Enter Najib, with baggage

Nov 6th 2008 | BANGKOK

From The Economist print edition

A new leader mired in accusations

ONE could certainly say that Najib Razak was born to be Malaysian prime minister. He is the son of Abdul Razak, the second man to hold that job following independence from Britain, and the nephew of his successor, Hussein Onn. Elected to parliament aged 23, on his father’s death, he rose to become deputy to the present prime minister, Abdullah Badawi. However, Mr Najib, expected within months to become the country’s sixth post-independence leader, will enter under a cloud of allegations, including ones linking him to a murder case, all of which he categorically denies. But some Malaysians will be wondering if he is a fit person to lead them.

Facing a revitalised opposition, in an election earlier this year the governing coalition, led by the United Malays National Organisation (UMNO), lost the two-thirds majority it needs to change the constitution. Since then, the knives have been out for Mr Badawi. Despite his efforts to cling on he is being forced to quit next March. The contest to succeed him as party president, and thus prime minister, at first promised to be lively. But party officials, fearful of the challenge from the opposition leader, Anwar Ibrahim (a former UMNO deputy leader), chose to hang together rather than hang separately. By November 2nd Mr Najib had won enough nominations to block his only rival, Razaleigh Hamzah, a former finance minister, from getting on the ballot-paper. The quizzical Mr Najib (left)

Like Mr Badawi before him, Mr Najib comes to the job promising reforms, including of the system of preference for members of the ethnic-Malay majority for state contracts and jobs. Mr Badawi achieved little, though he allowed a bit more freedom of expression than had his predecessor, Mahathir Mohamad. Expectations for Mr Najib are lower still. It is possible, notes Edmund Gomez, a political scientist, that he will use the worsening economic outlook as a pretext for reverting to Mahathir-style repression.

Mr Anwar has failed to carry out his threat to topple the government through a mass defection of parliamentarians. Even so, there is a palpable fin de régime air around UMNO. Mr Badawi, Mr Mahathir and other leaders are publicly lamenting how corruption and cronyism are rife in the party. But his opponents say Mr Najib is hardly the man to restore confidence. In the latest scandal to which they are linking him, the defence ministry (which he oversaw until recently) has deferred a big order for helicopters following questions about their high price. A parliamentary committee this week cleared the government of wrongdoing, but admitted not investigating whether “commissions” were paid.

In an earlier case, a company the opposition claimed was linked to Razak Baginda, an adviser to Mr Najib, was paid juicy fees for services provided over a contract for the purchase of French submarines. A Mongolian woman, said to have worked as a translator in the negotiations, was shot dead and her corpse destroyed with explosives in 2006. Mr Razak was put on trial over her killing, along with two policemen. The case has dragged on for months and seen various odd goings-on, including changes of judge, prosecutors and defence lawyers at the start of the trial. A private detective signed a statutory declaration implicating Mr Najib, retracted it the next day, saying it had been made under duress. Calls by the victim’s family for Mr Najib to testify were rejected. On October 31st the judge ruled that the prosecution had failed to make a prima facie case against Mr Razak.

The policemen’s trial will continue. A blogger who linked Mr Najib's wife to the case is on trial for criminal libel. None of this, however, seems likely to interfere with Mr Najib’s accession to the prime minister’s job. A bigger threat may yet emerge from the resurgent opposition and Mr Anwar, who nurtures a long-thwarted ambition to take the job himself.

Najib misses the point, Malaysia misses the boat

Liew Chin Tong is the DAP MP for Bukit Bendera.

OCT 23 — The much-awaited official response from the new Finance Minister Datuk Seri Najib Razak on the global meltdown was nothing but a letdown. Najib’s response was grossly inadequate, and misses the point entirely.

The world’s financial system is facing the worst breakdown since 1929, with the banking sector in total disarray and all the advance economies — representing 55 per cent of global gross domestic product — entering recession, it is incumbent upon any government to respond quickly and effectively in order to mitigate the effects of the crisis.

While the crisis and its impact are discussed daily in detailed fashion everywhere else, for our government leaders the only relevant index in Malaysia now is the nomination tally for Umno leadership positions. Who bothers about the economy?

As a response to the challenge by the Opposition to announce a revised Budget taking into consideration the new circumstances, especially the fall in oil prices which formed 46 per cent of the budgeted revenue for 2009, Najib promised a proper response on Oct 20.

However, apart from saying that the growth rate would be revised downwards, Najib could only manage to announce that the Government would inject RM5 billion into Valuecap Sdn Bhd so it can stabilise the stock exchange, as well as a promise that rules for foreign investment will be further relaxed.

The other strategies include the liberalisation of the service sector to attract investment and generate local employment, re-positioning of government projects to focus on those that generate higher multiplier effects, as well as strengthening of small and middle-scale enterprises.

He also announced that there will be no reduction in budgeted expenditure for 2009, which means a much bigger deficit as a result of a smaller revenue base due to the fall in oil prices.

Najib said details would be announced on Nov 4 when he concludes the Budget debate in Parliament, almost two months after the initial collapse of the financial markets.

In a global crisis of such calamitous magnitude, the Finance Minister is duty-bound to explain to the nation through at least a ministerial statement in Parliament as soon as he and the Treasury humanly can prepare it.

But instead the Government is acting as if there is no crisis, thus a revised Budget or even a tentative plan of action is not needed.

Malaysia is fortunate that its banks are not yet exposed to the international banking crisis but no one is immune from the global meltdown.

A decade after the 1997/8 crisis, problems contributing to the last crisis — cronyism, corruption and nepotism — are still very much alive. The net effect is that the cost of running the federal government tripled that of in 1998.

Datuk Seri Anwar Ibrahim's final Budget as Finance Minister was only RM68 billion in total, miniscule compared to the RM207 billion Budget presented by Prime Minister Datuk Seri Abdullah Ahmad Badawi on Aug 29.

The quality and availability of public goods like education, public housing, public health, crime prevention have all declined, while child and aged care and public transport are near inexistent, resulting in a Hobson's choice for the poor and middle class in either facing the decline in living conditions or an ever higher cost of maintaining a decent lifestyle.

A total of 57.8 per cent of the country's 5.8 million families live on a combined monthly income below RM3,000, including 8.6 per cent who make less than RM1,000 per month. The already skyrocketing inflation, and the impending crisis, has hit them really hard.

The dependence on government-related employment and foreign workers over the last decade stops the economy as a whole from moving up the value chain and to respond to a crisis effectively. One in four of Malaysia's labour force is a legal foreign worker while approximately one in four in the workforce works for the public sector directly or indirectly, for instance, in government-linked corporations. The private sector lacks the capacity to innovate and compete internationally, thus hindering its ability to weather the storm.

The challenge of our time is to ensure that there is sufficient food on the table of the almost 60 per cent of our nation's families, and to ensure that their quality of life does not descend further.

It is in this context that Najib's RM5 billion injection of capital into the controversial Valuecap misses the point. It is too little to boost the stock exchange in the face of the exit of foreign institutional players.

There is also a danger of throwing good money after bad money. The RM10 billion Valuecap possesses will not last for too many days if there is a storm while it may take years to recoup losses.

More importantly, it is, in the language of the United States, Main Street that matters, not Wall Street.

With Najib missing the point, the country risks missing the boat, of curtailing the fallout from the crisis. - The Malaysian Insider

Getting there is the easy part for Najib

OCT 18 — Barring any major scandals, Datuk Seri Najib Abdul Razak is poised to become Malaysia’s Prime Minister by next March.

At 55, the youngish and debonair Pahang aristocrat is achieving his goal at an age not uncommon for first-time Prime Ministers in Malaysia.

Of the five previous ones, three got into top office when they were around 54 to 56. Najib’s father, Tun Abdul Razak Hussein, was the youngest ever, becoming Prime Minister at 48. Abdullah was the oldest, at 64.

Few in the upper echelons of power in Malaysia can match Najib’s political breeding. Not only is his father remembered by Malays in general as the man who laid the groundwork for Malay progress, Najib is also nephew-in-law of his father’s successor, the much respected Tun Hussein Onn.

Education Minister Datuk Hishammuddin Hussein is therefore his first cousin on their mother’s side.

Not only do blood ties place Najib auspiciously in the Umno power structure, among the ruling class of both Johor and Pahang, few have the wide experience in government that he boasts of.

A graduate in Industrial Economics from the University of Nottingham in the United Kingdom, he was drawn into politics by his father’s sudden demise in 1976. He was soon made deputy minister in several ministries, including finance and education.

Later, he headed both those key ministries, and was also Pahang Menteri Besar. He held the powerful position of Umno Youth chief from 1987 to 1993.

Given such a background, being Prime Minister should not pose too big a challenge for Najib. He is known to be a decisive man when he needs to be.

However, holding positions of power for 32 years has left him tainted by controversies and scandals. Corruption allegations follow him endlessly, and might haunt him all the more once he becomes Prime Minister.

Non-Malays have not forgotten his part in fanning inter-ethnic tensions in 1987 with threats of soaking a keris in Chinese blood. Incessant claims that he was involved in the murder in 2006 of a Mongolian woman, Altantuya Shaariibuu, have harmed his reputation somewhat.

The latest controversy centres around tender irregularities in the ongoing purchase of 12 aircraft from the French-German firm, Eurocopters.

Despite these predicaments, Najib’s control over Umno once he becomes its president is expected to be strong. His career path and political network put him ahead of most potential contenders. However, circumstances surrounding his ascendance to the premiership are far from ideal.

The reason why Abdullah has to leave will also be the cause of much anxiety for a Najib administration. The opposition Pakatan Rakyat , led by Datuk Seri Anwar Ibrahim, is now a formidable presence in Parliament. With the opposition holding more than a third of the seats, Najib, as Premier, will be able to make constitutional amendments only with PR’s collaboration.

For the first time in Malaysian history, the ruling Barisan Nasional will be faced with an alternative coalition daring to dream of replacing it. To make matters worse for the BN, all its five members in mainland Malaysia, including Umno, fared badly in the March elections. The next BN leader will have to pay close attention to the strength and loyalty of its lesser allies, and reduce Malay-centrism within Umno.

By and large, Najib will need to demonstrate that he can withstand Anwar’s onslaughts and escape the stamp of passivity and tentativeness that Abdullah’s administration has been known for — and do all that without allowing former Prime Minister Tun Dr Mahathir Mohamad to steer his hand.

The purported reason why he was passed over by Dr Mahathir — Najib’s former mentor — in 2003 when the latter was choosing a successor is not an issue for Umno at the moment. The Muslim vote that Dr Mahathir lost for BN in 1999 and that Abdullah managed to regain in 2004 is now firmly in the hands of the opposition. It is not there any longer for Najib to lose, as was Dr Mahathir’s fear in 2003.

With opposition leader Anwar now seeking to be the next Premier instead of Najib, the latter will have little time for rest. The war of words between these two men will be intense, and there will be no shortage of political intrigue for Malaysians to gasp over in the coming months.

At present, the person most likely to become Najib’s deputy is Minister of International Trade and Industry Tan Sri Muhyiddin Yassin. Born in 1947, Muhyiddin is six years older than Najib. He is known to have ambitions of becoming Umno president, and being No. 2 to the younger Najib does not say much of his chances of ever getting there. How loyal Muhyuddin will be to Najib has yet to be tested. — TODAY

The writer is a Fellow at the Institute of Southeast Asian Studies. His latest book is “Lost in Transition: Malaysia under Abdullah”.