The Unsinkable Najib Razak

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The Unsinkable Najib Razak

Even as 1MDB and other scandals claim further scalps, Malaysia’s prime minister is expected to win the next election.

The Unsinkable Najib Razak

Malaysia’s Prime Minister Najib Razak gives the keynote address during the UMNO annual assembly at the Putra World Trade Centre in Kuala Lumpur (November 27, 2014).

Credit: REUTERS/Olivia Harris

Prime Minister Najib Razak has survived a series of unprecedented scandals, which in Western democracies would have doomed any leader and their party to the opposition benches. But in Malaysia, politicians dance to a different tune.

Here, Najib’s chances of winning the next election are being talked up, thanks largely to the forgotten man of Malaysian politics, opposition leader Anwar Ibrahim, who is languishing in jail despite calls by the United Nations for his release.

Anwar supporters say his five-year jail term for homosexuality charges was politically motivated. The sentence was handed down after he won the popular vote at elections in 2013, threatening the grip on power held by the United Malays National Organisation (UMNO) since 1957.

His incarceration, analysts said, will damage the opposition’s electoral chances.

“UMNO is certain to win the coming election as no combination of the fragmented opposition can realistically break through its gerrymandered constituency defenses,” said Gavin Greenwood, a risk analyst with Hong Kong-based Allan & Associates.

More Jailing, More Fines, More Seizures

Gerrymandering will prove key to UMNO’s survival as Najib grapples with the One Malaysia Development Berhad (1MDB) debacle, among other scandals. Arrests, convictions and further charges related to 1MDB are the stuff of daily headlines in Malaysia, alongside speculation about an early election, not due till next year.

Most recently the United States Department of Justice (DoJ) filed another lawsuit against the financier Low Taek Jho, better known as Jho Low, hoping to seize a penthouse, an office, and a flat in London after a trace was put on properties allegedly bought with 1MDB funds.

Singapore has slapped fines on Credit Suisse and UOB in a 1MDB money laundering probe and claimed its fifth conviction in 1MDB related cases.

1MDB, founded and chaired by Najib, has racked up known debts of $11.73 billion and is being investigated by authorities in the United States, Hong Kong, United Kingdom, United Arab Emirates, Luxembourg, and Switzerland. Najib has denied any wrong-doing in regards to a string of allegations that include the transfer of $700 million into his personal bank accounts.

Swiss investigators have also alleged that as much as $4.8 billion may have been diverted from companies linked to 1MDB while the Abu Dhabi sovereign wealth fund, Ipic, has settled on $1.2 billion repayment following a claim of $6.5 billion.

In the United States, authorities are trying to recoup $1 billion allegedly spent on homes in New York and Los Angeles, paintings by Picasso and Monet, and the Hollywood movie The Wolf of Wall Street.

Analysts say these investigations are straining Malaysia’s ties with the West and pushing it closer to China, pleasing Beijing and proponents of its ever expanding regional reach.

Under Pressure

Closer ties with China, however, will not translate into more votes from ethnic Chinese, the largest Malaysian minority making up 22.6 percent of the population. Ethnic Chinese voters deserted UMNO in droves at the 2013 poll amid financial scandals and a hardening of Malay and Islamic cultural assertions.

Greenwood said Najib faced a difficult balancing act in pleasing his Islamic constituency at the expense of Chinese voters while attempting to secure funding for a 1MDB rescue plan from Beijing.

“Najib has also made it clear that he will raise the specter of the ‘Chinese threat’ … while relying heavily on investment from Beijing to bail out 1MDB-linked companies and deliver massive infrastructure projects,” he said.

It is, however, a difficult road. One deal, with state-owned China Railway Engineering Corp and a local partner to take a stake in a real estate project controlled by 1MDB, fell apart in early May after it failed to win Beijing’s endorsement.

“And it’s not just about 1MDB,” one analyst, who declined to be named, said. “There’s the French legal action over the subs, the Bersih democratic movement wants his [Najib’s] resignation and electoral reform, his family has been tied to illegal logging in Borneo, and his country’s secular status is being challenged by Islamic militants.”

A French court is hearing a case that includes Najib’s role in the 2002 purchase of two submarines for the Malaysian navy and allegations of corruption linked to the murder of a Mongolian translator.

While insisting upon his innocence, Najib likes to point out that the Malaysian Anti-Corruption Commission has also cleared him of all allegations tied to 1MDB.

That has upset those demanding justice, including former Prime Minister Mahathir Mohamad, who seems interested in forming an unlikely alliance with Anwar’s Parti Keadilan Rakyat (PKR).

Saved by an Election?

Keith Loveard, a security analyst with Jakarta-based Concord Consulting, said Najib, for all his problems, remained protector and hero of the Malay masses and it was still unclear to what extent the 1MDB scandal had impacted upon the UMNO faithful.

That’s largely because of the constitutional protections afforded ethnic Malays over other races in jobs, education, and other aspects of life, championed by UMNO – much to the dislike of the Chinese community, which largely backed Anwar and the PKR in 2013.

“In any election it all depends on who is standing against the incumbent. At the moment there seems to be no alternative leader with wide-ranging support,” Loveard said.

Anwar continues to head the PKR from prison, a difficult challenge, especially as the party itself is the focus of corruption allegations and resignations.

“While the external world may consider Najib to be tainted, he continues to represent the peak of the machine that has coddled the majority (Malays) – and as such it is hardly likely that the electorate will turn against him,” Loveard said.

However, further issues are also dogging Najib and UMNO.

Greenwood said support within UMNO’s core Malay base had been damaged by government cuts to subsidies, increased consumption taxes, and Najib’s growing commitment to conservative Islam. This mix “of often diametrically opposed policies and prejudices would ensure the coming election campaign resonates with often alarming rhetoric,” he said.

That will still not be enough to unseat Najib. Not yet.

Najib is on notice from within his own ranks following UMNO’s worst-ever performance in 2013 when the number of seats held by Barison Nasional – the coalition through which UMNO rules – in the 222-seat Parliament was cut by seven to 133. Anwar won 51 percent of the popular vote and Najib just 47 percent.

“To date Najib has personalized the 1MDB scandal and China’s contentious and growing economic role in the country, serving as a scapegoat for any popular resentment,” Greenwood said.

“When this role is deemed no longer necessary Najib’s position will become untenable and he will be replaced. The outcome of the election, in its function as a gauge of popular opinion, is therefore likely to determine how much time he has left as Malaysia’s prime minister.”

Luke Hunt can be followed on Twitter @lukeanthonyhunt