The Mess In Malaysia May Have Been Mahathir's, But Now It Is Razak's

At least embattled Malaysian Prime Minister Najib Razak is right about one thing. The current mess within Malaysian politics is the making of his greatest nemesis, Mahathir Mohamad, who led the Southeast Asian nation with an iron fist from 1981–2003.

What Najib fails to fathom is that Mahathir has not produced this mess by criticising his management, but by paving Najib’s path to power in the fashion, he did during his years in office. Mahathir may believe that he can end the crisis through bringing Najib down. However, history should judge Mahathir himself because the author of a long nationwide decline that has culminated in this latest crisis.

To be sure, Najib’s fingerprints are all over the current chaos. The proximate source of the crisis has been the collapse of Najib’s pet sovereign-investment company, 1Malaysia Development Berhad (1MDB). This has caused Malaysia’s stock market and currency, the ringgit, in order to plummet in turn. All this has transpired amid credible allegations that the prime minister siphoned an eye-popping US$700 million into his personal bank account.

However, this road toward ruin commenced with Mahathir, not Najib. It is vital to understand that Mahathir rose to energy in blessed circumstances. Malaysia’utes economy had been growing sensibly for decades, thanks to the prudent financial management of a highly capable bureaucracy. Governance and tax collection were effective, and financial obligations were few.

Natural resource wealth, including oil, was expertly stewarded. A decade of muscular redistribution towards the country’s ethnic Malay majority experienced restored social stability after the race riots of 1969. Incoming foreign investment was copious contributing to to mushroom even further. Mahathir commanded probably the most cohesive ruling parties (the actual United Malays National Organization, or UMNO) and coalitions (the Barisan Nasional, or BN) in the world. The regime was authoritarian, but not intensely repressive or disliked in comparative terms. In short, Mahathir was holding a winning hand when he became prime minister almost 30 years ago.

Then came the debt. Obsessed with subsequent in the footsteps of Asia’s technological leaders, Mahathir began borrowing heavily to fund his ‘Look East’, state-led heavy-industrialisation program. Privatisation was part of their growth package, but the beneficiaries were businessmen of devotion more than talent. When the global economy went into recession within the mid-1980s, patronage started drying upward.

UMNO split, largely in reaction to Mahathir’s strong-armed style of rule. Mahathir’s two most talented rivals, Tengku Razaleigh and Musa Hitam, bolted from UMNO despite their deep personal ties to the party, mostly to escape Mahathir himself. Mahathir responded by launching a police operation under the pretext of racial tensions, imprisoning as well as intimidating political rivals, as well as cementing his autocratic control.

Hence, by the past due 1980s, all of the defining features of Malaysia’s current crisis below Najib’s leadership were currently evident under Mahathir. The regime was increasingly repressive. The office of prime minister was becoming a destination of autocracy. Ethnic tensions reopened in order to political manipulation. The economic climate was worrisomely indebted. UMNO was losing some of its most able leaders. This was the beginning of Malaysia’s sad national decline, under Mahathir’s watch and at their own hand.

Fast-forward a decade and all of these syndromes would recur in even nastier forms. The Oriental Financial Crisis of 1997–98 disciplined Malaysia for the unsustainable dollar-denominated debts it had accumulated under Mahathir’s single-minded push for breakneck growth. Mahathir held responsible everybody but himself for that crash. He sacked and imprisoned his popular and talented deputy, Anwar Ibrahim, largely for his temerity within suggesting that Malaysia needed much deeper reforms to regain economic health.

Mahathir did not pull Malaysia out of its crisis with economic reform or adjustment, however with more and more borrowing and investing. This was possible because Malaysia was still sitting on the fiscal reserves it had been amassing for fifty years, since the British colonial period. Mahathir grandiosely claimed that his imposition of capital controls had saved the economy.

However, by the time associated with capital control implementation, capital flight ran its course. Mahathir imposed them to facilitate politics repression as much as economic recovery. The spectre of anti-Chinese riots in neighbouring Indonesia was then callously manipulated to keep cultural Chinese voters in the BN collapse in the 1999 elections.

Hence, even before the turn of the millennium, Malaysia was hurtling down the very trajectory of decline we are seeing in the current crisis. Like Mahathir, Najib thought autocratic control over the economy as well as embarked on reckless credit and investment schemes, especially 1MDB. Like Mahathir, Najib unleashed a bittorrent of repression under antiquated security laws to protect his own position amid rising criticism from civil society and from within UMNO.

Like Mahathir, Najib has recklessly played the ethnic and religious card because his position has destabilized. In addition, in consummate Mahathir style, Najib has now even sacked his deputy, Muyhiddin Yassin, with regard to questioning Najib’s repression of the media in response to the 1MDB scandal. In sum, Mahathir offers nobody to blame more than himself as he watches Najib drive Malaysia even further into the ground.

Neither Najib nor any one of his current plausible substitutes appear capable of reversing Malaysia’s decades-long decline. Herein lies perhaps Mahathir’s worst legacy of all. By forcing the three most capable politicians beside themself out of UMNO during their prime, Mahathir made certain that only relative lightweights would command leading positions in Malaysia’s most powerful political institution.

If Malaysia is to exit this crisis on the path to restored health instead of steeper decline, the political and economic reforms first demanded in the reformasi movement of the late 1990s will finally need to put in place: either by a brand new generation of leadership within UMNO, or by Malaysia’s repressed but resilient political opposition.

Malaysia’s mess is Mahathir-made is republished with permission from East Asian countries Forum