Time Magazine to Obama: Steer Clear of Malaysian Prime Minister Najib

August 27, 2015

Obama Should Steer Clear of Malaysian Prime Minister Najib Razak and Why

by Charlie Campbell


Washington is having serious trouble finding dependable allies in Southeast Asia

The U.S.’s “rebalancing” toward Asia has two main pillars: being a counterweight to China and securing a free-trade deal called the Trans-Pacific Partnership. If Washington is to succeed on both fronts, it needs as many friends in the region as it can win. The U.S.’s newest ally is Malaysia, this year’s chair of the 10-member Association of Southeast Nation, collectively a growing market, and, on the surface, a modern, democratic, Muslim country.

In April 2014 U.S. President Barack Obama paid an official visit to Malaysia, the first sitting President to do so in decades, and, later in the year, played golf with Malaysian Prime Minister Najib Razak when both were on holiday in Honolulu. This November, Kuala Lumpur will host the next East Asia Summit and Obama is due to attend.

Obama_Najib-1mdbObama and the Sapuman

But recently, all the news coming out of Malaysia is negative. After becoming embroiled in a corruption scandal, Najib on Tuesday sacked his Deputy and Malaysia’s Attorney-General in an apparent purge of critics. British Prime Minister David Cameron is facing a domestic backlash for pushing forward with a visit to Kuala Lumpur this week despite the snowballing controversy.

Here are five reasons why Obama might want to break from Cameron by giving Najib a wide berth.

  1. 1MDB — A Wall Street Journal report has alleged that Najib’s personal bank accounts received nearly $700 million in March 2013 from 1Malaysia Development Berhad (1MDB), a government-owned development fund. Najib has protested his innocence and threatened legal action against the Journal. “I am not a thief,” Najib told Malaysian media on July 5. “I am not a traitor and will not betray Malaysians.” The police, the local anti-corruption agency, the attorney general’s office and the central bank are investigating the allegations. On July 8, the police raided 1MDB’s office in Kuala Lumpur and took away documents. Even before the latest news, 1MDB was an embarrassment for Najib, who chaired the fund’s advisory board as debts of $11.6 billion were accrued. Such are the suspicions of malfeasance that former Prime Minister Mahathir Mohamad, who ran the country from 1981 to 2003 and has long been considered Najib’s mentor, has repeatedly called for his protégé’s resignation over 1MDB’s alleged mishandling.
  1. Anwar Ibrahim — Najib’s main political rival is once again in prison for a sodomy conviction. Human Rights Watch deemed his five-year sentence handed down Feb. 10 to be “politically motivated proceedings under an abusive and archaic law.” This is the second time Anwar has been jailed for sodomy.
  1. Hudud — Stoning for adultery and amputation for theft are not the kind of punishments meted out by the progressive state that Malaysia purports to be. Yet Najib’s United Malays National Organisation (UMNO) is supporting attempts to introduce hudud Islamic law in the Pan-Malaysian Islamic Party’s (PAS) heartland state of Kelantan, where nightclubs are forbidden and men and women are designated separate public benches. Why is UMNO supportive of recognizing hudud under federal law? Largely because PAS is part of a three-party Pakatan Rakyat coalition that is UNMO’s chief challenger. The other partners — Anwar’s Keadilan, or People’s Justice Party, supported by middle-class, urban Malays, and the Chinese Malaysian–backed Democratic Action Party (DAP) — are strongly against hudud. Many analysts accuse UMNO of cynically fostering a radical Islamic bent to widen rifts in its political opponents.
  1. Shaariibuugiin Altantuyaa — In 2002, when Najib was Defense Minister, a $1.25 billion contract was signed to purchase two Scorpène submarines from French firm DCNS. Altantuyaa was a Mongolian woman who, knowing French, facilitated negotiations as a translator, and then allegedly attempted to blackmail Abdul Razak Baginda, one of Najib’s aides with whom she was also having an affair, for $500,000 over “commission” payments he had allegedly received. Two Policemen posted to Najib’s bodyguard detail were convicted of murdering Altantuyaa on October 18, 2006. Najib denies any involvement.
  1. Prevention of Terrorism Act — Najib campaigned on scrapping the controversial Internal Security Act (ISA) but then immediately replaced it with the equally sweeping Prevention of Terrorism Act (POTA) and Security Offences (Special Measures) Act, or SOSMA. The POTA includes practically the same powers as ISA, including two-year detention without trial, and was dubbed a “legal zombie arising from the grave of the abusive [ISA]” by Human Rights Watch. Najib also vowed to repeal the similarly maligned Sedition Act but reneged after his election in 2013. In fact, in April his government extended the maximum jail term under the Sedition Act from three to 20 years.



Malaysia Scandal Wreaks Havoc on Economy

August 26, 2015


Malaysia: Scandal Wreaks Havoc on Economy

by John Berthelsen@www.asiasentinel.com


Malaysia’s central bank (Bank Negara Malaysia) is clearly losing the battle to defend its national currency, the Ringgit, which fell to RM4.2275 to US$1 on August 24 before recovering slightly on the bank’s buying, with the pace accelerating as the international financial community continues to lose confidence in the country’s  deteriorating economic position and its massive twin financial scandals.

Events over the weekend did little to inspire confidence, with the Police arresting 29 protesters before they could even start a rally and charging them with Section 124 of the Penal Code, a nebulously worded amendment that deals with “activities detrimental to parliamentary democracy” and carries penalties up to 20 years in prison.

The electoral-reform group Bersih has called for mass street protests in Kuala Lumpur, Kuching and Kota Kinabalu on August 29 and 30. Police have vowed to stop the rally and jail its organizers.  The harsh penalties leveled at the protesters over the past weekend may have been aimed at frightening next week’s participants.

Union Bank of Switzerland (UBS) issues currency alert

The Swiss bank UBS last Friday, Aug. 21, issued an alert saying the magnitude and speed of the currency’s decline “exceeded our bearish expectations,” falling 24 percent against the US dollar over the past year and bringing the rate to a 17-year low.  But although UBS set a short-term target of 4.35, privately UBS bankers are saying the currency could go to RM5.0:US$1 just this week. It shot through the psychologically important barrier of 4:1 last week without a hitch.

With international reserves having fallen to US$94.5 billion as of August. 15, Bank Negara has few tools to stop the slide. Bank Negara Governor, Zeti Akhtar Aziz last week ruled out currency controls, leaving her only the weapon of raising interest rates, which would play havoc with the economy, given high household and government debt.  With crude oil and other commodity prices sliding, GDP growth fell to a still-respectable 4.9 percent for the second quarter.

The Kuala Lumpur stock market has headed for collapse as well, falling by 12.7 percent since August 3 and 2.17 percent today alone.  Although all Asian markets have been descending in line with China’s crashing bourses, the KLSE is the worst-performing market in Asia and looks set to get worse.  Foreigners have been bailing out of the market, the currency and foreign direct investment, with FDI plummeting by 41.8% to RM21.3 billion in the first half of 2015, although officials said the sharp fall was due to a high base year in the first half of 2014.

Throw it away

Prime Minister Najib Razak is seemingly willing to wreck almost every government institution in his bid to stay in power in the face of a widespread effort by the opposition and members of his own party to oust him over two massive scandals, one a US$681 million “donation” from unnamed Middle Eastern interests into his personal account, supposedly in gratitude for fighting ISIS. However, US$650 million was spirited back out of the account in 2013 to another Najib personal account in Singapore – then disappeared out of that account to somewhere else, raising more questions than it answered. 

The second is his stewardship of 1Malaysia Development Bhd., a state-backed investment fund which, according to critics, has US$6.6 billion worth of unfunded liabilities that a revolving door of chief executive officers and accounting firms have been unable to explain. The Sarawak Report, edited from the UK by Clare Rewcastle Brown, alleged that hundreds of millions of dollars have been diverted to accounts in Singapore and elsewhere held by the young Penang-born tycoon Jho Taek Low, who was instrumental in persuading Najib to establish the fund.

Unity Coalition Seeking No Confidence vote?

However, despite desperate attempts to contain the scandals by sacking or neutralizing a long list of officials involved in investigating them, there are indications that they are escaping into the wider global financial sphere. On August 26, Switzerland’s financial regulator FINMA announced that it is investigating the extent of any involvement which its banks may have had in any of the alleged ‘dubious’ transactions linked to 1MDB. At least half a dozen banks including Falcon Private Bank, BSI of Lugano, JP Morgan and Coutts & Co have been named elsewhere as involved.   Singapore authorities have also said they are investigating accounts connected to 1MDB.

Over the weekend, it appeared that the opposition  Pakatan Rakyat coalition’s three component parties might be willing to at least discuss the possibility of teaming up with former Prime Minister Mahathir Mohamad, Najib’s severest domestic critic, to seek a vote of no confidence in the Parliament.  Mahathir is insisting that the ruling Barisan Nasional lead any unity government. Lim Kit Siang, the Democratic Action Party parliamentary leader, said that the idea might be worth discussing. 

For Mahathir to team up with Lim would be a surprise. But earlier this month he agreed to meet with longtime foe Tengku Razaleigh Hamzah, who tried to oust him in the 1980s and failed, nearly destroying UMNO in the process. A vote of confidence would first have to get by the parliamentary speaker, who is a close ally of the Prime Minister’s.

Mahathir and Najib in the same UMNO pod

Perhaps anticipating such a challenge, over the weekend Najib set out to play the race card, telling a United Malays National Organization assembly that Malays and Muslims would be ‘bastardized’ if UMNO is ousted from ruling the government as a part of the Barisan Nasional coalition. The leaders of the challenge against him are almost all ethnic Malays, including Mahathir, Razaleigh, fired deputy prime minister Muhyiddin Yassin and others.

Fear tactics by Najib

“Some people say that the Malays will be defeated, beaten or fall flat on the ground but I choose the word ‘bastardize,’ Najib was quoted in local media as saying – a veiled reference to the possibility that ethnic Chinese would dominate the political process as well as the economy.

He and other officials have also charged that unnamed foreigners are also out to wreck Malaysia’s parliamentary democracy.  The United States’ two leading newspapers, the Wall Street Journal and the New York Times, have both carried extensive, deeply detailed stories describing both the 1MDB shenanigans and the Najib family’s personal wealth including expensive properties in New York and California. Najib has threatened to sue the Wall Street Journal for its reports, but has stalled on actually issuing a demand for retraction. His counsel’s latest ploy was to say he would seek advice from “other countries” on the feasibility of suing. That has been met with derision.

The Sarawak Report has been a particular source of irritation, with a constant drumbeat of entries describing family and governmental misdoings. The government has charged Rewcastle Brown with sedition and sought to have her extradited from the UK, which is regarded as nonsensical grandstanding for a domestic audience.


The Unfolding of the Najibian Tragedy

August 25, 2015

Malaysia: The Unfolding of the Najibian Tragedy

by Manjit Bhatia


As embattled Prime Minister Najib Razak still faces questions over the 1MDB scandal, the rule of law and justice are collapsing. 


The 1MDB saga continues on par with the soap-opera Days of our Lives.

The twists and turns come at a camel’s gallop. After all the promise of righting a wrong, Malaysians – and others – are still waiting to see if Prime Minister Najib Razak will launch a defamation suit against The Wall Street Journal. It’s been eerily quiet. Is this the lull before the storm?

Meanwhile, Najib Razak has not said a word on the source of the US $700 million found parked in bank accounts in his name. Nor has he said what he has done with the loot. Buying votes to win elections 2013 most likely.

All he has claimed is that the money is not his, and that he never benefited from it. There’s no element of greed here, nor of deception, on his part. So he would have Malaysians believe. Other than that his lips are Superglue sealed.

At the same time, the Malaysian Anti-Corruption Commission (MACC) poked its head out the trapdoor to claim its boss, Najib Razak, is clean, that the $700 million found in bank accounts he directly controlled – being in his name – came from the Middle East.

They were financial donations to the political party Najib leads, the United Malays National Organisation (UMNO), in a virtual one-party state. But why would anybody believe the MACC when it has been accused of murdering in custody DAP political activist Teoh Beng Hock and covering it up since?

And still more shenanigans and malarkey have happened over the last week. These are some of the best of Malaysia’s political trysts.

The MACC is probing the 1MDB fiasco. While the MACC has been raiding the offices and homes of those connected one way or another to the failed and bankrupt sovereign wealth-making investment fund, and arresting people for the purposes of questioning them, the Police under Inspector-General Khalid Abu Bakar was launching raids on the MACC.

In six short years Malaysia has morphed into one big looney farm. But then it has had a long gestation period – 39 years, to be sure.

Just the other day I saw an advertisement by Malaysia’s peak tourism body, funded by the Najib regime, pasted on the back of a bus in Hong Kong. It read: “Malaysia – Endless Celebrations”. I couldn’t decide whether to laugh or cry. Not so long ago, Najib himself had boasted Malaysia as the land of “endless possibilities”. I laughed hard then too.

On the weekend, I read a piece in The New Yorker by Jeffrey Frank titled ‘Nixon’s Nightmare – and Ours – Forty Years Ago’. We all know the story of Richard Milhous Nixon and his Watergate infamy, and how two Washington Post reporters, Bob Woodward and Carl Bernstein, brought him down to his knees, milled a confession out of him on national television, and forced Nixon to quit the presidency before he faced certain impeachment.

Frank used two key expressions when discussing Nixon: the first, “fevered detestation”, which he claims, rightly, to have abated since today’s generation of Americans will have little to no clue what or indeed who Nixon was. And those who do are a dying breed.

Former US President Bill Clinton, at Nixon’s funeral, hoped that Americans would judge Nixon only on “his entire life and career” and nothing less. Perhaps Clinton was really speaking for himself, hoping people will never recall Lewinsky and his infamy. Najib has his own ‘gates’ too – too many to count. No doubt he’d be making similar wishes as well.

The second expression Frank used relating to Nixon was that the man “remains an emblem of political villainy”. Frank added:

He was, after all, a President willing to countenance law-breaking and then cover it up; we know this because he had the bad luck to leave an uncensored oral history: the secret White House tape recordings made between February, 1971, and July, 1973. They captured some of Nixon’s worst moments.

Which reminded me at once of Malaysia’s ongoing woes. These woes have become unquestionably severely embarrassing and also terribly dangerous for Malaysia and Malaysians.

Every day the risks of political, economic and social rupture is escalating. Malaysians have been entrapped in Najib’s and UMNO’s undermined institutions, none of which are worthy of the name or definition. Continuing from Mahathir Mohamad’s legacy, the mounting risks are, without doubt, high.

So desperate and so thoroughly incompetent is Najib that he cannot bring himself to admitting his wrongs. Instead, he has chosen to box himself into a corner and covering himself in Stalinist or Maoist stripes. He has suspended Malaysia’s premier local media The Edge for daring to uncover the truth of corruption that maligns Najib, UMNO and ruling coalition Barisan Nasional.

Twitching in his grand seat, Najib parceled out his troopers on a witch hunt the likes of which would have made Joseph McCarthy enormously proud. So rather than tell the truth, Najib has chosen to shoot the messenger – one of the final acts of a desperado.

Najib-It takes a worried man

Najib had has grown even more desperate.He sacked his Attorney-General, Gani Patail, who was said to be in the midst of poring over investigation papers on Najib Razak. He sacked Shafie Apdal, his Rural and Agriculture Minister, who’ is a key member of the king-making UMNO Supreme Council, despite Apdal’s multitude of chronic gaffes. And he sacked Muhyiddin Yassin, his deputy PM, who claimed Najib had confessed to the US $700 million in his bank accounts.

Sacking Muhyiddin inevitably brought back searing memories of Mahathir sacking Anwar Ibrahim at the height of the late 1990s Asian economic crisis, and the former deputy PM’s subsequent imprisonment.

Najib demanded that UMNO leaders – who had also benefited from distribution of the US $700 million in his accounts – ought to end their hypocrisy. So it comes back to the money, its murky trail, the question of exactly who his Middle-Eastern donors were — and why them, specifically – and why, indeed, the money trail continues to be linked more directly to the bankrupt, debt-ridden 1MDB.

A crucible the size of a giant ocean-going ship’s anchor now hangs around Najib’s neck, and its leaden mass is weighing him down by the minute. Either he drowns in his own villainy or UMNO leaders move against him sooner rather than later.

Najib is now surrounding himself with his loyal sycophants who can be easily bought with promises of wealth and power. This has been Malaysia’s moral destiny – corruption, a cancer that was unleashed not in 1969 but earlier and within the ranks of UMNO and the Malay (Bumiputera) Economic Congress. The longevity of Malaysia’s political power rests almost entirely on what Yoshihara Kunio called “ersatz capitalism”.

The moves against the MACC and other investigatory bodies, such as the Public Accounts Committee of the Malaysian Parliament, which Najib has practically dismantled by promoting its committee head to a cabinet position, are a sign not dissimilar to Richard Nixon’s in the late 1960s. William Scranton, a friend of Jeffrey Frank, described the state of Nixon’s mind then as “darn paranoia.” Worse, Najib – like Nixon – appears to be encouraging lawlessness in Malaysia, or at least extra-judicial powers in the executive.

Few if any Malaysians will have read much less heard of one of Arthur Miller’s great body of literary work, The Crucible. It is a play, first published in 1953, and based in Salem, a village in Massachusetts, in 1692. A group of girls fell ill, becoming victims of hallucinations and seizures. Accusations of witchcraft became rife. Villagers are accused of consorting with devils and other evil spirits, and the state government and its judiciary are accused of being heavily influenced by religious dogma. Dozens of people are jailed on mere suspicion.

Literary critics have argued that Miller was criticising McCarthyism through the play. The co-incidence is more than uncanny. Those in Salem who refused to incriminate friends, relatives and colleagues would lose their careers or be blacklisted from potential jobs. Malaysia’s opposition Democratic Action Party’s outspoken and adept finance spokesperson, Tony Pua, has been banned from traveling abroad, as is S. Ambiga, the former head of electoral reform movement Bersih.

Najib is becoming hysterical. He’s afraid. He sees his proverbial political neck stretching in the proverbial political noose. Whatever his game going forward, his time is quickly coming to an ignominious end. His reputation he has ruined by his own hand.

Like his erstwhile enemy and one-time mentor Mahathir Mohamad, Najib Razak is desperately trying to empower himself by concentrating more power in his hands with the help of the worst of Malaysia’s institutions – the corrupt Malay-dominated bureaucracy, the corrupt Malay-dominated police, the incompetent Malay-dominated armed forces chiefs, and the corrupt Malay-dominated judiciary.

Najib Razak is devoid of all political legitimacy and personal integrity. He can’t save himself any more than he can be saved by others.

In Act III in The Crucible, one of Miller’s main characters, Danforth, attempting to understand the dichotomy between God and the devil, whether dissent is associated with satanic forces, and the underlying logic of the witch trials, resolves thus: “A person is either with this court or he must be counted against it.”And so it is too in Malaysia.

Manjit Bhatia is Head of Research at AsiaRisk, an economic and political risk consultancy firm.

Malaysia’s Penang: The Pearl of the Orient

August 24, 2015


Malaysia’s Penang: The Pearl of the Orient

by Zairil Khir Johari

Penang1 Pearl of the Orient and Rugged Society

When tabling the 11th Malaysia Plan (11MP) in Parliament on May 21, the Prime Minister waxed lyrical about the government’s intention of “anchoring growth on people” in this upcoming five-year development plan that is set to bring Malaysia towards the “aspiration of an advanced nation that is inclusive and sustainable by 2020.”

As usual, the Prime Minister is never short on verbosity. The 11MP document is replete with impressive jargons that tick all the right check boxes. However, the devil is always in the details, and the details in this case belie the grand promises of the Prime Minister.

Is the 11MP truly inclusive?

The term “inclusive”, for example, is used judiciously throughout the entire document. This implies a commitment towards ensuring that any gains from development and progress would be spread and shared by all Malaysians. Unfortunately, the inclusiveness of the 11MP is cast in serious doubt when one finds that the RM260 billion development plan has conveniently ignored certain regions, despite its massive scale.

For example, one of the six “game changer” strategies that have been introduced – “investing in competitive cities.” This strategy rightly recognises cities as a critical growth engine of the 21st century economy which plays a key role in spurring growth not only by providing jobs and trade opportunity, but also by connecting them to rural and suburban areas. Such a strategy is all the more relevant given the current context of a globalised world where talent migration is increasingly influenced by choice of city before choice of jobs.

Therefore, the 11MP seeks to develop “competitiveness master plans” for four major Malaysian cities, namely Kuala Lumpur, Johor Bahru, Kuching and Kota Kinabalu. These master plans are based on the principles of “creating density, expanding transit-oriented development, strengthening knowledge-based clusters, enhancing liveability, encouraging   development and practices, as well as ensuring inclusivity.”

The list of chosen cities appears to have one major exclusion – Penang.Notwithstanding the fact that Penang is the most well-known and developed city after KL, as well as the most liveable city in Malaysia and the eighth most liveable in Asia according to ECA International, the exclusion of the city-state is also incongruent with the very criteria purportedly used in making the selection.

According to the 11MP, the four cities were chosen based on their potential in terms of “population size, GDP contribution, existing major infrastructure, concentration of higher learning institutions, geographical advantage, and also the principle of inclusivity and fair distribution.” On each of these criteria, there is nothing that suggests why Penang should be sidelined.

LGE1LGE leads a Clean, Accountable and Transparent Government

In terms of population, Penang constitutes 1.7 million people, while the “Greater Penang Conurbation” metropolitan area covering parts of central and southern Kedah, along with northern Perak, encompasses almost three million people. In addition to that, Penang can boast of having the second highest population density in the country after KL, with about 1,500 people per sq km. These are ideal conditions for a competitive city.

Statistics from the 11MP itself also recognises Penang as a major GDP contributor. In 2014 Penang produced a GDP of RM67bil, which is the fifth highest in the country after KL, Selangor, Johor and Sarawak – a significant achievement considering the fact that Penang is also the second smallest state after Perlis. This translates to an impressive GDP per capita. This year Penang is expected to surpass Selangor with a GDP per capita of RM46,019, compared to RM45,617 for the most developed state in Malaysia. Thus, there is no better evidence of Penang’s role as an integral cog in the Malaysian economy.

Where infrastructure is concerned, Penang is already an established logistics hub for the northern region, in which the principal seaport, airport and rail station are located. In fact, the conditions are ripe for the government to invest in expanding and integrating the existing infrastructure in order to create a world-class urban conurbation.

In terms of higher learning institutions, Penang is also a well-known centre for education at all levels. Besides nine international schools, Penang also houses one of the country’s top public universities, USM, along with many other private colleges and university colleges. In addition to that, Penang has also attracted foreign institutions such as Hull University from the UK which will be setting up a campus in Batu Kawan in the near future.

As for geographical advantage, it is almost impossible to deny Penang’s optimal location, be it by air, land or sea. More importantly, Penang is also an important link that connects northern Indonesia to southern Thailand.

Finally, the four chosen cities represent the two states of Borneo, as well as the central and southern regions of Peninsular Malaysia. This induces a very glaring question – why is the northern region of the peninsula left out? How then, can the choice of cities be said to reflect the principles of inclusivity and fair distribution?

Based on all the above criteria, Penang not only qualifies, but should in fact be a prime candidate for the development of a competitive cities master plan. Clearly, Penang’s progress would help drive growth in the entire northern region in particular and Malaysia in general. Unfortunately, despite such a logical corollary, the federal government has chosen to exclude Penang for reasons known only to them.

The Malaysian stepchild?

It must be noted that this is not the first time that Penang has been unfairly treated. In the Ninth Malaysia Plan (2006-2010), Penang was promised many things, including two massive public infrastructure projects in the form of an rm 2 billion monorail line and an RM1.5 billion highway called the Penang Outer Ring Road (PORR).

We don’t double check – we trust what people tell us. They might be lies, but I think a lie invented by a person who is lying also tells you something about them.

Both the monorail and the PORR projects were put on indefinite suspension during the mid-term review in 2008, coincidentally following the 12th General Election in March the same year.

The monorail project looked set to be on its way when a tender was held in 2007 and awarded in 2008. However, both the monorail and the PORR projects were put on indefinite suspension during the mid-term review in 2008, coincidentally following the 12th General Election in March the same year, which saw the ruling BN coalition losing power in Penang. Two Malaysia Plans later, both projects have yet to resurface.

Penang Port. The state is already an established logistics hub for the northern region of Malaysia, where the principal seaport, airport and rail station are located

Penang Port. The state is already an established logistics hub for the northern region of Malaysia, where the principal seaport, airport and rail station are located.

However, in spite of the federal government’s non-cooperation, the Penang state government has moved to resolve the longstanding problem of traffic congestion in the state by developing the Penang Transport Master Plan. This long-term transport infrastructure project seeks to alleviate traffic congestion by incorporating transport systems with development plans in order to achieve optimum mobility.

At a total estimated cost of RM27 billion, this integrated plan is based on comprehensive studies that began in 2011, and will encompass the construction of new road highways, a light rail system in the form of LRTs and trams, upgrading of the existing bus system, innovative features such as water transport and South-East Asia’s first under-seabed tunnel.

penang-free-schoolThe Oldest School-Born 1816-Fortis Atque Fidelis

Despite many challenges and financial limitations, the Penang state government has signalled its commitment by pressing ahead with its ambitious plan. Currently, the public transport portion is being tendered for a Project Delivery Partner, while some of the highway improvement projects are scheduled to be completed in two to three years’ time.

The federal government’s attitude towards Penang is, on the one hand, regrettable, and on the other, ironical. Treating the state as an unwanted stepchild is akin to cutting their nose to spite their face. And while they may feel smug about it now, they will regret it in the future when they realise that Penang will, as it has in the past, prove its resilience as the prodigal child of Malaysia.

Zairil Khir Johari is MP for Bukit Bendera, Penang, and executive director of Penang Institute.

Reading the tea leaves of 1MDB

August 23, 2015

Malaysia: Reading the tea leaves of 1MDB

The 1MDB scandal shows that Malaysia is in desperate need of political finance reform. But can the country clean up its messy ‘money politics’?

Tea Leafs of Malaysian PoliticsMoney Politics with Malaysian Ringgit

By the time this piece comes out—even if it’s only a few hours from the writing—the array of known ‘facts’ about Malaysia’s bewilderingly complex 1Malaysia Development Berhad (1MDB) scandal will almost certainly have changed.

There may well be another conspiracy theory or two making the rounds by then, and some creative new threat,spin and bombast from one or another of Prime Minister Najib Tun Razak’s currently trusted spokespeople. I have no special powers to exhume the real story of where the money came from or where it went, so I will leave that archaeology to others. Instead, I will focus on what the unfolding of this drama indicates politically.

First, a brief sketch of the 1MDB saga, for those who have been spared or have been ignoring the gory details. Problems with 1MDB, a state investment fund, are not new. Until recently, it was missed payments toward the fund’s USD11 billion in debt, as well as murky managerial roles and practices, that worried investors and rankled observers.

Yet reports over the past several months, particularly by UK-based Sarawak Report, Malaysia’s The Edge financial daily, and the Wall Street Journal, have also unearthed the convoluted path of roughly US $700 million into accounts under Najib’s name, most of it shortly before Malaysia’s May 2013 general elections.

After initial quasi-denials and bluster, Najib’s camp has all but admitted that yes, the PM’s accounts did receive these funds—but they were perfectly legal donations from some astoundingly generous supporter(s), not from 1MDB. (By now, ‘1MDB’ stands synecdochically for a huge mess of issues.)

In the meantime, most of the officials investigating the saga have been early-retired, snap-promoted, detained for investigations themselves, or otherwise shunted off the task; critical activists and media have been whacked more forcefully, with threats of wilder punches yet to come.

What does this debacle tell us about the workings of Najib’s United Malays National Organisation (UMNO) and its Barisan Nasional (BN, National Front) coalition, or Malaysia’s wider political framework?

In some ways, the saga confirms what we know: commitment to civil liberties is tenuous, for instance, and ‘authoritarian backsliding’ is appealingly easy (and difficult to reverse), given the lack of effective checks and balances in Malaysia’s political system. Three other factors are worth highlighting.

First, while UMNO is a strongly institutionalised party, it is also deeply personalised, not least due to patronage ties within the party itself. No one should have been shocked by Najib’s acknowledgement that he ‘will evaluate people based on their loyalty’, rather than on how ‘smart’ they are—even at a time when clear thinking would be a real help.

Nor is this emphasis on loyalty unique to UMNO; other BN as well as opposition parties, too, are known for their ‘warlords’ and ‘camps’, for dynastic tendencies, for entrenching leaders as symbols, and for offering little latitude to threateningly clever upstarts.

Fault Mahathir’s long, self-aggrandising durée, the feudal sultanates of Malaysia’s past, or the structure of intraparty elections—but the point remains that if loyalty to people trumps loyalty to principles, parties will lack the political will to fix problems beyond sacrificing boat-rockers and whistle-blowers.

At this point, UMNO appears to be floundering, searching for direction. Maintain the BN’s power-sharing model, however shallow? Ally with Parti Islam seMalaysia, PAS, for a Malay-unity government? Rally round Najib and hope memories are short? Reshuffle the spoils by flocking to a new supreme leader—or back to Mahathir (his own sullied slate wiped magically clean)?

Second, Malaysian civil society is in a weak position to intervene. On a macro level, the rise (and decline) of the opposition Pakatan Rakyat (People’s Pact) coalition and its component parties has been at the expense of autonomous voices; ever more political space has become effectively partisan.

Creative solutions are in short supply, too. Mass street protests clearly hold appeal; the organisers of Bersih 4.0 are hard at work as outrage mounts. Yet the impetus for participation seems to be more frustration and anger than a sense of empowerment to effect change.

At best, street protest is a blunt tool, however elaborate the demands expressed. As one poster to an email news-list quipped, beyond repression, the risk in breaking the proverbial camel’s back is that you might end up with just another camel.

Moreover, the key problems at issue are not ones that civil societal actors are structurally positioned to address. Changing UMNO such that dissidents can unseat a party president requires action within the party.

Disassembling patronage politics is a long-term process, requiring civic education as well as a stepped-up regulatory framework. Putting in place effective electoral reforms requires substantial legislative action; it is up to parliament, too, to call a vote of confidence or put in place a transitional government.

On that note, lastly, Malaysia is in desperate need of political finance reform.

Najib’s supporters are correct in insisting that even a ridiculously large, anonymous donation to a political party is not illegal in Malaysia, so long as it does not come with strings or from public funds.

Even spending much of that money on electioneering would be above-board; what the Election Commission regulates is spending by candidates themselves, during the (very brief) official campaign period.

Government and opposition parties alike benefit from being not required to tally up and report contributions, and able to spend fairly freely between elections (although recent efforts to pin the lack of reform on opposition parties and their shadowy supporters are risible).

Unfortunately, Malaysia cannot readily borrow reform ideas from elsewhere; context matters. Suggestions for public funding of campaigns, for instance, are gaining traction among opposition strategists—yet such fixes may miss the point.

1MDB-Najib-Rosmah-685x320It takes two to tango

‘Money politics’ in Malaysia refers less to desperate fundraising and the debts so incurred than to parties’ direct involvement in and ties with business, as well as cronyism and kickbacks in awarding government contracts.

The priority instead should be such steps as establishing and enforcing more realistic limits for campaign expenditures than are currently in place; keeping track of at least large donations; enforcing open tender and transparency; establishing and empowering a competent administrative apparatus to monitor total election spending; and ensuring key agencies like the Malaysian Anti-Corruption Commission maintain (or regain) authority and independence.

Without doubt, ‘1MDB’ is a fiasco on all counts.We may never know the full story, particularly given the pace of efforts to stymie investigations. But Malaysia has no choice but to move forward somehow—and when the rot is at the roots, merely pruning the tree won’t suffice.

Much depends on where the impetus comes from … but only the tea leaves can tell whether the end result will be another limping camel or a fresh new ride.

Meredith Weiss is Associate Professor of Political Science at the State University of New York at Albany. She is currently a key investigator on an ANU research project led by Edward Aspinall examining money politics, patronage, and electoral dynamics in Southeast Asia.

Governor Zeti–Malaysia’s “Taichi”Queen

August 22, 2015

Governor Zeti–Malaysia’s “Taichi”Queen



Bank Negara Malaysia’s (Central Bank of Malaysia) Governor – Zeti Akhtar Aziz – has finally revealed herself to the public since the mass “arrest, firing and hiring” exercise carried out by Prime Minister Najib Razak to “cleanse” himself from an allegation of pocketing a staggering RM2.62 billion (US$696 million) found in his personal account.

It does not take a genius to figure out the supposedly iconic and respected Zeti has most likely made a deal with the tainted Najib regime for a win-win solution. Interestingly, Zeti has been awarded the Wharton Dean’s Medal in March this year, the same Wharton School of the University of Pennsylvania where controversial Jho Low received his education.

Zeti and Najib

Let us not speculate that it was the bad boy Jho Low who “bought” the medal for Madam Zeti, shall we (*grin*)? Isn’t it scary that a renowned Bloomberg columnist, William Pesek, had named her as a candidate for the post of IMF president following the resignation of the former president Dominique Strauss-Kahn (due to sexual assault charges) in May 2011?

It seems the deal agreed between Governor Zeti and PM Najib would ensure nobody go to prison, simply because both parties are on the same boat tainted with RM2.62 billion dirty money. Understandably, a new set of scripts needed to be drafted for a new chapter for this drama.

Here are some statements from Zeti.

  • She said the investigation papers and the “appropriate enforcement action” were submitted to the new A.G. Apandi Ali earlier this week.
  • She said Bank Negara was not an enforcement body and could not take action against any alleged wrongdoing.
  • She said it was the responsibility of financial institution (Najib’s private account was with Ambank) to conduct due diligence, not the central bank.
  • She said will sue those spreading rumours about her over issues surrounding 1Malaysia Development Berhad (1MDB) Scandal.
  • She said will remain in office until her term ends in April next year (2016).


The first statement is the most important among all. It is fabulous because the word “enforcement” gels superbly with the new Attorney-General. The word used is “enforcement” instead of “prosecution”, which would make life easy for the “friendly” A-G. So, how do you know PM Najib can sleep soundly tonight hugging his beauty legend wife?

If we read this correctly, the “appropriate enforcement action” will be applied to “new” offenders, and not applicable to PM Najib’s RM2.62 billion “donation” money. In other words, what the seven hundred million dollar man had received is considered “past tense” so let the bygones be bygones. Any punishment(s), if there is any, is for “future tense” and offenders.

The second statement is laughable. If Bank Negara could not take action against any alleged wrongdoing, which in this case presumably to be against the Prime Minister himself, then who the heck gave Zeti the authority to raid Genneva Malaysia suspected in scam involving gold trading in 2012, and in the process seized gold, monies and other properties?

Assuming Zeti is miles smarter then “3.85 CGPA” Ahmad Mazlan, surely she doesn’t buy the story that the US$700 million was a donation, does she? In comparison, Genneva Gold scam looks so much innocent. Well, at least Genneva investors received their physical gold, although not all of them did. Isn’t that more legitimate than getting US$700 million in private account for doing absolutely nothing?

The third statement only goes to show how birds of same feather flock together, not to mention Malaysia now has a new “taichi” queen. Besides passing the buck to financial institutions in Malaysia, Zeti has also shown how irresponsible she is as the guardian of good governance in the country’s financial industry.

By putting the “blame” squarely on banks (presumably Ambank in this scandal), does that mean the central bank couldn’t and wouldn’t care as long as banks conduct money laundering, loan sharking, arm dealings, secretive money transactions and whatnot without informing Zeti and her boys?

Cool, banks now have license to do whatever they like. Just remember not to inform the central bank. And how do you expect prosecutor to be informed of any illegal financial transactions or non-compliance if the central bank isn’t interest in enforcing and monitoring them in the first place?

What could be the rumours linking herself with 1MDB that have gotten her worries so much? Was it about allegation of corrupt scandal involving her hubby? Of course, after her statements issuance today, which are as good as acknowledging the US$700 million is as clean as a whistle; she can safely keep her job till the contract ends.


Hence, it is a win-win solution. Zeti will not be sacked and humiliated the same way former A-G Gani Patail was, so she has a clear path to probably take up international role. PM Najib can now tell all and sundry that since there are no irregularities found by the central bank, that means the US$700 (RM2.6 billion) donation is legitimate. Everybody can go home very happy and very rich.