Malaysia’s Reformers Stumble

The democratic revolution born in Malaysia with such promise on May 9, 2018 – wiping out a corrupt coalition that had ruled the country for 62 years — is in increasing danger, as demonstrated Sunday with the defeat of a ruling Pakatan Harapan candidate in a state constituency it had won just 10 months ago.

There has been some concrete progress. Former leaders including Premier Najib Razak, his wife Rosmah Mansor and the lawyer Mohammad Shafie Abdullah have been arrested. The Malaysian Anti-Corruption Commission has been removed from the prime minister’s jurisdiction along with the Election Commission. Judicial reform is moving slowly forward and the independent press has  been unleashed.

But generally the Pakatan Harapan coalition has presented a picture of stumbling from issue to issue, with infighting among the leaders as economic issues bite and with the ousted Barisan Nasional coalition doing its best to hamstring reform. The coalition has been blocked in parliament with doing away with a “fake news” bill pushed through at the last minute by Najib. Nor has it revoked the colonial-era sedition act – land in fact recently used against a former minister for questioning the appointment of non-Malays to top government positions, earning criticism from Amnesty International.

Voters hold their noses

Voter dissatisfaction was clear in the loss of the Selangor state constituency just a few kilometers from Kuala Lumpur, which fell to Zakaria Hanafi, a candidate for the United Malays National Organization by a 19,780 -17,866 margin, a swing of 11,000 votes away from the government in less than a year. The disgraced Najib campaigned energetically for Zakaria, excoriating the coalition on social media despite the fact that the former prime minister is under indictment in the massive US$4.8 billion 1Malaysia Development Bhd scandal.

It was the second loss to be suffered by the Pakatan Harapan coalition in recent weeks. On Jan. 26, again with Najib campaigning vigorously, a Barisan Nasional candidate, Ramli Mohd Nor, was elected to the national parliament, where the government coalition holds 125 of the 222 seats.

It is likely to not be the last loss. Another by-election is to be held next month in the rural constituency of Rantau, an UMNO stronghold southeast of the capital, and it will almost certainly be won by a Barisan Nasional candidate, which despite the composition of the district is likely to be psychologically damaging.

The 93-year-old Mahathir Mohamad appears to be having a difficult time holding his fractious coalition together. He and Anwar Ibrahim, who served as opposition leader during years of oppression including two extensive jail terms – one engineered by Mahathir – are plainly not getting along despite public shows of amity.  Anwar, who had pledged to take a two-year sabbatical from politics, shortly after the May election induced an allied Parti Keadilan Rakyat member of parliament to quit so that he could run for the seat, raising complaints that he was overly ambitious and impatient to take over.

Mahathir, having named Democratic Action Party Secretary General Lim Guan Eng finance minister, also named former Selangor chief minister Azmin Ali “minister of economic affairs,” setting up tensions over who is actually running the economics portfolio.  Nor does Azmin, now more closely aligned with Mahathir, get along with Anwar despite being a member of Anwar’s own party. Azmin is also at odds with Rafizi Ramli, the PKR secretary-general. Anwar’s daughter, Nurul Izzah, gave up her leadership position in the party over the slowing speed of reform.  Both she and Rafizi have largely been sidelined.

Unfilled pledges

The administration has run into heavy going over an unfulfilled pledge to reduce the cost of living as the economy slows. There have been policy missteps, with the government first announcing a RM1,150 (US$282.10) monthly minimum wage, then dropping the figure to RM1,000.

Pakatan Harapan had made the economy a major campaign issue and is paying for it. The World Bank projects slowing gross domestic product growth at 4.7 percent in 2019. Bank Islam Malaysia chief economist Mohd Afzanizam Abdul Rashid is warning that the economy could go into recession this year. 

Finance Minister Lim has belatedly lowered the cap on fuel prices and the administration is also seeking to replace the current high-cost highway toll regime – both campaign promises.  A campaign pledge to do away with an unpopular 6 percent goods and services tax has left the government scrambling for revenue. The consumer price index has started to rise again in the wake of a sharp fall after the GST was dropped.

Palm oil, a major export commodity, has fallen in price by 16 percent in the past year.  Crude prices have been trending down as well as US production has risen to more than 12 million bbl/day, taking a bigger share of the market and leaving small producers scrambling.

“The government, despite all of its promises, has failed to put food on the table for the majority of Malaysians,” said a local political analyst. “Not that things were improving under Najib, but that’s precisely the reason the voters threw out the Barisan, believing that Pakatan Harapan could change their lives.”

The Race CardThen there is the always-present concern over race and religion and Malay fear of loss of privilege. Ethnic Malays, all of whom are Muslims, and other indigenous peoples comprise 61.7 percent of the country’s 31 million people, the Chinese 20.8 percent with the remainder Indians and noncitizens. UMNO through its existence – egged on by the rural fundamentalist Parti Islam se-Malaysia – made its embrace of Islam and Malay welfare central to its governance, with government jobs and university positions all reserved for ethnic Malays. 

The Chinese-dominated Democratic Action Party is now a major leg of the four-party ruling coalition in a way that the largely subservient Malaysian Chinese Association never was, raising Malay suspicions that the Chinese will dominate politics the way they dominate economics.

Then there are the appointments that have traditionally gone to Malays. Lim Guan Eng, the secretary-general of the DAP, is now finance minister. Tommy Thomas, the attorney general, is an ethnic Indian. Richard Malanjum, 65, a Christian member of the Kadazandusun tribe in Sabah, has been made chief justice of the Federal Court, the country’s highest tribunal.

Najib and the Barisan have sought to exploit those appointments to show that Malays are being sidelined. There also has been a spate of incidents in which non-Malays have been accused of insulting Islam. There are also changing norms in government, with the armed forces, almost totally Malay, being opened to at least 10 percent non-Malays.

“The majority Malays feel that the new government hasn’t been sensitive to them,” said a source. “Like it or not, Muslims/Malays are the majority in the country and they guard their prerogatives jealously.”

Sham degrees

Then there is the issue of honesty in government. At least six Pakatan Harapan officials are under fire on allegations that they don’t possess real university degrees. Among them is Deputy Foreign Minister Marzuki Yahya, a member of Mahathir’s Parti Pribumi Bersatu, who claimed a Cambridge University degree. It turned out that the “degree” was from a diploma mill in the US called Cambridge international University. 

Mahathir is bringing along his own baggage with defectors from UMNO, which has earned the ire of the coalition partners. They include, among others, Hamzah Zainudin, a onetime Anwar acolyte who became a Najib loyalist, as well as Shabudin Yahaya, a former Najib aide who jumped ship when his boss was no longer in power.  They are members of an UMNO cadre who kept Najib in power allegedly through the force of outright bribes for years after he had been clearly identified by the US government as having allegedly stolen hundreds of millions of dollars from 1MDB.  

But beyond that, reformers say, race-based policies remain in place. Mahathir’s Parti Pribumi Bersatu – the united indigenous people’s party – makes no effort to disguise the fact that non-Malays need not apply. 

University Malaya Professor Terence Gomez, in a biting speech two weeks ago, charged that while Mahathir during the campaign, had promised to clean out rent-seeking, he was still allowing political appointments in government-linked companies.  He called attention to Mahathir’s embrace of onetime finance minister Daim Zainuddin, who during his tenure was widely believed to have enriched himself. The prime minister’s “council of elders” also includes, decides Daim, Zeti Akhtar Aziz, the former central bank governor, Hassan Marican, the former CEO of the national oil company Petronas, and Robert Kuok, the head of the Kuok group conglomerate. 

“Look at the political discourse,” Gomez was quoted in local media as saying. “Soon after they came to power, they said politicians will not be involved in business. But they reneged on that. They said no more race-based policies, but now we have the Bumiputera policy. It is a repeat of the discourse we have seen in the past.”  

“I think the voters decided to give these guys a kick in the groin,” said the KL-based political analyst about Sunday’s election. “I don’t think this is the end for PH. It’s a wakeup call. But if they continue screwing up as they have done the last 10 months, then it’s a matter of time before its curtains up for them.”

by AsiaSentinel.com

Malaysia’s Sub Scandal Resurfaces

What, until the US$4.5 billion 1MDB affair, had been Malaysia’s biggest scandal, has reappeared – the US$1.2 billion purchase of submarines under then-Defense Minister Najib Razak at the turn of the century, a lurid tangle of blackmail, bribery, murder, influence peddling, misuse of corporate assets and concealment.

Crusading French lawyer William Bourdon and his associate, Appoline Cagnat, are currently in Malaysia discussing the affair with Attorney General Tommy Thomas, according to local media. Bourdon and his associates compiled much of the evidence about the purchase at the turn of the decade for Suaram, the Malaysian good-government NGO, but he was kicked out of the country for attempting to follow up the case by Najib’s government.

The matter has remained in limbo since 2012 as the Najib government pulled out all the stops to keep it buried. Now, however, after the May 9, 2018 election that turned out the Barisan Nasional and brought the Pakatan Harapan coalition to power, the new government has shown considerable zeal in bringing long-buried scandals to the light.

The Scorpene submarines were purchased by Malaysia from subsidiaries of the state-owned weapons manufacturer DCN although there is no evidence that Malaysia ever needed submarines and in fact they had to be based in East Malaysia because the waters around Peninsular Malaysia were too shallow for them to operate efficiently.

According to evidence compiled by Asia Sentinel in a long series of articles that won the 2013 Award for Excellence in Investigative Reporting from the Society of Publishers in Asia – Asia’s version of the Pulitzer Prize – the transaction steered a €114.96 million (US$130.3 million at current exchange rates) kickback to the United Malays National Organization through a private company called Perimekar Sdn Bhd.

Perimekar was wholly owned by Abdul Razak Baginda and its principal shareholder was his wife, Mazlinda, a close friend of Najib’s wife Rosmah Mansor.  He was then the head of a Malaysian think tank called Malaysian Strategic Research.

DCN officials hinted that Perimekar had come into existence only to facilitate the kickback transaction. Documents note that “Perimekar was a limited liability company with a capital of MR5 million (€1.4 million) of which 1 million is available. It was created in August 1999 … it has no record of sales during 2000. Its ownership is in the process of restructuring.”

Razak Baginda was a close friend of Najib Razak, who went on to be Malaysia’s prime minister and would be booted out of office in disgrace over the 1MDB scandal, which later supplanted the Scorpene scandal by far.

Another €36 million was directed to an obscure company in Hong Kong named Terasasi Hong Kong Ltd., whose principal officers were listed as Razak Baginda and his father and which appeared to be nothing more than a name on an accounting firm’s wall. According to an August, 2017 story, Razak Baginda was charged by French prosecutors with “active and passive complicity in corruption.”

According to the documents made available to Asia Sentinel, some of the misdeeds appear to have taken place with the knowledge of top French government officials including then-foreign Minister Alain Juppe and with the consent of former – and current — Malaysian Prime Minister Mahathir Mohamad.

Top Thales officials been named in news stories in Paris as having suborned bribes in the matter. Najib was also named as the recipient.   However, given the involvement of such individuals as Juppe and others, it seems unlikely that the matter will be carried further in France despite a statement last July by French Ambassador to Malaysia Frédéric Laplanche that “Cooperation between France and Malaysia (on the investigation) is very good.”

As Asia Sentinel reported in 2012, the payment appears to have been in violation of the OECD Convention on Bribery, which France ratified on June 30, 2000. On Sep. 29, 2000, DCNI, a DCN subsidiary, “took corrective actions” after France joined the bribery convention. Contracts concluded after that date were to be routed to companies held by Jean-Marie Boivin, DCN’s former finance chief, headquartered in Luxembourg and Malta respectively.

Among the documents is one that shows Boivin paid to send Razak Baginda on a jaunt to Macau with his then-girlfriend, Altantuya Shaariibuu, a jet-setting Mongolian national who was later murdered by two of Najib’s bodyguards in gruesome fashion in October of 2006 and whose body was blown up with C4 explosives, possibly to destroy the fetus of the child she said she was carrying when she was killed.

In a handwritten note found in her hotel room after she had been murdered, Altantuya said she was blackmailing Razak Baginda for US$50,000, although she didn’t say why. However, according to the documents, she had considerable knowledge of the purchase of the submarines from her relationship with the defense analyst. And, although Najib has repeatedly denied it and sworn on the Quran that he had never met her, there is evidence that he had not only met her but had an affair with her before Razak Baginda.

Two of Najib’s bodyguards, Azilah Hadri and Sirul Azhar Umar, the latter of whom left the country when he was temporarily freed by an appeals court and remains in Australia, were tried and convicted of her murder in a long-running trial that appeared to be carefully orchestrated to make sure nobody above the two bodyguards was ever named despite the fact that one of them, in a sworn statement, said they were to be paid MYR50,000 to carry out the killing. Musa Safri, Najib’s aide de camp, was identified as the individual who designated Azilah and Sirul to pick up Altantuya. But there is no evidence he was ever questioned by the police about his involvement.

In June 2018, the then-newly appointed Inspector-General of Police Mohamad Fuzi Harun told reporters that an investigation into Altantuya’s death would be reopened, based on a new police report submitted by Altantuya’s father. So far there has been little public indication of progress

The story, which was considerably bigger than just the Scorpenes, in essence began when Najib was appointed defense minister in Mahathir’s cabinet in 1991 and embarked on a massive buildup of the country’s military, arranging for the purchase of tanks, Sukhoi jets, coastal patrol boats – and submarines, all of which appear to have been mired in corruption and kickbacks that enriched Najib and UMNO. French, German, Swedish, Russian and Dutch manufacturers in turn went looking for the most effective cronies of the Malaysian leadership to help them out.

“The major defense contracts in Malaysia as in other countries require substantial money transfers to individuals and/or [political] organizations,” according to documents taken from DCN’s files by French investigators. “In Malaysia, other than individuals, the ruling party [UMNO] is the largest beneficiary. Consultants [agents or companies] are often used as a political network to facilitate such transfers and receive commissions for their principals.”









by AsiaSentinel.com