Tuesday, July 16, 2013

Post-Election Payback Time in Malaysia

Mahathir backs moves to punish minorities and reward pro-government voters, companies

Last week, the Malaysian government announced its allocation of public university seats for the upcoming academic year. Only 19 percent of Chinese students got places, along with 4 percent of Indians despite the fact that the two together make up about 30 percent of the student population. Last year, Chinese students got 23 percent, in line with their proportion of the overall population

That was the first tangible fallout from the 13th general election held on May 5, in which the Barisan Nasional, the ruling national coalition, won 133 of the 222 seats in the Dewan Rakyat, or Parliament, preserving its majority despite the fact that it only received 47.38 percent of the popular vote against 50.87 for the opposition Pakatan Rakyat coalition headed by Anwar Ibrahim.

The second came yesterday with the revelation of the award of a RM1 billion (US$314 million) commuter railway project in the massive government-backed Iskandar development in the southern state of Johor to Malaysian Steel Works Sdn Bhd through direct negotiations rather than open tender, in contravention of competitive bid regulations supposedly implemented by Prime Minister Najib Tun Razak as a part of his three year old Economic Transformation Program to loosen the state's reins on the economy. 

Masteel, as the company is known, is 40 percent owned through its investment in KUB Bhd by the United Malays National Organization, the dominant political party in Malaysia and one known for its cornucopia of rent-seeking businesses that steer money to the party. In addition, Masteel gets a RMB700 million government soft loan to develop the project. According to an official with the company quoted in local media, Masteel will receive a 37-year build-own-transfer arrangement on the project despite the fact that it is slated to break even in 12 years.

The common denominator appears to be the return of Mahathir Mohamad, the 88-year-old former prime minister, and his close friend and ally, former Finance Minister Daim Zainuddin, at the top of the power structure in UMNO, politically emasculating the current Prime Minister, Najib Tun Razak. Despite the loss of the popular vote, the majority of the rank and file inside UMNO believe it was Mahathir's strident racial politics that preserved the Barisan's - and particularly UMNO's - place at the top of Malaysian politics, and that it was Najib's attempt to reach out to the other races that cost them.

Ethnic Malays make up 60.3 percent of Malaysia's population, Chinese 22.9 percent and Indians 7.1 percent, according to the latest census. Malays and Indians dramatically abandoned the Barisan Nasional in the May election, with the Malaysian Chinese Association hit so hard that the party, once the second-biggest in the coalition, refused all cabinet positions. The Malaysian Indian Congress fared somewhat better, but not much.

"Najib was a good prime minister. But instead of strengthening his hand the Chinese and non-Malays and non-Muslims weakened him. But UMNO is strong. So Najib is out of steam," said a lawyer with close contacts to the Mahathir wing of the party. "Najib has lost energy, lost his mandate, lost respect. Mahathir, Tun Daim and the UMNO grassroots are in charge,"

The practical effect is likely to be felt sometime around the UMNO annual general meeting, he and other sources say. The party appears to be following the dictates of Malay nationalists such as the firebrand Ibrahim Ali, the head of the NGO Perkasa, and will seek to cut further into Chinese opportunities in commerce, education and other fields. In particular, several sources said, Najib's attempts to broaden the investment horizon in Malaysia through cutting back on ethnic Malay ownership privileges are dead, along with his 1Malaysia attempts to reach out to other races.

Najib himself has gone silent, leaving his faction in the party distressed and at sea, believing he was so discouraged with the election results that he has basically given up. After the election, he left for an extended government trip to Tanzania and London, followed by a holiday on the French Rivera, then returned to Malaysia after two weeks to continue to remain mute. That spurred a news analysis in the increasingly influential Malaysian Insider news site asking: "There will come a time when Malaysians will ask this question: for how long more is Prime Minister Datuk Seri Najib Razak going to stay silent during roiling debates on the most important issues facing the country? And then there will come a time when Malaysians will just stop expecting any intervention from the man who occupies Putrajaya; when the mandate he won on May 5 will not matter…:"

In particular there are major concerns over Malaysia's always tense racial situation, which has grown more worrying in the face of expectations that tensions would abate following the election, in which Malay nationalists goaded on by Mahathir used ethnic concerns to charge that if the opposition won the election, the Chinese would dominate the political process as they have the country's economic landscape, leaving ethnic Malays behind.

Since the election, however firebrands have continued to fan religious and ethnic flames. In particular, a bill suddenly appeared in the cabinet, allowing the consent of just one parent for the conversion of a child to Islam, a major concern for the mostly Chinese wives who have married ethnic Malay males. The bill was hastily withdrawn after a public storm.

Other storms have erupted, including one over a statement by the Papal ambassador, Archbishop Joseph Marino, for "interfering in domestic affairs" after the Catholic official pointed out that everywhere else in the world, Christians refer to their god as "Allah," and should be allowed to do so in Malaysia as well.

"Under the 1961 Vienna Convention on diplomatic ties, Marino has clearly overstepped his authority as an ambassador by interfering in the domestic affairs of Malaysia," huffed Perkasa vice-president Datuk Zulkifli Noordin. Khairy Jamaluddin, now the Youth and Sports minister and someone usually thought of as a moderate, has criticized the Catholic figure.

But the biggest storm erupted when two foolhardy Chinese sex bloggers, Alvin Tan and Vivien Lee, posted a picture on Facebook with the greeting Salamat Berbuka Puasa (happy Ramadan breakfast) while eating bak kut teh, a popular herbal soup that is forbidden to Malays because it contains pork. The insult was doubled by the fact that Ramadan began on July 9 and Muslims are required to fast from sunup to sundown. The two were arrested and questioned for nine hours before delivering an abject apology.

The Facebook posting nonetheless caused outrage across the country, both on the part of Malays and non-Malays alike as raising racial tensions. In the meantime, say UMNO sources, members of the Chinese dominated Democratic Action Party, the biggest proportionate winner in the national election with 38 parliamentary seats, have been slinging racial insults of their own as fast as the Malays sling them back.

Throughout the controversies, however, Najib has not used his office as prime minister to lower the temperature. Although he gave a press conference in London, he didn't mention the attempts to oust the Vatican ambassador, growing questions over promised repeal of the country's sedition act, which hasn't taken place, or the racial tension fanned on both sides but mainly by Malay nationalists.

In the meantime, UMNO bloggers and cybertroopers paid by the party and the government, once supportive of Najib in the overthrow of his predecessor, Abdullah Ahmad Badawi, have now turned against the prime minister. Malaysia Bloghouse, a loose association of UMNO-friendly bloggers loyal to Mahathir, are asking for Najib's head. They include former Information Minister Zainuddin Maiden, a Mahathir acolyte, and Kadir Jasin, a former New Straits Times editor and Mahathir/Daim apologist.

Despite the pressure and despite his seeming disappearance, however, it appears Najib will stay on both as UMNO president and prime minister, sources say. Mahathir delivered a weak endorsement directly after the election, saying basically that there was nobody around to replace him.

As a sign of the emasculation of the prime minister, however, an UMNO source said, "Najib's ETP will proceed but with changes to suit the demands of Malays and UMNO. More of the economy for them, more privileges, more power, more access, more funding, more infrastructure." Asia Sentinel

There are no details yet, despite the educational changes and the Masteel award. However, the changes should be articulated during the UMNO annual general meeting.

"It's the political trend so far," the source said. "It is what the Malays want, Daim and Mahathir running the show, Najib will have to amend his course. It is talked about in every meeting I attend."

"Najib still chairs the cabinet meetings, still makes stupid decisions," said a Kuala Lumpur-based businessman. "But Mahathir and Daim are agitating for changing all of the posts. Daim is talking to people to challenge the prime minister. A lot of this is happening because (Najib) is sitting on his ass and doing nothing. It is going downhill."

As a result, the businessman said, his group's own plans for a major investment in the Iskandar project are on hold.

"Since the election, all policies, his 1Malaysia policy, have all gone quiet. We don't know if it's on or off. We don't know if we're going to get support from the government. So we are going to have to decide what to do, whether to commit. Nobody seems to know. Nobody has mentioned the ETP, nobody has talked about 1Malaysia."

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