He first lost an election. He was barred from leaving the country. Then, he was arrested. Now, the former Malaysian Prime Minister Najib Razak has been charged with corruption. On Monday, the Kuala Lumpur court judge granted him a RM1 million bail with two sureties. He is the first person to appear in court in connection with the 1-MDB scandal and the disappearance of $4 billion in taxpayers’ money. US investigators claim Razak and his family spent the government money on themselves and on projects such as funding Hollywood movies like ‘The Wolf of Wall Street’.
Given this backdrop, it is important to note that the initial investigation into this case started several years ago but stalled when Razak was the prime minister. Allegations of a cover-up have been made. Since the new government came into power in May this year, it has made recovering money stolen 1-MDB money a top priority.
To that end, the questions being asked are: Is this about transparency? Or is it just a political witch-hunt?
But, it is about more than transparency in a sense. It’s about moving Malaysia in a new direction and reckoning with the past one. The 1MDB scandal has been incredibly significant in terms of the financial situation of the country and its reputation. This new government wants to move beyond the scandal.
It very much depends on how far the net is cast. It remains to be seen whether this anti-corruption purge will just stop with Razak and his close associates or will go further and start to dismantle Malaysia’s system of crony capitalism. If it does go further and the system starts to be dismantled, we can expect serious resistance and political conflict, but that will enable genuine democracy take root in Malaysia in a way that simply dealing with Razak and his intimate circle would not.
Stated simply, patronage in Malaysia is very much embedded, as it is in many parts of the Southeast Asia. What makes it unique here is that the economy is so tied up with the government contracts, government spending, and the business community is engaged in winning these contracts. So, it’s not just the politicians, it’s actually the economic system. And, in order to bring about a shift in patronage requires a fundamentals shift in society that has to change its practices. The key steps, however, are to focus on the political arena and in order to do that one has to actually bring in some tougher laws and implement them properly. That means changing the actors involved like the courts, the anti-corruption agency, and the police. It also involves restructuring the economy, which is one of the things that the government is trying to do. As this is just the start of the transformation process it is very difficult because it’s not just the embedded practices that exist within the system, it’s also about moving the economy into a much more competitive, open, more transparent system that involves tenders and reduces much of the graft that exists within the system. So it is a huge task but one that the current government are aware of and are taking steps to handle.
Up until now this has precluded an indication that those at the very top will be held accountable. Now, it sets new standards for Malaysia, and every politician is held responsible. So, it puts a burden on the government.
In the opinion of many experts the steps required to change the norms and the political economy will be challenging and will involve a much longer process. After all it is about addressing some of the social problems in society. The new government has a whole series of tasks on their plate and they are interrelated. They understand this and are trying very hard to work towards it, despite the considerable resistance from deeply embedded factors.
But how far does it go?
The system is rotten from the very top to the very bottom. The difficulties are entrenched in the political economy. And it is a political economy that Mahathir himself had a key role in creating with the new economic policies of the 1980s. So it isn’t just about shuffling some personnel around and introducing new laws. It’s about taking on vested interests and extremely powerful oligarchs. The sad fact of the matter is that nowhere in Southeast Asia have we seen serious reforms take place after significant regime change.
The oligarchs that built up their wealth and power under previous administrations have always found ways to defend that wealth and power and influence after the transition. So the idea that any politician is now liable to be charged with anti-corruption measures is fanciful. For example, Abdul Taib Mahmud, the former Chief Minister of Sarawak, who ruled Sarawak for about 23 years, is believed to be Malaysia’s richest man as a result of his corruption. He is a key ally of Mahathir Mohamad and there are many files on his situation at the offices of the anti-corruption commission, but no action has been taken. Anyone with knowledge about recent Malaysian political dynamics doesn’t expect that this anti-corruption purge to go the whole way, because the whole system is rotten. If one could start picking at one thread we don’t really know where it will end up. It will very difficult to rule Malaysia.