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William F Case
Until a year or so ago, it was still possible to argue that Malaysia's prime minister, Datuk Seri Abdullah Badawi, was skilfully finessing sharp contrary challenges, keeping his leadership and the country's politics on beam. Today, this is rather harder to contend. Observers agree that sandwiched between competing demands for more patronage and better governance, Abdullah has been diminished.
When Abdullah came to power two-and-a-half years ago, there was widespread recognition within his UMNO-led government of the need to rein in corrupt practices. It is often forgotten how unpopular his predecessor, Tun Dr Mahathir Mohamad, had become in the end, weakened by fallout over cronyist dealings and economic uncertainty. In these circumstances, by mobilising widespread social grievances, the Islamist opposition party, PAS, made stunning electoral gains in 2001. Mahathir was then succeeded by Abdullah in late 2003. And by stressing good governance, suspending some dubious contracts, and initiating a few high-profile prosecutions, Abdullah placated mass publics, enabling him in the next election to turn back the Islamist tide.
As Abdullah gave new attention to good governance, however, many UMNO politicians and the corporate figures with whom they were allied bemoaned the loss of state contracts and credit. But at the UMNO's general assembly election held toward the end of 2004, Abdullah appeared to respond deftly, holding the line on government spending, yet overlooking the resumption of money politics within the assembly's confines. A mixed slate of new party leaders thus emerged, only some of whom were identified as opposing Abdullah. Hence, this new and flexible posture might have been counted upon to extend Abdullah's leadership, enabling him to weather the contrary pressures that were posed by grasping UMNO politicians and alienated social forces.
But with state patronage remaining modest, the patience of some UMNO politicians grew thin. After all, it is the promise of patronage that has motivated most of these figures even to seek careers in politics. Further, they were given a great boost when Mahathir, reclaiming the limelight, began loudly to vent complaints. In late March, for example, he declared his anger over the government's final cancelling of a bridge project that was to link the southern city of Johor Baru with Singapore. The folly of this project, extending no more than half way across the strait because of Singapore's refusal to participate, appeared not to matter to Mahathir. Rather, his resentments were stoked by nationalist outrage over what he portrayed as the government's cowering before Singapore. He may have been piqued too by yet another dent to his legacy. In turn, many UMNO politicians appear quietly to have welcomed these criticisms, though less out of injured patriotism than in hopes that they might help to rekindle government spending - or even mark the start of a process by which leadership can be changed.
Thus, for fear of alienating UMNO politicians further, Abdullah appears to have suspended his campaign against corrupt practices. A clear sign of this lies in his apparent unwillingness even to discipline a lowly Malacca MP, recently in the news for requesting that local customs officials 'close one eye' as his small company tried to take possession of some illegal timber that had been smuggled from Indonesia. In defending himself before parliament and the media, the MP made plain the utter ineffectiveness of Abdullah's attempts to instil a sense of probity within UMNO. When asked about conflicts of interest, the MP replied, 'I don't know whether my company was involved. Maybe yes, maybe no. If yes, so what? & Why can't an MP take care of his own interest?' Though public furore rose in reaction, Abdullah responded mildly, deeming the MP's behaviours 'inappropriate', then scheduling a meeting with the MP, though only after parliament's adjournment. More stringent treatment awaited the leader of UMNO's Backbenchers' Club, Shahrir Samad. After striving in vain to mobilise his colleagues in support of a motion that had been tabled by the opposition to refer the MP to the Committee on Privileges, Shahrir stepped down. A campaign was mounted in parliament asking that he reconsider, but it fizzled when Abdullah declared that the resignation should stand.
Thus, it appears that Abullah's campaign against corruption has been placed in abeyance. It seems too that state contracts are again being issued without tender. But while the return to these old habits might again gratify UMNO politicians, grievances at the societal level will be commensurately reactivated. Indeed, we note the recurrence of popular protests these past months, especially over rising petrol prices at the pump. And although the government insists that the savings it makes through reductions in subsidies will be channelled into improved public transport, many citizens remain doubtful. Indeed, a major contract for reconditioning the country's passenger rail cars has been awarded through 'restricted tender' to a subsidiary of Scomi Group, operated by Abdullah's son, Kamaluddin. It is in this context, then, that protests have begun to erupt. Noteworthy too is that fact that after several years in the shadows, it is PAS that is galvanising them.
WATCHPOINT: The extent to which Abdullah will have regained favour among UMNO politicians can be judged at next year's UMNO general assembly election. The extent to which broader electorates will in turn have abandoned him can be assessed by the general election, probably to be held a year later.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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