After almost two years in office, Malaysian Prime Minister Najib Razak is cutting an international image as a modern, progressive, moderate Muslim leader bent on closing the widening ethnic and religious divide that is threatening his country's future.

During a visit to secular Turkey last week, Mr Najib trumpeted Malaysia's credentials, saying it had proved that its system of governance based on moderate Islam had worked and could be a good model for other countries to emulate, especially Islamic countries.

He said the success of a system was not just about numbers but also about whether it could improve the quality of life, and about good values, ensuring fairness, rule of law, being inclusive, having a social safety net and caring for the poor.

This certainly is good news for Australia. Like Indonesia, the well-being of Malaysia is of paramount importance, given our links.

Since coming to power, Mr Najib, who is in Canberra on his first official visit to Australia, has pledged more transparency in government and reached out to the 28 million population - made up of 60 per cent Malays, 26 per cent Chinese and 10 per cent Indians - with inclusive policies such as the 1Malaysia concept which is aimed at uniting the people to work as one nation.

Last March, he launched his New Economic Model to cut red tape to promote greater private investment and domestic competition and reduce the state role in the economy as well as improve education programs to increase the number of skilled workers.

More radical is his declaration to wind back affirmative action policies that ironically were introduced by his father as prime minister in 1970 to empower Malays after race riots in 1969.

This policy switch is long overdue after more than 40 years of special privileges and racial quotas in business, government jobs, education and housing that have alienated many of the country's Chinese and Indians and led to a brain drain as thousands of skilled and professional people have moved to Australia, the US, Canada and Britain.

But Mr Najib's visionary 1Malaysia will come to nought so long as Malaysia's political parties, government and opposition alike, zealously continue to play the race and religious cards.

As Malaysian blogger-in-exile and whistleblower Raja Petra Kamaruddin observes, Malaysia's Malay politicians are mostly trying to outdo each other to show they are more Malay and more Muslim than the other guy. This in turn has bred suspicion and distrust and the people are drifting apart.

It does not help when disciplinary action is not taken after a school's Malay principal tells a group of Chinese students eating lunch during the fasting month of Ramadan to go back to China.

And what do you make of a fatwa against Muslims observing Valentine's Day, entertainers being banned because their dress is too short, women being threatened with the cane for drinking beer or having sex out of wedlock and churches and Hindu temples having to battle increasing restrictions?

The US International Religious Freedom Report 2010 says religious minorities continued to face limitations on religious expression, even though the Malaysian constitution provides for freedom of religion.

Government policies promoted Islam above other religions and restricted distribution of Malay-language Christian materials.....more