Sunday, June 21, 2015
Posted by Datuk Naim Mohamad at 3:52 PM
Monday, May 11, 2015
EXCESSES: The unresolved BMF scandal looms large even while some seek answers to the 1MDB puzzle In researching my subject I came across an article that I wrote for the Australian Journal of Public Administration in December 1999, titled “Malaysia Incorporated: Ethics on Trial”, as well as a paper that I delivered to the International Institute of International Affairs, Chatham House, London on March 19-20, 2001 titled “Has Reform Revived the Miracle?” I struck some historical nugget of information about Tun Dr Mahathir Mohamad’s outrageously questionable ventures that many may have forgotten. I believe it is important for our youth to know something about the Dr Mahathir years. For example, the country’s oldest English language broadsheet, the New Straits Times, felt constrained to editorialise on Sept 23, 1978, no doubt more in sorrow than in anger, “there was once a time when a Malaysian could indulge in a little smile of condescension when stories of corruption in developing countries, other countries of course, were entirely justified: virtually every aspect of administration was clean, abuse of power unheard of, departmental morale was high, public confidence was vibrant. For whatever reason, the present conditions have called forth a litany of exhortation against corruption”. The nostalgic “there was once a time” was a pointed reference to the administration of the first prime minister, Tunku Abdul Rahman, to whom service before self was an important personal creed. Soon after Dr Mahathir took over the reins of government, a horrendous financial scandal engulfed Bank Bumiputra Berhad, incorporated in 1978 as the vehicle to launch the Malays into business. Touted as the “flagship” of the New Economic Policy, by 1988 it had assets worth more than US$15 billion (RM54 billion). Moving aggressively into overseas ventures, lending recklessly to politically well-connected companies and individuals, many of them possessed neither the capacity nor the intention of repaying the loans. The bank shifted large sums of money to its wholly-owned subsidiary, Bumiputra Malaysia Finance Limited (BMF), which in turn lent in total close to US$1 billion to a Hong Kong $2 company called Plessey Investment Limited and another, Carrian Investment Limited. George Tan, the man behind Carrian, within months of the BMF money going through the books, ran his company into the ground. Billions disappeared into thin air. In Malaysia a committee of inquiry was set up, headed by Datuk Ahmad Nordin, the fearless auditor general whose report stopped just short of naming senior members of government who had profited from the loan disbursements. Nordin recommended that criminal proceedings be instituted against those involved. No such action took place in Malaysia. In Hong Kong, criminal action was taken under the law against the crooks as soon as the scandal broke. Scapegoats or, to use the modern expression, fall guys were quickly identified and “persuaded” to fall on their swords. One of them was Lorrain Osman, the then chairman of BMF, who went into exile in England. In Malaysia, Dr Mahathir’s studied indifference served to reinforce suspicions of high-level complicity. The most damning indictment was the claim made by a Hong Kong lawyer that BMF and its parent, Bank Bumiputra Malaysia Berhad, accepted an arrangement based on incestuous relations between senior politicians and bank officers and that his client simply carried out orders (Clad 1989:53). This, as to be expected, was never proven in Malaysia. I have highlighted just one incident that I was prepared to treat in a spirit of charity as an aberration. A few years ago, before he died, I met Lorrain in the company of my old friend, Datuk Yunus Rais, in London and over a meal asked Lorrain who was behind the Carrian affair? He asked me whether I thought that he alone could have made the decision to move billions of US dollars without instructions from “high above”? I had the answer I had been after all those years. In a more open and accountable society, the wrongdoers would not only have been dragged through the courts, but the government, too, would have been brought down. We need to find all the answers to the 1Malaysia Development Berhad (1MDB) financial conundrum, and the prime minister has done the right thing by getting the auditor general to investigate the operations of the company. Before we deliver a guilty verdict, let us exhaust all investigations and other avenues before we call anyone to account. We will, in our current climate of openness, get a lot faster to the bottom of 1MDB’s shortcomings, if indeed there are problems, than we got out of the investigations into financial and other excesses during the lost ethical years when Dr Mahathir was prime minister. (In the writing of this article, I have used information from the works of Gale, B; Clad; Jomo, K.S.; Hussein, S.A.; and the ‘New Straits Times’ Sept 23, 1978. I am indebted to them all.) The writer is a director of International Institute of Public Ethics and board member of the Malaysian Anti-Corruption Commission.
Read More : http://www.nst.com.my/node/82921
Posted by Datuk Naim Mohamad at 11:33 AM
Friday, April 24, 2015
In an old fable by Aesop, a hungry fox noticed a bunch of juicy grapes hanging from a vine. After several failed attempts to reach the grapes, the fox gave up and insisted that he didn't want them anyway because they were probably sour.
Nowadays when somebody expresses sour grapes, it means that they put down something simply because they can't have it.
Merriam-Webster - unfair criticism that comes from someone who is disappointed about not getting something.
The phrase is often used incorrectly as another way to express bitterness or resentment.
My friend once told me that in his country there was a powerful politician who ruled the country for many years, more than two decades. He introduced the heavy industry policy which is not a success story. Others are successful but the company that he is now the Chairman of the Board is not doing so well. He complains of other companies that is in the same activity that is doing very well serving the people including holders of approved permits. He is very bitter and full of resentment.
My friend’s friend told me that he grooms one young dynamic activist into his party and his government. This guy looks religious, brings Islamic values it seems. But did not practice what he preached. Trust him to look after education portfolio and screwed up. Trusted him to look after the economy and nearly sold out the country. The Bursa plummeted and plunges to diminishing values. He allowed this guy to climb the ladders of power and until his own position was at stake, he had to uproot the seed he planted, he is still bitter and full of resentment.
Another friend told me that he got a close friend who in good times do business and in bad times receives salary from the government and look after money. There are a lot of private tied business going on. Lucrative projects gone into private hands. Utility services palmed out to friends. National assets becomes privately owned. And some are stripped. The majority suffered in the hands of the few. When these is being reversed, where the people comes first instead of the few. When a special purpose government vehicle bought over these activities to benefit the people in the long run, he is very bitter and full of resentment.
A colleague told me that once he had a friend who he appointed as the Secretary General of his party. During that guy’s tenure, he allowed his party to be deregistered and forms a new party. This is actually the result of wanting to maintain political influence when a majority of the party members are against him. There is an occasion when he offered himself to be voted as a delegate to the General Assembly but was not chosen by the division. And blaming others for his debacle. He is still bitter and full of resentment about it.
Another friend told me that people die of acquired immune deficiency syndrome (AIDS), his political career and government dominance ended because of AIDS. Nobody asks him to resign, that country is heading the Non Aligned Movement and also chairing the Organization of Islamic Conference, a powerful and influential period. But GOD almighty is great, he is not GOD. In no particular reference to Ai or D or S. the power succumbs to the acquired immune deficiency syndrome. And he is still bitter and full of resentment.
Another friend told me that because of all these bitterness and resentment, he is deaf to logic, blind to political realities and not so dumb to be criticizing and criticizing and criticizing his predecessors and successors. Sour Grapes.
Posted by Datuk Naim Mohamad at 7:29 AM
Tuesday, April 14, 2015
TAHUKAH anda? pada zaman pentadbiran bekas Perdana Menteri Tun Dr Mahathir Mohamad, ada lapan individu pernah mendesak beliau meletakkan jawatan sekitar tahun 1987, kira-kira enam tahun selepas beliau menjadi Perdana Menteri.
Pada ketika itu pun, Dr Mahathir tidak mempedulikan desakan tersebut dan terus menjadi Perdana Menteri selama 22 tahun sebelum meletakkan jawatan pada 2003.
Terdapat lapan individu yang pernah mendesak beliau meletakkan jawatan sebagai Perdana Menteri yang pernah diperkatakan iaitu Tengku Razaleigh Hamzah, Bekas Timbalan Perdana Menteri Tun Musa Hitam, Bekas Perdana Menteri Tun Abdullah Ahmad Badawi, Tan Sri Dr Rais Yatim dan Tan Sri Syed Hamid Albar.
Baki mereka yang mahu Dr Mahathir meletakkan jawatan ialah Bekas Menteri Penerangan Tan Sri Abdul Kadir Sheikh Fadzir dan Datuk Seri Shahrir Abdul Samad dan bekas Menteri Perusahaan Awam Datuk Abdul Manan Othman.
Kebanyakan daripada individu itu merupakan anggota awal Parti Semangat 46 dipimpin Tengku Razaleigh. Parti itu ditubuhkan selepas Dr Mahathir enggan meletakkan jawatan biarpun didesak.
Daripada beberapa laman blog, ada mengatakan bahawa Dr Mahathir merupakan Perdana Menteri yang paling banyak menerima desakan untuk melepaskan jawatan.
Tetapi beliau berkata “Saya tidak pernah didesak letak jawatan sepanjang jadi Perdana Menteri,” kenyataan yang dipetik The Edge baru-baru ini.
Antara kejadian yang menyebabkan timbul desakan itu ialah peristiwa Memali, pemilihan Presiden UMNO 1987, pengharaman UMNO pada 1988, kerugian Bank Negara, kes Perwaja Steel dan isu berkaitan pemecatan Bekas Timbalan Perdana Menteri Datuk Seri Anwar Ibrahim.
Beliau juga pernah didesak letak jawatan kerana skandal pembelian 88 buah pesawat pejuang jenis Skyhawk pada awal 80-an.
Ia menjadi satu kontroversi kerana dari 88 buah yang dibeli, hanya separuh sahaja boleh digunakan itupun dengan pelbagai masalah teknikal sehingga dikatakan ramai juruterban Tentera Udara Diraja Malaysia (TUDM) hilang atau terbunuh dalam nahas.
Sebenarnya, ia merupakan sesuatu yang biasa bagi seseorang Perdana Menteri itu didesak meletakkan jawatan tetapi adakah desakan itu sesuai atau tidak untuk disuarakan.
Dr Mahathir pada ketika itu tidak langsung mengendahkan desakan itu dan terus kekal sebagai Perdana Menteri jadi tidak ada salahnya Perdana Menteri kini Datuk Seri Najib Tun Razak untuk mentadbir negara secara tersendiri dan terus kekal.
Tambahan lagi, Najib memperolehi sokongan demi sokongan dari para pemimpin parti komponen Barisan Nasional (BN) dan juga sokongan dari sayap parti dalam UMNO di belakang beliau.
Ia bagi menunjukkan kepimpinan Najib disokong oleh mereka biarpun dikritik secara bertalu-talu oleh Dr Mahathir melalui media, blog dan video ke atas kepimpinan beliau.
Posted by Datuk Naim Mohamad at 3:01 PM
Friday, April 10, 2015
TV3 interviewed me tonight. Here are some key points I wanted to make:
ON THE PASSING OF TAN SRI JAMALUDDIN JARJIS AND DATO’ AZLIN ALIAS
I had the privilege of working with both of these fine public servants and I can tell you that their contribution to the government, to UMNO, and to our country was immeasurable.
They were committed to a strong and prosperous Malaysia, a regional powerhouse that serves as an example for other countries. Whilst we have made significant progress towards this, there is still work to be done.
Within their loss, I am more determined than ever to lead our country towards realising this goal. That is what they would have wanted.
CRITICISM FROM TUN MAHATHIR
I respect Tun Mahathir as I respect every other citizen of this country. It is the rakyat’s right to ask questions of me, to question my performance as Prime Minister, and the performance of the Government I lead.
However, at the end of the day, we are a democracy. I was elected by my party, and by the people of this country, to lead them. As such, I am answerable only to the people – not to any one individual. And if at the next general election, the people want change, they will let us know through the ballot box.
I understand that there is some concern around the introduction of the GST. However, for the long term good of the economy, it is important that we broaden our tax base.
As Prime Minister, it is my responsibility to make the right decisions for all Malaysians, even if it can seem difficult at the time. I believe the introduction of the GST is an important reform that will help us build a stronger, more sustainable and transparent economy.
I have been made aware that some unscrupulous businesses, both big and small, are trying to take advantage of the introduction of GST to increase prices above the 6% rate. This is completely unacceptable.
I have instructed the relevant ministry to step up their enforcement efforts to ensure that any increases introduced by shopkeepers and business owners are in line with the 6% GST rate, and that any abuses of this system which negatively harm the consumer are brought to a halt.
STATE OF ECONOMY
Despite criticism from certain quarters, which damages investor confidence and harms our economy, our economy continues to develop fast and our economic fundamentals remain strong.
However, no country is isolated from global events, and we have already had a taste of the challenges with the falling oil price affecting everything from the ringgit to rubber.
Our economy’s growth and success did not come out of thin air. It came because we made the right decisions for Malaysia. I have always maintained that in politics you have to make the right decisions, not just the easy and populist ones.
At the start of the year, 1MDB came under new leadership, and a strategic review of the business was carried out.
Following its completion, a decision was made to restructure the business, and this process is currently underway.
However, it is important to remember that 1MDB’s assets are greater than its liabilities. So, in very simplistic terms, if 1MDB were to be wound down tomorrow, the company would still have some assets and money left even after paying off all its debt.
At the same time, I recognise that there are a number of questions swirling around 1MDB. Some of these questions are valid, but there are others that appear to be directed at the company solely with the intention of creating controversy.
That is precisely why I have instructed the Auditor General to undertake a comprehensive audit of the company and independently verify its accounts. This report will then be passed on to the Public Accounts Committee, which as you know is a fully bipartisan body for scrutiny.
This should ensure that the process is open and transparent, and all questions that have been asked of the company should be sufficiently and independently answered. Now, we must let the process run its due course.
However, there are certain elements who continue to repeat the same old allegations about 1MDB, more often than not without full knowledge of 1MDB’s affairs.
The people behind these attacks know that they have the potential to damage investor confidence in the country, which in turn would have a negative impact on the economy, but continue to do this. That is irresponsible and putting politics before the national interest.
NEXT GENERAL ELECTION
The result of the next general election will be decided by the people.
What we know is that, as long as BN and UMNO remain united, we will win the election. And that is certainly the case as leaders from Sarawak and Sabah, from the Peninsula, from many different parties in BN have made clear in recent days.
The only way we would lose the election is if there is internal sabotage and bickering, but I am confident that the party would not tolerate any acts of betrayal within it, and will stay united.
You have to bear in mind that circumstances change. From time to time, we need to re-evaluate things, and leaders can change their mind when it comes to doing what is best for the rakyat.
In order to realize our goal of building a stable, peaceful and harmonious state, the Sedition Act has been maintained.
The Sedition Act is not just for Muslims; it is for the protection of all Malaysians. It is aimed at preventing any person who promotes feelings of hostility between persons or groups on the grounds of religion - whether the religion attacked is Christianity, Hinduism, Islam or any of the other faiths Malaysia is proud to be home to.
We will not and cannot stand for the incitement of racial or inter-ethnic conflict. We have come too far to harm the progress that we have made. And that is why the government decided to keep the Sedition Act and amend it to make it a better and more suitable law.
NEW ANTI-TERROR LAWS
I have no greater priority than the safety and security of Malaysians. I take the threat of terrorism very seriously. The new anti-terror laws will help us address the threat that radical and extreme ideologies pose to Malaysia and how we are to stop it.
Contrary to what some are suggesting, these laws will not be used against critics of the government; rather, they will be an extra tool for dealing with the militant threat that all countries face.
We will do whatever necessary to prevent this sort of extremist ideology, which opposes Islamic teachings, democratic practices and humanitarian values.
Posted by Datuk Naim Mohamad at 4:26 AM
Posted by Datuk Naim Mohamad at 3:58 AM
Former premier Mahathir Mohamad has criticized every prime minister of Malaysia from the late Tunku Abdul Rahman to the current leader Najib Razak, sparing no one except of course, himself. Mahathir has also criticized other world leaders including UK’s Tony Blair and of course George W Bush, the 43rd president of the United States.
So far none of his local peers have swung back at him, which is not surprising considering that several are already dead and only Najib and 5th prime minister Abdullah Badawi are alive. As for the international leaders, they have largely ignored Mahathir’s existence, which only adds to his frustration, but there is nothing he can do to them. However, he can make life miserable for his successors here, and this he is already doing.
When Mahathir retired in 2003, after 22 years as PM, there was talk about his ‘great’ legacy and he was even called Bapa Pemodenan or Father of Modernization. Some 9 years after his retirement, the excesses and sheer ill-judgement of his economic, social and political decisions have come back to wallop the nation with a backlash stronger than the ferocious tsunami of 2006 that devastated much of South Asia.
At 86, Mahathir is now reviled by most Malaysians, blamed for the massive corruption that may soon bankrupt the country if no remedial economic action is taken, and for the apartheid-scale racial fissures amongst the various ethnic groups in the country.
Just pick the New Economic Policy, which was the brainchild of the policymakers of the 1960s but which he abused to the maximum. This abuse alone is enough to ensure that he will stay in the Malaysian Hall of Villains rather than in the Hall of Fame which he still thinks he belongs in.
His peers with better memories including former Finance minister Tengku Razaleigh Hamzah said last week that the NEP was never meant to create or to be used to incubate a class of Malay capitalists, but to address poverty and to raise the level of Malay participation in the economy. It was never meant to be abused by the government of the day to handpick a select group of Malay entrepreneurs, load them with sharply-discounted government deals and then expect them to prosper and create enough economic ripples to help lift the rest of the community.
This was Mahathir’s first and major mistake. But was it really a mistake? Doubters and critics point to the enormous wealth he accumulated for his cronies and proxies through the money-making schemes hatched under the guise of the NEP, and by privatizing government assets to favored Malay entrepreneurs, one of whom is the disgraced former MAS chairman Tajudin Ramli. Not able to deal with the ‘instant success’ or the stress of big time business, many succumbed to debt during the 1998 Asian financial crisis. Tajudin and friends like Halim Saad fell from hero to zero, losing enormous amounts of money and requiring massive government bailouts.
Cronies but the masses get nothing
The second mistake Mahathir, in his foolishness, made was to pool the major part of the nation’s wealth in the hands of a few. This time he included non-Malays millionaires such as Vincent Tan, Robert Kuok and Ananda Krishnan. Tan has just announced his retirement, Kuok unhappy with the worsening racial system in the country has chosen to stay Hong Kong, while Ananda is wanted by the Indian authorities for allegedly having corruptly wangled a telecoms licence to buy into Aircel.
This pooling of wealth in the hands of a few inevitably left the ordinary Malays and Malaysians with just a few crumbs to share amongst themselves, a slow-boil situation that has blown up to today’s red-hot disputes about social and economic fairness. Not only is there not enough money for scholarships, education, healthcare, employment and welfare for everyone, even the Malays who have been repeatedly told by Mahathir’s Umno party that they will get priority, have left in the lurch.
Malays now form 96% of the poorest 40% lowest income earners in the country. As for the non-Malays, of course, they have felt the pinch more. Many have been forced to go overseas to work and to study. That’s right, educational and employment opportunities are scarce for the non-Malays in the country. Again, the only group that benefited were the elite in the Umno party, their families and cronies. So Mahathir – despite his self-praise – was in fact rather shortsighted. Money was far more important to him than he cared to admit.
Trusting the wrong people
The third mistake that Mahathir made was choosing the wrong people for the wrong jobs. He also trusted the wrong people. All of the Malays tycoons that he picked had no real business savvy but were merely the trusted aides of former Finance minister Daim Zainuddin. That is why guys like Tajuddin, Halim, Rashid Husein of RHB Bank, Mohd Noor Mutalib and Abdul Rahman Maidin of MRCB fared poorly in the end. Some have even been hauled to court to settle debts.
Only Daim Zainudin remains ‘filthy’ rich. His nominees ended up owning all the various banks and business enterprises meant to be transferred into Umno Baru. Somehow, as the Umno legend goes, Daim managed to secure these for himself. This was obviously a huge letdown for Mahathir. Instead of ‘tricking’ people over to his point of view, for once, he had been had!
Set Malaysia off on the borrowing habit
Mahathir did not foresee that the National Debt could be as high as it is today, having ballooned to over RM450 billion. Despite several ‘begging’ trips to Singapore and Brunei, he was politely rebuffed. In the end, he borrowed from overseas by issuing bonds and ‘stealing’ every spare sen from Petronas and the other Government-Linked-Companies to fund his mega projects. Throughout his 22-year rule, Mahathir never saved a sen for Malaysia for a rainy day. And this was his fourth mistake.
Weak grasp of economic principles
Mahathir is just an ordinary doctor; a general practitioner and not a specialist. His understanding of economics is as rudimentary as the average Malaysian. His idea of increasing the equity of the Malays is so simplistic – use the GLCs. Mahathir’s vision of doing business is by profiteering through controlling shares in as many companies as possible without considering the possibility of losing money. Sad to say, real life businesses involves losses, not just profits.
Mahathir’s economic policy was not based on any solid foundation and had never been tested in any country before. It was based on his opinions and viewpoints. If these had been any good or worked, many countries would have already implemented similar ideas centuries ago. Even established capitalist and communist economic systems have come under fire and economic collapse is a norm these days, part of a man-made boom and bust cycle. Several economists have even urged nations to revert back to gold-based currencies, an ancient and established type of monetary system, so what are Mahathir’s child-like economic concepts by comparison? His fifth mistake is therefore his skewed understanding of the economy. It led to the controversial de-pegging of the ringgit from the US dollar and the overnight closure of the CLOB share market trading in 1998 – two events that investors have still not forgiven Malaysia and Mahathir for.
Mahathir’s ego and unconscious desire to be a dictator is his sixth mistake. He amended the constitution to weaken the Agong and the Sultans and then made sure that the law and enforcement bodies obeyed him. He sacked the Chief Justice Tun Salleh Abbas and closed both eyes when judges were openly bought by those who had money. It would be tough for Malaysians and their investors to fully trust the judiciary system again. This is why the Umno-BN has lost its integrity and the people their faith in the coalition. Malaysians will always distrust whatever Umno-BN does even if it may be well-intentioned.
To prevent the disintegration of his policies and his misdeeds from being exposed, Mahathir had to resort to his favorite racial politics. He had to convince the Malays that what he had done was necessary and in their interests. He kept for himself the great jewels and gave out the small chips so as to convince the Malays that the war against the other races was real. The non-Malays had to be kept back. Thus the budget allocations for places like BTN or the National Civics Bureau where Malay graduates and civil servants were openly taught to be suspicious of the other races.
But not all the Malays bought it. Such teachings were against Islam and also against universal values. The Malays were left confused, while the non-Malays totally sidelined. So being racist is Mahathir’s seventh mistake.
If Mahathir and Umno have been successful in making sure Malaysia achieves developed nation status by 2020, why does the record show so many serious faults to date. There are only eight years to go but the economy is still in a shambles with the national debt soaring, racial and religious harmony in disarray, and the political situation worsening with Umno-BN now openly resorting to physical violence to stop the opposition from holding their rallies.
The education system is also leading nowhere, healthcare is getting worse and more expensive, the much-touted and corrupt 1Care already rejected before it can even come on-stream, law and order is still questionable, mismanagement and graft more entrenched than before in the Umno-BN government. Instant of all cylinders kicking in, and culminating into the realization of Vision 2020, Malaysia may go bankrupt instead. Not fighting corruption, but perpetuating it is Mahathir’s eighth mistake.
Meddling with the running of the country
The majority of the Malays are poor and still need government help despite 55 years of Umno “successes“ (read failures). The non-Malays have been patient enough and have given Umno enough chances. They have waited until the third generation after the nation’s independence in 1957 and they are now fed-up with Umno-BN. The same too is happening with the Malays. Those not in the direct line of the Umno gravy train, and this would be the great majority, are getting fed-up too. More have voted for the opposition and will continue to do so.
When Mahathir realized that things were turning sour, he handed over the baton to Abdullah Badawi, thinking that he could still control the running of the government by ‘remote control’. But when things were not carried out as he had wished, Mahathir forced an ouster and replaced Badawi with Najib. Granted, the disorganized Badawi was in no capacity to lead Malaysia but Najib is just as incapable too. All through, instead of giving a helping hand, Mahathir continued to meddle with the running of the country. Interfering with the running of the country and disallowing the current leaders to put in solutions that suit the era is Mahathir’s ninth mistake.
Causing trouble in Umno and pushing Mukhriz up the ladder
Yet Mahathir stubbornly refuses to accept or to admit to his mistakes. This is one man who refuses to face up to reality. He is not really interested in the welfare of Malaysians at all, not even the Malays or Umno. He only wants to save his face and to make sure that his son Mukhriz will become prime minister no matter what deals he has to execute with the current batch of Umno warlords to effect this.
Ruthless and completely selfish, Mahathir would think nothing of creating chaos just to fulfill that ambition. After all, he could de-register Umno just to stay in power. Imagine what he won’t dare to do to get Mukhriz in as Umno president. But it is this incessant interfering and trouble-making in Umno that will be his tenth and last mistake.
Mahathir will doom Umno, and in imploding, Umno will very likely take Mahathir down for the count.
Posted by Datuk Naim Mohamad at 3:38 AM
Monday, January 26, 2015
Najib’s Political Battles Pose a Challenge to his Foreign Policy Agenda
By Murray Hiebert, (@MurrayHiebert1), Senior Fellow and Deputy Director, and Nigel Cory, Researcher, Sumitro Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS
Challenges at home suggest Malaysian prime minister Najib Razak could face an uphill battle in pursuing his foreign policy goals in the year ahead. The long-simmering battle between Najib and former prime minister Mahathir Mohamad has erupted into a public spat that must have Najib looking over his shoulder given Mahathir’s role in ousting his predecessor, Abdullah Badawi.
As a result Najib finds himself flanked on the right by Perkasa, the equivalent of the Tea Party within his ruling United Malays National Organization (UMNO), and on the left by the opposition coalition led by former deputy prime minister Anwar Ibrahim. No move Najib makes will please all Malaysians, and perhaps not even many, in this constrained environment.
The public mudslinging between Najib and Mahathir could weaken and distract the prime minister even as 2015 presents opportunities for Malaysia to make its mark on the international stage. Malaysia’s ruling party generally hides internal conflict from public view. But the escalation in political maneuvering between two of the party’s key leaders has changed this dynamic.
Old corruption charges have been rehashed against Daim Zainuddin, an outspoken critic of Najib. Daim is an UMNO insider, financial powerbroker, and two-time finance minister under Mahathir. He is seen as a proxy for the former prime minister and, to real insiders, may even be the one pulling the strings on his former boss. The government-controlled media took the unusual step of covering the case against Daim in detail, which some interpreted as a coordinated political attack and which prompted proxies on both sides to take the fight to the Internet.
The split between Najib and Mahathir burst into the open when the latter, now 89, publicly withdrew his support for Najib in an August 2014 blog. Mahathir blamed Najib for the ruling coalition’s poor showing in the 2013 national elections, attacked him for his efforts in 2011 to abolish the draconian Internal Security Act, and criticized his earlier plans to scale back the affirmative action program that provides special privileges for the country’s Malay majority. On all these issues, Mahathir has strong support from UMNO’s most conservative wing.
The bitter dispute between the two men and their respective camps appears to have picked up in earnest after a dinner between them in December did not go well. A thorny issue reportedly discussed at the meeting was the sovereign fund 1Malaysia Development Bhd., which has been plagued by charges of mismanagement and corruption and is reportedly suffering from billions of ringgit in nonperforming loans. Najib is chair of the fund’s advisory board.
Mahathir retains significant public and political influence in Malaysia as an elder statesman, particularly among conservative Malays. His profile stems from enduring public popularity, especially among older members of society who are nostalgic about his 22 years in power. Mahathir’s political influence within UMNO has loomed large over his successors since he stepped down in 2003. He leveraged this influence to undermine and ultimately remove his anointed successor, Abdullah, in 2009. Then-deputy prime minister Najib stepped up to become prime minister. He most certainly sees the possibility of history repeating itself.
And Malaysia’s economy is not going to provide any respite for Najib. The sharp drop in oil prices has created some stiff headwinds for Malaysia’s economy. Oil and gas exports account for a fifth of the country’s exports and a third of government revenue. It was therefore little surprise that Najib on January 20 announced $1.5 billion in spending cuts and said Malaysia’s economic growth has been revised down from 6 percent to between 4.5 and 5.5 percent for 2015.
Under withering attacks from Mahathir and party conservatives, Najib has backed off many of his earlier political and economic reform plans. In recent months, his government has been criticized by the United States and human rights organizations for repeatedly using the colonial-era Sedition Act against critics. Anwar Ibrahim is awaiting a court verdict on another round of sodomy charges that could once again see him sent to prison. The verdict, expected in the next few weeks, would undoubtedly lead to further criticism from the international community.
Najib’s domestic challenges could pose risks for his foreign policy goals in 2015. This year is shaping up as an important one for Malaysia given its chairmanship of ASEAN and its non-permanent seat on the UN Security Council. As ASEAN chair, Malaysia can be expected to play a key role in pressing the grouping to take steps to complete regional economic integration, keep tensions in the disputed South China Sea under control, and explore ways to bolster the role of the East Asia Summit.
Negotiators of the 12-nation Trans-Pacific Partnership (TPP), which Malaysia joined in 2010, are scrambling to complete the trade agreement by March. But for Malaysia to get to the finish line will require some tough decisions by Najib and his cabinet in such areas as state-owned enterprises, pharmaceuticals, and investor dispute mechanisms. Even before his latest broadsides against Najib, Mahathir, who oversaw Malaysia’s earlier transformation into an industrial powerhouse, had sharply criticized the TPP as an attempt by foreign powers to colonize Malaysia. Anwar and the opposition have also sought to foil Najib’s reform efforts.
The coming months could provide an opportunity for Malaysia and the United States to put more substance into the comprehensive partnership they announced last April when President Barack Obama visited Malaysia. But the visit marked only the beginning of the process, which requires more work by both sides to achieve deeper ties, including such things as stepped up cabinet-level exchanges, more military cooperation and intelligence sharing, and closer economic ties.
Najib’s golf outing with Obama in early January showed the depth of personal comradery between the two leaders, which could help them achieve greater depth to the comprehensive partnership before Obama visits again in November. However, the sharp criticism Najib received for golfing in Hawaii while parts of Malaysia faced terrible flooding highlights some of the challenges he could face in the months ahead as he seeks to deepen the country’s regional and global foreign policy opportunities.
The United States will need to make some tough decisions in the coming months about how to engage Najib and Malaysia. The country is a vital partner and a key to strengthening ASEAN. The White House will face pressure from various advocacy groups to limit or curtail engagement and there will be congressional pressure during the TPP approval process. The administration will have to step carefully but be guided by the strategic need to support political and economic reform in Malaysia. For his part, Najib will need to harden his resolve to pursue that reform.
Posted by Datuk Naim Mohamad at 9:51 PM