September 5, 2015
Political Crises will hobble Malaysia’s International Engagement
The ongoing political crisis will make it more difficult for Malaysia to complete negotiations with its 11 partners in the Trans-Pacific Partnership (TPP) trade agreement, which includes the United States and Japan. Najib, who had joined the TPP in the hopes that it would help him press economic reform to boost longer-term growth, now appears to lack the political juice to push through compromises at home on such politically sensitive issues as government procurement and state-owned enterprises.
The ongoing scandal also appears to have distracted Kuala Lumpur and Washington from pressing ahead on the U.S.-Malaysia comprehensive partnership announced during Obama’s visit in April 2014. Najib and Obama played golf in Hawaii in January, but plans for Najib to visit the White House this spring were jettisoned after the Malaysian government threw opposition leader Anwar Ibrahim in prison on sodomy charges.
Despite the anger over 1MDB, the size of the protests, and Mahathir’s involvement, Najib is expected to retain control of the government. He does not face the threat of a no-confidence vote in Parliament because his ruling coalition holds a significant majority. He also appears to retain outsize support among the leaders of his United Malays National Organization (UMNO) party, which has ruled Malaysia since independence in 1957, despite sniping from Mahathir and his supporters. As a warning to party dissidents, Najib fired his Deputy Prime Minister and the Attorney General in July and promoted four members of a parliamentary committee investigating 1MDB, thus making them ineligible to continue the investigation.
The opposition coalition lacks the heft to exploit the anger over 1MDB to challenge Najib even though it won 52 percent of the popular vote in the 2013 elections. The coalition has splintered along ethnic lines since the imprisonment of Anwar, the grouping’s charismatic leader. The mostly ethnic Chinese-based Democratic Action Party, along with Anwar’s People’s Justice Party, has split with the Pan-Malaysian Islamic Party (PAS) over the latter’s insistence on introducing Islamic law in areas it governs.
PAS decided not to participate in the protests, which resulted in virtually no rural Malay participation, although a small breakaway faction of PAS did support the rally. Roughly a quarter of the protesters were young ethnic Malays, but the majority were middle-class, urban ethnic Chinese, allowing UMNO leaders to conclude that most Malays were less upset about the continuing scandal surrounding 1MDB. A poll released by Merdeka Center found that 70 percent of Malays surveyed were opposed to the protest.
At least for now, the majority of the ruling party’s leaders appear to be siding with Najib. The only scenario in which they would move against the prime minister would be if they determined he would be a liability in the next elections, due before 2018, much like they decided to oust Najib’s predecessor, Abdullah Badawi, in 2008. To this end, Najib remains far more concerned with the slowing economy. If the economic situation continues to deteriorate, it could undermine UMNO’s popularity even with its ethnic Malay base.
It is unlikely that Najib’s political crisis will dissipate before Kuala Lumpur hosts the summits in November. Najib and his foreign ministry demonstrated in early August that they could host an effective ASEAN Regional Forum that seriously addressed challenges in the South China Sea, despite the country’s political distractions. President Obama and Malaysia’s neighbors should assume that Najib will be able host a credible ASEAN Summit and East Asia Summit in November, with serious regional economic and security discussions, despite the Prime Minister’s preoccupation with his political survival.