It is the kind of blatant, money-grabbing corruption that should have led to an immediate change in government. Yet not only is the ruling coalition still in power, it is now strengthening its hold, cracking down with unprecedented ferocity on the opposition, the nascent independent press, and civil society.
A year ago, the ‘1MDB scandal’ broke in Malaysia. More than $1 billion had been embezzled from the 1Malaysia Development Berhad fund, including $681 million deposited into Prime Minister Najib Razak’s bank account.
‘You’d think the Prime Minister would have stepped down by now,’ says Colin Rajah, president of Global Bersih, an international NGO calling for clean and fair elections in Malaysia. ‘Any other head of state would have, in shame.’
The story is a complex web of deceit, connecting Malaysia’s ruling elite to Middle Eastern royalty, investment bank Goldman Sachs, and offshore tax havens. At its centre is Prime Minister Najib, who in 2009 became chair of the 1MDB advisory board. Originally set up as a government-run development fund, 1MDB quickly ran up huge debts in dubious business dealings. Despite investigations, the truth about the fund and its missing billions remains unclear.
‘This is just the tip of iceberg,’ Rajah says. ‘What has been uncovered is not all [of it].’
Malaysia is a curious post-colonial creation, a multi-ethnic and multi-religious country that has, for the most part, maintained relative harmony. It was one of the infamous Asian Tigers that experienced rapid growth in the 1980s and 1990s. Its supposed stability made it a popular destination for foreign investment and it is often cited as a success story for liberal economic growth in the Global South.
The reality is starker and Malaysia’s democratic credentials are suspect. The ruling United Malays National Organization (UNMO) has been in power since 1957. Until 2008, the coalition that it leads, the Barisan Nasional (BN), maintained a super-majority almost consistently, allowing it to change the Constitution at will. This popularity was partly due to the country’s rich natural resource wealth – primarily oil, but also, later, oil palm – which allowed the government to lavish benefits on the Muslim Malay majority in an official ‘reverse affirmative action’ policy. Elections existed, but they were little more than a rubber stamp, seemingly fair but, in fact, a tool to entrench power in the hands of the BN elite.
According to Rajah, Prime Minister Mahathir Mohamad, who was in power for nearly two decades, ‘put in place institutionalized corruption, from the top all the way down, with power concentrated in the Prime Minister’s office’. In 2008, the BN lost its super-majority. In 2013, the coalition lost the popular vote, partly due to the unifying power of opposition leader Anwar Ibrahim. Yet the gerrymandered voting system, in which rural Malays had disproportionate power, meant that the BN still captured a remarkable 59 per cent of the seats. Two years later, Anwar was jailed on trumped-up charges of sodomy, and the loss of his leadership has fractured the opposition.
One thing that did not change after the 2008 and 2013 elections was the ruling coalition’s high level of corruption as it continued to embezzle the country’s natural resource wealth.
Malaysia’s independent media outlets – MalaysiaKini, The Edge and Sarawak Report – took last year’s 1MDB story that The Wall Street Journal had broken, and ran with it. Civil-society groups that had been pushing for clean and fair elections for years got involved, organizing massive Bersih (‘clean’) rallies not only across Malaysia but around the world. At one point, the government tried to ban the movement’s colour, yellow.
Yet, despite all this, Najib refused to step down. Instead, he began to consolidate power, first within his own party, then by neutering the independent investigation. The official inquiry found that the money in his bank account was ‘a gift’ from the Saudi royal family. Protesters were thrown in jail or had their freedom to travel rescinded.
The government is looking to force independent media to register with the state, the final nail in the coffin for the nascent industry
Pressure was put on media that covered the scandal. Several sites, including The Malaysia Insider and Sarawak Report (which is based in Britain) were blocked, leading to a drop in readership and advertising revenue.
‘When you’re a small outfit, having your ad revenue cut has a major impact,’ says Shannon Teoh, president of the Foreign Correspondents Club of Malaysia. ‘Advertisers moved on [when] the brand became toxic. Many companies do not want to be on the bad side of government.’
The Malaysia Insider became financially unviable and closed in March. Sarawak Report continues but is still regularly blocked by the Malaysian authorities. The few open media sites that remain, such as The Edge Weekly or MalaysiaKini, are facing increased financial and oversight pressures.
‘A certain space had been opened through independent online media,’ explains Shawn Crispin, Senior Southeast Asia Representative for the Committee to Protect Journalists. ‘The government is deliberately cracking down on [this media] because it has been leading the way with increased revelations.’
In the coming months, things may get worse. The Sedition Law, a hangover from the British colonial era, is being used more and more to muzzle free speech. The government is also looking to force independent media to register with the state, which could be the final nail in the coffin for the once-aspiring, nascent industry.
Malaysia remains a side-story, meriting little global attention. Yet the situation could get a lot worse. Increased corruption; declining commodity prices; and a new generation of Malaysians who don’t want to play by the old rules: these challenges mean that the only path forward for the ruling coalition is blatant, rather than hidden, authoritarianism.
The Sarawak regional elections that took place in May provide a hint of what’s to come. The BN won 72 of 82 seats despite the 1MDB scandal and massive regional corruption. The election was anything but fair: authoritarian tactics included refusing to allow civil-society groups to enter the state, repressing non-state approved journalists and blocking independent media sites.
There has been little outcry globally. Countries such as the US and Britain have chosen to remain close to Najib despite everything that has happened.
‘Malaysia is a clear case of the US downplaying its commitment to democracy, rights and press freedom in pursuit of larger strategic goals – to the point it is embarrassing,’ says Shawn Crispin.
Colin Rajah fears that the lack of attention could lead to increased disenfranchisement within the country, exacerbating racial tensions.
‘The tragedy for the global community is that we’re always too late. It only comes to [our] attention when things are like Libya, Syria – how did it blow up? But it’s been going on for years and years, and I fear Malaysia is getting to that point.’