Prime Minister Najib Razak

Malaysia: A Tale of Promised Economic Reforms Gone Astray Under Mahathir Mohamad

Mahathir, who inherited a debt-laden economy, has focused much of his administration’s attention on cleaning up public finances following a multibillion-dollar corruption scandal involving state fund 1MDB and former prime minister Najib Razak.

Kuala Lumpur: A year ago, Malaysian land surveyor Muhammad Nur Aliff had high hopes that a shock election victory by 93-year-old Mahathir Mohamad could be the catalyst for reform and revival in a country hobbled by sky-high public debt and corruption.

But polls show that such optimism has been steadily eroded since the election upset, in which the United Malays National Organisation (UMNO) was removed from power for the first time in 60 years and replaced by Mahathir and the patchwork Pakatan Harapan coalition.

Najib is facing charges but denies any wrongdoing.

Also Read: What Najib Razak’s Corruption Trial Means for Malaysia

Meanwhile, deep divisions within the ruling coalition have curbed efforts to boost government revenue, attract investment or create jobs.

Support for the government fell to just 39% in March, sharply down from the 66% rating in August 2018, according to a survey by independent pollster Merdeka Center.

Mahathir also saw his popularity plunge to 46% from 71% over the same period, although he says he doesn’t put much faith in these numbers.

Worryingly for Mahathir, Merdeka Center said Malay Muslims, who make up around 60% of Malaysia’s 32 million people, were largely more critical of his administration.

Most of the poorest people in the country are Malay and for decades they have been the beneficiaries of subsidies and other affirmative action policies pushed by UMNO.

Many in the majority community were also angered when Mahathir appointed an ethnic Chinese finance minister and an attorney-general from the Malaysian-Indian minority, and said cash handouts to Malays could be reduced.

Pledges to end the death penalty and rescind oppressive laws such as the colonial-era Sedition Act were also unpopular with traditionalists.

“Many young people placed a lot of hope in this new government, but we haven’t seen anything that we had hoped for,” said Aliff, 28, protesting in the capital last week with hundreds of other Malays.

FILE PHOTO: People take part in an Anti-ICERD (International Convention on the Elimination of All Forms of Racial Discrimination) mass rally in Kuala Lumpur, Malaysia, December 8, 2018. Credit: Reuters

“We want to ensure a better future for young people, especially young Malays.”

Reform U-Turn

Following protests by Malays and a series of by-election defeats for the ruling Pakatan coalition this year, many of these planned policies have been put on the backburner.

In recent months, Malaysia has rolled back efforts to abolish the death penalty and revoke repressive security laws, as well as reversed plans to ratify two UN human rights treaties, after pro-Malay groups raised objections.

But UMNO and members of the opposition Islamist party PAS have been quick to remind voters of what they describe as Mahathir’s failure to uphold Islam and protect Malay interests.

“Pakatan is unpopular with the Malay-Muslim electorate,” said Adib Zalkalpi, a Malaysia director with political risk consultancy Bower Group Asia.

“UMNO and PAS have formed a credible opposition front to challenge the government by exploiting communal sentiments.”

Reform ambitions are also hampered by fractures within Pakatan, a coalition of parties that were aligned in their goal of removing Najib and UMNO, but don’t seem to agree on much else.

FILE PHOTO: Mahathir Mohamad, former Malaysian prime minister and opposition candidate for Pakatan Harapan (Alliance of Hope) reacts during a news conference after the general election, in Petaling Jaya, Malaysia, May 10, 2018. Credit: Reuters

“Everyone is working in silos. Everyone has a general idea of the problems we face but there really are no discussions going on,” said a senior government source, who asked not to be named due to the sensitivity of the topic.

“We don’t have a common narrative to counter the opposition’s racial rhetoric.”

Mahathir says accusations the coalition is dysfunctional are false.

“Our attention is directed at correcting all the mistakes of the previous government. That has taken much of our time,” he told reporters on Thursday.

Investor Concerns

Business sentiment has cooled after initial optimism that followed Pakatan’s electoral win, due mainly to a lack of consensus on the way forward for the economy, according to an April survey of 250 businesses by Ipsos Business Consulting.

“The continued lack of clarity on economic policies may lead to an increased level of anxiety among the businesses and further intensify the fear of an economic slowdown,” the firm said its report.

Investors in the survey also expressed concerns over currency fluctuations and slowing economic growth. The ringgit currency has slumped this year and stocks are underperforming regional rivals.

Malaysia has had to fill a revenue shortfall stemming from a populist measure to scrap a goods and services tax last year, while efforts to turn around struggling state entities that burden the treasury, including long-suffering Malaysia Airlines, have faltered.

In March, Malaysia’s central bank cut its 2019 economic growth forecast to 4.3-4.8% from 4.9%, on expectations of a significant drop in export expansion due to slowing global growth and the U.S.-China trade war.

On Tuesday, Bank Negara Malaysia became the first central bank in the region to cut its benchmark interest rate, in a move to support the country’s economy.

Mahathir has mended ties with China, reaching a cut-price $11 billion rail link deal, which is a welcome investment boost.

But with Malaysia’s debt-to-GDP ratio around 50%, public support waning and an unstable ruling coalition, it will become increasingly difficult for Mahathir to boost economic growth and win back disillusioned voters.

“With exports likely to remain in the doldrums, GDP growth in Malaysia looks set to slow to a post-financial crisis low this year. The government’s recent policies will make the downturn even worse,” Capital Economics said in a research note on Wednesday.

(Reuters)

Money Missing from Malaysia State Fund Linked to Former PM

The items seized from six properties linked to Najib Razak totalled nearly $275 million. However, the former prime minister has denied any wrongdoings.

Kuala Lumpur: Malaysian police said on June 27 the total value of jewellery, handbags, watches and other items seized from premises linked to former prime minister Najib Razak totalled nearly $275 million.

Authorities are investigating Najib as part of their probe into how billions of dollars went missing from state fund, 1Malaysia Development Berhad (1MDB), which was founded by the former premier.

Since unexpectedly losing a general election to Mahathir Mohamad in May, Najib has been barred from leaving the country, questioned by the anti-graft agency and has had his personal and family houses searched as part of the 1MDB probe.

Amar Singh, head of the police commercial crime division, told a news conference that the retail cost of all the items seized from six properties linked to Najib totalled 900 million ringgit to 1.1 billion ringgit ($224 million-$273 million).

“We couldn’t do the counting at the premises because the numbers were too huge,” Singh said, adding that the seizures were the biggest in Malaysian history.

It took three days, six cash counting machines and 22 officials from the central bank to count the cash found at the premises, he said, adding the cash totalled 116.7 million ringgit.

Jewellery accounted for the biggest portion of the seizure – 12,000 pieces of jewellery that Singh said would cost 660 million to 880 million ringgit at retail prices.

The single most expensive item was a diamond necklace with yellow gold – worth 6.4 million ringgit at cost price, he said.

Authorities are yet to establish who the owners of the seized items are, Singh said, adding that Najib and his wife Rosmah Mansor would “soon” be called in for questioning.

Singh also said the police seized a total of 567 handbags in 37 different brands. The Hermes bags alone were worth 51.3 million ringgit, he said.

The police also found 423 watches worth 78 million ringgit and 234 pairs of sunglasses.

Mahathir, in an interview with Reuters last week, said Najib was fully responsible for the 1MDB scandal and that authorities have “an almost perfect case” against the former leader.

Najib, who led the country for almost a decade, has consistently denied any wrongdoing, having explained three years ago that the nearly $700 million transferred into his account had been a donation from an unnamed Saudi royal.

The U.S. Department of Justice has said the money came from 1MDB, and that a total of $4.5 billion was misappropriated from the fund.

Speaking to Reuters exclusively last week, Najib said he shouldn’t be blamed for the alleged stealing from 1MDB, and declared he knew nothing about the money from the state fund appearing in his bank account.

($1 = 4.0250 ringgit)

Malaysian PM’s Plan to Redraw Electoral Map Draws Backlash

The opposition and critics say Najib is trying to bulldoze through parliament changes to electoral boundaries they say would benefit his ruling coalition, facing arguably its toughest polls since independence nearly 61 years ago.

Kuala Lumpur: Hundreds of Malaysians protested on Wednesday against Prime Minister Najib Razak’s plan to push through a controversial proposal to redraw electoral boundaries just months ahead of a general election that must be held by August.

The government says the plan was drawn up by the Election Commision (EC), and not the government, and is free from political interference.

Opponents of the redrawing process say it shoves opposition-inclined voters into opposition-held seats to create super-constituencies and also reshapes constituencies to have more distinct ethnic majorities.

Protesters, rallying under the banner of pro-democracy group Bersih, gathered at a national monument close to the parliament wearing yellow T-shirts – Bersih’s signature colour – and carrying banners and placards. Opposition leaders also joined the protests.

Security was heightened at parliament’s main gate, which was blocked by riot police, some armed with teargas guns.

Bersih aims to hand over a memorandum to parliament’s speaker, outlining their reasons why he should scrap the government’s motion seeking approval for its redelineation exercise.

“We totally do not agree with the (EC) report. This is the biggest cheating to ever happen,” said Maria Chin Abdullah, the former chairwoman of Bersih. “They want to bulldoze the report that contradicts the constitution, ignores the rule of law and manipulates the electoral rolls,” she said.

Looming election

Prime Minister Najib is expected to table the redelineation motion at 0330 GMT. It is widely expected to be passed today.

This is the final session of parliament before the legislative body is dissolved for elections.

Electoral boundaries were last changed in 2003, under the leadership of then-premier Mahathir Mohamad. He, too, was accused of manipulating the process in favour of the ruling coalition, which has held power since independence from Britain in 1957.

Mahathir, 92, who led Malaysia for 22 years, is now running as the opposition’s candidate for prime minister against Najib, his former protege.

Najib is under pressure to deliver an emphatic victory for his ruling Barisan Nasional (BN) coalition, as he grapples with a scandal at state fund 1 Malaysia Development Berhad (1MDB), and public anxiety over rising living costs.

Earlier this week, the government tabled a bill seeking to outlaw “fake news”, which prescribes fines and up to 10 years in jail, raising more concern about media freedom in the wake of the 1MDB scandal.

The anti-fake news bill is expected to be debated and passed on Thursday.

Manipulated Elections and Malaysia’s Dire Democratic Crisis

Malaysia’s audacious use of dirty politics and pre-electoral rigging to tilt the level playing field in its upcoming general elections is contributing to a global democratic crisis.

Malaysia is gearing up for its 14th general elections, to be held by August 24. Its parliament is expected to be dissolved within weeks.

Prime Minister Najib Razak and his ruling coalition, Barisan Nasional (BN), are pulling out all the stops to tilt the level playing field, making them likely to win despite a strong opposition coalition led by former strongman prime minister Mahathir Mohamad.

Malaysia’s ruling party, the United Malays National Organization Party (UMNO), has ruled through a coalition alliance under BN for 60 uninterrupted years since the country declared independence from the British Empire.

Embattled by the 1Malaysia Development BHd (1MBD) corruption scandals and protests since 2015, Najib has managed to cling on to power by removing or buying off anyone investigating the scandal.

Najib has consistently denied channelling nearly US$700 million from 1MDB state funds to his personal bank accounts. He sacked his deputy, Muhyiddin Yassin, and replaced the attorney general over critical comments both made about the scandals.

Will his coalition, BN, hold on to its majority seat shares in this general election?

The last election, in 2013, was the closest fought in the country’s history. The BN coalition’s share of the popular vote slipped to 47%, but it’s holding on to 60% of Malaysia’s 222 parliamentary seats.

The euphoria for liberalization in Malaysia following the 2013 election has dwindled since the leader of the opposition coalition, Pakatan Harapan’s Anwar Ibrahim, was jailed for sodomy in 2014. With Anwar behind bars, Pakatan Harapan has put forward the most unlikely candidate, Anwar’s former boss and nemesis, the 92-year-old Mahathir Mohamad, to run against Najib for prime minister.

What’s at stake?

Opposition forces staged protests in the capital of Kuala Lumpur in 2016 and lobbied for stronger rule of law to end impunity and corruption in Malaysia. The opposition’s support is typically concentrated in urban areas, while the BN’s support is spread across rural areas.

In this election, Malaysian states Selangor, Johor and Kedah are emerging as key battlegrounds for the opposition coalition.

Johor, once a haven for BN supporters, has seen segments of Malay voters turn against the ruling party due to rising costs of living and corruption. If the BN loses these key states, it will follow in the footsteps of former longstanding hegemonic parties such as Taiwan’s Kuomintang Party and Mexico’s Institutional Revolutionary Party to lose dominance as the Malaysian system becomes more competitive and multi-party.

Malaysia’s elections are now among the most manipulated in the world.

Aside from restrictions on media freedom and the blocking of political blogs, the BN has used a range of tactics in the menu of manipulation such as gerrymandering, malapportionment, pork-barreling, opposition intimidation and jailing opponents to repress electoral competition.

Gerrymandering, Malaysian-style

The redrawing of electoral districts through “packing” opposition voters into a few seats or the “cracking” of opposition strongholds and absorbing them into adjoining constituencies — in the case of Beruas in Perak state —has benefitted the BN.

The gerrymandering by Malaysia’s Election Commission has also exacerbated malapportionment — meaning one electoral district has fewer voters than another but both get equal representation — and the separation of constituencies into highly populated urban areas and large, less populated rural areas.

Despite constitutional provisions that constituency sizes should be “approximately equal and not vary in size by more than 15%,” this was amended to 33 per cent.

This redrawing of boundaries has led to large pro-opposition constituencies with more than 100,000 voters, while pro-BN constituencies are disproportionately small with 30 having fewer than 18,000 voters.

This means that the value of each vote changes dramatically across the country. Opposition candidates now need more votes than their BN counterparts to get elected.

Malaysia’s opposition movement, Bersih — the Coalition for Clean and Fair Elections — is a civil society movement that launched in 2006. It’s submitted more than 30,000 objections to the “unconstitutional” boundary changes.

Supporters of pro-democracy group Bersih (Clean) gather at Central Market in Kuala Lumpur. Credit: Athit Perawongmetha/Reuters

It has also highlighted many unfair rules and practices, such as the inclusion of “phantom voters” in the electoral rolls and allegations of indelible ink, used to prevent voter fraud, that washed off too easily in 2013 and allowed voters to cast ballots more than once.

But nothing has been done to address the objections.

As the incumbent, the BN government has dipped into state funds and announced big spending programs to curry favour with Malaysian voters.

Some recent examples include handing out cash to voters through 1Malaysia People’s Aid fund. Nearly 700 million poorer Malaysians are expected to receive handouts of up to US$308 over the course of the year. Civil servants are also expected to receive special bonuses this year and more following the election.

With inflation at an all-time high and unhappiness over taxes, unemployment and wages, such pork-barreling will certainly help Razak and its embattled party win over some uncertain voters.

Global democratic crisis

Pro-democracy watchdogs like Freedom House and the Economist Intelligence Unit have warned that democracy is facing its most serious crisis in decades.

The basic tenets that include guarantees of free and fair elections, the rights of minorities, freedom of the press and the rule of law are under attack around the world.

Malaysia’s use of dirty politics and pre-electoral rigging to tilt the level playing field contributes to this global democratic crisis.

Despite strong opposition movements and mass calls for change, Razak and his BN coalition are likely to win the coming election. A Merdeka Centre for Opinion Research poll conducted in December predicted a decline in the BN’s overall popular vote, but suggested the ongoing rigging of the electoral system will bring about a two-thirds majority win for the incumbent.

This unfair win is likely to fracture the tenuous opposition coalition and worsen Malaysia’s disturbing retreat to authoritarianism.

Netina Tan, Associate Professor, McMaster University and Cassandra Preece, Political Science, MA Student, McMaster University

This article was originally published on The Conversation. Read the original article.

As Hard-Line Islam Gets a Grip, Promoters of Pop Concerts and Other Events May Ditch Malaysia

The politicisation of Islam has increased as Prime Minister Najib Razak’s ruling party seeks to appease more-fundamentalist elements to secure its large, rural Malay vote bank.

Devotees pray before a special prayer for fellow Malaysians in North Korea at the National Mosque in Kuala Lumpur, Malaysia March 10, 2017. Credit: Reuters

Kuala Lumpur: Organisers of pop concerts and some other big events are increasingly wary of including Malaysia on their itineraries, as the cancellation of a beer festival due to take place next month highlighted growing intolerance towards activities regarded as insulting to Islam by some Muslim groups.

The promoters say that international music stars, especially those known for risqué lyrics or revealing clothing, are unlikely to be brought to Malaysia as part of regional or global tours. The same goes for any gatherings that could in any way be deemed un-Islamic.

While such concerns have been building for some time in this majority Sunni Muslim nation, the organizers say that the atmosphere has become particularly difficult in the past year.

The politicization of Islam has increased as Prime Minister Najib Razak’s ruling party seeks to appease more-fundamentalist elements to secure its large, rural Malay vote bank ahead of an election expected in the coming months.

A UN cultural rights expert warned in a report last week that there is growing pressure to adopt a more narrow interpretation of the Islamic religion and identity in Malaysia, which excludes the country’s cross-cultural history, marginalises religious minorities, and fails to take account of the diversity of Malay Muslims.

“Of course it does affect the overall attractiveness of Malaysia being a venue for artists, events or festivals to be held. With artists’ touring of Southeast Asia, Malaysia will not be the first choice for any act to tour,” said Darren Choy, the chairman of the Recording Industry Association of Malaysia who also heads the Malaysian unit of American entertainment and record label group Warner Music. “It may end up being the last to be considered, or not at all,” he added.

The Malaysian government did not respond to requests for comment for this story.

‘Vice centre warning”

The popular Better Beer Festival 2017, which has been held for the past five years, was unexpectedly called off last week after the Kuala Lumpur city council banned the October 6-7 event. The ban followed protests by the Pan-Malaysian Islamic Party (PAS), who said the event would turn the capital into “the largest vice centre in Asia.”

The beer festival’s organisers said that authorities called it off “due to the political sensitivity surrounding the event”.

Police said later that it was cancelled because of the threat of a militant attack.

PAS said on Thursday it has now also filed an objection over plans to host next month the annual Oktoberfest beer festival in the Petaling Jaya area of the capital. The party said in a statement that it was its “social responsibility” to oppose alcohol festivals.

Also last week, after rumours that a gay party was being planned for Kuala Lumpur, the government issued a ban notice, and ordered immigration officers to deny entry to anyone planning to attend either that or the Better Beer Festival. The gay party organisers said they only ever intended to hold the party in Thailand, not Malaysia.

Enforcement authorities last month launched a probe into the Kuala Lumpur chapter of Atheists Republic, a Canada-based organisation. A minister in Najib’s cabinet said later that Muslim apostates should be “hunted down vehemently”.

Malaysia has already made international headlines this year for barring the screening of the 2017 edition of Disney’s “Beauty and the Beast” due to a “gay moment” in one scene. The film was eventually released after local distributors asked the censor board to review the decision.

Shortly after, the catchy summer dance song ‘Despacito’ was taken off state radio and television stations after complaints that the lyrics were obscene.

Costume concerns

For some years it has been getting more difficult for international pop stars who wish to make appearances in Malaysia. In 2013, a concert set to be performed by musical artist, Kesha, was banned. In the past, artists such as Beyonce have cancelled performances in Malaysia due to restrictions over costumes and dancing.

A concert by American pop star Selena Gomez was only allowed in July 2016 after assurances that she would cover herself up. But fear of trouble at the concert – PAS youth leaders protested outside the venue – kept many fans away and thousands of tickets were left unsold.

There have been no big Western acts so far this year, though British singer Ed Sheeran is expected to perform in Kuala Lumpur in November.

This weekend’s Formula 1 Malaysian Grand Prix does not include major international pop stars as has usually been the case in recent years. Organizers denied this was due to recent controversies.

“You have to be very careful about the type of acts you book and make sure you comply with all the rules and even then, there’s no guarantee it will be approved by the authorities,” said Qisthina Razin, representative of Malaysian events organization, Freeform.

Rizal Kamal, vice president of the arts, live festivals and the arts association (ALIFE), a body representing event organisers, said Malaysian show producers have started moving out.

“Malaysian producers are going to Singapore and Indonesia due to problems in Malaysia,” he said.

Choy said the bans are “denting the perception of Malaysia being a moderate and tolerant Islamic country.”

Growing Islamisation

The impact of religious fundamentalism isn’t just about Malaysia’s image to the outside world. It also gnaws away at the country’s multicultural and pluralistic fabric.

About 40% of Malaysia’s population is non-Muslim, including Christians, Buddhists and Hindus.

Najib’s approach risks empowering and legitimising conservative parties and organizations once only classified as extreme fringe groups. Such religious organizations are also in an increasingly strong position to influence the government and its policies.

UN Special Rapporteur Karima Bennoune in her report last week expressed deep concern at the level of involvement of religious authorities in policy decisions.

She said some Malaysians have expressed concern about a growing Islamisation, which represented a “significant break with the past”.

Bennoune expressed particular concern over bans regarding traditional Malay arts and restrictions on women performing in public in the northeastern state of Kelantan, which is governed by PAS.

Double speak

Prime Minister Najib has projected a global image of a moderate Muslim leader and has widely promoted himself as a key player in the fight against Islamic extremism.

In a meeting with US President Donald Trump last month, Najib said Malaysia is a partner in America’s fight against the ISIS, and it will be a key player in promoting moderate Islam.

He has been largely silent during a series of recent religion-related incidents in Malaysia.

He did, though, comment this week after the owner of a laundromat in southern Malaysia apologised for barring non-Muslim users, a ban that had gone viral on social media and triggered condemnations by community leaders, including the Sultan of Johor.

“The government will remain committed to upholding the true Islamic teachings while protecting the interests of the other communities as demanded of Islam,” Najib said in a statement late on Wednesday, state news agency Bernama reported.

Cynthia Gabriel, executive director for a Kuala Lumpur based welfare group C4, said there is an urgent need to accept multi-culturalism again.

“It is bad for society, so it is bad for business, when two sets of laws and policies operate in one country,” she said.

(Reuters)

Malaysia’s Mahathir Promises Comeback, Renewing Opposition

Malaysia’s former prime minister Mahathir Mohamad, who turns 92 next week, will lead opposition alliance government if it wins in polls.

Former Malaysian prime minister Mahathir Mohamad smiles during an interview with Reuters in Putrajaya, Malaysia, March 30, 2017. Credit: Reuters/Lai Seng Sin

Kuala Sin, Malaysia: Prime Minister Najib Razak won Malaysia’s last general election, despite losing the popular vote. Since then, he has been embroiled in a corruption scandal that has been investigated in a half-dozen countries.

Yet the avuncular leader with an aristocratic pedigree was still expecting to cruise to another election victory in polls due by mid-2018, maintaining his coalition’s record of unbroken rule since independence in 1957.

Now, all bets are off.

That’s because his former mentor and prime minister for 22 years, Mahathir Mohamad, who turns 92 next week, has agreed to join a fractured opposition alliance and head the government again if it wins. He would be the world’s oldest prime minister if that happened.

Mahathir, along with Najib’s former deputy, Muhyiddin Yassin – fired last year for questioning his boss about the scandal – have formed a new party called Bersatu (Unite). It has opened branches in 165 of parliament’s 222 constituencies, Muhyiddin told Reuters, a feat few opposition parties have managed.

During his 1981-2003 rule, Mahathir championed modernisation by switching Malaysia’s focus from plantations and mining to a diversified high-tech manufacturing base on the back of foreign investment. He built the world’s tallest buildings at the time, the Petronas Twin Towers.

A considerable fan base is excited about his comeback.

“I was still young when Mahathir was prime minister. And I thought anything was possible … maybe cars could fly,” said Nazariah Harun, a former government party supporter in the southern state of Johor, bordering Singapore.

Mahathir also dealt ruthlessly with opponents, jailing his former deputy – and now alliance partner – Anwar Ibrahim on corruption and sodomy charges in the late 1990s.

The opposition alliance hopes to capitalise on a couple of scandals that are resonating in rural Malaysia.

One is around the state’s 1Malaysia Development Berhad (1MDB) strategic development fund that Najib, 63, founded after taking power in 2009.

Its murky transactions through overseas front companies and Middle Eastern partners, many of them exposed by foreign media reports, have bewildered the public over the past two years.

Najib insisted he did nothing wrong when it leaked to the media that $700 million wound up in his bank account before the 2013 election.

The other scandal, involving state plantation company FELDA, is more problematic because it directly affects tens of thousands of small landholders in the heartlands. They are a key vote bank for Najib’s party, the United Malay National Organisation (UMNO).

Uno Patronage

The 1,600 residents of Kuala Sin, a village of farmers and rubber tappers in Mahathir’s home state of Kedah, are switching from UMNO to Bersatu, says UMNO’s former chief there.

“I’ve held the ballot box here (for UMNO) from 1962 until 2014… but this year, God willing, UMNO will lose,” said 77-year-old Ramli Mat Akib at his weathered two-storey wooden home in Kuala Sin.

The UMNO branch office opposite his home has closed.

Mahthir’s son Mukhriz, who leads Bersatu’s campaign in Kedah, believes it is “making huge headway” in rural Malaysia.

“It goes all the way down to the branches, and in Kedah very many UMNO branches have dissolved,” Mukhriz told Reuters.

UMNO says that isn’t true nationwide.

“We have a lot of young people queuing up to sign up at our headquarters as new party members. I don’t see a problem at all,” said UMNO’s secretary general Tengku Adnan Mansor.

Despite the scandals, Najib commands the loyalty of UMNO chieftains. Patronage has much to do with that.

An UMNO leader needs to distribute largesse to guarantee chiefs’ support and they, in turn, operate an affirmative action plan for ethnic Malays first introduced in 1971.

The policy gives majority Malays government contracts, cheap housing, guaranteed university admissions and preferential stock shares.

Government-appointed village committees also provide cradle-to-grave assistance.

“This makes the villagers closely dependent on the committee, and that makes the committee supreme and also makes UMNO supreme,” said Radzi Ayob, 54, a veteran UMNO leader in Kedah, who joined Bersatu last year.

But most Malays have moved to cities and even those in the countryside are less reliant on the rural welfare model.

“As it is now, UMNO still needs Malaysians but Malaysians may not need UMNO,” Radzi said.

An IPO that flopped

No leadership surveys have been published in Malaysia recently, but sources in UMNO say an internal poll in April showed Najib winning 128 of the 222 parliamentary seats, down from the current 131.

A government source told Reuters Najib’s cabinet had been preparing to call polls in September, but the timing has since become less clear in the wake of the scandals. “Now nothing is firm,” he said.

Malaysia’s opposition won only 40 percent of the seats in the 2013 election despite winning 51 percent of the popular vote, thanks to a “first-past-the-post” system that awards seats based on a plurality of votes.

Just before the 2013 election, Najib spun off a listed company of FELDA and gave its Malay landowners and suppliers, known as settlers, the opportunity to buy preferential shares.

They are less than thrilled about it today.

The shares have plunged 70 percent since the $3 billion listing. The anti-corruption agency is investigating officials at the listed company, Felda Global Ventures Holdings, with the FELDA chairman himself raising questions about what happened to the IPO proceeds.

“They basically told us we will be rich,” said Md Isa Md Yassan, 59, a palm oil grower in Muhyiddin’s home constituency of Pagoh. “The settlers are just dissatisfied and it’s not just me feeling it… everyone feels the same way.”

Curtailing Dissent

Najib has kept a lid on the scandals by curbing dissent.

The main media outlets are allied to his government. Anwar, the charismatic opposition figure, is in jail on what critics say was another trumped-up sodomy conviction in 2014. Najib has revived a colonial-era subversion law allowing him to jail opponents without trial. The only conviction in the 1MDB scandal was of a legislator – who publicised alleged wrongdoing at the fund.

But Najib is riding a good economy into the election. The ringgit has been one of Asia’s strongest currencies, stocks have hit a two-year high, and economic growth was 5.6% in the first quarter. And an opposition victory, however unlikely, would put Malaysia into uncharted waters and likely trigger fears of a short-term plunge in financial markets.

Analysts, however, say Mahathir’s entry into the electoral fray supporting an Anwar-led opposition alliance does represents a real threat to UMNO.

“If the two leaders can revive a reversed role of their previous partnership displayed so effectively when they were in national leadership in the 1990s, the opposition could have a winning formula,” said Yang Razali Kassim, senior fellow at S. Rajaratnam School of International Studies in Singapore. “Mahathir supporting Anwar, in a spirit of genuine reconciliation, will be a powerful combination.”

Salbiah Kassim, a member of the UMNO women’s wing in Kedah, saw parallels to Brexit and US President Donald Trump’s election win.

“Just like overseas, things can change,” she said. “We don’t know where the silent voters will go.”

(Reuters)

Malaysia’s First Lady Linked to 1MDB Scandal

The first lady is being accused of buying a 22 carat diamond necklace from the $30 million funds involved in the scandal.

Malaysia’s Prime Minister Najib Razak and wife Rosmah Mansor arrives before Najib’s National Day speech in the capital city of Kuala Lumpur August 30, 2015. Credit: Reuters/Edgar Su/Files

Kuala Lumpur: Nearly $30 million of funds stolen from scandal-hit 1Malaysia Development Berhad (1MDB) was used to buy jewelry for the prime minister’s wife, including a rare 22-carat pink diamond set in a necklace, according to the latest filings by the US Justice Department in a civil lawsuit.

The filings lodged at the US District Court in Los Angeles on Thursday did not identify Prime Minister Najib Razak or his wife Rosmah Mansor by name, but said the jewelry purchases were for the wife of “Malaysian Official 1.”

Malaysian and US government sources have previously confirmed that “Malaysian Official 1” refers to Najib.

The diamond necklace set alone cost $27.3 million, according to the latest filings in a lawsuit that was launched last July.

The accusations will provide further ammunition for Najib’s political rivals, who often criticize his wife for lavish spending, and come at an awkward time for the Malaysian leader, as he had been expected to call a snap election later this year.

Rosmah’s aide did not immediately respond to requests for comment. The prime minister’s office, in a statement early on Friday, said it was “concerned by the unnecessary and gratuitous naming of certain matters and individuals that are only relevant to domestic political manipulation and interference.”

Najib has consistently denied any wrongdoing.

A total of $4.5 billion have been misappropriated from 1MDB, the US Justice Department said on Thursday. The fund was set up by Najib in 2009 to promote economic development.

The department is seeking to seize a total of about $1.7 billion in assets that were bought with misappropriated funds, including a Picasso painting that was given to actor Leonardo DiCaprio and the rights to two Hollywood films.

“This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people,” acting US Assistant Attorney General Kenneth Blanco said in a statement.

The jewelry purchases were arranged by Malaysian financier Low Taek Jho, or Jho Low, who was also accused of gifting DiCaprio the $3.2 million Picasso.

A spokesman for DiCaprio on Thursday said that the actor had begun proceedings to transfer ownership of the Picasso to the US government, having in July 2016 “initiated the return” of gifts he had received from financiers connected to the 1MDB case.

Low, whose whereabouts are unknown, could not be reached for comment.

In an emailed statement through a representative, Low said the Justice Department’s actions were “a further example of global overreach in pursuit of a deeply flawed case.”

“The US Department of Justice’s latest move continues its inappropriate efforts to seize assets despite not having proven that any improprieties have occurred,” the statement read.

Rasky Partners, a public relations firm that emailed his statement, could not be immediately reached by phone.

Najib’s bank account

The lawsuits show the jewelry for Rosmah was bought with funds that passed through Najib’s account. The jewelry, like the Picasso painting, was purchased with funds traceable to diverted proceeds from a 2013 bond offering by 1MDB, according to the filings.

The diamond necklace was bought in 2013, just months after $680 million was transferred to the private bank account of Najib in Kuala Lumpur, the filings show. The Malaysian government says that money came from a member of the Saudi royal family.

The necklace was purchased from New York jeweler Lorraine Schwartz, who has designed for Beyonce Knowles, Jennifer Lopez and other stars of the entertainment world.

“Need a 18 carrot [carat] pink heart diamond vivid or slightly short of vivid. On diamond necklace urgent,” Low said in a text message to Schwartz in June 2013, the filings said.

A month later Schwartz showed the necklace in Monaco to a group of people, including Rosmah, onboard Topaz, one of the largest private yachts in the world.

Low had chartered the 147-meter yacht for seven days in early July 2013, according to the filings.

Rosmah and Low again met with Schwartz at a US hotel in September that year, when Najib was in New York to attend the United Nations General Assembly.

The necklace was eventually delivered to an unnamed friend of Rosmah’s in 2014 in Hong Kong, who then handed it over to Rosmah in Kuala Lumpur, the filings said.

Low also arranged for the purchase of 27 pieces of jewelry – worth a total of $1.3 million – for Rosmah in 2014.

The lawsuits also describe how Low spent about $9 million in 2014 buying jewelry for Australian model Miranda Kerr.

Low bought a necklace with a 11.72 carat heart-shaped diamond for $1.29 million, with Kerr’s initials “MK” inscribed on the back. The necklace was given to Kerr as a Valentine’s Day gift, according to the lawsuit.

Later that same year, Low bought a 8.88-carat pink heart diamond pendant worth $4.8 million, also as a gift for Kerr.

Representatives for Kerr, who married Snapchat cofounder and CEO Evan Spiegel late last month, had no comment.

(Reuters)

Malaysia: After Facing Down Scandal, Rising Costs Could Erode Najib’s Support

Rising prices were a key factor that prompted urban and non-Malay voters to abandon the coalition led by UMNO over the past two elections.

Malaysian Prime Minister Najib Razak speaks during the 10th Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) Summit as part of the 30th Association of Southeast Asian Nations (ASEAN) summit in metropolitan Manila, Philippines April 29, 2017. Credit: Reuters/Aaron Favila/Pool

Kuala Lumpur: Malaysia’s 1.6 million public servants have long been one of the most reliable vote banks for Prime Minister Najib Razak’s ruling coalition, but as he prepares to seek re-election he faces warnings that soaring living costs risk eroding that support.

Prices have risen sharply since Malaysia cut state subsidies and launched a national goods and services (GST) tax to plug a hole in its finances caused by falling oil and gas revenues, and rank-and-file government workers say they are feeling the pinch.

“My wife earns some side income doing freelance work, but we just can’t save,” said 28-year-old Mohd Nizam, who has supported Najib‘s United Malays National Organisation (UMNO) in the past but, like around a dozen public sector workers who spoke to Reuters, did not want to say if he would do so again.

“I don’t know how we’ll manage if we have a child,” said Nizam, who rides a motorcycle to work each day in the administrative capital Putrajaya, where he earns 3,000 ringgit ($687) a month as a government clerk.

Rising prices were a key factor that prompted urban and non-Malay voters to abandon the coalition led by UMNO over the past two elections.

But UMNO clung on to its rural Malay Muslim heartlands and the votes of rank-and-file civil servants – most of whom are ethnic Malays due to a decades-old positive discrimination policy that gives them priority for government jobs.

The next election is not due until 2018 but, after facing down a corruption scandal at state developer 1Malaysia Development Berhad (1MDB), Razak is expected to capitalise on opposition disarray and call an election this year.

Analysts expect Razak to win, but he has little room for manoeuvre. In 2013 the UMNO-led Barisan Nasional (BN) coalition lost the popular vote but won most seats in parliament – if its majority were further eroded this time Razak could face an internal leadership challenge.

Rizalman Mokhtar, a grassroots leader with UMNO, said he feared civil servants – who make up around 15% of all voters – could turn against the party if nothing is done about the rising cost of living.

“We have to address this issue, or it will have a big impact on our support,” he said.

Deeper in debt

Malaysia’s annual inflation hit an eight-year high of 5.1% in March, among the quickest in Southeast Asia and far outpacing Singapore, Indonesia, the Philippines and Thailand.

Private sector wage growth is expected to average 5.7% between 2013 and 2017, based on data compiled by the Malaysian Employers’ Federation.

But public sector wage growth was between 2-3% over the same period, according to the Congress of Unions of Employees in the Public and Civil Service (Ceupacs).

Ceupacs President Azih Muda said civil servants have ended up heavily indebted to manage rising living costs, to the point that more than 60,000 of them risk bankruptcy.

“This is a direct effect of the hike in cost of living. Civil servants end up taking up a lot of loans and this is unsustainable and they are unable to manage their finances,” Azih told Reuters.

Adib Zalkapli, an analyst with political risk consulting firm Vriens & Partners, agrees cost-of-living issues threaten to eat into a core component of UMNO’s support.

“The hardest hit would be the rank-and-file civil servants working and living in major cities like Kuala Lumpur or Penang,” Adib said, adding that civil servants had less flexibility to take part-time jobs than other low-paid urban workers.

Razak last month assured the public that managing cost of living remained his government’s priority, arguing that Malaysia remained among the cheapest countries in the region.

“We have done a lot of work to ease the people’s burden related to the rising cost of living,” the 63-year-old son of a former prime minister said in a statement.

The government had increased payouts for poor households, implemented measures to control prices and provided affordable housing and healthcare, Razak said.

Grip weakening?

But the dismantling of fuel subsidies, needed to stave off the threat of a sovereign ratingdowngrade after Najib‘s narrow 2013 win, came at the expense of public goodwill.

Former Prime Minister Mahathir Mohamed, Razak’s mentor-turned-rival, thinks the continued rise in costs will be the push needed to end UMNO’s near-60-year unbeaten grip on power.

“High cost of living, their children cannot get scholarships, unemployment is very high. Many people feel how poor they are now,” the 92-year-old political veteran said in an interview with Reuters.

Mahathir launched a new political party last year and joined hands with his former foe, the charismatic de facto opposition leader Anwar Ibrahim, in a campaign to oust Razak.

Anwar remains in prison serving a sentence for sodomy he says was politically motivated, however, and in his absence a feud has fractured the opposition alliance.

With his opponents more divided than at the last poll, government sources have said that Razak is considering a calling snap election by the third quarter.

Ibrahim Suffian, director of independent opinion polling firm Merdeka Center said that is not without risk – if the opposition can get their act together.

“If the opposition are able to agree to a pact and minimise multi-cornered contests, we’re looking at several states changing hands and a significant drop in BN’s parliamentary seats,” he said. ($1 = 4.3930 ringgit)

(Reuters)

Malaysia PM Warns Uneven Growth Could Fuel Extremism

Malaysian PM Razak Najib warned that South East Asian countries needed to ensure more inclusive growth or risk fuelling extremism amongst the marginalised.

Malaysian Prime Minister Razak Najib waves to photographers upon arrival at the Manila International Airport in Pasay city, metro Manila, Philippines April 27, 2017. Credit: Reuters/Romeo Ranoco

Manila: Malaysian Prime Minister Najib Razak warned on Friday that South East Asian countries needed to ensure their economic growth was inclusive, or risk marginalised people turning to violent extremism or even overturning political systems.

“We know that those who see no hope in their own societies are more prone to the siren calls of terrorists who can exploit their vulnerability and fill them with their lies,” Najib told an entrepreneurship event during an Association of South East Asian Nations (ASEAN) summit in Manila.

Islamist extremism is expected to be on the agenda, with fears for Indonesia, Malaysia and the Philippines about piracy, the rising threat of ISIS and the ease with which militants can acquire weapons and move between countries.

But the first order of the summit addressed a more pressing threat, as ASEAN called for calm from all involved in tensions on the Korean peninsula.

US President Donald Trump in an interview with Reuters said a “major, major conflict” was possible with North Korea over its missile programmes and China said the situation could slip out of control.

In a rare, stand-alone statement, ASEAN urged North Korea and all parties concerned “to exercise self-restraint in order to de-escalate the tension and refrain from actions that may aggravate the situation”.

Indonesian foreign minister Retno Marsudi said all countries were worried.

“The Korean peninsula is not that far from Southeast Asia. So whatever happens in the Korean peninsula, for sure it will affect us,” she told Reuters.

Dangers of disparity

Najib lauded the success of the 50-year-old ASEAN in expanding its collective gross domestic product to about $2.7 trillion, from $87 billion four decades ago, and said the region could become the world’s fourth-largest economy.

ASEAN has ten members: Thailand, Myanmar, Laos, Cambodia, Vietnam, Singapore, Brunei, Malaysia, Indonesia and the Philippines.

Trade integration was lagging, Najib said, and tariff removal and harmonised customs standards needed to be “vigorously pursued”.

The Malaysian leader, whose premiership has been dogged by corruption allegations, which he rejects, and is expected to call an election this year, also warned that economic disparity could be politically destabilising.

“The neglected underclass of those who felt left behind by economic growth, prosperity and globalisation can overturn elections and political systems,” he said.

Philippines Vice President Leni Robredo echoed Najib’s call for leaders to pay more attention to their poor.

“The voiceless and the powerless are now raring to be heard … their frustrations are being felt on a global scale,” she said in a speech.

Philippine President Rodrigo Duterte will chair meetings of the ASEAN leaders on Saturday. He made it clear on Thursday that Beijing’s contentious activities in the South China Sea – a divisive topic that figures at most ASEAN meetings – would not be discussed because it would achieve nothing.

Indonesia’s Marsudi said the South China Sea issue was discussed among her counterparts but the focus was on completing guidelines for negotiating an ASEAN-China maritime code of conduct.

Critics are sceptical and say China is trying to buy time while it develops islands it built from scratch, adding missiles and, according to some experts, the capability to deploy combat aircraft in disputed waters deep into Southeast Asia.

ASEAN secretary general, Le Luong Minh, said the code needed to be legally binding to put a stop to “unilateral actions” because a previous commitment to play fair had been ignored.

“It’s important … because of the complex developments in the South China Sea, especially the reclamation and militarisation activities and all those unilateral actions,” Minh told Reuters in an interview.

“In that context, the need for an instrument which is legally binding.”

(Reuters)

Malaysia’s Prime Minister Seeks to Increase Power Via National Security Council Act

Malaysia’s Prime Minister Najib Razak faces popular protest as he tries to put in place the National Security Council Act, amidst allegations of fraud and embezzlement.

Malaysia’s Prime Minister Najib Razak speaks to journalists after attending an event in Kuala Lumpur, Malaysia July 21, 2016. Reuters/Files

Kuala Lumpur: Malaysia‘s Prime Minister Najib Razak will get sweeping security powers on Monday amid planned protests calling for his resignation over US allegations that millions of dollars from a state fund wound up in his personal bank account.

The new National Security Council (NSC) Act, which comes into force on August 1, allows Najib to designate any area as a ‘security area’, where he can deploy forces to search any individual, vehicle or premise without a warrant. It also allows investigators to dispense with formal inquests into killings by the police or armed forces in those areas.

Najib‘s ruling coalition promoted the law as a means to counter threats to security in predominantly Muslim Malaysia, which has long dealt with a fringe element of radical Islamists.

But critics say the law’s expansive powers threaten human rights and democracy in the middle-income emerging nation, and could now be used to silence critics of the One MalaysiaDevelopment Berhad (1MDB) fund scandal.

“The concern among the civil society and others is because the NSC can be used against anything that the government is unhappy with,” said Wan Saiful Wan Jan, chief executive of the Institute for Democracy and Economic Affairs, adding that it could extend to public rallies.

“It does give the PM a huge amount of power to declare emergency zones…,” he said.

No royal assent

The law was passed on the last day of the legislation session in December, surprising the opposition, as Najib came under mounting criticism over the multi-billion dollar scandal surrounding the 1MDB fund, which he founded and whose advisory council he chaired until recently.

The law was enacted without the customary royal assent from Malaysia‘s king, who had asked for some changes.

Pressure on Najib to step down mounted last week after the US Justice Department filed civil lawsuits alleging that over $3.5 billion was misappropriated from 1MDB. The lawsuits seek to seize more than $1 billion of assets allegedly siphoned from the fund, saying they were part of “an international conspiracy to launder money”.

The civil lawsuits do not name Najib, but refer to a high-ranking government official who received over $700 million of the misappropriated funds. A source familiar with the investigations told Reuters the official, named as Malaysian Official 1 in the lawsuits, was Najib.

Najib, who has denied any wrongdoing, has said that Malaysia will cooperate in international investigations of the 1MDB case.

The ruling party suffered unprecedented losses in the 2008 general elections and then lost the popular vote in 2013 under Najib‘s leadership. The next general election must be called by 2018.

Anti-Najib rallies

The NSC is coming into force amid growing complaints about assaults on civil liberties in Malaysia.

Najib has, in recent months, used the colonial era Sedition Act and other draconian laws to arrest government critics, jail opposition leaders and stifle free speech by suspending media groups and blogs.

“The possibility of the NSC being utilized in order to crack down against any act of civil movement is likely to steadily increase as maneuvering space for the PM decreases,” said Sevan Doraisamy, executive director at Suaram, a human rights NGO.

Malaysia‘s opposition coalition is planning an anti-Najib rally on July 30. Pro-democracy group Bersih, whose street protests last year drew a 200,000-strong crowd, is also planning a separate rally, but has not set a date.

While rallies can still be organised under the Peaceful Assembly Act, the NSC can declare any area – a building, a street or a city – a ‘security area’, where protests will be disallowed.

Inspector-General of Police Khalid Abu Bakar said on Monday he will not allow rallies that demand Najib step down from power.

‘Red Shirt’ supporters from Najib‘s ruling United Malays National Organisation have vowed to hold a counter-rally. They did so last September and it turned rowdy when participants breached security barricades and clashed with riot police.

“I think they (the government) are getting nervous about 1MDB and the reaction of the people,” said civil rights activist and lawyer Ambiga Sreenevasan, adding that the public was also ‘very nervous’ about the new security law.

(Reuters)