The first quarter of 2017 indicated that Malaysia’s economy is growing robustly again. In general, the country’s market economy – compared to other countries in Southeast Asia – is built on a solid macroeconomic foundation with a relatively high level of socioeconomic development. The Bertelsmann Stiftung’s Transformation Index (BTI) ranks it 21 out of 129 countries on economic transformation.
From afar, these positive economic figures should help stabilize the ruling coalition Barisan Nasional (BN) before the next general elections, which must be held before August 2018. Since riots broke out between the Malay majority and the ethnic Chinese minority after the general elections in 1969, the multi-ethnic BN, which includes parties representing the largest ethnic groups and is led by the United Malays National Organization (UMNO), has narrowed the ethnic and religious divides in the country and helped improve living conditions for large parts of the population.
The 2008 general elections marked the first time since 1969 that the BN lost its two-thirds majority in the national parliament. The loss was blamed on large numbers of highly dissatisfied ethnic Chinese and ethnic Indian voters. Prime Minister Najib Razak responded by promising to reform Malaysia by implementing his “1Malaysia” concept. The program explicitly aimed to promote harmony among the country’s different ethnic groups, while improving government services and establishing economic plans to generate future growth.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
After taking a closer look at Malaysia’s current economic and political situation and evaluating the effectiveness of the 1Malaysia campaign, however, the results are rather disenchanting. High levels of private and public sector debt as well as continued dependency on raw materials exports pose a threat to the country’s economic development.
Even more potentially destabilizing for the country’s future is the slow but steady deterioration of relations between the Muslim majority and the ethnic Indian and Chinese minorities. A possible shift in the composition of the ruling coalition’s multi-ethnic character has the same potential. In May 2016 Najib stunned the component parties of his ruling coalition by deciding to submit a bill for parliament to amend the Sharia Court Act. Originally proposed by the opposition Parti Islam Se-Malaysia (PAS), the bill would allow Islamic courts to impose stricter punishments in religious and family matters for Muslims.
Najib’s decision to side with the PAS on this matter was remarkable for at least two reasons. First, the bill stands in stark contrast to Najib’s 1Malaysia rhetoric, and so it fuels fears of further cultural marginalization under Malay dominance among ethnic minorities in the country. Second, UMNO’s cooperation with the Islamic PAS on a bill that goes against the explicit will of several BN component parties finalized a power shift within the BN.
So how can we explain the UMNO’s decision under Najib’s leadership to intensify cooperation with the Islamic PAS when the result was to alienate several BN component parties and parts of the population?
Despite positive economic data and the implementation of important infrastructure projects in Kuala Lumpur, Najib has lost popularity among the electorate. The shift began when he was linked to a massive scandal involving a state development fund, 1 Malaysia Development Berhad (1MDB), in July 2015. Although Najib strongly denied any wrongdoing, claiming that the money came from Saudi Arabian donors, calls for his resignation persist to this day. TIME Magazine recently placed the prime minister on its list of least popular state leaders, right next to Venezuelan president Nicolás Maduro and South African president Jacob Zuma.
Najib’s weak opinion polls are not the only threat to the ruling BN coalition. Since the 2008 general elections it has become evident that the BN is no longer able to gain the votes of all ethnic groups in the country. The coalition’s power basically depends on the strength of the UMNO and the component parties in Sabah and Sarawak, leaving long-time BN members such as the Malaysian Indian Congress (MIC) and the Malaysian Chinese Association (MCA) virtually marginalized.
Greater cooperation between the UMNO and the PAS gained momentum as early as 2008 when the MCA and MIC lost more than half of their seats. However, back then the PAS’s spiritual leader, Nik Abdul Aziz Nik Mat, led the party in an opposition coalition pact with the secular Democratic Action Party (DAP) and Parti Keadilan Rakyat (PKR).
After Nik Abdul Aziz Nik Mat’s death in February 2015 and the subsequent strengthening of conservative forces within the PAS, the party’s pact with the DAP and the PKR finally broke down in June 2015. Recognizing the possibility of further weakening the opposition while also appealing to the country’s conservative Malay electorate, the UMNO used this window of opportunity and offered closer cooperation with the PAS. The UMNO’s decision to put forth amendments to the Sharia Court Act must be viewed in the light of these developments. The bill is an indicator of how far the multi-ethnic character of the BN has deteriorated, and it symbolizes the UMNO’s dominance within the BN.
The bill shows that the BN’s longstanding multi-racial platform is now just a façade. Under Najib’s leadership, the UMNO is putting all its eggs in one basket by cooperating with the PAS to secure the votes of the Muslim electorate in the next general elections.
The short-term implications of this shift in the make-up of the BN should help Najib maintain power past the next general elections. But the potential long-term damage to the ethnic and religious relationships in the country should not be underestimated. Ethnic Indian and Chinese minorities’ fears of further political and cultural marginalization with no effective representation in the ruling coalition reinforce the ethnic divide in Malaysia and leave the 1Malaysia concept in ruins.
Stephan Giersdorf is a political scientist and lecturer at the University of Heidelberg. He is one of 246 country experts who worked on the latest edition of the Bertelsmann Stiftung’s Transformation Index, BTI 2016.