NYT: Malay majority are tired of the corruption and theft of public assets practiced in their name, greeted with enthusiasm the pledge to replace the corrupt ethnicity-based affirmative action program that has benefited cronies of PM Najib with a program that bases assistance on need

May 4, 2013

In Malaysia, a Historic Chance for Reform



MALAYSIANS are going to the polls Sunday for the most important election in our history. The opposition stands a real chance of winning, for the first time since independence from Britain in 1957. Recent polls show the People’s Alliance, the opposition coalition led by Anwar Ibrahim, running neck and neck with the governing National Front, led by Prime Minister Najib Razak. The National Front, the direct successor to the Alliance Party of the 1950s, has been one of the world’s longest-governing parties, outside of authoritarian regimes like China, North Korea and Cuba. For half a century, until 2008, it had a two-thirds parliamentary majority, which allowed it to amend Malaysia’s Constitution at will. Since the 1980s, the governing party has resorted to stoking fears among the country’s many ethnic communities — Malays, Chinese, Indians and many non-Malay indigenous peoples — to keep them beholden to its rule. It has abused affirmative action policies, intended to help impoverished ethnic Malays, in order to enrich its members and their cronies. Malaysia’s outdated model of governance — a system of racially exclusive parties that deliver patronage to captive racial voter blocs — is no longer sustainable.The National Front’s brand of racial politics is the disease to which it pretends to be the cure. And it is the reason genuine reform is not possible without a change of government.

Malaysia is a multiethnic, middle-income country. Just over half of its 28 million people are of Malay origin, a quarter are of Chinese descent, 11 percent belong to other indigenous groups and 7 percent are of Indian descent. Malaysian politics since independence have been shaped by issues of race and identity and dominated by the National Front’s majority coalition partner, the United Malays National Organization and its successor, the more racially chauvinistic party, Umno Baru. After race riots in 1969, the “New Economic Policy” was launched to reduce inequality and increase the share of the economy held by Malays. This policy provides preferential treatment to Malays in business, jobs, education, scholarships and access to loans, assisted saving and housing. Although it was originally intended to end in 1990, it has since become permanent as part of the ruling party’s doctrine of Malay supremacy over and against “immigrant races.” In the name of advancing ethnic and religious interests, the National Front divides the Malaysian people and plays us against each other.

Today, after more than six decades in power, the lines between the assets of the state, the ruling party and its leaders are blurred. Corruption and deceit are now endemic to the system. Bridget Welsh, a political scientist at Singapore Management University, has estimated that Malaysia’s prime minister, Mr. Najib, in power since 2009, has spent close to $20 billion on populist election-related incentives over the four years of his administration.

The National Front controls the mainstream media and uses the machinery and resources of the government for partisan purposes. Electoral fraud is widespread and the election commission is believed to be partisan. Although international monitors will be present for Sunday’s vote, and the government has set up an online portal for citizens to monitor the balloting, many citizens fear that cheating will determine the outcome due to allegations of widespread fraud.

Malaysia has a history of electoral manipulation. In one of the most brazen examples of manufacturing ethnic identity for political gain, Mahathir Mohamad, the prime minister from 1981 to 2003, imported about 700,000 Muslim immigrants from the southern Philippines into the Malaysian state of Sabah. They were secretly issued Malaysian citizenship in order to create a “Malay” Muslim vote base for Mr. Mahathir’s party.

This scam altered the demographic composition of a state that previously had only 2 million inhabitants and a Christian rather than a Muslim majority. To this day, the government relies on what it calls its “fixed deposit” of votes from Sabah to stay in power. The National Front secured this deposit by trading citizenship for votes.

Fortunately, Malaysians of all races have come together to protest the deceit, corruption and race-baiting practiced by the National Front. Street protests have grown since the first demonstrations demanding electoral reform in 2007. In January, more than 150,000 Malaysians demonstrated in the historically significant Stadium of Independence in Kuala Lumpur to demand political reform.

The race is close, in spite of the gross unfairness of our electoral process. The Malaysian electoral system is heavily gerrymandered against the urban and Chinese vote. The use of “phantom” voters and the manipulating of ballots cast by post are routine.

Even by those standards, what we have seen in the last two weeks already qualifies this as the dirtiest election Malaysia has ever seen. The National Front has gone to astonishing lengths to buy votes, abuse government resources and engage in electoral fraud. Over the past week, chartered flights that may have been ordered by Mr. Najib’s office have flown thousands of foreign laborers working in Malaysia’s Sabah and Sarawak provinces on the island of Borneo into key voting areas in mainland Malaysia. There are grounds to suspect that they will be supplied with fraudulent credentials to vote.

The opposition leader, Mr. Anwar, a former finance minister and deputy prime minister, and his coalition are riding a tide of desire for reform and national renewal. He survived trumped-up charges of sodomy and faced accusations of corruption, which landed him in prison from 1999 to 2004, and the vicious efforts of the government to destroy his reputation, to emerge as the leader of a broad movement for change.

The People’s Alliance coalition he leads has been criticized as an expedient but unstable coalition of ideologically incompatible parties, united only in their desire for power. But its leaders have been consistent and firm in rejecting the old brand of racial politics that has cast such a pall on Malaysia’s politics, society and economy.

Against the government’s ideology of “Malay Supremacy” — an ideology that has been entrenched in school curriculums and even Civil Service training, the People’s Alliance has pledged to replace the corrupt ethnicity-based affirmative action program that has benefited cronies of Mr. Najib, with a program that bases assistance on need. These proposals have been greeted with enthusiasm by many among the Malay majority, who are tired of the corruption and theft of public assets practiced in their name.

The opposition’s popularity has been aided by a demographic bulge of young people, a rapidly urbanizing population and the widespread adoption of social media and smartphones that circumvent the government’s monopoly over mainstream media. Open vote buying and electoral fraud, when videos of such malpractice can be circulated via Facebook and YouTube, has provoked anger and ridicule.

If, against all odds, the opposition wins, this may go down as a revolution in which the incumbents were laughed out of power.

John Pang is chief executive of a research institute focused on economic integration in Southeast Asia.

Ruling coalition faces fight of its life in Malaysian vote

Malaysians are to vote in an election that could weaken or even end the rule of one of the world’s longest-lived coalitions. -Reuters
Sun, May 05, 2013

KUALA LUMPUR – Malaysians vote on Sunday in an election that could weaken or even end the rule of one of the world’s longest-lived coalitions, which faces a stiff challenge from an opposition pledging to clean up politics and end race-based policies.

Led by former finance minister Anwar Ibrahim, the opposition is aiming to build on startling electoral gains in 2008, when the Barisan Nasional (BN), or National Front, ruling coalition lost its customary two-thirds parliamentary majority.

The historic result signalled a breakdown in traditional politics as minority ethnic Chinese and ethnic Indians, as well as many majority Malays, rejected the National Front’s brand of race-based patronage that has ensured stability in the Southeast Asian nation but led to corruption and widening inequality.

Under Prime Minister Najib Razak, the blue-blood son of a former leader, the coalition has tried to win over a growing middle class with social reforms and secure traditional voters with a US$2.6 billion (S$3.2 billion) deluge of cash handouts to poor families.

He can point to robust growth of 5.6 per cent last year as evidence that his Economic Transformation Program to double incomes by 2020 is bearing fruit, while warning that the untested three-party opposition would spark economic ruin.

Najib, who is personally more popular than his party, has had some success in steadying the ship since he was installed as head of the dominant United Malays National Organisation (UMNO) in 2009. Formidable advantages such as the coalition’s control of mainstream media, its deep pockets and a skewed electoral system make it the clear favourite.

But opinion polls suggest a tightening race that could further reduce the coalition’s majority and lead the opposition to dispute the result over claims of election fraud.

The opposition alliance has been buoyed by unusually large, enthusiastic turnouts at campaign rallies in recent days. It says its “X factor” may be a surge in young, first-time voters who are more likely to be attracted to its call for change after 56 years of rule by the BN coalition.

“The momentum is far greater in 2013,” Nurul Izzah, Anwar’s daughter and an opposition member of parliament, said at a meeting with journalists and foreign diplomats on Friday.

“I’ve never enjoyed so much support everywhere. That’s our only hope, to ensure a good turnout.”

A failure to improve on 2008’s performance, when the BN won 140 seats in the 222-seat parliament, could threaten Najib’s position and his reform programme. Conservative forces in UMNO, unhappy with his tentative efforts to roll back affirmative action policies favouring ethnic Malays, are waiting in the wings to challenge his leadership.

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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