Kuala Lumpur: Malaysia’s prime minister has a problem: He can’t explain away a USD 700 million bank account to a skeptical public. His response? A crackdown on critics and the press that has kept him in power but doesn’t address a deep reservoir of dissatisfaction with his leadership. Less than a month after leaked documents suggested that USD 700 million from entities linked to debt-ridden state investment fund 1MDB was funneled into Prime Minister Najib Razak’s accounts, he has expelled critics in his government, sacked the attorney-general probing him, suspended two newspapers, blocked a UK-based website and stalled investigations over the scandal.
It is the first time a Malaysian leader has faced criminal allegations, and news of possible graft at the top level has gripped the country. It is also the biggest political crisis for Najib since he took power in 2009. Concerns over 1MDB also contributed to the Malaysian currency plunging to a 17-year low beyond 4 ringgit to the dollar on Wednesday.
“Malaysia’s leader is still facing a legitimacy crisis with declining domestic support,” said Bridget Welsh, senior research associate at the Center for East Asia Democratic Studies at the National Taiwan University. The message being sent is that Najib’s leadership is moving further toward a hardline trajectory, she said.
“History shows that crackdowns, arrests and threats backfire, and are at best temporary measures that fail to address the underlying demands for a better Malaysia.” A nation of 30 million, Malaysia is predominantly Malay Muslim with significant Chinese and Indian minorities. It is a US ally in Southeast Asia and one of the region’s lynchpin economies, with ambitions to rise from middle income status to developed nation level this decade. Najib’s increasing authoritarianism is a setback for the hopes of many Malaysians that their country was slowly embracing elements of liberal democracy.
In a new twist last week, the anti-graft agency said the money was donations from the Middle East, and unrelated to 1MDB. Najib, who insists he has never used government funds for personal gain, then said he received the money on behalf of his ruling Malay party, with much of it going toward “social responsibility” programs.