Malaysia’s Elections: Corruption, Foreign Money, and Burying-the-Hatchet Politics

On the early morning of 10th of May, 2018, Dr. Mahathir, leader of the “Pakatan Harapan” (PH – Alliance of hope) coalition declared that they would seek to form the national government in Malaysia (1). After a delay the Electoral Commission confirmed that had surpassed the minimum of 112 required in the 222-seat parliament (2). Another delay followed, after which the “Agong” (King) of Malaysia swore in Dr. Mahathir as Prime Minister once again (3), following his 22-year tenure as “Barison Nasional” (BN – National Front) Prime Minister between 1981 – 2003 (4).

The 2018 results

This result was unexpected - BN, and its primary party “Pertubuhan Kebansaan Melayu Bersatu” (UMNO – United Malays National Organisation), had never lost an election. UMNO had been in power, usually winning a two-third majority, since independence in 1957 (5). Despite this, PH won the majority of seats in parliament (122 out of 222), the largest proportion of the popular vote (48% to BN’s 34%), seven out of 12 state governments (Kedah, Penang, Selangor, Perak, Negeri Sembilan, Malacca, & Johor), and an eighth state government won by PH ally “Parti Warisan Sabah” (Warisan - Sabah Heritage Party) (6). BN won only two state governments, Perlis and Pahang, as well as a (reduced) majority of seats in Sarawak (7).

The new parliament of Malaysia based on the recent election results (compiled by the author)

What was unexpected were BN’s losses in areas traditionally dependable for the party. Johor, for example, is the birthplace of UMNO and is an area where UMNO has always succeeded in in the past. However, in a symbolic blow to UMNO, following a strong and targeted campaign from PH, BN only retained 19 seats, while PH walked away with 36, and “Parti Islam Semalaysia” (PAS – Malaysian Islamic Party) having one (8). In Sarawak, considered a ‘vote bank’ for BN in the past (9), BN and its constituting parties managed to keep a majority, but lost six seats to “Parti Keadilan Rakyat” (PKR – Peoples’ Justice Party) and Democratic Action Party (DAP), both constitutive parties of PH (10). Sabah too was considered a vote bank, with BN winning 22 seats in 2013, but they suffered massive losses and managed to retain only 10 in 2018 (11). These seats were instead picked up by Warisan, PKR and DAP. The list of ministers defeated includes former Communications and Multimedia Minister Dr. Salleh Said Keruak, former Minister in the Prime Minister’s Department Abdul Rahman Dahlan, Former Agriculture and Agro-based Industries Minister Ahmad Shabery Cheek, former Transport Minister Liow Tiong Lai, and former Health Minister Subramaniam Sathasivam.

Administrative Map of Malaysia showing state boundaries  [https://aseanup.com/free-maps-malaysia]

Whilst the election result was bad for UMNO, it was even worst for their allies. The Malaysian Chinese Association (MCA) President Liow lost his seat to DAP, and they only have one parliamentary seat following the election. The Malaysian Indian Congress (MIC) President Sathasivam also lost his seat to PKR, and the MIC now only have two parliamentary seats. This has led to both parties questioning their continuing role in BN (12). UMNO, too, is questioning its future direction. In the past, as will be shown in the following sections, UMNO depended on ethnonationalism. They have worked with other racially based parties, such as the MCA and MIC, but UMNO is a party for Malays. Their massive defeat has led to some members questioning whether they should open-up membership, and whether they should become more representative of Malaysia rather than Malays (13).

Overcoming an uneven playing field

These results and outcomes were a significant shock for a number of reasons. Whilst Malaysia declares itself a democracy, most scholars refer to it as a ‘electoral authoritarian’ state (14). Elections are considered a tool to legitimise the rule of these incumbents, and they are organised in a way whereby the structure of the political system prevents the emergence of significant competition (whether through co-option or repression), the electoral process favours the incumbents (through mechanisms such as gerrymandering), and state resources are used for the benefits of the incumbents (15). This serves to limit competition and ensure the incumbent wins.
BN garnered multiple pillars of legitimacy, engaged in repression, and used state resources for neo-patrimonialism. In their study of legitimacy, Soest and Grauvogel identify the following pillars; Identity (foundation myth, ideology, personalism); International engagement; Performance (successfully running the country for constituents); and Procedural (engaging in democratic processes such as elections) (16).

In regard to identity, UMNO had a strong foundational myth and supportive ideology in the guise of ethnonationalism, based on the privileging (and protection) of Malay rights, as well as an increasing Islamisation. The ‘foundation myth’ is that UMNO was a crucial agent during independence, and saved Malays from the machinations of Britain, and the Chinese and Indians it had brought over for labour (17). UMNO then became focused on the tenants of Malay identity, including the special position of the Malay and the “Bumiputera” (Sons of the Soil). This was deepened following the May 13th incident in 1969, where racial violence occurred after the opposition made significant gains in the election (18). The New Economic Policy (NEP) resulted, whereby Malay interests were prioritised economically (19). These past attempts at wealth distribution also meant that BN, and in particular UMNO, enjoyed performance legitimacy.

Identity was further emphasised in UMNO leaders’ speeches and comments, when they played on the fear of other races who, it was argued, would take away Malay rights. An extreme example of this was in 2006, when Hishamuddin (Former Prime Minister Najib’s cousin, and most recently former Defence Minister), waved his “Keris”, a Malay ceremonial dagger, at a BN assembly (20). This was perceived as threatening to non-Malays. There have also been constant racist remarks, such as “Cina babi” (which links Chinese to pigs) and references to Chinese born in Malaysia as “pendatang” (immigrants). Furthermore, UMNO also slowly shifted from being committed to a secular state to an Islamic state (21). This religious ethno-nationalism redefined the limits of pluralism and gave the government legitimacy. Najib in particular used Malay communalism, and the racism and culture of fear used to try to create a common identity amongst UMNO and the Malays was perceived to have gotten worse (22).

Repression and buying support are also important pillars for competitive authoritarian states such as Malaysia (23). Here too, BN had a clear advantage. In terms of buying support, there is a common view that UMNO owes its previous victories to neo-patrimonialism (24). The machinery of BN is well established, as it was intertwined with the government, which allowed a distribution of resources beneficial to BN. Such links came about due to BN’s longevity. Local elections were suspended during “konfrontasi” (confrontation) with Indonesia. Since then, local councils are appointed by the state government (usually BN) (25). In the bureaucracy of the state, those wanting senior positions had to be sympathetic to UMNO (26). This allowed for ‘money politics’ to proliferate, whereby UMNO could engage in promises and pay-outs, through money raised by resource rents, party holding companies and business deals (27). UMNO could spend more during the election itself, demonstrated especially in the giving of gifts and food at the “ceramah” (political gatherings) (28).

Repression was also a tool used to weaken the opposition, with arrests occurring of opposition members, limiting activities and resources, and controlling information. There have been many repressive laws throughout Malaysia’s history that allow this to occur. The Peaceful Assemblies Act and Police Act require assemblies to gain police permission, for example. The Internal Security Act, Sedition Act, Security Offences (Special Measures) Act and Prevention of Crime Act are all open to abuse, and have been targeted at the opposition (29).

The electoral process itself significantly favoured BN. This is a result of institutions such as the Electoral Commission (EC) being heavily biased. Gerrymandering is one of the most significant issues, with boundaries being drawn to give constituencies a significant rural weightage which favours BN (30). Postal voters did not have enough time to send their votes (31) and the election was mid-week, seen as an attempt to prevent people voting (32). When polling stations closed at five pm, people queueing were told they would not be able to vote. Mahathir’s face was even removed from a billboard (33). The EU declared EC as not credible after they kept referring to themselves as ‘we in the government’ (34). This demonstrates the uneven level of the playing field.

There has also been significant control of media. Utusan is the main daily newspaper linked to UMNO, but so are many others. Those critical of the government have been forced to close or had their licenses revoked, such as the Malaysia Insider, The Edge and Sarawak Report. This control of the media saw a significant example when on the night of the election, results were unavailable from sources that were not within UMNO’s linked ownership (35). All of this is enabled by restrictive laws, such as the Printing Press and Publications Act, and a relatively new Anti-Fake News Act which extends the control of information to social media (36).

This repression also expanded to civil society, which, for the most part, has more links to the former opposition. A “Bersih” (Clean – a electoral reform NGO) protest, for example, under Abdullah’s governance was met with water cannons and tear gas (37). This is common in authoritarian regimes, who manipulate legal regulations to make it difficult for civil society to operate (38).

This meant that the opposition faced significant obstacles, which made the result surprising when considering the weaknesses of the opposition in the past. There had been another coalition, “Pakatan Rakyat” (PR – People’s Pact), with PKR, DAP and PAS between 2008 and 2015. Despite coherency during the election, significant differences emerged. The outlooks of the parties were not compatible. As such, there was little expectation a new coalition could win, which makes an analysis of the reasons behind their victory important.

BN’s declining legitimacy

One primary reason is the gradual decline of BN’s legitimacy. The electoral barriers seem to have resulted in some backlash, as it undermined the procedural legitimacy. In the Electoral Integrity Project’s Global Perceptions of Electoral Integrity (PEI) Malaysia falls in the Very Low/Failed category, ranking 142nd out of the 158 assessed countries (39). There is a recognised trade off between electoral control and electoral credibility (40), and BN could not persuade the country that procedures had been respected, which Dukalsksis argues is particularly important for the procedural pillar of legitimacy (41).

Other pillars of legitimacy were also undermined (42). Claims of representing Malays has seen BN in competition with PAS, who pressure the government to adopt more conservative Islam. Kessler argues that it seemed insincere and uncommitted when UMNO finally followed this pressure, as it was a form of political expediency (43). This identity basis was also undermined as UMNO is seen to be representing the elites, rather than the grassroots, which raises the question of whether they really represent the majority of the Malays. In the past UMNO was elitist, but it left important powers in the hands of those further down (44). Now, there are few connections to society (45). Abdullah, a former senior member of UMNO, argues that businessman and money politics became more important at a cost to the normal Malay voter (46). This will be demonstrated in greater extent on the analysis of the role of corruption, but it is important to note that it undermined the identity basis of legitimacy.

Partly, this can be explained through an information gap, as UMNO has evolved there is now a loss of perspective and an ‘UMNO echo chamber’ (47). This is a common feature of authoritarian states (48). UMNO did not know how to perform for a public that it no longer understood, which can be witnessed by the fact that Najib seemed extremely surprised he was not well liked (49). Another important factor is that this is seemingly a less popular form of legitimacy. Anwar Ibrahim, former PKR leader, emphasises a needs-based approach, rather than a race based one. Abdullah, another PKR member, argues that there is a growing consciousness of the people who want progressive political thought, and a movement away from a focus on race (50). Instead, UMNO invested more into the race-based identity, and did not engage with this debate.

The performance pillar was also undermined. There has been a growing inequality, and a massive growth between promises and deliverance. Peoples’ income were stagnating and there was a growing cost of living, but BN introduced an extremely unpopular Goods and Services Tax (GST) of six percent. The majority of people in Malaysia do not pay tax. As social welfare is the ‘quid pro quo’, by burdening the people BN made themselves extremely unpopular (51). This prevents creating an apathetic political people, which Dukalsis argues is another important factor in legitimacy (52). Instead, the people mobilized as their standard of living was infringed upon.

Corruption (& Foreign Money)

Of particular importance, and linked to the above idea, is corruption, as it came during this time of growing inequality. Corruption is not a new feature of Malaysian society or politics (53). Scandals have mired most Prime Ministers, even that of Mahathir’s tenure, where it was seen as particularly widespread. In the past, however, families did not benefit financially under Tun Razak (Najib’s father), and benefits were limited following until now (54). Scandals during Najib’s tenure led to a perception of the party individuals enriching themselves on massive scale, and abandoning their base at a time of growing inequality. Instead, leaders’ lives were improving as their constituents were facing growing pressures.

There have been a number of prolific scandals, such as those surrounding the Scorpene Submarines and FELDA (Federal Land Development Authority) management. More are emerging, such as government contracts for solar panels, and payments for books. The 1MDB scandal, linked to SRC International, however, is key. 1MDB is a well-known saga of a state investment fund where money flowed through illegally into personal accounts (55). Some of the money is alleged to have ended up with Najib and his family. 1MDB shows that UMNO is no longer able to check the excess of its leaders, as the scale of it was particularly relevant. There was a strong perception that Najib was abusing his power for financial gain, with people criticising his wife Rosmah’s spending habits on expensive handbags and watches (56). Reports that corruption included $681 million that landed in the prime minister’s personal bank account shocked the Malaysian population (57).

Whilst Malaysia’s attorney general and Saudi authorities said the $681 million was a donation from the Saudi Arabian royal family, much of which was returned, other authorities refute this (58). Even the reasoning given by Najib was not particularly popular. Whilst Malaysia has strong links with Saudi Arabia, there have been concerns that Saudi money and influence could be particularly problematic due to Saudi Arabia’s current geopolitical policies, which Malaysia does not wish to involve itself in (59). This is also the reason for Defence Minister Mat Sabu’s comments concerning an evaluation of the Saudi backed counter terrorism centre, the King Salman Centre for International Peace, and the recent announcement of a review concerning the stationing of troops in Saudi Arabia. There was a healthy scepticism surrounding just what it is Najib had done to deserve such an extensive donation from a foreign power. There were also concerns concerning Chinese-backed infrastructure projects, which the opposition had argued were Najib’s attempts to sell Malaysia to China in exchange for help in settling 1MDB debts, as well as primarily benefitting China as the companies use Chinese labour and imports.

As such, BN’s leadership was perceived as enriching itself, whether from the people or from foreign donors, at a time when inequality was particularly problematic. The scale of corruption has just now been realised, and much of the country has reacted with shock at the sheer extent of it, with demands that the money stolen from the people is returned. Three properties related to Najib have been raided, with 284 luxury bags and 72 bags of cash amounting to $30 million dollars recovered by police, and a further 37 bags of jewellery, watches and gold bars seized are yet to be valued (60). The new Finance Minister, Lim Guan Eng, has revealed that the Ministry of Finance (which was headed by Najib previously) has been paying 1MDB loan settlements and liabilities, and that the country’s debt is much more significant than previously announced (61).

Another feature that 1MDB demonstrated to the population was the lack of accountability for the government, which also caused electoral backlash. There was a lack of investigation related to 1MDB. This was especially the case when Najib fired senior members of UMNO who criticised 1MDB, and transferred MACC officers investigating the abuses. Senior UMNO members have argued they were unable to broach the topic of 1MDB. Those that were meant to have some degree of independence, such as the Attorney-General, instead demonstrated that they were co-opted into the UMNO structure, and that justice would not result while UMNO was in power. This, along with the problematic living conditions and massive abuse of power, showed the people that BN were no longer acting in the interests of the community, and could no longer claim to, something which is seen as particularly significant for legitimacy (62). The displeasure this caused for the public is demonstrated by the strength of will to bring Najib to justice following his party’s loss. Najib has been prevented from travelling, and him and his wife have given testimony at the Malaysian Anti-Corruption Commission offices. There have been suggestions that there is enough evidence (or what Mahathir calls an ‘almost perfect case’) to result in prosecutions over the coming months. Indeed, even UMNO members also seem to be disillusioned by just how much the party was acting in the interests of a small minority.

Awareness of these corruption scandals were also particularly high. Popular politicians, such as Anwar, Mahathir and Muhyidden were very vocal criticising 1MDB and Najib’s handling of it, meaning the people were well-informed and were receiving information from those that are perceived as having credibility (63). They highlightesd to the population that UMNO had become the vehicle of Najib only (64). This information was shared widely among social media, which has been an important element in informing the population about the scale of corruption in Najib’s government (65). The opposition have particularly strong social media accounts, especially in comparison to UMNO’s relatively weak social media presence (66).

As such, corruption scandals, and particularly 1MDB, have demonstrated to the people that patronage benefits those with UMNO links, and no longer the wider Malay community that constitute their usual support (67). It has caused a massive introspection within UMNO, with some such as Khairy Jamaluddin (who is running for UMNO Presidency) expressing regret for not recognising the problems it was causing, and blaming the affair for their downfall. This comes at a time where people are unhappy with their economic outlook, and has therefore led to a situation whereby the pillars of legitimacy were completely obliterated, as people perceived themselves to be suffering in order to enrich a leadership which had effectively abandoned them.

The importance of a strong opposition

Literature surrounding electoral authoritarianism suggests that elections themselves can cause democratization (68). Elections leading to democratisation is considered dependent on the relative weakness of the ruling party when faced with opposition coordination (69). As demonstrated, BN entered the election in a position of weakness, but the election also allowed the mobilization of a coherent opposition. The election became a focal point for anti-incumbent mobilization, which is a key argument of Morgenbesser & Pepinsky (70).

Mahathir’s new party, “Parti Pribumi Bersatu Malaysia” (Bersatu – Malysian United Indigenous Party) was seen as a credible alternative for Malays. Their focus on reform allowed them to united with both PKR, DAP and “Parti Amanah Negara” (Amanah – National Trust Party). The coalition represents many different sections of society, but united with a common goal. Abolishing GST was their main policy presented. This allowed a coherent message leading up to the election, and a consistent mobilisation around the goal of reform and righting the Malaysian economy, which also gave them a common agenda in their plan for governance. The opposition were also helped by the fact that they were aligned with credible mass movement NGOs such as Bersih, who contributed by increasing transparency around the electoral problems and giving PH greater credibility. In contrast, UMNO had no reform agenda, meaning the now coherent opposition were able to control the political narrative and raise significant momentum in mobilising society for change (particularly in regards to GST) (71).

Burying the Hatchet?

This is not to suggest that there are no problems faced by the new government. Along with dismantling UMNO’s embedded structures, reforming resistant institutions and difficulties in keeping all their promises, the continuing relationship of the coalition members requires a shared commitment, and a burying of the hatchet for past mis-deeds and incompatible views.

Mahathir when he became Prime Minister for UMNO in 1981, promised a more open and accountable government (72). His leadership was not without significant problems however. In 1987, he enacted Operation Lalang, whereby 119 people, some from opposition parties and civil society, were arrested using the ISA (73). It will be interesting to see whether is now truly committed to reform. He will have to show he is to allay any concerns from his coalition partners. Early signs are that he is willing to commit to reform, as he considers his legacy and the short time he has to ‘right past wrongs’ (74). He has, so far, committed to accountability especially.

Mahathir has also seemingly moved away from his race-based focus. Both Mahathir and Anwar Ibrahim where responsible for the growth of Islamic principles in the civil service, and its institutionalisation through bodies such as “Jabatan Kemajuan Islam Malaysia” (JAKIM – Department of Islamic Development Malaysia) and Bank Islam. Mahathir was “ultra-Malay” in the past, and in his book the ‘Malay Dilemma’ he blamed Non-Malays for economic disparity and called the Chinese the biggest political danger (75). DAP is seen as a Chinese party, which means this discourse creates significant tension. He was supportive of having Malaysian Chinese Lim Guan Eng as Finance Minister though, as well as Malaysian Indian (and Christian) Tommy Thomas as Attorney General (76). This is despite others’ misgivings, including Anwar over Lim Guan Eng’s appointment and the Agong’s over Thomas’s appointment. As such, it seems that the parties are able to, so far, bury the hatchet over any potential political differences.

Another significant dimension is the burying of the hatchet in personal relationships, the most important being that of Mahathir and Anwar’s (as well as Anwar’s family, with his wife Wan Azizah serving as Deputy Prime Minister and his daughter Nurul as a Member of Parliament). Anwar was the leader of “Angkatan Belia Islam Malaysia” (ABIM - Muslim Youth Movement of Malaysia) in 1982 who was co-opted into UMNO. Mahathir was unhappy when Anwar replaced Ghafan as Vice President of UNMO, as leaders seemed very enthusiastic about Anwar, resulting in concern about his influence (77). During their tenure, there was constant contests between the two, based on issues such as whose candidates would be appointed, which companies would be helping during the Asian Financial Crisis in 1997, and with Anwar’s reform project which Mahathir did not agree with (78). Anwar was later sacked and arrested under ISA, where he received an infamous black eye from the police chief, and the government led a massive and cruel PR campaign based around charges of sexual misconduct, eventually sentencing him to six years in prison (79). Anwar has been in and out of prison since that event, and, even though he is now pardoned, has the potential to hold misgivings against Mahathir for instigating the cruel treatment he faced, especially as Mahathir has made very personal comments since" (80).

There is also a clear need to build trust, as Anwar served as Mahathir’s deputy before, and Mahathir has promised that Anwar will be the next Prime Minister. Originally it was suggested that this would be after two years, but Mahathir seems to have backtracked and now suggests it could be longer. Despite this, Anwar seems to be particularly conciliatory and focused on trust building. When asked if he trusts Mahathir he argued that they have to move on. He has stated that it is his job to support Mahathir, and that, while it was not easy for him to agree to cooperate with Mahathir, he was satisfied that Mahathir agreed to the reform agenda of PH and was atoning for past mistakes (81). He has also lobbied to the sultans on Mahathir’s behalf. So far, it seems that the goodwill garnered is based on the reform agenda, and the peoples’ continuing calls for this to be adhered to, and that this is central to whether the hatchet will remain buried.

This also seems to be the case within other relationships, between Mahathir, and Lim Kit Siang and his son Lim Guan Eng (now Finance Minister), Mat Sabu (Amanah leader and now Defence Minister) and Yunus Ali (husband of PKR parliament member, and former Bersih head, Maria Chin). They were all arrested during Mahathir’s Operation Lalang, and were vocal critics during Mahathir’s tenure as Prime Minister. Lim Kit Siang argues that Mahathir is aware of his past mistakes, however, and that all seems to be forgiven between them (82). This is another relationship whereby the burying of the hatchet is significant, as Lim Guan Eng is the secretary-general of DAP, and his father is the parliamentary leader. Mat Sabu is extremely popular, and now holds an important portfolio, and Maria Chin fronted the Bersih campaign which gives PH credibility. Mahathir has admitted that Operation Lalang was primarily political, but that he was an unwilling participant. While some doubt his sincerity, especially as he has not apologised, there is so far a willingness to cooperate again seems to be based on the reform agenda, and the others’ perceived integrity of Mahathir in his commitment to this agenda. One indication of this was Mahathir giving up the education portfolio as it went against PH’s manifesto promise that the PM would not hold any other ministerial roles.

This is not to suggest that things could not turn out badly, however. Anwar has said he would not be comfortable being in Mahathir’s cabinet based on their past relationship. In order to build trust, perhaps the past needs to be confronted by Mahathir, as well, and until then there will be a significant ‘elephant in the room’, especially as he refuses to apologise to the others that have had reason for grievances. Until then, a focus on the reform agenda may be enough for them to put aside their problematic history and work together, especially if the people hold PH accountable.

A look at Malaysia’s Horizon

Malaysia now faces a future where fortunes have been reversed. The former opposition now holds the power, while the former government is suffering a legitimacy crisis based on its past mistakes. The election provided a focal point for a people desperate for change. This can be seen in the popularity of “Tabung Harapan” (Hope Fund - a crowdfund aimed at reducing Malaysia’s national debt). It is unlikely that people would have mobilised around a similar BN attempt, but the people perceive PH as being relatively clean. While this mobilisation based on change also allowed PH victory, however, there will need to be a significant ‘burying-the-hatchet’.

For the continuing success of PH, therefore, there needs to be a maintenance of forgiveness, and the development of good relations between the different constituent parties. This will be based on the strength of commitment to the reform agenda, the continuing development of trust between the leaders who have problematic relationships, and the continuing pressure for change from the people. Up until now, early signs are encouraging that the hatchet has been buried as a result of these factors. Pressure on the parties from the people is also needed to hold PH accountable. There is a current lack of credible opposition, as UMNO finds itself fragmented and directionless. While UMNO will most likely recover after a great degree of soul-searching, it is important the people maintain their calls for change to prevent PH from getting too comfortable with their new-found powers, prevent further corruption and PH making the mistakes UMNO did, and to prevent Mahathir from falling into his old ways.

The government has so far demonstrated democratic credentials with a greater freedom of the press, less legal interference in political activism and opposition, and a respect for democratic principles and the desires of the people. If the people can successfully lobby PH, and if PH remain committed to the reform agenda that benefits (all) the people over themselves or certain sections, therefore, there is no reason for the fragmentation of the coalition, the hatchet could be buried, and Malaysia may indeed be entering its new dawn which redefines the democratic space and the intra-coalition relationships.