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Malaysia in political stalemate

Prof. Murray Hunter

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Malaysia’s Prime Minister Najib is facing accusations of fraud with the 1MDB fiasco, and the murder of Mongolian model Altantuya Shaaribuu, while the economy is going into a ‘nosedive’.

After six and a half years in office, Premier Najib presides over a nation with contracting growth, rising inflation, growing unemployment, a Ringgit at a 20 year low against the US Dollar, significant capital flight, a massive debt problem, disappearing sources of income, and low consumer confidence.

Although some of these problems are the result of global factors such as declining oil and gas prices, low commodity prices, and sluggish growth of major trading partners, Malaysia’s problems also greatly exist today as the result of policy failures. Extremist policies have also led to social and ethnic tensions within the country. In addition, the depreciation of the Ringgit and introduction of the GST have put undue hardships on the people.

Malaysia is going through a very intense period of political infighting at the highest echelons of power within the dominant party within the Barisan Nasional (BN), UMNO. Premier Najib recently sacked his Deputy Muhyiddin Yassin, and other ministers and officials in desperation to maintain his grip on power, while the former PM Dr. Mahathir is leading a vanguard of senior UMNO stalwarts to remove Najib from office.

Within corporate Malaysia, there is now a deep realization about how fast Malaysia is falling behind the rest of the world. Many believe that the Prime Minister has not grappled with the real problems facing the nation. This thinking according to sources goes right to the board rooms of companies like Sime Darby and Petronas, some of the premier financial institutions of the land, as well as a number of Royal Households.

However there is a large split in thinking about how to solve the problem, as the Mahathir forces are still viewed with great suspicion by many sections of royalty. Thus any possibility of him being an immediate interim prime minister would never be considered. There is also a general distain for the weak and incompetent opposition in the country, which instead of showing leadership has allowed infighting to surface publicly and dissolve the Pakatan Rakyat.

Consequently, there is no planned takeover of power, coup, of method to remove Najib from office in existence. The prevailing view is one of being stunned and a feeling of impotence, as Premier Najib has managed to centralize most power in the country around the Prime Minister’s position.

The immediate task at hand for Premier Najib was to deliver a national budget. There has been massive revenue shrinkage due to falling oil revenue and a corresponding reduction of dividends paid by Petronas to government consolidated revenue. The unpopular GST will not make up the projected short falls over the coming years, which will increase the budget deficit, if government spending is not drastically reduced. This would be politically unpalatable, particularly at a time when Najib is so unpopular. Najib also has to contend with growing unemployment and will be pressured to maintain infrastructure spending, so lucrative contracts can continue to be given out to his supporters.

The flip side for Najib is that with the falling Ringgit, and rising debt, ratings agencies will be looking for fiscal responsibility in the budget. A fiscally irresponsible budget could increase capital flight which is already a major problem for Malaysia’s balance of payments.

Najib has tried to do all this. He has chosen the path to spur the economy through nine infrastructure projects, of which a high proportion are in rural areas, Sabah and Sarawak. In addition, a lot of ‘sweeteners’ have been added into the budget, which are no doubt aimed at shoring up his popular base. From this point of view, it could be construed as an election budget, giving Najib the option to call a snap election, if necessary. At the same time a number of reforms for the civil service have been announced as well as a projection of a lower budget deficit of 3.2% of GDP, down from 6.7% the year before, in an attempt to win support of ratings agencies.

It’s a budget that BN members of Parliament would find it difficult to vote against, due to the large numbers of specific programs benefitting their individual electorates.

The weak opposition has become Premier Najib’s great strength. PAS President Aman Hadi’s push for HUDUD laws eventually broke up the opposition alliance, Pakatan Rakyat. In addition Hadi’s indecisiveness on whether PAS would support any no confidence motion against Najib in parliament this week was seen by many in the opposition as treacherous.

The handling of the no confidence motion showed complete incompetence. The fact that DAP MP Hee Loy Sia filed a motion of no confidence before PKR leader Wan Azizah, has led to questions in the local media about whether the new alliance Pakatan Harapan actually wants to remove Najib from office. The opposition seemed to be more interested in who would make the motion of no confidence, rather than actually making this symbolic move in parliament, which would have failed anyway, due to lack of numbers of support the motion.

Others felt that the whole matter of a no confidence motion was just a waste of time, as there is no chance of and mass defection of Barisan MPs. UMNO backbenchers have shown no sign of wavering, as have Sabah and Sarawak MPs, along with Gerakan and MCA members.

There is also worry about the opposition’s policy proposals to solve the financial crisis. The opposition proposal to put 1MDB into administration in Wan Azizah’s budget speech would only lead to an asset fire sale. In addition, blocking TNB from taking over 1MDB assets is just sabotaging any initiatives to reduce debt.

There is no end game in sight.

It is rumoured that Najib’s mother and at least one brother has asked him to make a deal with Dr. Mahathir on safe passage out of Malaysia and immunity from prosecution. However, upon Najib’s wife, Rosnah’s insistence, he is taking up the fight to survive with a new and ruthless political secretary in charge. Such a deal anyhow would provide Najib with no guarantee, as Dr. Mahathir has no legal or political standing to make such a deal.

No doubt, Najib will pass through this session of parliament with the partisan speaker Pandikar Amin Mulia, and the UMNO AGM in December. In theory Najib can continue right up to 2018 as party president and prime minister. However, the pressure of a quickly deteriorating economy and a poor budget reception could change that timing, particularly is any other unforeseen event arises over the next few months.

The advantage to Najib is the extremely poorly coordinated opposition that has shown itself to be in disarray with the PAS/Parti Amanah Negara (PAN) split. Ironically, Dr. Mahathir looks and appears to be the only effective opposition leader in Malaysia today. Yet the Mahathir forces themselves are also impotent (something he admitted himself) against the Najib forces which control the powerful PM’s office, ministers, UMNO, and police.

Overall, Mahathir has been disappointing in his handling of Najib, which has only in reality showed up his impotence in standing up to his old protégé. He has failed to show the strength he once had as a leader and politician.

Muhyiddin and Tunku Razaleigh have primarily been on the side-lines, unwilling to take any lead.

Najib’s best action would be to go for an immediate snap election after the budget and catch the opposition ‘off guard’, and weaken them further. By placing his people in winnable seats, Najib could further his strength within UMNO and government, and even weaken the Mahathir forces mortally.

The recent poll stating the unpopularity of UMNO and its leader with the Malay electorate was urban biased, thus such a result would be expected. The general election is won or lost in the heartland, not the urban areas, so UMNO can still win.

However, there would be very little incentive to do this as parliament still has two years to run until an election is needed. Nevertheless, it could be tempting to wipe out PKR, PAS, and Harapan Baru all at once, as PAS is likely to stand candidates against PKR and DAP leading to three-cornered contests. The opposition also has a major credibility gap with the Malaysian public.

A new parliament after an election would most probably be dominated by UMNO and DAP, which is set to make massive gains.

Najib’s best and only option open to him at the moment is to stay in power to protect himself, and the interests of his family’s businesses, controlled by his brothers Nazir, Ahmad Johari, Mohamed Nizam, and Mohamed Nazin Razak. These business interests include a number of high profile corporate assets, entangled with a number of close associates including Tan Kay Hock, Shahril Shamsuddin, Mohamed Azman Yahya, Rohana Mahmood, Azman Mokhtar, Mohd. Nadzmi Mohd. Salleh, and others, who could stand to lose many of their assets should Najib no longer be prime minister.

Najib seems very hesitant to go the election track and may rely on police repression to maintain his grip on power for the time being. Najib’s new DPM Zaid is like a ‘pitball’ and his new political secretary Muhd Khairun Aseh Che Mat has shown himself to be a ruthless political operator. Attacks on dissenters and the arrests of those trying to expose Najib, like Khairuddin and Matthius Chang under the anti-terror SOSMA laws, shows what Malaysia may be install for in the near future.

This would leave the leadership crisis in stalemate, where Najib can choose his own time to step down, while the economy continues to deteriorate into the foreseeable future.

To this point in time, primarily due to the lack of incentive to unite, Najib’s detractors are powerless to make any decisive constitutional moves against him.

No one is able to convince to UMNO/BN politicians, except for the Najib forces, who are keeping a tight rein on them. So any move by former senior UMNO leaders to push for an interim government through the parliament and constitution is not a possibility.

Najib, who was once Dr. Mahathir’s protégé has proven himself to be more skilful and cunning than the master.

Yet the biggest tragedy for Malaysia is that the Najib regime has no vision for Malaysia, and thus the longer he stays, the more damage that will be done.

There is also little hope in any post-Najib era as well. The opposition is only coming out with ad hoc policy measures, which may even make worse some of the problems, and the Mahathir forces are totally silent about what they would do.

Innovator and entrepreneur. Notable author, thinker and prof. Hat Yai University, Thailand Contact: murrayhunter58(at)gmail.com

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Southeast Asia

Lost Malaysian Hopes and the Pakatan Catch 22

Prof. Murray Hunter

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It took the Malaysian opposition more than a generation to topple the Barisan Nasional government, led by the now-discredited United Malays National Organization. Throughout mosques, coffee shops and markets in Malaysia, there has been an atmosphere of hope and anticipation by many for change that goes all the way back to when Mahathir Mohamed dismissed Anwar Ibrahim as deputy prime minister back in 1998 and jailed him in a trial regarded universally as trumped up.

From that day on Anwar Ibrahim became synonymous for reform in Malaysia. The charismatic opposition leader, from jail and out, managed to unite a wide diversity of NGOs and mostof the opposition parties against the Barisan. But it took 20 years and reports by the Sarawak Report, the Wall Street Journal, Asia Sentinel and others to expose what is now known as the 1Malaysia Development Bud scandal which tainted Prime Minister Najib Razak as a complete crook and his wife as a grasping harridan. Najib shut down critical parts of the local media and sacked the Attorney General before charges could be laid against him.

Mahathir, in quasi-private life through two administrations, once again mobilized forces to remove Najib, creating Parti Pribumi Bersatu Malaysia (PPBM) with the help of defectors from UMNO and joining the Pakatan Harapan coalition led from prison by his nemesis Anwar.

The 2018 election became a Mahathir-vs-Najib contest, where Najib was almost universally expected to hold onto power. There seemed to be an air of disillusionment with the electoral process and apathyduring the campaign. However, voter turnout was more than 82 percent. The Pakatan Harapan coalition defeated Najib, who was prevented from fleeing the country in a private aircraft for Indonesia. The surprised public instantaneously became euphoric, celebrating in the streets. Many Malaysians believed they would now get the reform and change they had long hoped for.

The Pakatan Catch 22

However, the defeat of the Barisan exposed a very complex electorate. Different groups of voters made their decisions for different reasons. Non-Malays saw the removal of the Barisan as the end of a dark apartheid era in which every citizen would be regarded as equal, as was promised by sections of the Harapan manifesto. In contrast, many urban, professional and middle-class Malays hoped that Mahathir would clean up the mess the country was in. Voters in rural Malaysia, particularly in Kelantan and Terengganu, didn’t switch at all. They went to the rural Islamist Parti Islam se-Malaysia, or PAS. The small northern state of Perlis remained staunchly Barisan. 

There is now a deep polarization in the Malaysian electorate between those who want a Malaysian Malaysia and those who want a Malay Malaysia. This is a massive dilemma for the reform government.

A major part of the electorate sees reform as a threat to special privileges that they have received since the advent of the New Economic Policy, an affirmative action policy for the Malay majority, in 1971. Three generations of education and political narrative have created this sense of privilege, which is deeply engrained in rural Malays. These sentiments are being played upon politically to the point where the government has had to stall decisions about child marriage and reverse its decision to ratify the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD). 

In addition, the Pakatan government is being subjected to pressure from sections of the Malaysian royalty, which led to the reversal in ratifying the Rome Statute, a prelude to joining the International Criminal Court, and the resignation of Johor Chief Minister Osman Sapian.

The government now faces a situation in which any future policy decisions and reforms must be framed from a Bumiputera perspective and agreed in royal circles. This is particularly the case as the government is extremely slow with any electoral reform, which would effectively weaken opposition to policy reform, through adopting the principle of “one vote, one value.”  Without electoral reform, any policy reversals will favor the newly formed UNMO-PAS alliance with its narrative pandering to the rural Malay electorate.

The Pakatan government needs to very quickly undertake electoral reform to counter the strength of the conservative electorate. Currently a rural vote can be worth anything up to four times an urban one. It is this imbalance that is providing UMNO-PAS with a powerful base from which to prevent the government pushing through any reform agenda.

However the latest news on electoral reform is that the Election Commission and UNDP will only make a joint study about the electoral system in the coming months, far too long for something that is threatening the very long-term livelihood of the government. 

More of the same

With this inaction on electoral reform, it could be argued that the May 9 general election was not about vital reform needed in the country, but rather replacing one leadership group with another. In many respects the Pakatan government is acting just like its predecessor. The reform report handed down by the Council of Eminent Persons (CEP) has been suppressed by the Official Secrets Act, indicating the new government doesn’t place a high priority on transparency.

The Sedition Act has not been repealed and is in fact being used to prosecute political opponents. The Anti-Corruption Agency (MACC) still cannot decide who to prosecute independently. Cabinet ministers have had corruption charges quickly dismissed against them. Political appointees are still being appointed to government-linked companies and statutory bodies.

Mahathir’s Parti Bersatu and Parti Keadilan Rakyat, the two Malay parties in the Pakatan Harapan coalition, both strongly resemble UMNO right down to the internal politics and squabbles. With defectors from UMNO freely running across to Parti Bersatu, the parties are looking more like a new UMNO.

In defense of the Pakatan Government, Mahathir has worked hard to form an operational government from a broad group of parties. However many within the cabinet are very inexperienced, and there is a strong sense of inertia and apathy coming from the largely ethnic Malay civil service, with stories of sabotage against the new government.

Even with Mahathir back in power, changing institutions that have been inefficiently built and harboring wasteful cronies of the previous government is very difficult. However what is sad to see is that many of these cronies are still being reappointed to positions of power.

The old guard still are very clearly in charge of the new government, which has a “back to the future” quality about it. Old rivalries continue. The Anwar-Mahathir power struggle continues from the 1990s. Gamesmanship seems to be a trademark of the new government. There are many disappointed with not being given plumb jobs and important positions within the new administration.

Consequently, the Pakatan ministry is more a transition than reform one. The country must mark time until Anwar takes over from Mahathir to become prime minister. The country is waiting for someone who currently has no position in government. The country is waiting for someone they don’t really know very well.

Anwar Ibrahim was the education minister who introduced Malay medium at schools, which many claimed was a major setback to the country’s education system. Anwar advocated IMF intervention in the 1997 Asian financial crisis. Anwar is well known for saying different things to different audiences.

From Anwar’s actions and stands taken over the years, he seems to be more a pragmatist rather than a visionary leader. Most of the policies he has advocated are populist, even though they may not be in Malaysia’s best interests such as the abolition of the goods and services tax that Najib put in place, denying the government a critical source of revenue, and maintenance of fuel subsidies. Anwar’s politics have been high in gamesmanship at a time the country really needs to get down and focus on the social, economic, financial, and institutional problems facing it.

As a sideshow, Najib, still active despite charges against him for looting 1MDB, is looking for a political solution to his problems rather than a legal one. Current electoral demographics favor him. The UMNO-Pas alliance will enable Najib to skillfully exploit the insular side of the electorate. The Pakatan government’s mistakes have shown up electorally in the last two by-election results.

Najib also knows, if he can say out of jail, that he will not be facing Mahathir in the next election. Most probably he will be facing Anwar, who has made many strategic blunders over the years in election campaigns.

Malaysians are very quickly losing hope in their new government, especially with the Malay-Malaysian narratives that are creeping into the arena. With the Pakatan government waiting for its new leader and its current leader going back to his old policies of the 1980s and 90s with flying cars, the Singapore aggravation, looking East, privatization and a secretive executive government, real economic and market reforms are not on the agenda, even though some of these reforms are very doable.

Institutionalized discrimination appears to be strengthening rather than being eliminated. The new narratives Pakatan members talked about during the election have all disappeared. The national mindset is going back to an insular view of the world.

Author’s note: Originally published in the Asia Sentinel

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Southeast Asia

Sustainable development by 2030: Achievable in Cambodia and Asia and the Pacific

Armida Salsiah Alisjahbana

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Cambodia’s recent development story has much in common with the broader region. Phenomenal growth has changed its economy and society beyond recognition. Yet as in the rest of Asia and the Pacific, progress must be accelerated if sustainable development is to be achieved by 2030. The additional investment needed is significant but is still within Cambodia’s reach. Especially if the economy’s transformation is managed to reduce poverty, and small and medium-sized businesses led by women entrepreneurs can flourish.

At the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), we take a regional approach to supporting our member States achieve sustainable development. We work with the whole UN family to overcome challenges which cut across borders and to achieve a sweeping set of economic, social and environmental objectives captured by the United Nations 2030 Agenda. I am meeting the Cambodian leadership this week with these objectives in mind. To build on our region’s successes and join forces to accelerate progress.

This approach is crucial because our analysis demonstrates the region must strengthen its effort to achieve sustainable development. Asia and the Pacific has made progress towards eradicating poverty and providing universal education. Measures are underway to achieve affordable clean energy. Yet on its current trajectory, the region needs to do more to achieve all 17 Sustainable Development Goals. When it comes to providing clean water and sanitation, decent work and economic growth, and achieving responsible consumption and production, urgent action is needed to change course.

Cambodia’s impressive economic growth, above seven percent for over two decades, has reduced poverty significantly. Life expectancy has markedly increased, child and maternal mortality declined sharply, the incidence of infectious diseases reduced, and universal primary school enrollment achieved. This is an impressive achievement. Yet as in many parts of Asia and the Pacific, the proceeds of growth have not always been equitably shared. The focus must now be on improving the lives of the 4.5 million people who remain poor or at risk of falling back into poverty.

If Cambodia, and Asia and the Pacific, are to achieve the 2030 Agenda, increased investment is needed. We estimate the additional investment required across the whole of the Asia-Pacific region to be some $1.5 trillion a year. Our analysis shows that the region has the fiscal space to afford this. Yet while possible, mobilizing the additional resources will be challenging. Reforms to increase the tax-take and private sector investment will be necessary in many countries as overseas development assistance declines. In Cambodia, $3 of additional investment is required per person per day to achieve the SDGs. 5.4 percent of GDP a year could end poverty by financing cash transfer payments and universal social protection.

How can Cambodia take steps to make this happen? Effectively managing the structural transformation of the economy – shifting employment to more productive and diverse activities – will increase the resources available for sustainable investment and reduce poverty. Already, the share of agricultural employment has declined significantly and is now on par with the industrial sector. Services employ nearly half of the workforce. Now, the focus must be on improving labour productivity and supporting new, more advanced, higher value sectors. This would reduce the labour force’s vulnerability to the automation of unskilled, labour intensive tasks. For this, we need to create an ecosystem which is supportive of innovation and entrepreneurs; especially micro, small and medium size enterprises (MSMEs).

MSMEs represent 99 percent of companies in Cambodia. It is a vibrant sector dominated by informal micro businesses predominantly owned by women. Yet MSMEs face a financing gap equivalent to 21 percent of GDP. We want to complement government efforts to improve their access to finance through an initiative focused on promoting female entrepreneurship, because the evidence shows that women-led MSMEs support gender equality and sustainable development. Women employ other women and spend more on their families. So, we are working to increase women entrepreneurs’ access to technology and innovative financing solutions. We are supporting these activities with deeper gender analysis of the MSME sector, including in Cambodia. We want to ensure that the business environment is genuinely gender responsive, one that works for women, powered by women.

Cambodia has a major role to play in our region’s effort to achieving the 2030 Agenda. The country’s Sustainable Development Goals Framework which translates global commitments into national delivery efforts is a positive step, as is mainstreaming goals into its National Strategic Development plan. I am looking forward to working with Cambodia and its National Committee for ESCAP to strengthen its long-term development partnership with the UN family. To ensure the resourcing and financing of SDGs is as efficient and effective as possible, to support the productivity and successful economic transformation needed to initiate the least developed country graduation process, and to encourage women entrepreneurs as catalysts for a more inclusive and prosperous society.

UNESCAP

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Southeast Asia

Will the Voters protest be able to win Prabowo-Sandi?

Igor Dirgantara

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In literatures on 2019 political campaigns and elections in Indonesia, popularity is a condition for image-building. When image is no longer effective, survey results can be instruments for opinion-building, as well as image recovery.  Ideally, the electability of the incumbent must be above 50% with 20% distance from its competitor (the wider the distance, the better). The level of satisfaction of the incumbent’s work performance must also get a high approval rating from the community. The goal is to create trust and establish bandwagon effect that the incumbents will be re-elected based on their performance. Incumbent came off strong because of the evidence of the work he did. Control over state resources, media and bureaucracy reinforces this argument.

On the other hand, incumbents can also be defeated if there is a survey of the level of public satisfaction towards the incumbent’s performance to be 70%, with the electability is only 50% (or even <50%), which will not be proportional. This could mean that there are voters that are satisfied with the incumbent’s performance, but will not vote for him/them/the incumbent. Or it can also be assumed that the voter is a swing voter. If not, then maybe the bubbles migrate to the undecided voters position, or become Golput (non-voters or abstainers). A separate survey is needed to determine how many the prospective voters (or non-voters) that can be influenced by the results of a survey.

Unlike the results from other survey institutions, Kompas and SPIN (Survey & Pollling Indonesia) stated that the electability of incumbents was below 50% (Kompas 49.2%, SPIN 49%). Clearly this is a warning for the incumbent that there is an indication that a portion of Indonesia’s population (50%) in actuality provides opportunities for its competitors. In other words, incumbents and competitors have the same potential and opportunity to win and to lose (50:50). It can be assumed that some of the subjects in the survey wanted change. This is an indication of protest votes against the government. A protest vote is that someone vote for party usually support in order to disapprove of something they are doing or planning to do.

Public perception on the current economic situation is very important. If it is good, the incumbent will be re-elected. But if it is bad, then the opponent will be able to take advantage. Economic issues are the most important issues that can cause incumbents to lose. The percentage is 50:50. SPIN’s survey results stated that Jokowi’s focus in choosing development priorities was a mistake, thus created opportunities and momentum for Prabowo-Sandi as competitors to pursue and boost their electoral potential. While Kompas’ survey results saw that there was a decrease in society satisfaction towards government performance.

However Jokowi is still a strong candidate to win the presidency. If incumbents are strong, but are in a state of low level of confidence, then their strength will be based on logistics and bureaucratic instruments or other state institutions in mobilizing its support. Whereas the opposite party will rely far more on powerful militancy. It is predicted that the 2019 presidential election will be close. Because the pair of candidates have the same opportunity. Even though incumbent (Jokowi-Ma’ruf Amin) is still superior, but the gap is narrowing, instead of getting wider. Right now, the pair of Prabowo-Sandi from the opposition party are catching up. So, whoever candidate wins, it will be very close.

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