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Can Malaysia’s new government root out corruption and ensure justice is served?

Philip Bowring says Malaysia’s new ruling coalition faces many challenges, not least a legacy of systemic sleaze as well as economic malaise, ethnic tensions, maintaining good relations with China and the potential for internal dissent

PUBLISHED : Wednesday, 23 May, 2018, 4:58pm
UPDATED : Wednesday, 23 May, 2018, 8:11pm

An electoral tsunami swept away Malaysian prime minister Najib Razak, ending 60 years of rule by the United Malays National Organization (Umno). The outcome was welcomed at home as well as abroad – viewed as a democratic system asserting itself against corruption and erosion of the rule of law, and perhaps presaging the decline of race-based politics.

Enthusiasm, though, is tempered by questions about the new ruling government – a disparate four-party coalition headed by 92-year-old former Prime Minister Mahathir Mohamad, a former physician with a limited record of compromise. The tsunami resulted from a mixture of factors including Mahathir’s personal appeal; economic grievances straddling all races, comprising Malay, Chinese, Indian and others; a desire for more inclusive politics, particularly among urban Malays; and resentment against greed and arrogance of Umno’s leadership.

Race and religion-based politics remains alive, indeed represented by Mahathir himself as creator of the Malay Parti Pribumi Bersatu Malaysia, a breakaway from Umno he led for two decades.

The coalition’s cohesion and durability will be determined in large part by relations between Mahathir and his former deputy Anwar Ibrahim. The king pardoned Anwar, who was released on May 16 from jail after being found guilty of dubious sodomy charges.

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Mahathir has promised to pass leadership to Anwar within two years, and Anwar and his team may try to bring their policies to bear soon. In principle, the People's Justice Party (PKR) – founded by Anwar – should be able to work with the second-largest party, the predominantly Chinese Democratic Action Party.

But it must also protect its position among Malays, be they nationalists like Mahathir or Islamists like Amanah, the coalition’s fourth member, as well as a potential Umno revival. The PKR may have to contend with policies favouring majority Malays who are overwhelmingly Muslim while non-Malay expectations of a shift away from racial preferences must also be met.

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The racial question relates directly to an economy held back by an exodus of capital and talent caused by preferences. In turn, government spending financed by borrowing has boosted economic growth.

The pattern could continue, at least in the short term, as the government has already fulfilled a promise to abolish the unpopular goods and services tax introduced by Najib. Addressing this problem now falls to leader of the Democratic Action Party, DAP, Lim Guan Eng, the first Chinese chosen to be finance minister since the 1970s – though he must first face corruption charges brought by the ousted government.

Current high oil prices will help, and so may new scrutiny of huge infrastructure schemes including rail and port projects financed by massive Chinese loans, part of the “Belt and Road Initiative”. Critics accused Najib of kowtowing to China, which had helped bail out 1MDB, the multibillion-dollar scandal-ridden state investment company, by buying some assets at generous prices.

Infrastructure projects provide fat contracts for some local firms. Others complain that China’s state companies get the bulk of benefits and import Chinese workers. While the money is welcome, some Malays express concern about an influx of migrants. More generally, Malaysia wonders whether, as a capital-surplus country, it should rely on foreign money for projects like housing for which foreign technology is not needed.

Malaysian Chinese also have mixed feelings about China’s rise and belt and road projects – the economic spur offers a potential antidote to the “bumiputra” policy of preference given to ethnic Malays, but the display of wealth and power stirs Malay resentment. The new government is likely to continue welcoming Chinese money while being more discriminating.

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Suspicions of China are unlikely to have much impact on foreign policy. Although Malaysia’s maritime area comes well within China’s claims in the South China Sea, the government has kept a low profile. Likewise, no new direction in defence policy is expected in the near term. Defence Minister Mohamad Sabu, leader of the Islamist Amanah party and not known for a prior interest in the topic, is likely to focus initially on uncovering arms-deal kickbacks.

Waters subject to Chinese claims are off the east Malaysian states, Sabah and Sarawak, neither predominantly Malay nor, in the case of Sarawak, Muslim. The election showed a sharp rise in the appeal of parties demanding more local autonomy and a fair share of state resources. Once in the Umno pocket, they may flex their muscles.

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Malaysia’s neighbours have varying perspectives. Singapore had good relations with Najib and is wary of Mahathir, but was well aware of the threat of corruption for Malaysia. Singapore may worry about the new government’s stability, but hopes for a more balanced ethnic composition.

Thailand’s ruling generals may see Malaysia as reason to delay long-promised elections. Mass discontent can overwhelm even the stoutest constitutional barriers to free and fair democracy. Indonesian President Joko Widodo, facing an election in 2019, may feel most comforted. His personal popularity could yet be overwhelmed by big-money backed opponents mobilising Islamic and anti-Chinese sentiment, but Malaysia has shown that such tactics may not work and that anti-corruption efforts win votes.

Much depends on harmony between Mahathir and Anwar, which in turn hinges on whether Mahathir acknowledges that seeds of corruption and abuse of the judicial system were sowed during his previous premiership. The new coalition’s name, Pakatan Harapan – Alliance of Hope – sums up popular expectations that the tsunami will sweep away not just Umno leadership but systemic sleaze.

Philip Bowring is a journalist who has been based in Asia since 1973. Reprinted with permission from YaleGlobal Online