Southeast Asia’s two major Grands Prix in Malaysia and Singapore could both be in trouble, according to recent media reports.
Of the two, the Malaysian Grand Prix looks most likely to succumb, with the country’s Tourism and Culture Minister admitting that the event is unlikely to be renewed beyond its current contract which runs until next year.
Malaysia has played host to the Formula 1 World Championship since 1999 at the Sepang circuit and has remained a permanent fixture ever since.
This admission is hardly a surprise. Crowd attendance has been poor in recent years, in no part thanks to the burgeoning success enjoyed by the Grand Prix of its neighbour, Singapore.
while the country’s economy slows and the current government – which partly subsidises the race – is mired in scandal amid claims that the Prime Minister, Najib Razak, has been helping himself to a government wealth fund.
While the Prime Minister has predictably denied any wrongdoing, the allegations are being investigated by a number of groups which include the American Justice Department.
It is a far cry from the days of the Malaysian Grand Prix’s visionary, the then-Prime Minister Dr Mahathir Mohamad, who led the country for over twenty years. While Mahathir was himself no political saint, he had a clear vision to bring Malaysia into one of the world’s leading technological and industrial hubs. Bringing Formula 1 to Malaysia was part of that vision, and he remains widely lauded for doing so.
Today, Malaysia remains highly dependent on oil and gas exports headlined by the Petronas group – amounting to roughly one-third of the country’s total revenue – but with the current low oil prices the country is suffering and has to make drastic spending cuts in the short to mid-term.
The stories surrounding the Singapore Grand Prix coming to an end should be treated with more scepticism, given the source of these claims is Formula 1 supremo Bernie Ecclestone.
Such claims are often a ploy to force through a new contract deal, although with the global economy the way it is, there’s little surprise that the Singapore organisers are trying to hold firm in their negotiations.
The event is co-funded by the private sector and the government, but the former wants to reduce its outlay in order to keep more of the profits from the significant number of visitors who flock to the city every year for Formula 1’s original night race. The government wants to keep the race, which has done a tremendous job boosting the country’s image, but will be reluctant to pay more than it already is.
Image via XPB Images