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Things falling apart? – Political instability, worsening economy, corruption in high places, flailing Covid response

Have our institutions been compromised after 60 years of Umno-BN rule?


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Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world;

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all convictions, while the worst

Are full of passionate intensity.

– WB Yeats, The Second Coming (1919)

In our last newsletter, Azmil Tayeb asked: Quo vadis? What will be the future of politics now that Malay politics has become divided three ways – among Umno, Pas and Bersatu?

It was not so long ago when Umno dominated almost all politics concerning the Malay community. Pas could only pose a challenge in Kelantan and Terengganu, and not even consistently.

In the 2018 general election, we witnessed regime change as the Umno-Barisan Nasional coalition was displaced after 60 years of political domination.

Then, just over a year ago, Umno worked with Bersatu and Pas, under the umbrella of fostering Malay-Muslim unity, to undermine the Pakatan Harapan coalition (which was as multi-ethnic a coalition as we have ever witnessed in Malaysia). This was the Sheraton backdoor coup in late February 2020.

Political instability and unpredictability

Since then, instability has set in, and politics in Malaysia has become unpredictable. Not only is Malay politics divided three ways; there is really no Umno-BN at the centre anymore.

We have the Muhyiddin Yassin-led Perikatan Nasional government in power making decisions, but we do not know who his Bersatu’s partners are anymore.

We know that Dr Mahathir Mohamad, his son Mukhriz and a handful of other ex-Bersatu leaders have formed a new party, Pejuang.

We also know that there have been factional fights within Umno. Some leaders like Hishammuddin Hussein and Khairy Jamaluddin continue to work with PN and serve as ministers. Others like Umno president Zahid Hamidi advocate a break with Bersatu.

Since the Sheraton coup, Parliament has only met for a short period. And with the ongoing emergency, declared ostensibly to combat Covid-19, Parliament will not meet in the near future either. PN obviously fears a vote of no-confidence against it if Parliament is allowed to sit!

So, the next general election is looming. Yet, with Malay politics so divided, we will most likely see multi-cornered electoral contests, and no party will win an outright victory.

Yes, Umno is likely to win most seats in the Malay heartland constituencies (with over 60% Malay voters). Pas will dominate in Kelantan and Terengganu but perhaps not in Kedah, while Bersatu (including Mahathir’s breakaway Pejuang) will be reduced to a footnote!

That said, regardless of how well Umno performs in the Malay heartland areas, it will not be able to form a government on its own. It cannot do well in the multi-ethnic constituencies (which PKR will dominate), or in the urban non-Malay urban areas (which the DAP will win, hands down). The parties in Sabah and Sarawak are undergoing another round of rethinking about which of these peninsula-based coalitions they should back.

Emergency – propping up those in power, bad for economy

Three outstanding economists – Muhammed Abdul Khalid, former director of the Khazanah Research Institute and former adviser to the prime minister; Jomo Kwame Sundaram, former UN assistant secretary general and Khazanah Research Institute senior adviser; and Nungsari Ahmad Radhi, former Malaysian aviation commission (MavCom) executive chairman – have all spoken publicly against the ongoing emergency.

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All three believe the emergency has been bad for the Malaysian economy. Jomo also detailed how the five previous emergencies had served the interests of those in power, rather than those of the rakyat.

In a survey of business conditions conducted by the Federation of Malaysian Manufacturers and the Malaysian Institute of Economic Research, over 80% of respondents experienced lower profits and a fall in revenue in the first half of 2020. Only glove manufacturers reported higher profits and revenue.

Ominously, 42% of respondents planned to shed 30% of their jobs by the end of 2020 in a bid to keep afloat. The survey also revealed that more staff would be laid off in 2021 as output had fallen. Other than in the rubber glove sector, operating capacity had not been restored to pre-Covid levels. Instead, most manufacturers were operating at half capacity due to subdued demand locally and by exporters.

Most badly affected were building material manufacturers who supply the construction sector. Next came the food manufacturers catering to the hospitality industry. About 39% believed their companies would only be able to survive for fewer than 12 months; another 34% felt they could survive beyond 12 months. Many felt it would take up to two years to restore their businesses.

Apart from manufacturing, the travel, leisure, retail, hospitality and property sectors have also been hit. Air Asia carried out three rounds of job cuts, shedding 2,000 of its total staff of 24,000. Malaysia Airlines, which has liabilities of over RM15bn, is renegotiating with its lessors and looking for another injection of funds from Khazanah. Otherwise, the airlines could be shut down for good!

The Genting Group, which runs casinos, hotels, recreation and entertainment centres and the cable car up Genting Heights, has stopped most operations and shed 3,000 jobs, some 15% of its total workforce, and suspended payments to its creditors. Genting Hong Kong (formerly known as Star Cruises) has stopped operations and owes some $3.4bn (RM14bn).

Penang, so dependent on foreign tourists, has seen many hotels shuttered in George Town and along the beaches in Tanjong Bungah and Batu Ferringhi. When the lockdown was relaxed (under the recovery movement control order) in early 2021, a sudden influx of domestic tourists converged on Penang’s beach hotels, which were offering room discounts over long weekends. But overall occupancy rate has remained low, especially after the movement control order was tightened again.

In May 2020, some 826,000 people registered themselves as unemployed with the Department of Statistics. That’s a 5.3% rate of unemployment – much higher than in years past, when we needed to import some four to five million foreign workers to sustain economic growth. As many as half a million college graduates are believed to be currently unemployed, not all of whom are included in the total unemployed figures cited above.

Foreign investments dry up

Already laid low by the pandemic, the emergency has worsened matters for the rakyat and the economy. Confidence in Malaysia among potential investors has dropped due to the political instability and changes in policies. The country has witnessed one of the lowest levels of foreign direct investments in two decades, not just when compared to our own past, but also compared to its Asean neighbours.

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Significantly, Facebook and Google are planning two new undersea cables connecting the west coast of the US to Indonesia and Singapore, but not to Malaysia. The cables are part of the tech giants’ plan to roll out greater access and faster internet services in the region.

Alas, Malaysia has been excluded from this plan because it had withdrawn an exemption from the country’s cabotage policy. (The cabotage policy, which governs coastal shipping within the country, is aimed at developing Malaysian shipping while reducing dependence on foreign vessels). The previous Pakatan Harapan government had earlier granted the exemption to the tech giants. That exemption would have allowed foreign vessels involved in carrying out repair and maintenance work to dock without having to pay the usual landing charges that apply to vessels carrying goods and passengers.

Perhaps this also explains why Malaysia is not among the 40 nations invited by the White House to attend a virtual “Leaders Summit on Climate” on 23-24 April. Representing Southeast Asia instead are Indonesia, Vietnam and Singapore.

Sordid corruption in high places

Malaysia’s reputation had taken a beating even prior to the pandemic and the state of emergency. Former Prime Minister Najib Razak had shamefully been named as “Malaysian Official No 1” and investigated by the US Department of Justice for having diverted money that belonged to the government into his own accounts, including those held in the US.

Prosecutors in Malaysia slapped Najib with seven corruption-related charges – abuse of power, three counts of criminal breach of trust and three counts of money laundering – for pocketing RM42m from SRC International Sdn Bhd, a firm owned by the Ministry of Finance. This took place between 2014 and 2015, when he was finance minister and prime minister. In July 2020, he was found guilty and sentenced to 12 years’ imprisonment and fined RM210m.

Probably Washington knows Najib is appealing his conviction (which is now nearing a verdict), and it is not improbable that it also knows that Zahid Hamidi, who replaced Najib as Umno president, is himself awaiting trial for corruption. So too several other Umno leaders like Tengku Adnan Tengku Mansor and Mohd Isa Abdul Samad.

The point is Malaysia’s global reputation has taken quite a beating with such corruption cases at the apex of government. 

Flailing Covid response despite emergency rule

Apart from this distasteful politicking and the worsening economic situation, not helped by a state of emergency and corruption in high places, the Malaysian government’s flailing response to Covid-19 has weighed down on the nation.

It is not just that Health Minister Adham Baba simply does not inspire confidence, certainly not after he proposed drinking warm water to combat the virus.

The Muhyiddin Yassin-led PN government has also practised double standards in its Covid response – with the public heavily fined and even jailed for breaking health Covid-prevention rules, while political leaders, including ministers, have been treated leniently!

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Imagine, why should the rakyat have to be quarantined for 14 days while travelling ministers do not need to! “Where got logic?” as a Twitter account exclaimed.

The reopening of schools in April has also led to fresh clusters breaking out. These schools have had to be closed for disinfection and for contact tracing among teachers and students. Yet, they had only reopened in March and April.

The health director general, Dr Noor Hisham Abdullah, disclosed that there were 41 Covid clusters linked to the reopening of schools by late March. In early April, six students tested positive in a primary school, which was then closed.

The latest announcement disclosed the discovery of six new clusters. District health authorities ordered the closure of 19 schools in the Petaling district for disinfection and close contact tracing.

And now, masses of people appear to be gathering, many of them without regard for physical distancing, at buka puasa markets and supermarkets – and, let’s be clear, we are talking of Malaysians of all ethnic backgrounds.

From observations reported over social media, Malaysia may witness a fourth wave of the pandemic after the Raya holidays, if not earlier. So, what was the point of the declaration of emergency? Who can blame the rakyat for believing that the emergency is a political ploy to prevent Parliament from sitting.  

I won’t try to recount what is being said of the tardiness in rolling out our vaccinations. So, I won’t disclose what they are saying of “the royals and their hangers-on”, in jumping queues and getting the jab of their choice. But you might want to check out #kerajaangagal on social media and this news report.  

A ‘grand coalition’?

April Fools’ Day has come and gone. It is not a trick statement to say we are witnessing political instability and unpredictability, a worsening economy despite emergency rule, the government’s flailing Covid response, and a worsening global reputation for Malaysia – not least due to corruption in high places.

In last week’s newsletter, Azmil Tayib suggested the possibility of yet another coalition being formed, this time involving Umno and PH (comprising PKR, Amanah and the DAP). Umno leaders, including Zahid, have always sworn they would never work with the DAP.

Yet it seems likely for Azmil that a “grand coalition” that would bring together ideologically diverse parties, like in Germany, might be in the offing.

Is this a formula that can bring the political parties in Malaysia together? Where is Malaysia’s equivalent of the no-nonsense Angela Merkel, who is respected by all parties at home and globally?

Is such a grand coalition in Malaysia going to be supported by strong democratic institutions and procedures, as in Germany? Really? Have our institutions like the bureaucracy, the judiciary, the police, the Election Commission been compromised after 60 years of Umno-BN rule? Or have they maintained their impartiality and autonomy over the past six decades?

And is our economy robust enough to sustain all the politicking that will surely occur? Or “will things fall apart” since “the centre cannot hold”?

Francis Loh
Co-editor, Aliran newsletter
22 April 2021

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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loyal malaysian
loyal malaysian
22 Apr 2021 7.46pm

Dr Francis , this is evil I know. I pray that things in Malaysia will fall apart because there really is no
center to hold things together.
Yes, may all things fall apart in Malaysia, and may all those evil frogs receive due desserts for their evil deeds.

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