Malaysia poll to test regional democracy; Political upsets could undermine southeast Asia’s success

April 8, 2013 4:37 pm

Malaysia poll to test regional democracy

Political upsets could undermine southeast Asia’s success

By Jeremy Grant in Singapore

With their signature royal blue shirts, the leaders of the governing coalition led by Najib Razak, Malaysia’s prime minister, fired up a crowd of thousands of party loyalists in a stadium in Kuala Lumpur at the weekend.

Launching its election manifesto, Barisan Nasional – Malay for “national front” – pledged a raft of election giveaways including more cash handouts for the poor.

So far, so normal in electoral politics in Malaysia, where taxi drivers have already received vouchers for new tyres. But what was unusual was the rally’s timing.

In past elections Barisan’s main party, the United Malays National Organisation (Umno) has waited until after a date has been set for polling day before unveiling its manifesto, such has been its confidence of repeating the thumping majorities it has enjoyed for decades.

But now the coalition is nervous, and with good reason.A resurgent opposition, led by former finance minister and serial battler of sodomy charges Anwar Ibrahim, stands its best chance of upsetting the status quo in Malaysia, a moderate Muslim nation that has played a key role in forging political and economic consensus in southeast Asia.

The outcome matters in a region where democratic succession is set to be tested in a wave of elections that will reveal whether the economic success story of southeast Asia could yet be undermined by political upsets.

In Indonesia, tycoon Aburizal Bakrie is one of a handful of figures expected to run for the presidency next year in elections that could affect the pace of the country’s economic reforms.

In Myanmar, no one is yet willing to predict how a planned transfer of power from the military to a civilian administration will pan out after an election in 2015.

Even in tiny Singapore, which is watching its neighbour Malaysia’s election closely, the ruling party faces an existential crisis amid a groundswell of popular pressure for a more responsive political system. The next poll there is due in 2016.

Disaffection with Barisan, and in particular with Umno, is at unprecedented levels thanks to widespread anger over corruption and cronyism in a country where the lines between personal and public business have long been blurred.

That was highlighted last month in a report by Global Witness, a campaign group, alleging entrenched corruption implicating Abdul Taib Mahmud, chief minister of Sawarak, on the Malaysian portion of Borneo, and his family.

Mr Taib, who heads a small party in the Barisan coalition, has dismissed the allegations. But the image of him escaping a local TV reporter’s questions by slipping into his vintage silver Rolls-Royce probably did not help.

In addition, the great multi-ethnic experiment that has defined this country of 28m since independence from Britain in 1957 is not quite what it was.

The country’s dominant Malay population has coexisted, largely peacefully, alongside the smaller Chinese and Indian communities. Yet Umno will struggle to translate that into support at the ballot box.

At the last election in 2008, Chinese disaffected by pro-Malay affirmative actionpolicies helped rob Umno and its partners of a decades-long two-thirds majority in parliament. Chinese voters are even less enamoured of Barisan this time.

Mr Najib seems to hope that these issues can be overcome by touting his economic record. Last year’s 5.6 per cent gross domestic product growth would be the envy of many.

But Barisan may not have grasped that a narrative of sound economic stewardship alone cannot guarantee an improvement on its last election result – seen as key to Mr Najib avoiding a possible leadership challenge as head of Umno.

The new unknown in Malaysian politics is an unprecedented influx of young, first-time voters flooding on to the electoral roll – about 2.4m of them, representing just under 10 per cent of the population.

That makes social media, not the public stadium, the main battleground. Thirteen million Malaysians have Facebook accounts, up from 800,000 at the last election.

Polling shows that one in five voters remains undecided in the peninsular Malaysian states. Ibrahim Suffian of the Merdeka Centre, a respected opinion research group, thinks the election is “too close to call”.

For the international community, which has long looked to Malaysia as an anchor of moderate Muslim stability in Asia, this means an end to the era of super-majorities in Malaysian politics and, ultimately, the end of predictability. The Malaysian experiment is entering uncharted waters.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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