Malaysia’s Unending Political Crisis

Squabble for power among ethnic Malays paralyzes nation

Malaysia’s still-unfolding political crisis has paralyzed the government, leading to failure of the educational system, inability to secure vital anti-Covid vaccines, a flagging economy that has led to a downgrade from A- to BBB+ from the Fitch rating agency and growing public anger with the political system.

“Speak to anybody here, everybody despises politicians on all sides of the spectrum,” said an ethnic Malay businessman. “Everything in the country is screwed up, there has been no progress, no plans, there is no economic planning, even Indonesia is doing better despite their numbers of cases. These guys are scumbags.”

Muhyiddin Yassin (above, praying), the 73-year-old head of what has been called a “backdoor government” because it was cobbled together without a parliamentary vote, barely managed to survive a budget vote earlier this week with a three-vote majority after weeks of delay because of the prospect that his government might not survive the vote. Opposition members and ruling coalition backbenchers have criticized the budget as insufficient to revive the economy, with some insisting they wouldn’t support it if parochial party demands weren’t met.

The December 15 Fitch downgrade – the same day as the budget vote – led Liew Chin Tong, a senator and executive council member from the opposition Democratic Action Party, to say that “we now find ourselves in the worst-case scenario. The announced budget is too timid to ensure a strong recovery, and due to the downgrade, our borrowing costs will go up regardless, constraining our ability to invest in the economy and create greater prosperity for all Malaysians. It was clear all along that this budget cycle would require unconventional thinking, given the high economic cost of the pandemic. The budget should have focused solely on doing what was right for our economy, instead of trying to abide by the opaque and arbitrary rules of the rating agencies. That opportunity was missed, and ordinary Malaysians now risk being left to pay the price.”

The crisis began on February 24 when Mahathir suddenly resigned as prime minister, losing command of Parti Pribumi Bersatu Malaysia, the tiny party he had cobbled together to lead the opposition coalition against the irretrievably corrupt United Malays National Organization and its kleptocratic leader, Najib Razak, in the 2018 general election. But Mahathir lost control of the entire situation and saw his chief deputy and ally, Muhyiddin, take over the party and put together a shaky Perikatan Nasional (PN) coalition that manages to stay in power with the consent of UMNO and its confederate of convenience, the rural Parti Islam se-Malaysia, and a three-vote plurality. 

In an effort to buy the loyalty of MPs who might otherwise listen to the blandishments of other parties, Muhyiddin named the biggest cabinet in Malaysian history, swollen with candidates eager to use their cabinet positions to line their pockets. For rent-seekers for whom there was no room, he added them to the country’s inefficient, staggering government-linked companies.

As the months have worn on, the scramble for primacy has inevitably featured increasing accusations that the Chinese are seeking to steal power, with for instance the chief minister of the northern state of Kedah demolishing Hindu temples and threatening to cut off the water supply to Penang, whose population are 53 percent Chinese. In Perak, UMNO organized the removal of the Bersatu chief minister Ahmad Faizal Azumu to place their own nominee Saarani Mohamed into the position. Saarani has dismissed the need to include Indian and Chinese members of the state legislature in his executive council, a slap in the face to multi-culturalism and a message that executive government is becoming the exclusive domain of the Malays. A bid by the Chinese-dominated Democratic Action Party to seek a coalition in Perak with UMNO – a political enemy for 70 years – was humiliatingly turned down.

But the fact is, as Khoo Boo Teik, a retired professor writing for the Institute of Southeast Asian Studies (ISEAS), a think tank at the National University of Singapore, pointed out in a scathing 19-page paper published earlier this month and titled “Malay Politics:  Parlous Condition, Continuing Problems,” the unending wrangle for power has nothing to do with minority races. It is between four Malay political factions – Muhyiddin’s shaky Perikatan coalition; the remnants of UMNO after its leaders were arrested or discredited; PAS after it split in two, with liberals joining Anwar Ibrahim’s Pakatan Harapan coalition; and Parti Pejuang Tanah Air or Fighters of the Nation, the nearly irrelevant rump party put together by an increasingly irrelevant Mahathir. At age 95 he has mainly been reduced to trying to promote his plodding son, Mukhriz into a position of power and hoping Pakatan Harapan leaders Lim Guan Eng of the DAP and Mat Sabu of Amanah would resurrect him from oblivion in yet another leadership bid.

While those machinations were taking place, the country, once one of the best-run in Southeast Asia, has been slipping inexorably downward. As sources have pointed out, unemployment, at 3.2 percent in January, rose to 5.3 percent in May and remains at 4.7 percent despite a dedicated wage subsidy program costing the equivalent of US$3.5 billion. Schools remain closed and are unlikely to reopen before January 21, the start of the traditional school year, costing the country’s youth months of learning.  Many sectors like private higher education are floundering with campus sell-offs and closures, while GLCs like Petronas are facing tough financial challenges.

“In Malaysia, 1 percent of kids getting online learning,” an outraged parent said. “Kids are not going to university, a lot of kids have just dropped out, some will never go back.”

The country’s vaccination program is to be directed at fewer than a third of the country’s population – primarily the aged and front-line workers – and appears unlikely to get underway before the second or third quarter of 2021. That is in contrast to Singapore, just down the road at the bottom of the Malay peninsula, for instance, which will begin a widespread vaccination program in the first week of January with the aged and priority workers first, and a target to vaccinate the entire population of 5.3 million as soon as possible.

The political crisis and, according to the World Bank, the Covid-19 crisis has tipped the country into “its sharpest recession in 20 years due to the impact of a triple shock related to the direct health impact of the pandemic; the economic impact of domestic restrictions on movement; and the impact of a synchronized global recession on Malaysia’s tradeable sectors.” The economy is expected to contract by 5.8 percent in 2020 and, according to the World Bank, “is not expected to recover fully from the shock of COVID-19 within the next few years.”  

The government has depleted much of its available fiscal space and “will exit the crisis with a larger burden of debt and contingent liabilities that will leave it less equipped to invest in lasting recovery and growth tomorrow without the support of a stronger revenue base,” the World Bank said. “The Covid-19 pandemic has exacted a heavy toll on Malaysia’s economy. When the current situation stabilizes and recovery becomes more entrenched, the government should refocus its fiscal policy to rebuild buffers against future shocks and to sustain public financing.”

A general election, which must be held before May 2023, is likely to be held sometime in the first or second quarter of 2021, according to political prognosticators. Muhyiddin himself has said he would call an election as soon as the Covid crisis is over. But given the fact that widespread vaccination isn’t in the cards before at least the middle of 2021, nobody knows when that will be.

In the meantime, Najib, who according to the US Justice Department was integral as “Malaysian Official 1” to the biggest kleptocracy case in US history and who has been sentenced to 12 years in prison in Malaysia, is free on appeal and campaigning for UMNO candidates. Ahmad Zahid Hamidi remains UMNO president despite facing 88 charges of corruption. PAS head Abdul Hadi Awang has been tainted by reports the Islamist party received RM90 million (US$18.2 million) in bribes to align with UMNO in the 2018 election. Hadi sued the Sarawak Report, which made the allegation, but backed away and secretly paid editor Clare Rewcastle Brown RM1.4 million to settle the case. Like Najib and Zahid, he remains in office, an indication of how badly Muhyiddin needs all three of them to stay in power.

“We are going to continue with instability,” a political analyst told Asia Sentinel. “Even if there is a general election, it is going to be the same situation – a dicey parliament with a slim majority.”

As the retired Prof. Khoo Boo Teik writes, “the regime is so fixated on surviving the machinations of inconstant allies that it neglects policy-making in a time of pandemic and economic contraction.” Opposition leader Anwar Ibrahim, the 73-year-old head of Parti Keadilan Rakyat, “has just announced that he can form a new regime with a substantial majority, including many UMNO MPs ready to cross to his side. Whether he has the ‘numbers’ for a new regime is one thing. Whether Anwar would thereby solve Perikatan Nasional’s core weakness of being dependent on defections is another. Or would an Anwar-led alliance merely precede another defection-derived pact whose tenure is similarly ‘nasty, brutish and short?’”

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