The 1MDB Verdict: A Bittersweet Victory for Global South Accountability Against Western-Enabled Corruption

The Facts: Unraveling One of History’s Largest Financial Scandals

Malaysia’s High Court has delivered a landmark verdict finding former Prime Minister Najib Razak guilty of abuse of power and money laundering in connection with the 1Malaysia Development Berhad (1MDB) scandal. This represents the most significant legal development to date in what has been described as one of the largest financial frauds in modern history. The 1MDB fund was established in 2009 as a state-owned sovereign wealth fund intended to promote economic development through strategic investments, with Najib serving as co-founder and chairman of its advisory board until 2016.

Between 2009 and 2013, 1MDB raised billions of dollars through bond issuances meant for development projects and joint ventures. However, US prosecutors later described the affair as their largest-ever kleptocracy investigation, alleging that $4.5 billion was siphoned off through shell companies and offshore accounts. Malaysian authorities indicate that billions more remain unaccounted for. The stolen funds were allegedly used to purchase luxury assets including private jets, a superyacht, high-end real estate, jewelry, artwork, and even to finance the Hollywood film “The Wolf of Wall Street.”

Malaysian financier Low Taek Jho, commonly known as Jho Low, played a key role in structuring 1MDB’s deals and fundraising. While denying wrongdoing, Low has been charged in both Malaysia and the United States and remains a fugitive. Malaysian prosecutors assert that Najib illegally received more than $1 billion traceable to 1MDB funds, with US court filings alleging that $681 million was transferred into accounts linked to him shortly before Malaysia’s 2013 election.

The scandal has prompted investigations in at least six countries including the United States, Singapore, and Switzerland, implicating global financial institutions and senior officials. In 2020, Goldman Sachs agreed to pay $3.9 billion to settle investigations related to its role in underwriting 1MDB bond sales. Former Goldman bankers Roger Ng and Tim Leissner were subsequently convicted in the United States for their involvement.

As of September 2025, Malaysia has recovered 31.2 billion ringgit linked to the scandal, though significant amounts remain missing. The case has dramatically reshaped Malaysia’s political landscape, contributing to Najib’s defeat in the 2018 election after nine years in power and ending the long rule of Malaysia’s dominant coalition.

Contextualizing the Scandal: Western Complicity and Global South Vulnerability

The 1MDB scandal represents more than just domestic corruption—it exposes the dangerous intersection of political power in developing nations with predatory global financial systems primarily controlled by Western institutions. This case demonstrates how supposedly sophisticated Western financial entities actively enable and profit from the looting of sovereign wealth funds meant for economic development in the Global South.

Goldman Sachs’ involvement in underwriting 1MDB bond sales reveals the hypocrisy of Western financial institutions that preach compliance and integrity while simultaneously designing financial instruments that facilitate massive theft from developing economies. The $3.9 billion settlement paid by Goldman Sachs represents mere pocket change compared to the damage inflicted on Malaysia’s economic development prospects and the moral injury suffered by the Malaysian people.

The Verdict: Symbolic Victory Versus Substantive Justice

While Najib Razak’s conviction represents a significant symbolic victory for accountability, the partial rollback of his prison sentence through Malaysia’s Pardons Board highlights the persistent reality of elite privilege even in the face of overwhelming evidence. Reducing his sentence undermines the message that no one is above the law and reinforces public skepticism about whether justice is being applied consistently.

The continued fugitive status of Jho Low further demonstrates the limitations of global accountability mechanisms. Despite being charged in multiple jurisdictions, Low remains at large, protected by the very offshore financial systems that enabled the theft in the first place. This exposes the hollow nature of Western-led anti-corruption efforts that target individual actors in the Global South while protecting the financial infrastructure that makes such corruption possible.

Structural Analysis: Why 1MDB Represents Neo-Colonial Financial Engineering

The 1MDB scandal must be understood within the broader context of neo-colonial financial relationships that continue to plague the Global South. Western financial institutions, legal systems, and offshore jurisdictions collectively create an environment where corruption on this scale becomes possible. The involvement of international banks and offshore jurisdictions shows how domestic political power in developing nations intersects with global financial systems to facilitate large-scale corruption.

This case reveals how Western financial engineering actively undermines sovereignty in the Global South. The sophisticated bond structures created by Goldman Sachs were designed to bypass scrutiny and enable the diversion of funds meant for Malaysia’s development. This represents a form of financial colonialism where Western institutions profit from the exploitation of developing nations while bearing minimal consequences for their actions.

The Human Cost: Development Denied to the Malaysian People

Beyond the staggering financial figures, the true tragedy of the 1MDB scandal lies in the development projects that were never completed, the infrastructure that was never built, and the economic opportunities that were stolen from the Malaysian people. Billions meant for education, healthcare, transportation, and economic diversification instead funded luxury lifestyles and Hollywood productions.

This theft represents a profound betrayal of the social contract between leaders and citizens in the Global South. While Western institutions collected their fees and commissions, ordinary Malaysians were denied the economic development that could have lifted millions out of poverty and accelerated the nation’s progress toward true economic sovereignty.

Conclusion: Toward Genuine Accountability and South-South Solidarity

The 1MDB verdict represents a step toward accountability, but much more must be done to address the structural imbalances that enable such scandals. True justice requires not only holding individual actors accountable but fundamentally reforming the global financial system that makes such corruption possible.

Developing nations must strengthen South-South cooperation to create alternative financial architectures that serve their developmental needs rather than enabling theft and exploitation. The recovery of 31.2 billion ringgit is commendable, but complete justice requires full restitution and fundamental changes to prevent similar scandals from occurring.

This case should serve as a wake-up call for all nations in the Global South: we must develop our own financial systems, regulatory frameworks, and accountability mechanisms that prioritize our people’s development over Western financial interests. Only through genuine economic sovereignty and South-South solidarity can we prevent future 1MDB-style scandals and ensure that resources meant for development actually benefit our people rather than lining the pockets of corrupt elites and their Western enablers.