Malaysia: ‘Coalition of Hope’ collapses as racial tension and economic uncertainty mount

On Monday, 24 February, the prime minister of Malaysia, Mahathir Mohamad, submitted his resignation to the country’s king, opening the way for enormous confusion as to what will follow. The reasons for Mahathir’s decision seemed to be linked to his reluctance to hand over to Anwar Ibrahim as agreed before the coalition was elected. But now it appears that the two leaders have been meeting with each other to try and agree a common position while a number of parliamentary representatives have resigned from their two parties.

Uncertainty reigns. A new coalition may be cobbled together or an emergency general election may have to be called. The background to the present crisis is outlined in the article below, written just days before it erupted.

The Pakatan Harapan (‘Coalition of Hope’) government came to power in the May 2018 general election after for the first time successfully unseating the National Front (Barisan Nasional) which had been in power for 60 years. Prior to being elected, in their manifesto the PH politicians had promised many things to create a ‘New Malaysia’. They would implement policies such as removing road tolls, increasing the minimum wage to 1,500 Malaysian Ringit (RM) (equivalent of $360), reducing oil prices, providing free education for all, reducing the cost of living and many other promises that have failed to be fulfilled.

When the majority of the people voted for the PH, they really hoped for them to improve the country’s economy and people’s living standards, create more democratic rights and change government policies, ending privileges based on race to establishing equal rights based on needs.

However, after over a year and a half, the right wing populist coalition government has failed to live up to its promises and most of the time has succumbed to pressure from big businesses. The ordinary people, frustrated by the betrayal of the new government, began to fall victim to racist and religious propaganda, played up by opposition politicians from UMNO (United Malay Nationalist Organisation) – the main party in the BN, and PAS (the Malaysian Islamic Party). In order to gain the support of the Malays or ‘Bumiputra’ (‘Sons of the soil’) who are the largest ethnic group and account for 60 percent of the population, UMNO and PAS propagate the idea of Malay hegemony and privilege and stir up hostility against the minority ethnic groups of Chinese and Indians.

Growing dissatisfaction with government

The continual defeat of the PH candidates in the last five by-elections reflects the dissatisfaction of the people against the government that is failing to realise the people’s hopes for better and more secure living standards. Many of the social welfare funds are seen as inadequate to raise the living standards of millions of working class people who are facing a rising cost of living. No attempt is made to tap the huge profits of big businesses with progressive taxes that could ease the burdens of the working class and ordinary people who are continuously burdened by household debt which is almost 83 percent of GDP.

Some of the government’s measures supposed to address the problem of unemployment for young people and graduates are seen as giving an advantage to private companies to pursue a low wage policy with their workers. The high cost of housing means that millions of people are unable to own their own house. Although the total value of unsold houses has surpassed RM20 billion ($4.9 billion), housing developers are continuing to build only high-cost and luxury homes. The government’s measures to reduce the price limit of property available for foreign investors and buyers from RM1 million ($240,000) previously to RM 600,000 ($146,000) are aimed at helping rich developers. They are not making any effort to reduce housing prices or regulate the profitability of developers.

In October 2019, the government launched the ‘Vision of Equal Prosperity’ (‘WKB’) 2030 to replace ‘Vision 2020’ inspired by Mahathir Mohamad, when he was prime minister for the Bahasa Nasional government in the 1990s. ‘Vision 2020’ aimed to “make Malaysia a fully industrialised and developed nation by 2020, which includes not only economics, but also political, social, spiritual, psychological, as well as national and social unity”.

After thirty years of ‘Vision 2020′, the income gap between rich and poor has actually grown. The project has failed to achieve its goals, especially that of ensuring a fair and equitable distribution of national wealth. The relation of workers’ total income to GDP is still low at 35.7 per cent, compared with the bosses’ income of 61 per cent of GDP. For RM4,000 worth of production, workers in Malaysia receive only RM1,360 ($330) in wages compared with workers in the United States, Australia, Germany, Singapore and the United Kingdom who can earn around $500.

Severe inequalities

Seventy five percent of Malaysians cannot even find RM1,000 for emergencies and most Malaysians will run out of money in a week if they lose their source of income. Half of Kuala Lumpur households with families of four people, earn less than the equivalent of $1,280 a month, and the living wage is supposed to be at least the equivalent of $1,590 to cover their living costs.

Only three million out of the 14.5 million workers in Malaysia have enough retirement savings. The inter-state development gap is also growing, with 40 per cent of GDP concentrated in Kuala Lumpur and Selangor and only 25 per cent of GDP produced in the five poorest states – Kelantan, Kedah, Pahang, Sabah and Sarawak.

The monthly income gap between the highest 20 per cent of households and the lowest 40 per cent has significantly increased over the past 27 years. In 1989,it was the equivalent of $470 and continually increased to $2,480 in 2016.

The monthly income gap between the Malay and Chinese ethnic households in 1989 was RM 497. In 2016, this gap increased nearly 4 times to RM 1,736. This is one of the reasons why racial prejudice is out of control, and as long as the government has no solution to bridge the wealth gap, racial sentiment will continue to be played on by politicians for their political gain.

The ‘vision’ of 2030 is not much different from the ‘vision of 2020. As long as alternative governments based on the needs of the working class and youth are not built, and an alternative economic programme to the free-market economy of capitalism is not created, the poor and the working-class will continue to suffer under an unequal social and economic structure.

Also, without a reasonable living wage and control of the prices of goods and services, under a democratically planned economy based on the rights and needs of the people, the people’s hopes cannot be realised. Like the BN, the PH is also trapped under the hegemony of a free-market that prioritises profit and power over people’s needs and hopes. This clearly shows that the PH government is just another government of elites ensuring the continuity of a free-market economic agenda based on maximum profit through exploitation and competition. Economic and social policies favouring the needs and rights of the working class and youth will not be possible without building a socialist alternative to capitalism,

Unstable government and increasing racial tensions

Recent surveys have shown that the majority of Malaysians are concerned about their living standards and the country’s economy. With the value of the ringgit shrinking, buying essential food and household items has become an expensive affair. No one takes seriously the optimism expressed by PH politicians about the state of economy, with their predictions that the economy will do better this year.

The ringgit has weakened against both the US dollar and the Singapore dollar -respectively almost 30% and 20%. This reflects the pessimism and lack of confidence in economic growth, trade and current account balances and in the management of the country’s debt profile, international reserves, interest rates and inflation.

A weaker ringgit means import prices going higher. Malaysia remains a net importer of food, with figures showing that the nation’s food and live animal imports have gone up from RM38.9 billion ($9.5 billion) in 2013 to RM51.3bil ($12.5 biliion) in 2017. With no signs of the US-China trade war ending, its impact on the global marketa are creating more uncertainties for Malaysia’s export dependent economy and for the inflow of foreign direct investment (FDI) from both countries on which Malaysia is very dependent.

With the deteriorating support for the PH government, fractures have been emerging in the coalition parties. The period for the transfer of the post of prime minister from Mahathir Mohamad to Anwar Ibrahim, as agreed by the PH coalition before the last general election is still unclear even though it was supposed to be after two years’ term of government which ends in May this year. Prolonged uncertainty on this issue could create conflicts within the parties in the coalition. There could also be attempts by either Anwar or Mahathir to form new coalitions of parties to form the government if the PH coalition collapses.

With the conflicts that exist inside the PH and the growing public dissatisfaction with the government, the racial tensions are also increasing. In the last general election a majority of Malays supported UMNO and PAS and most non-Malays voted for PH. Because of that, that PH is being seen as a government dominated by non-Malays. UMNO and PAS are using the race card to garner the support of Malays whenever PH is seen favouring the non-Malays or seen as trying to undermine the Malay privileges that were protected and strengthened under BN rule.

After the defeat of the BN, a new coalition between UMNO/BN and PAS was formed last year to garner the support especially of Malays for the next general election expected in the year 2023. So far, this cooperation between UMNO and PAS has brought them some victories in by-elections by using the Malay-Muslim sentiments and the growing people’s dissatisfactions against the PH government. Although at the beginning of the formation, the new coalition focused on attracting the support of Malays by using the ‘Malay supremacy’ approach, lately, the agenda and direction of the coalition has been evolving towards combining with other race-based parties as a strategy to win the next general election. The UMNO and PAS leaderships are aware that, in order to win the general election and establish a stable government, they need to garner support from other races especially Chinese and Indians and from the significant Christian populations in the Borneo states of Sabah and Sarawak.

Elements of racism also exist among the component parts of the ruling party, the PH. Now, however, it is clear that both the BN and the PH are concerned only with the agenda of the rich and the big corporations, regardless of race and religion. Under BN’s rule as a government, the rich from all backgrounds became richer and the common people of various races were oppressed and exploited by them. In this matter, there is no significant difference between the BN, PH or PAS. All of them support the capitalist economic system – the interests of the capitalists and the 1% elite in society. Racial politics is a tool which the upper class and these political elites use to break the unity among the common people.

Socialist alternative needed

The agenda and economic policy of the PH government clearly reveal its real character, focusing only on the interests of the minority wealthy elite and ignoring the plight of the working class and poor. Although the people chose this government to break free from the social and economic oppression that has taken place under the BN government, the common people find themselves still in the same situation as before.

At every budget and in all government policies, the interests of the billionaires and big businesses are given the most priority and the aspirations of the common people are marginalised. This unstable economic and political situation has been used by politicians to create suspicion between people of different races. The propaganda of racism created by politicians has become a widespread poison among ordinary people who are seeking a solution to improve their deteriorating social and economic conditions. As such, the situation in Malaysia is increasingly unstable with the threat of racist attacks and clashes between different ethnic groups.

With the failure of the PH to govern the country’s economy and society in line with the people’s hopes, the opposition will continue to fill the existing political vacuum to present themselves as a better choice. However, in reality, both the ruling party and the opposition have no solution to the issues that really haunt the people such as rising prices, the rising wealth gap, cost of living, health and higher education, poor job opportunities and various other socio-economic problems.

Recognising the failure of the BN and the PH to meet the expectations and aspirations of the people, a number of young people and NGOs are trying to popularise the idea of establishing a ‘Third Political Force’ as an alternative to the BN and PH. However, if this third political force is also based on pro-capitalist policies and no concrete alternative policies, then, like the BN and the PH, this third force will not be able to meet the people’s aspirations if they form a government.

The problems faced by the common people can only be addressed by launching a struggle against the economic system of capitalism that controls the lives of all and dominates all the national economic, social and political agenda. For this reason, the pro-capitalist political leadership of a ‘third force’ will change nothing. A new political power must be built with the participation of the working class, the young and the oppressed.

The working class and the trade unions have the responsibility to bring their aspirations forward through organised struggles. Without championing the plight of the common people, government institutions and mainstream politicians will continue their agenda of using the common people in order to secure the advantage of a handful of very rich capitalists. The struggles must pursue a viable alternative to the system of capitalism that oppresses millions of the working class and the common people.

A political party comprised of workers and oppressed should be built on a socialist programme based on democratic principles and the rights and needs of the people at large. Such political power could gain the support of the majority and unite all people of various races and religions. Only with a socialist programme opposed to the system of capitalism and involving the active participation of the majority, can the racist agenda of capitalist politicians be overcome and a political and economic structure based on the aspirations of the people be built.

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