Saving Malaysia from Itself

Malaysia is currently in crisis; the ringgit seems to be on an inexorable downhill slide, ethnic tensions have deteriorated from an uncomfortable simmer to an open flame, and both the government and opposition coalitions are unravelling. Malaysian politics and society have hit rough patches before. The dominant United Malays National Organisation (UMNO) party fractures about once a decade, opposition parties fall in and out of love like teenagers, and cyclical economic downturns summon forth the usual host of scapegoats and bogeys.

Malaysia is currently in crisis; the ringgit seems to be on an inexorable downhill slide, ethnic tensions have deteriorated from an uncomfortable simmer to an open flame, and both the government and opposition coalitions are unravelling. Malaysian politics and society have hit rough patches before. The dominant United Malays National Organisation (UMNO) party fractures about once a decade, opposition parties fall in and out of love like teenagers, and cyclical economic downturns summon forth the usual host of scapegoats and bogeys. However, this round is different: the pathology runs deep and wide, with no easy remedy.

Even describing the current crisis is difficult. We have, essentially, two cancers that feed off each other in subtle ways: one centred on race and religion, the other around economics and corruption. Magnifying both is a dearth of central leadership or direction, in a polity accustomed to strong-armed rule. What should be a straightforward matter of investigating the heavy debts of a government investment body and some clearly questionable ‘campaign donations’ has transformed into a contest about the very ideology of the state.

First, there is a precarious economic environment for a substantial share of Malaysians. Its component parts include environmental disasters such as the 2014 floods on the east coast that left thousands destitute and with no ready means of recouping homes and livelihoods. Costs of housing and other necessities are rising, especially for the ever-growing urban majority. There is persistent unemployment and underemployment, particularly for university graduates, as well as obvious and increasing intra-ethnic inequality of wealth and income. In addition, there is the introduction of a new goods and services tax that hits the poor especially hard, while the ringgit plumbs depths not seen since the Asian financial crisis.

Compounding endemic economic discomfort, though, were revelations earlier in 2015 of apparent mismanagement, extravagant debts and election bankrolling on the part of government investment fund 1Malaysia Development Berhad (1MDB). Prime Minister Najib Razak’s personal accounts revealed approximately US$700 million in deposits before the last election. After bluster and threats, Najib’s spokespeople admitted to the deposits, but insisted they came not from 1MDB as media speculated, but from Middle Eastern supporters of the ruling Barisan Nasional (BN) coalition.

On the socio-political side, racial and religious tensions have been ratcheting up since at least the 2013 elections. An acrimonious debate over the introduction of hudud (Islamic criminal law) legislation in Kelantan in March 2015 not only capsized the opposition Pakatan coalition (now reconstituted as Pakatan Harapan, Coalition of Hope), but fed ongoing incendiary discourse over Malay-Muslim primacy. While the dominant voices in this chorus were non-governmental Malay nationalist groups, the government backed up that discourse with a rash of sedition and related charges against politicians, activists, and media, signalling its intolerance of challenges to its rule.

The convening of a Malay ‘red shirts’ rally on Malaysia Day, of all days, in September 2015 suggests the extent to which these two strands intertwine. Defending Najib, red-shirt activists insist those who allege corruption — particularly the majority Malaysian Chinese participants in massive ‘Bersih’ (‘clean’) protests at the end of August — impugn Malay rights and dominance.

One possible explanation is that ethnically structured patronage makes opposing dubious financial transfers into a racial issue. Certainly, the lack of pressure for an investigation or reforms from Najib’s colleagues in UMNO and other BN parties seems likely to tie to the threat of missing cabinet positions or future benefits should they press Najib to stand down. It perhaps also points to their own culpability via receipt of campaign or other funds.

As a consequence, there is a simultaneous failure of political will to investigate the allegations seriously, and spiralling racial antagonism, including unprecedented open calls for violent retaliation against Bersih protesters (specifically, the non-Malays among them). That conflation of causes precludes any easy solution to the current impasse.

Meanwhile, the crisis lays bare serious institutional weaknesses in the Malaysian polity. First, the 1MDB and ‘donation’ stories in particular reveal the power of investigative journalism. Yet the state’s ruthless response to what it sees as harmful muckraking that also reveals how constrained the media still is. Media outlets face lawsuits and suspension, journalists, and editors face harassment, and government officials advocate curbing even internet platforms.

Second, these long-percolating conflicts have laid bare a baffling lack of clarity on what Malaysia’s constitution and laws actually say. Political interference in anti-corruption efforts likewise indicates blurred lines of authority and how encumbered are supposedly independent checks and balances.

Third, this crisis has revealed the best and the worst of the Malaysian police. On the positive side, their conduct during Bersih, at least in Kuala Lumpur, was exemplary. On the other hand, the rounds of sedition and other arrests have detained even clearly cooperative ‘suspects’ for days for investigation. Such overreach defies explanation, except as a show of force for deterrent effect.

So what might Malaysia’s political future hold?

Realignment is inevitable. The prime minister’s position is untenable, even if party or personal loyalty keeps him secure in the short term. Regaining international credibility — and arresting the ringgit’s decline — will surely require at least a gesture toward institutional reform, including stronger measures to ensure transparency and accountability. In addition, amid newly racialised politics, both BN and Pakatan are in the throes of reconfiguration. However, institutional weaknesses mean a slide toward authoritarianism may be difficult to reverse. Malaysia’s troubles are far from over.

No easy solutions for Malaysia’s mess is republished with permission from East Asia Forum