Malaysia PM Stumbles to New Crisis

Malaysia’s Prime Minister Najib Tun Razak, under relentless attack by former Premier Mahathir Mohamad, the man who championed his premiership in 2009, appears to be stumbling from crisis to crisis and facing growing discontent within his United Malays National Organization, the leading party in the ruling national coalition.

Two of his lieutenants, his cousin, Hishammuddin Hussein, the defense minister, and Mohamad Nazri Abdul Aziz, tourism and culture minister, were called upon on June 10 at parliament to deny widespread rumors that a cabinet reshuffle to remove rebels was in the cards. Hishammuddin joked with reporters, saying the rumors had him resigning as well.

Nonetheless, the pressure is increasing, to the point that recently the prime minister privately told ministers who disagreed with him on the increasingly controversial issue of the 1Malaysia Development Bhd state-backed investment fund, which has billions of unfunded liabilities, to resign if they didn’t go along with him.

So far, none have done so, although Deputy Prime Minister Muhyiddin Yassin has continued to raise the pressure on Najib, saying behind closed doors that the directors of 1MDB should be subjected to criminal investigation. Rural and Regional Development Minister Shafie Apdal has also been critical of the firm. Hishammuddin himself, despite his continued professions of loyalty, has dropped hints as well that he is nervous about 1MDB’s operations.

There are additional questions as exports have slipped, consumer prices have increased, and the government has taken a public beating from its implementation of an extremely unpopular goods and services tax of 6 percent to attempt to soak up a long-running government deficit.

“My reading is that he definitely is hard pressed to do a reshuffle to inject some kind of credibility into what is obviously a fatigued entity,” said an opposition figure in Kuala Lumpur. “It’s really very explosive. Whichever way he goes, if he kicks anybody out, is trouble. At the same time, he is suffering from a severe trust deficit. Any move of his, whichever action he takes, is no longer going to generate excitement.”

Last week, Najib committed an amazing gaffe, organizing a “Nothing2Hide” public forum for May 5 at the Putra World Trade Center in Kuala Lumpur and announcing he had a “warrior spirit” to answer all concerns about 1MDB from an audience of 1,000 people. One of them, however, turned out to be Mahathir.

Apparently on hearing that, Najib’s advisors told him not to appear, citing “security concerns” and generating a plethora of Internet jokes that the event should have been called “Nothing2Show.” Mahathir did show, wearing his traditional safari outfit, as hundreds of cameras and cellphones clicked, to take to the microphone. Five minutes and 10 seconds into his diatribe about 1MDB, delivered in Malay, the microphone was abruptly shut off and a black-clad policeman appeared. After a few minutes, a squad of police escorted the 90-year-old former premier from the building to the jeers of the crowd.

Analysts were universal in saying the affair had badly hurt the already-ailing prime minister’s credibility. Besides from Mahathir, Najib has been under unrelenting attack from the opposition, particularly Parti Keadilan Rakyat Secretary General Rafizi Ramli and DAP shadow minister Tony Pua. Although no reliable polls have been taken since February, the Merdeka Centre at that time put Najib’s approval rating at an all-time low of 44 percent, with UMNO descending in popularity along with him. It appears certain to have fallen more since as the 1MDB affair has seeped into the public consciousness.

Analyst Wan Saiful Wan Jan, head of the think tank Institute of Democracy and Economic Affairs, told the Malaysian Insider the no-show would damage Najib’s reputation, both domestically and abroad.

That doesn’t mean Najib is going to go anytime soon. It really doesn’t matter what the wider country thinks as long as he can retain the support of enough UMNO members. A cabinet shuffle may well be out of the question because, as one longtime political observer put it, “It’s hard to see who would align with Muhyiddin because everybody else is either owned by Najib or covering their butts. But my sense is that it would be tough just to dump Muhyiddin. The risk is that it triggers a public UMNO schism.”

The UMNO leadership is propped up by huge amounts of money that flow from government coffers to the cadres through payments that flow from various government agencies including the Village Security and Development Committee, to which the cadres are appointed. They are also appointed to four propaganda agencies under the Ministry of Information Communications and Culture, which have offices in each of Malaysia’s 13 states and three federal territories. The bulk of the money to support these propaganda agencies comes from Najib’s 1MDB Foundation, from which more than RM1 billion was siphoned off, purportedly for charity work, a well-placed source told Asia Sentinel.

Mahathir, his wingman former Finance Minister Daim Zainuddin and Muhyiddin have all loudly warned that if affairs continue on their present path, UMNO, which has led the governing coalition since its inception in 1957, would lose the next election, due in 2018. But unless there is a radical realignment of politics, Najib has nothing to fear from Pakatan Rakyat, the floundering opposition coalition made up of the centrist Malay Parti Keadilan Rakyat, largely leaderless since Anwar Ibrahim was railroaded into prison on charges of sodomy that are widely considered to be trumped up, the Chinese-dominated Democratic Action Party, and the increasingly fundamentalist Parti Islam se-Malaysia which this month basically committed electoral suicide.

The party emasculated its so-called Erdogans, the Islamic moderates named for the Turkish prime minister Recip Tayyip Erdogan, by emasculating its moderates and siding with the leader, Abdul Hadi Awang, they have abandoned their dream of an inclusive political party that could challenge UMNO for Malay votes, veering hard right into the past to seek to make hudud, or 7th-century shariah law, a national goal – something that the Chinese, Indian and other ethnic Christian minorities in Sabah and Sarawak, would not tolerate. There is concern among some analysts that the fundamentalists will splinter to go with UMNO, forming an entity they nickname as PASNO.

That makes it impossible to keep Anwar’s opposition dream alive. It remains to be seen how that shakes out in coming weeks. But for a viable opposition, it appears discouraging.