November 28, 2014
UMNO GA 2014 is a challenge for Prime Minister Najib Razak
No open rebellion, but Prime Minister faces a rebellion over Malay privilege
Malaysian Prime Minister Najib Tun Razak opened the United Malays National Organization annual general meeting Tuesday under siege, partly from former Prime Minister Mahathir Mohamad and partly from his own Deputy Prime Minister and party Deputy Chief Muhyiddin Yassin, who openly seems to be challenging him.
Given Malay politics, where frontal opposition is rare, the attacks are opaque. But the messages from both are clear: under the party’s current leadership, the ruling Barisan Nasional will lose the next general election because UMNO, the biggest component of the ruling coalition, is being deserted by ethnic Malays.
The conclave is expected to run through Saturday and will likely feature the usual fire-breathing attacks on other races and religions from the dais. But a source close to Mahathir say this gathering is also expected to see rank-and-file efforts to pass a resolution telling Najib he can’t do away with the country’s colonial era sedition laws, as the prime minister has promised.
“That is a blow to the PM, who has pledged to abolish it,” the source said. The factions likely won’t raise a growing scandal over the sovereign wealth fund 1Malaysia Development Bd., he said, “because it is now a national problem. We don’t expect it to be discussed because most members don’t know what is going on. It’s too complicated.”
1MDB, however, is the elephant in the room to the leadership, a disastrously managed fund that has accumulated debts of RM36 billion, apparently because of a calamitous investment in a Saudi Arabian oil venture in which RM7.2 billion appears to have disappeared altogether. Subsequent attempts to cover the failed investment have driven debt through the roof. Mahathir has assailed the government over the operation of 1MDB, as has former Finance Minister Daim Zainuddin and several bloggers who are loyal to Mahathir.
A source close to the Mahathir wing described the 1MDB investment as the biggest scandal the country has ever faced, a tall statement given that billions have been lost through disastrous and crooked loans from the state-owned Bank Bumiputera Bhd, the modernization of the Port Klang seaport, attempts to corner the tin market, a failed steel mill and many others.
The bigger issue now is Malay privilege. Ethnic Malays dominate almost all of the top positions in the civil service, the military and the police. Malay-owned companies are given the lion’s share of government contracts. They are given preferential treatment in the number of positions in government universities, receive 7 percent discounts for new houses, have special reserve land in housing settlements and burial plots. A minimum of 30 percent equity must be given to Malays in all listed companies. Mosques and Islamic places of worship are fully funded. They receive special share allocations for new applications.
Nonetheless, Najib and the coterie surrounding him are under fire from Mahathir and organizations such as PERKASA, a Malay superiority group headed by Ibrahim Ali, once described by a critic as “Mahathir’s Brown Shirts,” for giving away too much to other ethnic groupings, particularly the Chinese. The Chinese continue to dominate the economy.
Mahathir and his close associate, Daim, lambasted Najib for attempting to reach out to minorities prior to the 2013 general election, in which a three-party coalition headed by Anwar Ibrahim won a vast majority of the Chinese votes. Anwar’s coalition, Pakatan Rakyat, won a majority of all votes in the election but lost parliamentary seats through gerrymandering and the country’s first-past-the-post electoral system.
Political rumor mills are buzzing over indications that Muhyiddin would make a move for the top job, although change is unlikely during the current meeting. But for months, Muhyiddin, a Johor-based Malay nationalist, had been telling associates and friends that he would like to retire. He is 67 and has said he is tired. He recently went on the haj to Mecca, however, and came back to say he feels rejuvenated.
Last week, he gave a series of interviews to local papers, saying he is afraid the party will lose the next election, which must be held before May 2017, because of continued infighting and corruption. He singled out UMNO Youth and the women’s division for criticism, which is interesting because both are headed by Najib allies. The youth wing is headed by Khairy Jamaluddin, a close lieutenant of Najib’s, and the women’s division is headed by Shahrizat Abdul Jamil, whom Najib saved from a massive scandal involving the loss of millions of dollars from a national cattle feeding scheme.
Mahathir, in his blog Che Det, urged the rank and file to criticize party leaders, saying warlords are blocking fresh blood from entering the party ranks and that ethnic Malay voters are losing faith in the party. Implicit in that attack is that Najib has given away too much political and economic power to ethnic Chinese, who make up 22.9 percent of the population against 60.1 percent for ethnic Malays.
PERKASA, which has become quite influential within UMNO, held its own AGM recently to say that if UMNO continues to ”fail Malays,” Malays will teach UMNO a lesson by leaving the party in the next election.
Unfortunately these statements betray ignorance of the fact that Malays are turned off not so much by UMNO’s failure to protect them as by the fact that the party has grown sclerotic and is characterized by rent-seeking and outright corruption on a vast scale, with the party’s leadership enriching themselves while leaving villagers with few benefits except at election time. One of Muhyiddin’s family, for instance, is rumored to have grown rich enough via government contracts to afford a private executive jet.
Most recently, costs for the construction of a new terminal at Kuala Lumpur International Airport is believed to have ballooned from RM1.7 billion to RM4 billion because of contract irregularities.