August 12, 2015
Malaysia: Unity Government
Malaysia’s deteriorating political situation has driven two once-implacable foes – former Prime Minister Mahathir Mohamad and his onetime rival for UMNO party leadership Tengku Razaleigh Hamzah – together to try to form a unity government to remove current Prime Minister Najib Razak.
“There is a leadership crisis in Malaysia and the consensus is that only one candidate can end it,” said a longtime friend of Razaleigh who played a role in setting up a meeting between the two figures. “That is Ku Li [Razaleigh’s nickname], the only solution. The question is how to put together the mechanics of how it is to be done.”
Sources in Kuala Lumpur say Najib has dug in his heels and refuses to entertain the idea of stepping down voluntarily. It is believed that he has threatened to bring down other politicians and officials with him if he is forced out.
Friends and associates of Razaleigh have been trying for weeks to persuade him to join the effort to oust Najib. But the fact that the former enemies within the United Malays National Organization (UMNO) would seek common cause is an indication of how deep Malaysia’s political and economic crisis has become.
Mahathir and Razaleigh met Tuesday, August 11, the source said, adding that the biggest hurdle with be forcing a vote of no-confidence in the parliament.
The two believe they would have unanimous support from the opposition Pakatan Rakyat coalition, which holds 89 of the 222 parliamentary seats although some Parti Islam se-Malaysia votes would be questionable after the fundamentalist Islamic party split earlier this year. Attempts to reach Pakatan officials were unsuccessful.
The ruling Barisan Nasional holds 132 seats, but UMNO has only 88 of them. A general election is not due until April 2018 – unless events overtake Najib’s defenses.
“The Parliament is dysfunctional in that the speaker [Pandikar Amin Mulia] is not a democratic speaker,” said the source, a constitutional lawyer. “He controls parliament on behalf of the ruling coalition instead of being a neutral speaker. He won’t allow a vote of confidence on an incumbent Prime Minister who has lost the confidence of the people.”
However, with rank-and-file sentiment growing restive in the face of a financial scandal linking Najib to irregularities in the 1Malaysia Development Berhad investment fund, some of the component parties in the BN could be open to changing horses. The Malaysian Chinese Association, for instance, has grown disenchanted with UMNO’s increasing embrace of fundamentalist Islamic views and Malay-first rhetoric. Christian parties in East Malaysia could also be up for grabs.
How much real clout the two elderly politicians have is unknown. Although Razaleigh, 78, has retained his seat in Parliament, he has been out of a leadership position since 1987, when he challenged Mahathir for the premiership and lost in a battle that split UMNO and guaranteed their enmity. Mahathir, 90, remains a more potent force, but he has been attempting to bring down Najib for more than a year, largely without traction.
However, the economic situation may play as much of a role as politics in forcing the issue. Global Risk Insights, the international risk rating agency, warned on August 12 that the 1MDB scandal has “shattered business confidence in Malaysia” and that the government has been distracted as a result from dealing with economic issues like the impact of falling global oil prices on oil-dependent Malaysia’s government debt. Household debt is climbing.
The ringgit, having fallen through the psychologically important RM4:US$1 barrier, is one of the globe’s worst performing currencies. The raid on the currency from global traders appears to be picking up speed, with the ringgit weakening to RM4.25 to the US dollar before the central bank used enough reserves to drive it back down to RM4:03. Banks have begun to limit retail withdrawals to RM3,000 and currency traders say there is a shortage of foreign currencies as people seek safer havens in the dollar.
In the meantime, Najib may be losing his grip on UMNO. He still has the loyalty of a large number of the 191 divisional cadres, mostly through vast payments that provide them with electoral resources and jobs between elections, but the grass roots are another matter.
An extraordinary video went viral earlier this week, for example, of a young woman going postal on Najib during an UMNO women’s wing gathering in Langkawi, accusing Najib in a screeching voice of having “urinated on the 3 million UMNO members. He needs to be sent for medical treatment.” The video has been seen by hundreds of thousands of people.
BERSIH, the reform NGO, has ordered what it hopes will be a massive rally for August 29. Mahathir is urging people to attend and has suggested they bring water bottles to mop up the tear gas. The Police have threatened to block the rally.
The focal point of the whole mess is 1MDB, which was set up as a state-backed investment fund in 2009 with the advice of Jho Taek Low, the young Penang-born tycoon and friend of the Najib family. In the intervening years, the fund, as a result of what appears to be extraordinarily bad management, has run up debts that by some estimates have reached RM50 billion, an unknown amount of that unfunded.
In early July, the Sarawak Report and the Wall Street Journal reported that US$680 million was transferred from unknown sources through a complex web of transactions to Najib’s personal bank account at AmBank in Kuala Lumpur prior to the 2013 general election. Sarawak Report has released graphic details on the flow of millions of ringgit through banks, companies and government agencies linked to 1MDB into accounts held by Jho Low, as he is known, and other accounts.
Najib has said the money was not for his personal use, leaving others to hint that it came from Middle Eastern sources to be used in the 2013 election. But sources have told Asia Sentinel that at least RM1billion flowed out from Najib’s accounts overseas. Neither the source of the money nor its final destination is clear. Certainly, given the relatively small amounts needed to fund electoral races in Malaysia, it would seem impossible to spend such a huge amount
On his blog, Che Det, Mahathir ridiculed the idea that the money came from unknown Arab sources, saying “his claim that Arabs donated billions is what people describe as hogwash or bullshit. Certainly I don’t believe it and neither can the majority of Malaysians if we go by the comments on the social media. The world had a good laugh.”