On Oct 10, 2025, while presenting Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced that Malaysia had clawed back RM15.5bil in stolen and smuggled funds in just two years. I was impressed at first. That’s a lot of money, roughly three-quarters of what was stolen in the 1MDB scandal.
But then two thoughts came to mind. First, RM15.5bil is impressive until you remember how much more is probably gone. A 2017 report by the Washington-based Global Financial Integrity think tank estimated that Malaysia lost what amounts to an average of RM200bil every year between 2005 and 2014 through illicit money outflows.
Second, if that much can leak out of the system, the system is probably producing a lot more than that. The report’s figure is about 10% of all money flows going in and out of Malaysia. And yet, despite the drain, the economy hasn’t collapsed. In fact, it has, more or less, managed to move onwards and even upwards.
So here’s a novel thought: Are there kinds of corruption that help an economy grow?
Economists call this the “grease the wheels” hypothesis. The idea is that when bureaucracy grinds too slowly, corruption can help overcome it. Indeed, some research has shown that where countries’ institutions are weak and function poorly, bribes can increase efficiency and reduce transaction costs.
But small payments grease only small gears. For benefits at a national level you need a much larger engine, with much more expensive oil.
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