Malaysia: Ruling Front under strain

Power transition to save weakening UMNO/BN

Malaysia’s sixth Prime Minister, Najib Razak, took office on 3 April from his predecessor, Abdullah Ahmad Badawi, after he was elected as UMNO president. This transition took effect under immense pressure within UMNO (United Malay Nationalist Organisation), the dominant party of the Barisan Nasional (National Front) government. This is a desperate attempt to save UMNO and BN from the tainted and weakened position since the humiliating defeat in the last General Election (March 2008). However, this power transition does not bode well amongst many ordinary people who have become disgusted with racial politics and cronyism that only benefits BN politicians and the capitalist class. With the weakening economy and emboldened oppositions, this could lead to the fall of UMNO/BN who has had political domination since independence in 1957.

Five years of Abdullah

When Abdullah took over the premiership from Mahathir Mohamad in 2003, he promised reforms to strengthen democracy, weed out corruption and make governance transparent and accountable, with the motto “work with me and not for me”. After more than 20 years of an autocratic regime and the neo-liberal attacks of Mahathir, Abdullah’s promises of reform swept the BN to an extraordinary electoral victory in the 2004 General Election. But the overwhelming public support for his reform agenda soon turned to frustration and anger when ordinary people could not see much of the change that was assured to them, though Abdullah allowed a bit more freedom of expression than had Mahathir.

Abdullah was considered as a ‘clean’ man but he failed to even clean some of the corrupted government machinery, such as the police and judiciary. He has also been powerless in confronting the profit system of capitalism to raise the living standards of the working class and most of the time he favours the needs of the capitalist class. Instead, his laissez-faire leadership had succumbed to the demands of his party apparatchiks to follow the status quo set by his predecessors. The working class and poor, who suffered under Mahathir’s autocratic regime, are discontented that Abdullah seems incapable of challenging ‘Mahathirism’. This has shattered their hopes for change.

The people’s frustration and anger towards UMNO and BN broadened when racial hypocrisy and the wealth disparity between rich and poor became more serious. They also realised that the UMNO/BN hegemony has meant the abandonment of the rights and the needs of ordinary people and they must be “taught a lesson”. This anger amongst people, regardless of race, particularly in West Malaysia was translated into protest votes against the UMNO and BN to generate the ‘political tsunami’ of 8th March 2008. This resulted in unprecedented losses to the ruling government of BN – the biggest in 50 years. The BN lost its two-thirds majority and five state governments to the opposition coalition, the Pakatan Rakyat, although the BN has remained as the government of the day.

With the set-back, UMNO leaders fear that the dire straits the party is in could lead to total defeat in the next general election, due before 2013, if it is not revitalised with “strong leadership”. Consequently, the crushing blow ended Abdullah’s tenure as he was forced into early retirement, despite his efforts to cling on.

Mahathir also played a part in ousting Abdullah by blaming his policies for ruining UMNO but ironically it was during Mahathir’s tenure that UMNO had become mired in patronage and money politics. Meanwhile, Najib is considered a close ally of Mahathir and now Mahathir has vowed to assist Najib to regain the “past glory” of UMNO, in other words to solidify ‘Mahathirism’.

Najib’s tarnished image

Paradoxically, even before taking power, Najib had been under a cloud of allegations, including ones linking him to a murder case and another one on corruption. Many also believe that Najib has also played a key role in the ‘power coup’ in the state of Perak, where three assemblymen of Pakatan were lured to support the BN. Pakatan won the state of Perak in the last General Election but with the exodus of their three assemblymen, with the support of the Sultan of Perak, BN hurriedly formed the government in the state.

Although Najib denied all these allegations, this has somehow undermined the public perception of him. This is the first time a Prime Minister of Malaysia has been deemed to have such a very low public profile as soon as taking power.

However, in order to amplify his leadership credibility, Najib, in his maiden speech, put his direction: “One Malaysia, People First, Performance Now”. With the diminishing public support, Najib knows there is no honeymoon period for him and he desperately needed something positive to boost his standing. He immediately took action to release 13 ISA detainees and to lift a temporary ban on two opposition parties’ newspapers. Such attempts to gain political impetus are not new to Malaysian politics. When Mahathir and Abdullah took power they also staged similar stunts with slogans and rhetoric of reforms. Since people had experienced enough with such empty rhetoric and slogans during the era of Mahathir and Abdullah, Najib’s attempts, with his low standing, didn’t augur well amongst most ordinary people.

Weakening UMNO/BN

With the power transition, the UMNO desperately hoped that with the new leadership, the BN would be rejuvenated to “turn back the clock and bring back past glory” of the time when they ruled the country with the mighty support of the electorate. But this hope was dashed when the BN could not win the recently held by-election of Bukit Gantang and Bukit Selambau in West Malaysia, viewed as a referendum on Najib. This indicates that the appointment of Najib as Prime Minister had no great impact on the general public as with the great euphoria when Abdullah took over from Mahathir in 2003.

Many political analysts are also foreseeing that the UMNO/BN would enter the last period of their demise if unwilling to change – ‘change or perish’ – with the new political landscape since the last general election, the strengthened opposition and embolden electorate.

But as Zainah Anwar, The Star political analyst put it, “For as long as the government continues to play Santa Claus to keep UMNO members happy, there will be no end to money politics and corruption in the party. This is the big running sore that is poisoning UMNO”. Will Najib rock the boat to change the tainted UMNO? As Zainah continues, “Who within UMNO dares to sink the gravy boat? Obviously, if the new President does not also embark on this big party clean up, the discontent between UMNO and the rakyat will be prolonged”.

In this tainted and weakened position, if UMNO/BN could not be revamped, as a veteran politician advised Najib, “Do what your father did. If the BN has become useless, then you have to throw it away". He was referring to the decision by Najib’s father, Abdul Razak Hussein, to revamp the Alliance coalition into Barisan Nasional in 1973 by influencing some of the opposition parties such as PAS, GERAKAN and PPP into its fold, making it more popular among the voters. At that time, this attempt was to counter Left leaning support among non-Malays and the growing support of the Islamic Party among rural Malays.

Since the General Election, the opposition parties, with different beliefs and approaches, are rallying behind Anwar Ibrahim under the banner of Pakatan Rakyat (People Coalition). With the increasing popularity of Anwar and his prominence amongst international capitalists, there are more possibilities of some ruling parties joining the PR if the UMNO/BN is further weakened.

Meanwhile Najib will try to disintegrate the Pakatan Rakyat in order to strengthen the BN. If conflict erupts among Opposition parties, in the name of strengthening Malay or Islam supremacy, the PAS could join the BN, as indicated by some PAS leaders few months ago.

But at this stage the UMNO/BN has become saturated with crony capitalism, compared to its characteristics in 1970. If the BN were restructured, this means crony capitalism, which is its main attractive point, would disintegrate. The careerist politicians and members of the UMNO/BN will not easily allow this link to be lost.

Crony capitalism

The UMNO at present is merely a patronage machine and we could trace the emergence of this culture, since the inception of the New Economy Policy (NEP) in 1971 by Najib’s father, Abdul Razak, who was the second Prime Minister at that time. Initially the NEP was intended to eradicate poverty among rural Malays but later was used as a tool to sustain the support of Malays towards the UMNO by making it “a circle of goodies in return for support”.

Full-blown crony capitalism occurred in the Mahathir era, between 1981 and 2003. During his tenure, the formation of a ‘party-state’ was realised through the notion of “Malaysia Incorporated”, very similar to what was practiced in Taiwan. In the 1980s, with the massive development of heavy industries and widespread privatisation of state enterprises, Mahathir used the NEP to develop and strengthen the position of the Malay capitalist class and this further fortified the patronage culture among UMNO members. There are also linkages established to noted business tycoons, many of whom engaged in ‘rent-seeking’ enterprises (- ones enjoying preferential treatment from which they could benefit). One statistic shows that the UMNO and UMNO-related individuals were said to hold directorships in more than 100 companies with assets valued at RM4 billion by 1990.

At present, for many, the UMNO is merely a passport to personal wealth accumulation and to gain lucrative positions. This has deeply brought the party into money politics, systemic corruption, ‘rent-seeking’ behavior and entrenched patronage. The other BN component parties such as MCA, MIC and others, have also emulated the patronage culture of the UMNO to entice the support of their respective race, in another words, ‘divide and rule’ the different races to maintain the power.

Emboldened opposition

On the other hand, more and more working class and poor, regardless of race, have become conscious that the cronies of the UMNO/ BN have been reaping the profits generated by the ‘labour’ of the working class. Because of the unscrupulous acts of these capitalist parties, the working class and the poor have been left out of gaining proper benefits from the abundant wealth and rapid development of the country. Many have come to the conclusion that they need to change the status quo. Since there is no mass party of the working class, they are turning their support towards Pakatan Rakyat.

Based on results of by-elections since the general election, the PR, with the leadership of Anwar Ibrahim, has been increasing its support, particularly in West Malaysia. The recently held by-election in Batang Ai, which the BN won, showed that it still has the upper hand in the politics in Sarawak and Sabah (East Malaysia). But disgruntled feelings amongst people in these states, against the BN policies, are growing and could favour the PR if some of the reforms promised by the BN in these states do not come to fruition.

The PR could also take advantage of the internal conflicts between the Najib and Abdullah factions in UMNO. The growing purge of Abdullah people from the party leadership has angered supporters of Abdullah. If the conflicts worsen, this might end-up with the exodus of Abdullah supporters to the PR camp.

Deteriorating economy

However, there are still many who are not convinced by the politics of the PR, with their pro-capitalist agenda. These fence-sitters are concerned more about the economy and their living standards than the politics of these parties. Therefore, at this stage the future of the UMNO/BN rule very much depends on the performance of the country’s economy.

As an economist of the United Overseas Bank said, “Asia yet to see the worst…it’s just a matter of time because we are still in early stages of crisis”. The future of the economy in every corner of the world looks gloomy and uncertain. Even in this early stage, in Malaysia, many working class people, as well as the middle class, have suffered the pinch of the global economic meltdown. So far, almost 30,000 jobs have been lost, mainly in the manufacturing and electronics sectors, since January. Even the capitalists’ club, the MEF (Malaysian Employee Federation) predicted that by the end of the year, 400,000 workers could be made redundant. Export fell by almost 30% year-on-year in January as a result of the reduced demands from the US, Europe, China, Japan and Singapore. It’s expected that the economy will contract 2.5% in the first quarter and by 4% in the second and third quarters.

The reform agenda of Najib and his “team for change” could be further undermined by the gloomy outlook of the economy. The export-orientated economy of Malaysia is very vulnerable to global economic circumstances and the government has totally lost control. However, with the worsening economy, in order to save the national capitalists, Najib could be forced to use the similar protectionist measures that Mahathir implemented during the 1997 financial crisis.

In worsening circumstances, with declining support from the ordinary people and increasing conflicts in UMNO, the PR, with the support of some national and international capitalists, could take advantage and form a government.

Nevertheless, with its 50 years hegemony and its crony capitalism, the BN won’t accede to defeat with ease. At the same time, many expect that Najib could use the deteriorating economic outlook of country and the growing internal conflict in the UMNO as a pretext for reverting to Mahathir-style repression. This means that the BN could exploit every possible way to be in power, including undermining and using repressive measures against the PR leaders and the opposition forces. In worsening circumstances, this might lead to the re-emergence of the ‘reformasi’ movement, which could be on a bigger scale than in 1998.

Capitalism in crisis

The capitalist system has been groomed by the UMNO/BN since independence and reached a high point during Mahathir’s era. Many young people, workers, peasants, students and others, particularly in West Malaysia, that have been oppressed, have come to the view that the UMNO/BN has become saturated with a profit-orientated mentality and is incapable of preserving and fulfilling their fundamental rights and needs.

This shows that the capitalist system, supported by the UMNO/BN government, aims to merely assist the national and international capitalists to maximise profits and, at the same time, act as a conduit to fulfill the unscrupulous desires of their leaders and members for power and luxury. With these characters, they are not going to fulfill the fundamental needs of the working class, young people and others that are oppressed by the system. Abdullah, the ‘clean’ man, failed to carry out reforms that he himself promised when he took power, because he was powerless in confronting and challenging the corrupted system of capitalism.

Although the PR is talking about reforms and democratic rights it is unwilling to challenge the system of capitalism. In fact, Anwar, when part of UMNO, was a disciple of neo-liberalism, trained in the Chicago School. They are simply proposing to make free market capitalism ‘nicer’ by reducing corruption and increasing transparency. This, in reality, is the demand of international capitalists to further conquer the investment/business opportunities and local resources from the national capitalists. And the national capitalists are using the crony capitalism of the UMNO/BN to safeguard their profit-orientated desire not to be subjugated by multinationals.

The PR governments in states like Selangor and Penang are powerless when the multinational corporations make workers redundant. They could not even confront the cheap labour policies and the repressive labour and union laws that exploit the workers. Moreover, they have no clear programme to safeguard or preserve the rights of the working class if the PR manages to take over the country.

Under capitalism, certain democratic rights or reforms could be won under pressure from mass movements. If the PR manages to take power, there is possibility that they could concede some reforms and democratic rights under the pressure of working people demanding change.

But the export-orientated economy of Malaysia is subordinate to global capitalism, which means Malaysia has to succumb to the needs of global capitalism. In that case international capitalists are always more powerful than the government itself and most of the time the government has to accede to these multinationals’ demands and the needs to maximise profits. That is why we have cheap labour policies, no minimum wage, no union rights etc that suppress the living standards of the working class and the poor.

Consequently, regardless of how sincere the government is or how clean the leaders are, if they are pro-capitalism, they would succumb to the demands of the system. This is to appease the capitalists for their investment and business activities. In that case, some democratic rights or reforms that are gained at certain periods could be clawed back if they undermine the profit system of capitalism. Therefore the struggle for democratic rights must come together with the struggle against the capitalism.

Socialism – the future

Capitalism in the world is in severe crisis and it will be the working class and poor who will be called upon to pay the price. With the pro-capitalist agenda, the BN and the PR are not representing the class interests of the working class and they have no answers to the economic crisis and workers’ concern other than to save the free market capitalism with their reform agenda.

The capitalist system offers no way forward for the working class, poor and others that are affected by the system. It is also devastating for our environment. As an alternative we need to build a socialist society that prioritises the fundamental needs of the society nationally and globally by democratic planning.

Therefore, besides fighting for democratic rights, the working class and poor of Malaysia, with the support of peasants, the middle class and students, has a huge task to build a mass party that clearly counters the destructive character of the capitalist system and at the same time puts forward a socialist programme. This is the time to build this alternative, the working class alternative for our future.

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April 2009