Malaysia’s UMNO Readies for its AGM

Malaysia’s United Malays National Organization's five-day annual general assembly opens today in the party’s sumptuous headquarters in Kuala Lumpur. It is reasonable to expect five days of rhetoric reasserting ethnic Malay ownership of the country and a demand that all ethnic minorities, especially the Chinese, recognize that they are there as guests or bloody well get out.

The Chinese, having abandoned the Barisan Nasional, or ruling national coalition virtually en masse for the 2010 elections, can expect to come in for a particular hiding accompanied by some waving of the ceremonial kris by the more fiery members.

But the sum and substance of the conclave should generally be business as usual. There is a feeling that the political situation is stabilizing, especially following September UMNO intraparty elections that solidified Prime Minister Najib Tun Razak’s position. The three-party opposition Pakatan Rakyat, despite winning the popular vote in the May election, is regarded by political analysts as probably having crested in influence.

Najib is to deliver the keynote address to 5,500 delegates wearing pastel baju melayu tunics and songkoks, having ostensibly recovered from the disaster of the general election, in which the Barisan lost the popular vote for the first time since 1969. At that time top members of the Mahathir wing of the party accused Najib of running the wrong campaign at the wrong time in attempting to reach out to the country’s minority population, particularly the Chinese, who make up 22.9 percent of the population, and the Indians, 7.1 percent. Both races opted in large numbers for other parties in the general election, ignoring the ethnic parties tied to the Barisan, and they are paying for it. For instance, state university place allocations for Chinese students, formerly 24 percent, have been cut to 19 percent.

What that means as the party approaches this AGM is that UMNO pretty much constitutes the Barisan, and acts like it in its intent to protect the rights of ethnic Malays. The Malaysian Indian Congress and the Malaysian Chinese Association, the other two major components of the coalition, have largely been shattered and have little influence today.

Since the time when Najib was the target of almost-daily attacks by a plethora of bloggers aligned with Mahathir, one of whom likened him to a “bug on the windshield,” he has managed to regain the initiative, in large part by making common cause with forces aligned with Abdullah Ahmad Badawi, who preceded him as prime minister and who Mahathir helped to drive from office in the wake of the Barisan’s poor 2008 showing.

In particular, Najib has befriended Khairy Jamaluddin, Abdullah Badawi’s son-in-law, who was the focus of widespread outrage during Badawi’s reign for his arrogance and for a perception that he was playing gatekeeper to Badawi. Najib also rehabilitated Shahrizat Abdul Jalil, who was appointed head of the Women’s Wing of UMNO by Badawi. Shahrizat was forced to resign in 2012 over accusations that she and her family looted public funds from a RM250 million government soft loan to establish the National Feedlot Corporation, which was intended to fatten and slaughter cattle under halal, or religiously acceptable conditions.

However, Shahrizat is regarded as an effective women’s wing leader. Despite the opprobrium attached to the family, she was cleared by the Malaysia Anti-Corruption Commission and reinstated in her position prior to the election by Najib because of the crucial need for women’s votes.

Others brought in from the cold included Ahmad Zahid Hamidi, the Justice Minister and former ally of Opposition Leader Anwar Ibrahim, and also a Badawi supporter. Najib’s strategy paid off in the September party polls, resulting in a resurrection of sorts for the premier in the wake of the Mahathir attacks. Najib's candidates for the party’s top seven slots – president, deputy president, three vice presidents, youth leader and women’s leader – all were returned to office, most by healthy margins, as were his allies on the party’s Supreme Council, freezing out all candidates from the Mahathir wing.

Najib’s forces are said to have poured vast amounts of money into buying votes at the district level to ensure that his candidates won. The vote-buying was termed a “golden storm” by party insiders, with votes going for as much as RM300 each.

Najib and his deputy, Muhyiddin Yassin, were unopposed in the party elections. However, an unofficial “Mahathir slate” developed for other positions. Particularly, Mahathir was pushing to make his son, Mukhriz, the 49-year-old chief minister of Kedah, one of the three vice presidents, which would have been viewed as a springboard to eventually go for the party presidency and premiership.

Mukhriz finished fourth, with Mahathir allies complaining that the influence of money had made the victory a poisoned chalice that will result in widespread public disillusion and eventually cost the party in future years. Certainly the taint of corruption continues to dog UMNO for its cronyism and rentier philosophy.

But one way or another, the dominance by the Najib forces, the lack of any opposition within the party and the waning influence of the opposition mean the UMNO AGM will be a relatively staid affair.

If anything, the events since the May 5 election probably signal a diminution of Mahathir’s power and influence, 10 years after he left the premiership and despite the fact that polls indicate he is still the party’s most popular figure. That power continued to be evident in the following decade after he left office when both Badawi and Najib sought vainly to de-emphasize his often-criticized industrialization drive. At 89, the former prime minister entered hospital last month with a chest infection. Today, he announced that he is giving up his position as a senior adviser to Petronas, the national energy company.

So the way has been cleared for Najib to move on. But it is unlikely that he can carry his determination to reform the economy any further. His announcement in September of a RM31 billion Bumiputera Economic Empowerment Plan, immediately dubbed Beep, was a clear step backward from his four-year 1Malaysia crusade to loosen the fetters on the economy put there by the New Economic Policy, or NEP, in 1971 to attempt to lift the Malay majority out of poverty in the wake of murderous 1969 race riots that took the lives of hundreds on both sides.

The plan does include one extremely important facet, however. In a canny move, it adds the indigenous tribes of Sarawak and Sabah, which together account for 5.72 million Malaysians, more than 20 percent of the population and most of them Christian or animist, to the economic program. Sabah and Sarawak are mathematically critical in deciding which side of politics forms the federal government. Ensuring their loyalty in subsequent elections is crucial. They preserved the 2013 election for the Barisan when large numbers of urban voters in Peninsular Malaysia voted for the opposition. There are also nascent stirrings of a separatist movement that the government is eager to stamp out.

The country faces economic troubles that must be addressed, with a currency that has fallen sharply along with those of other emerging markets as concerns that the US Federal reserve will slow quantitative easing, making emerging markets less attractive. The fiscal debt is approaching 55 percent of annual gross domestic product, spurring Fitch Ratings to downgrade the country’s sovereign debt. Subsidies have been cut, but must be cut further. With a calming political situation, Najib’s hand is freer to deal with the economic issue.