Market consensus holds that Malaysia paid a high yield and looked worse when it had to cut its bond issue into one-third its planned size . So, if Mahathir's foreign threat were real, it would cast him and his allies in the role of traitors. But the truth is the foreign threat is a lie, or at least a grotesque exaggeration created to cover up Mahathir's own blundering and to justify crony bailouts. Mahathir's bogeyman damages Malaysia on several levels. It enfeebles political discourse by insisting on some fantasy premise - the equivalent of playing some giant video game with no bearing on the real world.
Real policy is twisted in an enormous, wasted effort to sustain the myth.
Worst of all, this political stratagem and resulting policy do chill foreign investment - it's difficult to entice investors while calling them names and threatening retribution.