Published on Nov 28, 2014 in The Edge Review Column

As Malaysia’s dominant political party held its 68th annual general assembly this week, the familiar rallying cries of imminent crisis and racial insecurity rang out again.

The leadership tactic of the United Malays National Organisation (UMNO) from Dr Mahathir Mohamad onwards has been to foster insecurity among the Malay community and to use it to maintain political control.

The use of racial supremacy fears has deepened since the 2013 general election, in which UMNO faced the most serious threat yet to its political position despite securing the most seats within the governing coalition.

UMNO’s waning appeal comes from an unexpected source: within the party leadership itself. In fact, one of the distinguishing features of Najib Razak’s tenure has been the displacement of UMNO as a truly dominant political actor. With stealth and effective political initiatives, Najib has changed UMNO’s political role, making it less of a target and, ironically, less politically relevant.

To understand this dynamic, one has to go back to 2008. Then the phrase ‘Anything But UMNO’ was the battle cry for the opposition. UMNO was the target, criticised for its race-based policies and entrenched corruption.

After UMNO faced winning only a third of parliamentary seats in the March 2008 polls, it had two choices: reform or transform. It was not able to do the latter. The ties between political power and economic interests and the sense of entitlement of the party elites were too deeply entrenched.

The party needed to reduce its exposure, but it could not find a response from inside to the challenges to its political power. Years of complacency and limited leadership innovation required new approaches and different structures, but the resulting changes have only seen UMNO further sidelined.

The first major change was outsourcing the calls to defend the Malays. Reactionary groups such as PERKASA, PERKIDA and other race-based organisations emerged, feeding on the racial insecurity that UMNO has relied on for years. Familiar arguments that Malays were under threat and needed to be united were now espoused by (un)civil society organisations. Some were responses to the 2008 election losses, others were more based on political calculation.

These groups were funded in part by the government, although they stayed closely linked to UMNO as most of their members are also party members, with many of the leaders holding party or government positions. But this outsourcing of “defending Malays” still marked the start of UMNO’s slide to the sidelines.

A second change was to ratchet up efforts to dent the challenge from the Islamist party PAS. To do this the Najib government expanded funding for religious bureaucracy. The idea was to take over religious practices, from education to doctrine, and ultimately position UMNO as the “defender of Islam” in Malaysia.

State funding for Islam and Islamic-based groups in civil society increased sharply. Links with religious scholars were made across political lines, with the aim of splitting PAS as government funds poured into the religious schools of PAS’s conservative ulama.

The impact did effectively divide PAS, but it also moved UMNO away from its moderate roots and strengthened an already powerful and increasingly autonomous religious bureaucracy within government.

Next, UMNO’s interaction with voters changed. Government handouts replaced the party as the vehicle for wooing voters. Most visible was the 1Malaysia People’s Aid programme (BR1M), which pays poorer Malaysians US$200 to US$300 annually. It features a broad range of new government programmes including items from textbook vouchers to tyre replacements for taxis.

As a result, the government has taken over from UMNO as the face of political patronage. Loyalty to the party is still expected, but is less direct.

Another significant factor has been changes to party financing. Traditionally, UMNO has been the fountain for political funds, supporting elections. Under Najib, though, it has relied on new vehicles for election funding, including the scandal-ridden 1Malaysia Development Berhad fund.

Today other investment arms and entities have changed UMNO’s dominant position. It has opened up alternative sources of funding for party leaders, but at the same time reduced the party’s role in setting the direction of financing.

Changes from inside government are also reducing UMNO engagement in politics. Notably, hired consultants were brought in for policy suggestions, with UMNO itself no longer a major conduit to offer ideas and inputs.

The party’s contribution to governing had long been on the decline, with only a handful of elites and insiders participating. Now if contributions are made at all in party-affiliated “labs” they are filtered by those hired from outside.

The common feature of all of these changes has been to push UMNO back from the political front line. It no longer is the leading racial or religious champion for the Malays, it is no longer the source for patronage or financing and it has been marginalised from inputs into governance. It is not attracting the young leaders it needs, as they turn to other, more dynamic avenues for advancement.

Changes to UMNO’s political role have been conducted in “survival mode”, seen as crucial for the party to protect its position. But rather than protect UMNO from exposure they have made it more irrelevant.

UMNO has become more dependent on holding on to political power, on government actors and institutions rather than the other way round. It is following, not leading.

So while the party’s general assembly this week may have featured themes of crisis, insecurity and even hate speech, these are largely being exacerbated by the transformations taking place in UMNO itself.