On Aug. 31, Malaysia will celebrate – if that is the proper word – the 60th anniversary of its founding with its people subdued and with a government widely regarded as a kleptocacy.

It is wracked with a continuing scandal that has robbed the exchequer of an estimated US$11.4 billion lost to fraud and mismanagement of its state-backed 1Malaysia Development Fund, its top government leaders being investigated in six countries including the United States.

It is the second big scandal wrapped around Prime Minister Najib Razak. Two executives with a subsidiary of the French munitions giant DCN have been indicted in France specifically for bribing him in the purchase of submarines during the previous decade, and his close friend and associate, Abdul Razak Baginda, was recently indicted in the same scandal.

It is a country whose every institution that exists in a normal democracy to protect its people is broken – the parliament, whose leaders exist on bribes from the prime minister to keep him in office. The courts function to repress the opposition and to exculpate the guilty among the leadership. The police investigate only the opposition on political matters. The mainstream press is in the hands of the government-aligned political parties and uses its monopoly to clout the opposition and protect the establishment..

The religious establishment – the leaders of Islam, the major religion in the country -- are there to back the leadership when needed, loading onto the people a fundamentalism that most do not espouse. The opposition has been emasculated by sedition charges, police pressure, intimidation, hammering by a kept press, and gerrymandering.

“Perhaps the biggest travesty or paradox is that many of the troubled elite and urban class are now looking towards the man who actually started the decay as their savior – Mahathir Mohamad,” said an increasingly jaded source.

Indeed, the man many hold responsible is former Prime Minister Mahathir, who in 2001 declared that Malaysia was an Islamic state despite the presence of minorities who made up at that point nearly half the population. It was Mahathir who, in 1988, took away the power of the judiciary, firing the Supreme Court and replacing it with appointees aligned with his United Malays National Organization. It was Mahathir who broke the power of the Sultans as the nation’s highest power in the 1980s.

It was Mahathir who emasculated the Parliament in 1987, jailing 106 people under the colonial-era Internal Security Act in what was called Operation Lalang, including the leaders of the opposition and members of civil societies, and shutting down the press. In 1999, he engineered the trumped-up trial on sodomy charges that put his onetime acolyte, opposition leader Anwar Ibrahim, in jail.

Today it is Mahathir, at age 92, who is a reformer that as much as anybody is the victim of those limitations on democracy and free speech. Now probably fervently wishing the democratic institutions were in place, Mahathir has cobbled together Pakatan Harapan (Pact of Hope) in a long-shot attempt to win back power after 14 years in outraged retirement. He is the head of Parti Prebumi Bersatu Malaysia, or the Malaysian Indigenous Party, which has taken over the leadership of the opposition coalition formerly headed by Anwar’s wife Wan Azizah Wan Ismail.

There are two radically different views of Mahathir’s tenure. “If everything failed under Mahathir how did Malaysia modernize, itself dubbed the Asian Tiger, host a smooth Commonwealth games with race relations pretty good and Islamists in check?” said a Malay lawyer. “Mahathir turned Malaysia from a backwater country into a modern prosperous nation. This is the very reason why Pakatan Harapan and much of the country today pin their hopes on Tun to solve Malaysia's crisis. As soon as Mahathir retired voluntarily 13 years ago, Badawi then Najib smashed our prosperity, preferring to focus on enriching themselves and their families. Najib lost the Barisan’s two-thirds majority and the popular vote.”

As a measure of the opposition's desperation for change, Anwar, whom Mahathir fired as deputy prime minister and jailed – and who is in prison again on trumped up charges – has endorsed his leadership. So has Lim Kit Siang, the leader of the Democratic Action Party, who spent 17 months in prison after Mahathir implemented Operation Lalang,

Whether the coalition can have much of an impact on elections which must be held before Aug. 24, 2018 is questionable. Anwar, the country’s most charismatic figure, will remain in prison to serve out his five-year term while privately the country’s leaders look for reasons to keep him there forever. Parti Islam seMalaysia, the rural-based Islamic party, has been resisting Mahathir’s blandishments to pull together with Harapan and is instead flirting with the idea of contesting at least 100 seats on its own in the 222-seat Dewan Rakyat, or lower house of parliament, a death-knell for the opposition.

How did the country get there? In 2007, Nobel Prize-winning economist Joseph Stiglitzcould write that Malaysia “invested in education and technology, pushed a high savings rate, enacted a strong and effective affirmative action program and adopted sound macroeconomic policies. [It] also recognized that success required an active role for government. It eschewed ideology, following or rejecting outsiders' advice on a pragmatic basis. Most tellingly, during the financial crisis of 1997, it did not adopt IMF policies - and as a result had the shortest and shallowest downturn of any of the afflicted countries. When it re-emerged, it was not burdened with debt and bankrupt firms like so many of its neighbors.”

The country’s success, Stiglitz wrote, “should be studied both by those looking for economic prosperity and those seeking to understand how our world can live together, not just with toleration, but also with respect, sharing their common humanity and working together to achieve common goals.”

But, said a Malaysian political analyst, “In the past decade or so, Malaysia has undergone political turmoil and changes to the political backdrop that have had far-reaching effects on its future. In fact, in a multi-ethnic, multi-religious society like Malaysia where the nightmarish memories of the racial riots of 1969 still linger, the events of the last decade have brought it down a slippery slope that many Malaysians fear may take it a long time to recover, if at all.”

Many of the changes to the socio-political fabric have been exacerbated during the past eight years of rule under Najib. In January 2010, shortly after he became prime minister, a series of arsons and desecrations took place against 10 churches and two mosques. It continued with the emergence of belligerent right-wing groups, like Perkasa, an extreme Malays-first NGO of which Mahathir was patron, and continued incidences of intolerance and bullying of minorities, and the kind of race-baiting, chauvinism and racism not seen since 1969.

“In any other country, the 60th anniversary would be a landmark celebration. But in the streets of Kuala Lumpur, there are hardly any banners, billboards or signs that this is an occasion to be celebrated,” the political analyst said: “The misguided policies, corruption, a deteriorating education system, rise in crime, a tarnished judiciary and legislature and incessant political bickering and infighting have taken their toll. A cynical population has tired of promises and as Malaysia goes to 2018, when general elections must be called by June, there is more uncertainty than there ever was in the last 60 years.”

Will Malaysia succeed? The brain drain, the outflow of capital, the increased applications for permanent residence by minorities bailing out for countries such as Singapore and Australia, all dictate that a solution is urgently required.

“The politics of old will only ensure that the future is bleak,” the source said. “Najib’s administration has failed to implement and execute reforms and workable economic programs. It has failed to silence the racists and bigots and in effect has abetted them. It has failed to curb corruption and nepotism. In fact it is a very bleak report card where red ink dominates almost every box that needs to be ticked. Malaysia is teetering on the brink of failure.”