MANY REFORMERS IN PAKATAN HARAPAN DISAPPEAR

RETURN OF THE CRONIES IN MALAYSIA

Mahathir has become a liability to the ruling coalition

On 17 October 2019, Halim Saad, the executive chairman of Renong Group, bid RM5.2 billion (US$1.24 billion) in an attempt to acquire the government investment company Khazanah International’s majority interest in PLUS Malaysia Bhd., the country’s biggest highway concessionaire.

Although Halim’s bid was said to be the highest, apparently Prime Minister Mahathir Mohamad would like to steer the ownership to another Tan Sri, Abu Sahid Mohamad of the Maju Holdings Group, a close friend and lunch partner of the premier. In the meantime, Lim Guan Eng, who heads the Finance Ministry, which controls Khazanah and thus the 51 percent PLUS stake, is fighting “tooth and nail,” in the words of one source, to keep it in the government. (Editor: Khazanah is controlled by the Prime Minister's Department)

If there is anything that exemplifies the paralysis that has seized the putative reform government that Malaysia’s voters put in place in May of 2018 – more than 500 days ago – it is the fight over PLUS, which could have come directly out of a 1980s playbook, a distressing indication that little has changed despite the electoral earthquake.

"The problem is that these guys can’t get their act together,” said a highly placed business source. “Every single problem they have, they turn back to practices put in place by the old regime. Mahathir, Daim, and Anwar were part of the old regime. Now they are running the new one.”

Strangely, the reformers who formed the backbone of the resistance to the old regime have gone utterly silent. Rafizi Ramli, the articulate chartered accountant who embarrassed the old regime with his exposes of affairs like the “Cowgate” scandal, has disappeared from view. Tony Pua, the technocrat who joined the Democratic Action Party and exposed much of the misdoings in the 1MDB scandal, is little heard from. Nurul Izzah, Anwar’s daughter and a major voice for reform, has also basically disappeared. Azmin Ali, a Mahathir ally who previously had outmaneuvered his rivals in the Parti Keadilan Rakyat headed by Anwar Ibrahim, has been sidelined by allegations of sexual deviancy.

Voters have become disillusioned with a government in which very little has changed except that it has ceased to even function as well as the corrupt coalition that preceded it, critics say. Many of those critics are within the Pakatan Harapan coalition itself.

Instead of the generation of young reformers who helped to drive the Barisan from power, the country looks to the 94-year old Mahathir, who again took up the prime ministership 18 months ago. He is being challenged for the country’s leadership by his erstwhile ally Anwar Ibrahim, 72, who was the finance minister and a Mahathir acolyte three decades ago. Mahathir is being advised by Daim Zainuddin, 81, his finance minister from the 1980s.

It was these government-linked companies, or GLCs, that stultified the Barisan Nasional and were in part responsible for Malaysia slipping behind other countries in the region. They included more than 30 such crony-driven operations as Malaysian Resources, UEM, PLUS, Renong, Malaysian Airlines, and Realmild. Abu Sahid, seeking to take over PLUS, is now the owner of Perwaja Steel, a failed white elephant that cost the government an estimated US$2.4 billion. MAS mismanagement is believed to have cost US$2 billion, UEM more than US$1 billion. A complete list of the companies that had to be taken over by the government can be found here.

The political situation is “tense,” according to a political analyst, with everybody waiting to see how long Mahathir will remain. Although he had promised prior to the election to be gone in two years, with seven months or so left to go, he shows little inclination that he might actually give up. His party, Parti Pribumi Bersatu Malaysia, and his policies are increasingly appearing to be throwbacks to his previous prime ministership.

The economy is reacting to the situation. While manufacturing foreign direct investment is on the increase as foreign multinationals look for other bolt-holes for their supply chains because of the US trade war with China, domestic investment has declined sharply, by 21 percent, with palm oil prices weakening.

Mahathir then jolted the country recently by publicly backing Pakistan over India’s takeover of the autonomous region of Jammu & Kashmir, causing India to threaten a boycott of Malaysian palm oil. He also jolted Malaysia’s Chinese community by saying Hong Kong Chief Executive Carrie Lam should step down in the face of months-long protests, adding that eventually, China would crush the protests. In a majority Muslim country, he has argued that China is “too powerful” to censure over the issue of Beijing’s treatment of Muslim Uyghurs, leading to concerns that Malaysia is engaging in selective humanitarian criticism. Growing segments of the country are concerned that these statements are unnecessary and causing controversy that Malaysia doesn’t need – and raising questions over Mahathir’s fitness at age 94.

One investment bank report suggested that political bickering has paralyzed reform. The private sector remains confused as to the rules of engagement, with ministers unsure of their roles, and holdover businessmen fearing both tax arears and possible criminal charges.

The civil service, as Asia Sentinel reported on 23 October 2019, remains basically hostile to the government, with Mukhriz Mahathir, the prime minister’s son and chief minister of Kedah state, charging a veritable “fifth column” with allegiance to the previous government remains in place.

Leaders from decades ago remain in charge, following the policies that got the country off the rails in the first place. Halim Saad, the executive chairman of Renong Group and Abu Sahid Mohamad are fighting for an entity that was invented as a state-backed creation tasked with pouring a cornucopia of money into the United Malays National Organization, then the dominant political party in the Barisan Nasional, the national ruling coalition, then headed by Mahathir.

"Mahathir’s allies don’t want him to give up, they don’t want to give up their perks, the cronies are circling,” a source said. “UMNO and PAS have aligned together and they look to take advantage of a government that is looking paralyzed. Lots of people want to tell Mahathir to hang up his boots. But the majority don’t trust Anwar.”

Khairy Jamaluddin, the former youth minister in UMNO looked on as the party’s hope, has been silenced because he was looked upon as arrogant and far too ambitious. There “will be no comeback for 10 years even if he plays his cards right. The reformers are underground,” a political analyst said. “It looks like Anwar is the last man standing.”

written by John Berthelsen, published by Asia Sentinel on 24 October 2019

edited by Fauzi Kadir  

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