Not business as usual in Malaysia

Malaysian politics is entering new and rough terrain, writes Bridget Welsh. And the longer Najib stays in power the worse the country will be.

The formation of an alliance of former foes this month marks a turning point in Malaysia’s contemporary political history.

The Citizen’s Declaration opposing premier Najib Tun Razak through peaceful means and calling for political reform was signed by former premier Tun Dr Mahathir Mohamad and leaders of the 1999 reformasi movement who opposed his leadership, other senior leaders in the dominant party UMNO, civil society activists who mobilised the masses to protest the party’s rule, and long-standing traditional political party antagonists.

To get these men and women to sit down together reflected the depth of concern among prominent Malaysians, who opted to put their country’s future before its political past. At issue was not just the scandals plaguing the country, but its declining economic fortunes, exacerbated by declining revenues from oil and gas and poor governance.

In response, the government has intensified a crackdown on international and Malaysia’s media, strengthened the government’s relationship with conservative elements in the Islamist party PAS, and to portrayed the Declaration as a conspiracy to topple the government — measures that have only deepened the ongoing crisis of confidence with Najib Tun Razak.

In contrast to the cool portrayal of ‘business as usual’, Malaysian politics is entering new and rough terrain. The democratic slide will continue, as Najib fights growing opposition to and disappointment in his leadership

Najib’s diminishing returns
Over the last nine months since the 1MDB scandal was brought into the open, current Prime Minister Najib has used all the levers of his office to stay in power. From the control of his party’s presidency and powers of the executive over other parts of government to its use of resources and high-paid public relations consultants, Najib has shown himself to be a capable student of his mentor, the same man who is now leading the charge to oppose him, Tun Dr Mahathir. It remains an uphill task to dislodge him from his position – but not impossible.

Contemporary shifts in political alliances are the product of deepening damage being inflicted on Malaysia itself by Najib’s decision to hold onto power. The storm of 1MDB has not passed by, but in fact moved up a few categories in intensity, with even more dangerous national effect. Five dimensions have deepened in recent months.

i. Government linked companies, funds and entities
1MDB is no longer confined to the assets and money directly in the sovereign fund’s purview and some of these funds were deposited into the prime minister’s personal account, as those effected extend deep into other government-linked companies, funds and entities.

From the fund supporting savings for the hajj involving nine million depositors (half of all adult Malaysians) to questions surrounding land deals with a variety of government companies and the financial position of the national oil company, concerns about sound fiscal management have grown and not been adequately addressed. Trust has evaporated, replaced by suspicion and disappointment as 1MDB has become synonymous with poor governance.

One of the most pressing issues in governance surrounds the independence and integrity of Malaysia’s Central Bank, Bank Negara. The prime minister has not recused himself from making the sensitive and vital policy appointee to succeed the current Governor, after months of inadequately addressing questions about the funds in his personal account.

This follows Najib’s pattern of not recognising conflict of interest, and opens up Bank Negara to even greater scrutiny at arguably one of the most challenging periods in the organisation’s history. The challenges if faces includes currency pressures, weakened reserves and unprecedented international scrutiny.

Many of the candidates for Governor announced to date have not helped to restore confidence, particularly the candidate who was a 1MDB advisor.

ii. Malaysia’s standing
Confidence is sorely needed due to the scope and nature of the Najib government-inspired international investigations into governance. In recent months these have widened, with greater amounts of money revealed that are so large they have even surpassed shock value and a widening net of individuals under investigation. With multiple jurisdictions across the globe investigating the Najib government, this scrutiny has negatively affected investment and needlessly brought shame on the country.

Rather than promoting the prosperity of Malaysia, prioritising the fortunes of the leader have undermined the nation. As long as Najib stays in office the international shaming of Malaysia will continue, and the landing will be hard not only for Najib’s collaborators and Najib himself, but for Malaysia as a whole.

With reports of scandal now even becoming fodder for international tabloids, Najib has surpassed his mentor in putting Malaysia on the international stage – sadly this time it is no longer about national pride but the poison of power, greed and corruption.

iii. Malaysia’s sovereignty
In order to remain in power, Najib has increasingly relied on capital from abroad to fund projects, especially infrastructure projects, and is no longer in a strong bargaining position that will guarantee protection of Malaysia’s interest. These deals are seen to have favourable terms to those willing to offer needed capital to sustain projects that are tied for Najib’s political survival.

Questions about what has been sold off, at what price, to whom and for what are circulating and in this deal-making, the goals of serving the nation appear to have been lost to serving the dealmaker. Whether it involves ports built by companies linked to China or high-speed rail negotiations that are seen as investments for high-speed cash, Malaysians are legitimately asking what is it for them, as they earlier asked about bauxite and rare earth mineral investments.

More than any premier Najib has relied on external legitimacy to shore up his position at home. The Najib government has used his relationship with international leaders to his advantage, as they have taken as much as possible from him.

Whether it is the Obama administration’s sell out of human rights and good governance for support for the (now dying) Trans-Pacific Partnership or Australian companies access to rare earth minerals, Najib has worked to have those much needed photos with leaders to promote at home.

This portrait of a leader respected abroad has only served to showcase the insecurities of a leader who now has the lowest level of popular support in polling than any premier in Malaysian history. It also reinforces the view that the external environment has been given greater prominence than conditions at home. The fact that the 1MDB fund was supposed to promote domestic investment, but was primarily invested abroad – through a variety of shell companies and havens to hide away funds — is illustrative.

iv. UMNO
As damage goes, one of the organisations at the top of the leaderboard is Najib’s own party UMNO. It would appear that Najib holds onto the lion’s share of support, as division chiefs were again asked to perform the ritual of confirming support publicly last weekend. But, the situation on the ground is murky and less stable. Najib has to work at maintaining his position.

The purges of leaders internally were (and are) as much a part of efforts to maintain the loyalty of allies as they were well-timed ‘strong man’ removals of enemies. As pressures grow on Najib, so do the demands in exchange for loyalty. For now, in the risk-averse environment inside UMNO, staying ‘loyal’ to Najib is the safest option and most lucrative for party elites.

How many actual genuine loyalists there are is not clear. While some go out of their way to ‘show’ loyalty and curry favor, the silence of many others is telling. The majority of UMNO elites are in waiting mode, with many not wanting to go down with the Najib ship. When the time comes, survival not loyalty will win out.

Meanwhile, UMNO is taking a beating, especially among its base. It is being exposed as a vehicle for the rich fat-cat division chiefs and the political tool of the ‘strongman’ premier, while the rank-and-file are hurting. Najib’s policies in areas such as GST and increasing costs of tolls and services have hit the Malay base hard, with most Malaysians across races surviving pay check to pay check.

Shrinking growth and job reductions along with inflation and rising costs in living have made conditions especially difficult, with the most affected the Malay community as they make up the largest share of the younger population. Insecurity and uncertainty has replaced confidence and opportunity.

Anger on the ground is growing. UMNO is increasingly not been seen as effectively protecting the interests of Malays under Najib, as the party is losing its legitimacy. Every day Najib holds on, UMNO is exposed to greater risk and political erosion, with the anger on the ground simmering.

Najib has to watch his back for the time when younger leaders opt to takeover to ‘Save UMNO,’ and when the rising discontentment being fanned moves with another wind.

v. Media
In weakening efforts to stay in control, Najib’s government is now engaged in a crackdown on the media. The arrests of Australian ABC journalists last weekend are not new, but signal globally that Malaysia’s premier is unwilling to answer questions — a fact that has been known for months within Malaysia. Many in Malaysia would have given Najib the benefit of the doubt if he answered truthfully why the funds are in his account and how they were spent. Now the world wants answers.

Journalists within Malaysia are fighting to tell the truth, with repeated attacks on websites. The Malaysian Insider was forced to shut down this week, officially for commercial reasons tied to the losses of the company. But the steps that the government took to deny local access to the news portal at a critical time for the company was decisive in its closure.

Other media outlets such as Malaysiakini are facing access problems with continued attacks on their website. The denial of information and gross distortion of other information now has become the norm, with this having spillover effects not only in politics but in investor confidence. The actions against the media speak to insecurity and abuse of power.

What distinguishes this period from other critical junctures in Malaysian political history and dissent of national leadership, is the depth of damage occurring, as there appears to be no limits on what will be done to stay in office.

Right side of history
The Citizen’s Declaration provides a glimmer of hope. While there has clearly been an adjustment period – the public and even many across the political divide are uncomfortable with the new foes to friends relationships and distrust is running deep — the common goal of putting in different leadership for Malaysia has tapped into public sentiment.

While some – especially those outside of Malaysia – continue to see Mahathir as the problem, others are more willing to see the former premier’s actions as a necessary corrective to work toward current national solutions. Malaysians largely reject violence as a means to change power and have been voting for an alternative to UMNO in large numbers for the past decade, with a majority doing so in 2013.

The challenges for the Save Malaysia movement are three-fold, as their task is about building confidence and moving the crisis politics of Malaysia into the zone where Malaysians do feel safe, and finally after months of despair feel promise and hope. The battle is for the middle ground, across races, but their challenges are significant.

i. Cooperation
While the announcement of the Citizen’s Declaration reverberated across Malaysia, working together is another dynamic altogether. The mood since the declaration has been defensive, justifying the formation of the group. The real challenge is to put aside differences, personal and ideological, as well as to prioritise national over personal or party interests.

To say that this is not easy is a gross understatement. To date, the focus has been on shared antipathy to Najib’s government, but ultimately the success of the movement will depend on whether it can craft a narrative of common ground moving forward, a narrative that will strengthen rather than weaken budding alliance relationships.

ii. Alternative leadership
Najib stays in office because it remains unclear who will replace him, and who will govern with whom. The replacements cannot be figures who are divisive and about Malaysia’s past rather than its future.

The Save Malaysia movement will have to move beyond older leaders, namely Tun Mahathir, Anwar Ibrahim or Lim Kit Siang and tap into the young and ideals of younger Malaysians. Who will be the alternative leadership remains a serious obstacle in Malaysia’s feudal political culture, especially among Malays.

The willingness of the Save Malaysia movement to showcase alternative, younger leaders, will be a major test. This test will likely come in the evolution of the movement itself, not in the negotiations of the old guards. Ultimately alternatives emerge in times such as these politically.

iii. True reform colours
The Save Malaysia campaign also signals another dynamic altogether — it reveals those who are truly supportive of reform and putting Malaysia first.

It is noteworthy that the narrative of the movement is not about race, or religion, but much needed reforms for the country and its people — the political narrative that has brought the most hope to Malaysians in the past decade and been the driver of key political changes from 2008 to 2013. Political parties will have to face the difficult choice to end alliances with individuals and parties who are not with a democratic reform program.

On the chopping block first is PAS, or the members of the party who are willing to work to support Najib to stay in power. The efforts last week by some PAS members to tie into UMNO’s agenda starkly contrast with others who signed the Declaration.

Malaysia’s Islamist party continues to remain divided, wedded to its conservative Islamist vision for the country that has long passed. This battle for the soul of PAS will continue to be fought, with its ability to embrace any meaningful reform hampered by the party’s current leadership.

The battles ahead will not be easy, as Malaysian politics remains in crisis, but the shifts that are taking place highlight that Malaysians are not willing to give up the chances of a better future and are demanding better leadership. The momentum lies with those on the right side of history.

Developments outside of Malaysia are as important as those taking place inside the country, with most international governments enabling Malaysia’s democratic decay and deepening crisis to take root. The longer the crisis continues, the longer Najib stays in power, the greater the destabilisation in Malaysia and potentially to its neighbours.

The ongoing struggle to stay in office by Najib’s government and its control of the office of the premier give it an advantage, but one that is no guarantee of its security. It is also most certainly not in the interest of security and prosperity within Malaysia itself.

Bridget Welsh is Professor of Political Science at Ipek University, Senior Research Associate at the Center for East Asian Democratic Studies of National Taiwan University, Senior Associate Fellow of The Habibie Center, and University Fellow of Charles Darwin University.