Malaysia's Prime Minister, Najib Tun Razak, made an eloquent speech to the United Nations earlier this week, telling the assembled body that, among other things, Malaysia "is a multi-racial, multi-religious, multi-cultural and democratic society that has benefited from the positive interaction and synergy between the various communities. Mosques, temples, churches and other places of worship co-exist in harmony.

"Although Islam is the official religion, we honor other religions – Buddhism, Christianity, Hinduism – by making their religious and cultural celebrations as national holidays and celebrate them as national events. It is this equilibrium that leads to moderation or wasatiyyah in the Islamic tradition of mutual justice."

That picture of Malaysia, thought to have been crafted by the giant US public relations firm APCO Worldwide for delivery in New York, is badly frayed, however. Many people in Kuala Lumpur say racial tension is higher than it has been since 1987, when former Prime Minister Mahathir cracked down in the so-called Operation Lalang and threw lots of top opposition politicians in jail under the Internal Security Act, which allows in effect for indefinite detention without trial.

Political events since the 2008 general election have led to ever-rising tension, particularly between Malays and Chinese although there have been strains in the Indian community as well. It is unclear today how far down into the society that racial bitterness extends. On many occasions, the two races have worked together to attempt to calm racial tensions. Last year, when unknown vandals firebombed a Christian church in a Kuala Lumpur suburb, urban Malays went to the church to attempt to calm anger.

Najib's attempts to unify his country are facing deep problems, many of them caused by former Prime Minister Mahathir Mohamad, who has taken on the question of special rights for the Malay majority and played a major role in the development of a Malay superiority NGO called Perkasa, whose fiery leader, Ibrahim Ali, has been perceived as a Mahathir ally although he is an independent legislator.

"Perkasa's vocal spokesmen Ibrahim and Mahathir seem hell bent – through such vociferous bickering – to stop Prime Minister Najib Razak from implementing his New Economic Model which is supposed to liberalise the economy from the clutches of the economically stifling, much corrupted and skewed New Economic Policy that heavily plays on 'Malay rights," wrote Raja Petra Kamarudin, the editor of the influential blog Malaysia Today.

"The problem is a segment of the Malays fear what is needed to revive private investment, especially domestic private investment, could cause Najib to lose the general election," said an analyst with a Kuala Lumpur-based think tank. "This assumes that the Malay electorate would be hostile to policy measures to ameliorate the NEP's re-structuring objectives. Najib has said this will now be applied on nationally rather than on a company basis while continuing the focus on reducing poverty. Perkasa's strength comes from its linkage with Mahathir who still commands some support in Umno and among the Malay community. Undoubtedly, Malays who feel threatened by prospect of less contracts etc from the Government will be hostile to Najib's economic plans."

The Sept. 27 death of another lawmaker, Parti Islam se-Malaysia state assemblyman Che Hashim Sulaima, will kick off the 12th by-election since the 2008 electoral surprise that gave the opposition control of four states and shocked the ruling Barisan Nasional. The United Malays National Organisation is expected to pull out all the stops in going after the Kelantan seat. With the Islamic fundamentalist PAS in the unanticipated role of positioning itself as a moderate party seeking to attract non-Malay votes, it remains to be seen if UMNO will attempt to appeal to voters by emphasizing Malay superiority.

Mahathir has been fanning the flames of unrest by his continuing demand for the continuation of special treatment for Malays, a cause he has espoused ever since the publication of his book, The Malay Dilemma. In that book, Mahathir argued that because Malays were rural and backward and because the economy was controlled by urban Chinese, they needed special treatment. After disastrous racial riots in July of 1969, the government agreed with Mahathir and created the New Economic Policy, in affect an affirmative action program for a majority race. For 40 years, they have been given that special treatment but they have advanced relatively little vis-à-vis the Chinese. Today, social scientists argue that affirmative action to help the Malays has been a crutch that has cushioned their lives and kept them from healthy competition.

But changing that policy is messing with a powder keg. Rallies against changing it have drawn thousands of angry Malays. Mahathir fanned the flames considerably by lending his public support to a Malay superiority rally in Terengganu on May 13, the anniversary of the 1969 race riots that took hundreds of lives. The octogenarian former leader has not broken with Najib, partly out of his loyalty to Najib's father, who reinstated him in politics after he was expelled from UMNO following publication of his book. But he continues to demand special treatment for Malays. In his blog, Che Det, on August 30, he wrote that the leader of the Chinese Economic Congress was racist for calling for a meritocratic society.

"It is racial because he was advocating taking away the protection afforded by the NEP and quotas from the bumiputeras (native Malays) and not from any other race," Mahathir wrote. "I am not proud of the protection afforded the bumiputera. It implies weakness. I don't think Malays and other bumiputera like to think that they are inferior in any way. But the reality is that in Malaysia the bumiputeras need new skills and a new culture even. These cannot be had by them in a mere 20 years. The original planners of the NEP were too optimistic."

Najib hired the US public relations firm APCO to come up with a US$40 million program to seek to pull the races together as well as to seek to burnish his own image overseas, tarnished as it has been by a long series of scandals. The program, called 1Malaysia, is considered by most people to have failed.

Despite the fact that the special rights have become a millstone around their neck instead of moving them into a higher income bracket. Especially, critics say, it has created a rentier class of so-called "Umnoputras" who skim off contracts through government–linked companies to enrich themselves and that little of the benefit trickles down to the rank and file

When Najib took office in April 2009, he started seeking to modify the program, called the New Economic Policy. That has led to continuing tension. In May, some 1,500 members of the Malay Consultative Council, a group of 76 Malay-rights organizations, summarily rejected Najib's plans to replace it with what the premier called his New Economic Model.

At the forefront of the protest against Najib's plans has been Ibrahim Ali, who has not only threatened non-Malays but launched a series of attacks on moderates. Among other things, Ibrahim has sought to have top officials including Chua Soi Lek, the president of the Malaysian Chinese Association – the second biggest component of the Barisan Nasional after the United Malays National Organisation – arrested for sedition, basically for talking back at him. He has demanded also that shariah laws be amended to prohibit non-Muslims from entering mosques and prayer rooms – which they have done traditionally. He has also demanded that Nurul Izzah Anwar, an MP and opposition leader Anwar Ibrahim, be jailed as well after Nurul accused Mahathir of inciting racial animosities.