Mahathir Mohamad, Malaysia's prime minister. Picture: GETTY IMAGES
Mahathir Mohamad, Malaysia's prime minister. Picture: GETTY IMAGES

When a nonagenarian political veteran runs a campaign promising change, it’s only a matter of time before that message comes full circle. For Malaysia’s Prime Minister Mahathir Mohamad, that means succession planning can’t be delayed any longer.

In May 2018, Mahathir pulled off a stunning election victory to lead Malaysia for a second time. In defeating Najib Razak, who denies allegations of siphoning off hundreds of millions of dollars from a state investment fund, the prime minister promised a fresh start, free of corruption and full of economic opportunity. When the US-China trade war started that summer, many foreign observers looked to Malaysia as a potential winner from the conflict.

A year and a half later, growth has stagnated and the stock market has fallen about 14%, outpacing declines in the MSCI Asia Pacific Index. Voters have also become jaded. In a special election last weekend, a parliamentary seat in the southern state of Johor was lost in spectacular style to the Barisan Nasional bloc Najib once led. The scale of the drubbing suggests that one-time core supporters of Mahathir’s coalition have begun to defect — Najib himself posed for photos with the victors.

Mahathir’s presumed heir, Anwar Ibrahim, described the vote as a shock. While the government had been bracing for a relatively shallow defeat, they weren’t expecting this kind of landslide. What’s perhaps most surprising about the result is that many ethnic Chinese voters — a mainstay of the Democratic Action Party, which is a vital part of the government’s coalition — appear to be so dismayed that they’re supporting a bloc aligning itself with Islamic fundamentalists.

Mahathir has since pledged a thorough postmortem. That’s the least he can offer. Any halfway decent critique of the administration’s performance has to start with his own track record and the knotty issue of when he retires. The prime minister has said he will stand aside before the parliament’s five-year term is up; Anwar’s base understood that to mean two years. Political talk in Kuala Lumpur is now dominated by succession, not unlike the last time these two men were in government together in the 1990s.

To make real progress, the air needs to be cleared: who is in charge, until when, and succeeded by whom? Mahathir’s supporters counter that only he could have delivered a government for the coalition in the first place — only he was able to make a vital slice of the ethnic Malay Muslim majority comfortable with deserting Barisan after more than half a century of support. While that argument has merit, it doesn’t change the fact that Mahathir’s time is limited, literally.

Malaysia is drifting when it needs to be operating full-steam ahead. The country has touted itself as an attractive option for manufacturers seeking to add capacity outside China. The state of Penang, long a favourite of the electronics industry, burnished its credentials as a winner from the clash between Washington and Beijing. Yet that optimism hasn’t materialised into busier ports and factories. September exports fell by the most since 2016 and industrial production in the third quarter slackened.

When I lived in Kuala Lumpur in the late 1990s, Mahathir was deep into a 22-year reign. At that point, any switch from Barisan seemed barely conceivable. Now his moment of change is starting to look like a blip. This only goes to show that combating graft is necessary but insufficient to get this one-time tiger economy roaring back. Though data have been saying this for a while, voters have finally added their voices.

Malaysia has plenty going for it, including an educated workforce, widely spoken English, a democratically elected government and decent infrastructure. But the window to realise its potential is closing. By this time in 2020, it may be shut.

• Moss is a Bloomberg Opinion columnist covering Asian economies.

Bloomberg