This is English translation of the piece published in Italian in Relazioni internazionali e International political economy del Sud-Est asiatico, Torino World Affairs Institute (Twai)

Contemporary Malaysian politics looks like a contest between two stalwarts from the dominant party, the United Malays National Organization (UMNO). Current Prime Minister Najib Razak, in office since 2009, is facing a challenge from a multi-faceted opposition now led by former premier Mahathir Mohamad, the man who led the country from 1981-2003 and who ironically put in place many of the undemocratic institutional and governance conditions that have been the subject of calls for reform since the 1997 Asian Financial Crisis. Ninety-two-year-old Mahathir joined the opposition last year after he failed to convince current UMNO leaders to unseat Najib in the midst of revelations of unprecedented levels of corruption. It is thus tempting to see the next election – required to be held before August this year but likely to be called earlier – as a test of different views of their records in office and legacies. The campaign to date has concentrated on competing perceptions of their leadership, with both men demonized and lauded by their supporters. This election, however, is less about the past than how Malaysia is grappling with persistent governance challenges, rising undemocratic pressures and a strengthening political right. Since Najib scrapped through in the 2013 election, heavily relying on an uneven electoral playing field, his administration has become more authoritarian. Human rights reports detail how he has ratcheted up repression against his political opponents.[i] The former opposition leader Anwar Ibrahim has been in jail for over three years after a tainted political trial in 2015. Critics within UMNO have been purged and face intimidation and investigation. Even ordinary citizens have been charged for comments on social media or become the target of an increasingly politicized anti-corruption and pro-Najib bureaucratic machinery. Najib has used his office not only to curb dissent and perpetuate fear but also to strengthen the executive. He pushed through a law on national security (National Security Council Act 2016) which gives the prime minister greater powers to undemocratically hold onto power. Najib has simultaneously centralized financial decision-making as Minister of Finance and used the control of the levers of patronage to his advantage, notably squeezing out challengers within the system.[ii] He has further undermined electoral integrity by increasing malapportionment, gerrymandering and the distortion of constituencies as the election has approached.[iii] The price has been a more closed polity.

Increasing authoritarianism in Malaysia has been exacerbated by serious governance issues. Najib has weathered serious allegations of kleptocracy involving over $700 million of funds from a government-linked company 1Malaysia Development Berhad (1MDB) deposited into his personal bank account and broader mismanagement of $4.5 billion of company funds. The 1MDB scandal has involved multiple international investigations for money-laundering and corruption.[iv] Najib himself has avoided prosecution, using his position to assure that charges within Malaysia have not been filed. He has also forged international alliances with Saudi Arabia[v] and China[vi] to access the funds needed to pay off the company’s debts and lobbied the Trump administration to put their investigation on hold.[vii]

In this age of growing global economic competition, Najib has also appealed to international investors due to his embrace of neo-liberal economic policies. From trade liberalization to the introduction of a goods and service tax (GST)), he has appeared willing to open the economy to attract investment and strengthen revenue. The primary recipient of this liberalization has been China and Malaysian political elites that have brokered the largely infrastructure-related investment deals. Foreign capital has served to spur growth, reaching 5.9% of GDP in 2017, and fostered the view that Najib has steered Malaysia’s economy out of the 2008-2009 financial crisis. Cuts in spending to services and rising cost of living however have negatively impacted ordinary Malaysians, especially those living on tight margins. Following global trends, inequality in Malaysia has risen and social mobility narrowed. Wage levels have remained stagnant. An estimated forty percent of Malaysians earn less than $1000 monthly and face high levels of precarity.[viii] Household debt stood at 85% of household incomes at the end of last year, one of the highest levels in the world. Debt levels are echoed at the national level, standing at over $172 billion (50.1% of GDP) for the federal government with an additional $57 billion (16.9% of GDP) tied to government guarantees, including 1MDB.[ix] These debt numbers have risen sharply under Najib, with debt servicing charges now over $7 billion or 12% of estimated revenue.[x] Growth has been accompanied by higher risks and not trickled down to those most in need.

Troubled underlying social conditions underscore the context for the upcoming competitive political campaign. While the economy should be prioritized, conflicting views of Najib’s economic record and its effects have undercut meaningful discussion of how to move forward. Mahathir and the political opposition he leads does not offer a clear viable economic alternative. Instead the main undercurrent involves identity politics, also in keeping with global trends. Rather than immigration, concerns center on race and religion, primarily the dominant position of the Malay community and the increased exclusionary conservative Islam that the Najib government has used to shore up its political legitimacy, following his ally Saudi Arabia. Ethnic identity and competition has long been prepotent political features in Malaysia, but in recent years multi-ethnic cooperation has offered new forms of citizenship. Najib’s government has capitalized on resentment towards the more inclusionary trends. Since Najib’s governement framed the 2013 election in zero-sum ethnic terms[xi], tensions have increased, as non-Muslims minorities have been scapegoated and attacked as undermining the position of Islam and the dominant Muslim ethnic group. The multi-ethnic opposition has not been able to effectively respond to divisive identity politics, failing to articulate an inclusionary vision. As such, the campaign narrative is being controlled by negative identity discourse, which advantages the incumbent.

Rising authoritarianism, macroeconomic precarity, persistent inequality and exclusionary racialized identity politics make for a difficult political terrain to expand democratic politics. The right has gained traction in Malaysia, as has occurred globally. The contest ahead will determine whether these trends will continue. The opposition faces an uphill battle, in part due to its own limitations. Ironically, the person who first moved Malaysia in a more undemocratic direction in the 1980s, ninety-two-year-old Mahathir Mohamad, will be the person to shape whether the country can move back to a more inclusive center.

 

 

Footnotes

[i] See Human Rights Watch: https://www.hrw.org/report/2015/10/26/creating-culture-fear/criminalization-peaceful-expression-malaysia

[ii] Edmund Terence Gomez, Ministry of Finance Incorporated. (Petaling Jaya: SIRD, 2017)

[iii] Kai Ostwald. “Malaysia’s Electoral Process: The Methods and Costs of Perpetuating UMNO Rule,” Trends in Southeast Asia. No. 19. 2017. Singapore. ISEAS. https://www.iseas.edu.sg/images/pdf/TRS19_17.pdf and https://www.economist.com/news/leaders/21738363-american-officials-say-he-already-stole-millions-taxpayers-malaysias-pm-about-steal

[iv] For details on the 1MDB scandal, see: http://www.wsj.com/specialcoverage/malaysia-controversy and Kerstin Steiner, “Economics, Politics and the Law in Malaysia: A Case Study of the !MDB Scandal,” in Sophie Lemiere, Illusions of Democracy: Malaysian Politics and the People Volume II. (Petaling Jaya: SIRD, 2017), pp. 245-270.

[v] https://thediplomat.com/2017/10/saudi-arabias-footprints-in-southeast-asia/

[vi] https://www.wsj.com/articles/chinas-clout-in-malaysia-set-to-grow-after-1mdb-deal-1448362952

[vii] https://www.wsj.com/articles/trump-ally-was-in-talks-to-earn-millions-in-effort-to-end-1mdb-probe-in-u-s-1519919321

[viii] https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=120&bul_id=RUZ5REwveU1ra1hGL21JWVlPRmU2Zz09&menu_id=amVoWU54UTl0a21NWmdhMjFMMWcyZz09

[ix] http://www.theedgemarkets.com/article/malaysias-spiralling-debt-burden

[x] http://www.theedgemarkets.com/article/malaysias-spiralling-debt-burden

[xi] This was laid out in the article in the government-affiliated newspaper entitled “What more to Chinese want?” http://ww1.utusan.com.my/utusan/Pilihan_Raya/20130507/px_03/Apa-lagi-orang-Cina-mahu