Malaysia's political money trail

Malaysia's political money trail

A tradition of vote buying and political slush funds is front and center in current power struggles


In Malaysia’s squabble for primacy between Prime Minister Abdullah Ahmad Badawi and former premier Mahathir Mohamad, money politics is playing an increasingly crucial role. The extent to which one well-heeled political faction can weather the other's onslaught until the next leadership election in the United Malays National Organisation, will weigh heavily on ready access to various forms of monetary support.

Abdullah announced Thursday that the triennial race to lead the largest of Malaysia’s three ethic-based political parties will come sometime after the next general election. It is a battle that Abdullah looks more like winning, not least because of the amount of patronage he is able to dispense to party stalwarts, critics say.

UMNO has led the Barisan Nasional, or national coalition, since independence in 1958 and control of UMNO is tantamount to control of Malaysian politics.

After months of sniping against Abdullah by Mahathir, the first real electoral skirmish came during national party elections held on September 7 for seats to the next UMNO general assembly. The battleground was in the northern Malaysia state of Kedah, Mahathir’s home territory. The result was a humiliating defeat for the man who was the strongest political leader in the country for 22 years.

In the wake of his loss, Mahathir charged that money played a vital part in denying him one of seven seats up for grabs in his home division. He claimed RM200 had been placed in brown envelopes for party electors, along with a list of “preferred candidates” that did not include his candidate. The claim was dismissed by the local party chief. Mahathir’s two sons, however, did win seats in Kedah.

While details of money politics are often murky, Malaysia’s party slush funds are legendary and allegations of money politics have persistently dogged the party.

Mahathir and former Minister Daim Zainuddin reportedly used UMNO slush funds to attempt to corner the world tin market and lost hundreds of millions of dollars in the early 1980s. Mahathir himself charged that his former protégé and onetime finance minister Anwar Ibrahim had accumulated a RM3 billion fund for political purposes.

Anwar, who was jailed on charges of corruption and sexual perversion, was freed by Abdullah in 2004. He has since told reporters that the UMNO leadership’s own fund now amounts to as much as RM8 billion.

Certainly, through his son-in-law, Khairy Jamaluddin, a director of ECM Libra Avenue, Abdullah is believed to have access to enough cash to wage a prolonged campaign of attrition. The company, cobbled together through a series of corporate maneuvers, has been the subject of extensive questions in Malaysia. Its chairman, Kalimullah Hassan, is a onetime journalist who has become an UMNO stalwart and close Abdullah ally.

Critics have asked how Kairy, the deputy head of the UMNO youth wing, was able to fund his RM9.2 million purchase of a minority share in the company and why the purchase was considerably below market price. The shares rose 50 percent after the transaction was announced. Khairy has since said he borrowed the money to fund the purchase.

Continuing charges of nepotism forced Khairy to sell his shares back to ECM Libra in August, for a total of RM6.63 million, a move meant to protect Abdullah.

On other corporate fronts, Kamaluddin Abdullah, the PM’s son, also wields considerable financial clout. He controls SCOMI Engineering, whose shares surged from a low of MR$1 to more than MR $18 before falling back below RM2 over the last six months. Despite the tumble, there is no telling if cash reserves churned up by the stock’s wild ride could be leveraged or used for campaigns that may enhance Abdullah Badawi's political survival.

Through the development of the Johor Southern Corridor, where Abdullah will serve as co-chairman of the investment committee along with the state’s Chief Minister, more control can be exerted on the economy. Indeed, thousands of contracts and concessions in the Ninth Malaysian Plan (2006-2010), which have not been parcelled out, can be instrumental for similar purposes. Development plans in Penang and Kedah wield similar advantages for the prime minister.

Given this, many Malaysians have ruled out a comeback for Mahathir, especially when he himself is now no longer bankrolled by federal and state coffers. Most of his business supporters are believed to no longer see eye to eye with him.

Najib Abdul Razak, the deputy Prime Minister, also has the means to project his position, should the campaign increase in competitiveness and intensity.

Through elaborate maneuvering by his younger brother Nazir, Abdul Razak heads the CIMB Group, an entity that was merged with Southern Bank Ltd earlier this year. Although Southern Bank is the country's second-smallest bank by assets, at the time of the merger Nazir said the niche bank would help investment bank CIMB to develop its consumer operations. With the consolidation, CIMB is now one of the biggest investment banks in Malaysia, with regional ambition and scale.

Should Anwar Ibrahim feel he has to wade into the fray as an independent --or perhaps even as Abdullah’s ally -- he could probably count on the financial might of his friends and colleagues in the Middle East, especially in Dubai, where Anwar is known to have considerable business interests. He operates a consulting firm in Dubai that advises Middle Eastern businesses on how to invest in Asia, specifically Malaysia.

In the weeks and months to come, money will matter more and more in UMNO’s competitive politics, not just through simple cash pay-outs, but in oiling the political machinery of each candidate.

In turn, members are expected to calibrate their loyalty accordingly to ensure maximum gains and advantage. Come what may, the usual pledges of allegiance to Abdullah and Najib Razak would be guaranteed. What is less certain is whether such a culture will in due course undermine the strength of the party, leading the opposition to make further inroads.
(Source:Asia Sentinel)


Are the Chinese discriminated in Malaysia?

Are the Chinese discriminated against in Malaysia? Looks like what is good for the goose is not good for the gender. This is in so far as Singapore’s long standing veteran leader and Minister Mentor, Lee Kuan Yew is concerned.

In a forum in Singapore in conjunction with the World Bank/IMF meeting there last Friday, he condescendingly accused Indonesia and Malaysia of marginalising the Chinese. To him both Indonesia and Malaysia are discriminating against the Chinese.

It looks as if he doesn’t know his facts (which is odd considering the worldwide accolade attributed to his legendary intellect) or if he does then he had purposely feigned ignorance. More of this later at least in so far as Malaysia is concerned.

It is also odd that the Minister Mentor deem it fit to derogatorily comment on a sensitive domestic issue of Malaysia. Singapore do not brook any nonsense over anything they deem to be interfering in their domestic affairs. But what is no go for others is OK for them? Isn’t Lee’s comments not interfering in our domestic affairs? Is it now open season for the Singapore leaders to pass negative remarks/judgements about its neighbours?

But woe betide a foreigner if he so much as hint negatively on a sensitive domestic issue of the island republic. The Singapore leadership is legendary in not allowing such things and will not rest until they can clean out anyone brave enough to make such remarks on its domestic issues through its courts.

A number of foreign newspapers and periodicals that have crossed such lines had the unpleasant task of meeting head-on with Lee and company resulting in them meekly becoming compliant to the dictates of the island state apart from suffering monetary losses.

But what exactly did the Minster Mentor said? The Singapore Straits Times Interactive quoted him thus: “My neighbours both have problems with their Chinese. They are successful, they're hard-working and therefore they are systematically marginalised, even in education. And they want Singapore, to put it simply, to be like their Chinese, compliant.” So said the great champion of the Nanyang Chinese.

In response to a question, Lee said it was important for Singapore to have a government that was 'really firm, stout-hearted, subtle and resolute', noting that the attitude of Malaysia and Indonesia towards the Republic was shaped by the way they treated their own ethnic Chinese minorities, according to Straits Times Interactive.

What does it mean when he said the Chinese here are being systematically marginalised? Don’t the Chinese have a share in governing the country? Isn’t there power sharing among the Malay, Chinese and Indian political parties? Do the Malaysian government though dominated by the majority Malays curtailed the Chinese from carrying out their various endeavours? Do they not have a share of the economic cake, in fact the major share?

Lee attributed the Chinese success to their being hard working and diligent. But this is only half the story. It is not as if they are not given any chance at all in getting government largesse. Most of the Chinese enterprises big and small continue to get government jobs and tenders? Even when a Malay/Bumiputera enterprise obtained government tenders, the Chinese businesses is still not left out. They continue to benefit from the Malay contractors and will still have a share the job in some instances even the majority share. But can the Malay contractor expect the same treatment from a Chinese enterprise/business? How many Malay contractors have won tenders from Chinese owned enterprises/conglomerates?

In any case a company 51 percent owned by the Malays, meaning 49 percent is owned by the non-Malays, is still deemed a Bumiputera company. So even if it gets a government job the Chinese still have a very substantial share. But can the same be said of a Chinese company? Invariably it would be 100 percent owned by the Chinese.

It is the Malays who often times get only the crumbs. Of course in some instances it is the Malays themselves who are to be blamed if and when they are only interested in becoming rent seekers.


Thus the country’s economy is still in the hands of the Chinese. For a Malay contractor who gets a tender to build a building, he will need various supplies and materials. Invariably these can only be obtained from a Chinese distributor or wholesaler. Even when they do the work themselves, they still need to get supplies from the Chinese merchants who continue to monopolise the wholesale and distribution businesses.

And often times he is the one who gets discriminated against. A Chinese contractor is said to be able to purchase his supplies at a discounted rate which a Malay contractor do not enjoy. The Chinese contractor is also given longer credit terms sometimes up to six months whilst his Malay counterpart not only have to settle cash on delivery terms without the discount. And even if he can get credit it will be at a much shorter period of credit.

There are other cases of discrimination. Even in employment for example when for no valid reason a profiency in Mandarin is required even for a job as a salesgirl in a retail outlet at a shoping complex patronised by the Malays.

Yet the Malays continued to get the brickbats that the Chinese are discriminated against and the latest from the Nanyang Chinese champion himself.

One good criteria to measure whether the Chinese are discriminated against or not is the differentials in their per capita earnings. Latest figures supplied by the government say for every ringgit the Malay earns, the Chinese earns RM1.64. But no matter that this figure is disputed because prior to this the ratio had always show a widening gap from 1:1.6 some five or six years ago to 1:1.7 then 1:1.8 and even 1:2.04 a couple of years back. But suddenly the latest seem to show this ratio had improved to 1:1.64.

Even at this ratio, the target set by the government to get income parity between the Malays and Chinese by 2020 seems a tall order. Whether this is attainable is to be seen but what is certain it is a very difficult goal to reach.

In so far as Indonesia is concerned, suffice it to say that despite the Chinese accounting for only 5 percent of the population, they control nearly 90 percent of the Indonesia economy. If this is discrimination then I am sure the Pribumi Indonesian want to have that discrimination.

One thing that can be concluded from his statement, Lee Kuan Yew still has that fortress mentality – not surprisingly with all the Israeli advisors at his disposal.

So the island republic feels constricted by the larger neighbours which encircles it. Such inferiority complex has rendered the republic to its present stance pouring billions of dollars yearly into modern and sophisticated weaponry and war hardware and software including chemical and biological weapons capability thanks to the US and Israeli assistance. But this is a subject for another commentary.

By Dato' Rejal Arbee-MYKMU.Net

Malaysia Singapore Mahathir Adullah Ahmad Badawi MM KY Lee Chinese Malay money politic