers”, the prime minister added.

Experts see the light for Malaysia’s economy

Experts have lauded the appointment of a career banker to the top finance post.

Economist Wellian Wiranto from Singapore’s OCBC Bank sees Zafrul’s appointment as an “attempt to ensure fiscal credibility” and has called it “a positive move”, although the economist also had a word of caution. “It remains to be seen how he can quickly win market confidence at a time when fiscal stability may be threatened by the deep plunge in the oil price”, he said.

Asian Strategy and Leadership Institute Centre chairman Ramon Navaratnam thinks Zafrul’s surprise appointment is a pleasant one and that the new finance minister will bring fresh ideas to the table. “He is a tried-and-tested finance man. Banking is related to economy and finance, so he got the experience and expertise to handle the job well”, he said.

Meanwhile, Malaysian Institute of Economic Research chairman Kamal Salih believes Zafrul, Azmin, and Mustapa make “a formidable economic team” for Malaysia. “Zafrul is very experienced in banking and economy, Azmin has experience in managing the economy of a state while Mustapa is an old hand in economy and previously was in the Economic Planning Unit”, he noted.

Whilst the foundations are being laid for the new government and its cabinet, Malaysia’s political crisis is not over yet. There remains criticism about Muhyiddin’s pivot towards scandal-tainted UMNO, not to mention questions about whether or not the new government will last. Former PM Mahathir Mohamad and opposition are also planning to contest Muhyiddin’s post through a confidence vote when parliament opens in May.