The $700 million question – can Malaysia’s PM survive?

Malaysians are no strangers to money politics, but this time it’s different.

Malaysia''s Prime Minister Najib Razak arrives at a presentation for government interns at the Prime Minster''s office in Putrajaya, Malaysia
The unfolding scandals are the inevitable end point of the failure of Malaysian democracy, writes Mcauliffe [Getty]

Show us the money,” was the message to beleaguered Malyasian Prime Minister Najib Razak from former leader, elder statesman and political kingmaker Mahathir Mohamad, the public face of those pushing for Najib to resign.  

A financial scandal of unprecedented scale is miring the political landscape in Malaysia and it could lead right to the top of the political power chain. Najib stands accused of receiving up to $700 million in a series of transfers to his personal accounts, the bulk of it allegedly transferred just prior to the 2013 election. Najib denies the allegations, saying they are the work of political opponents set on unseating him.

The sum of $700m is staggering by any calculation. Malaysians are no strangers to money politics but this time it’s different. Toughened and made cynical by an escalating series of scandals involving financial mishandling, allegations of high-level corruption as well as a crack down on dissent, Malaysian society is now captivated by the unfolding drama. Social media is alive with truth, rumour, speculation, and sparks of dark humour.

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But what lies beneath the latest – and by far the largest – scandalous allegations and the complex web of transactions, is a political system that has lost the trust of the majority of the people.

Bitter fight for survival

Malaysian politics has descended into a bitter for fight for survival for the party led by Najib Razak, the United Malays National Organisation (UMNO), that has ruled Malaysia as the major coalition partner since independence from Britain in 1957.

Malaysia is effectively a one party state and it seems UMNO will do almost anything in their power to keep it that way. But its stranglehold on power is slipping. In the 2013 election, the Barisan Nasional coalition, of which UNMO is the largest party, polled poorly. For the first time, the opposition alliance won the popular vote but not the required number of parliamentary seats to lead.  

The election result rattled the government. The reaction to the vote and the upsurge in popular support for opposition parties was swift and harsh. In the months following the election, the government strengthened a wide-ranging colonial-era law known as the Sedition Act. A media landscape that had already been tightly controlled saw the arrest of journalists as well as lawyers and opposition politicians for acts deemed “seditious“. Online news portals, that had up to this point operated outside government control, were also targeted.

Fighting back

But the online news sites fought back. In recent months, they have published an increasingly alarming array of allegations against the government and, in particular, the One Malaysia Development Fund (1MDB), a debt-laden government investment fund established by Najib and on which he chairs the advisory board. The IMBD is facing criticism over financial mismanagement and allegations of graft in relation to its debt of $11bn. 

What's clear is that Najib now lacks credibility and moral authority.


Other stories alleging corrupt practises linked to government officials also began to appear in the international media. An investigative report by The New York Times detailed multi-million-dollar purchases of luxury US real estate by a close Najib family associate whom various reports have linked to 1MDB. Reports of a link were denied by Najib.

Further allegations of a property scam in Melbourne fingering Malaysian government officials surfaced in the Australian media. Najib’s government was once again back-footed and announced an investigation.

The prime minister’s extensive personal wealth was questioned amid claims of extraordinary amounts paid for designer goods by the prime minister’s wife, Rosmah Mansor, who is widely ridiculed in Malaysia for her luxurious tastes.

It was all leading to one conclusion – a ruling class that has become so bloated by power that it seemed any kind of largesse seemed possible. An awareness of the costs involved, both politically and perhaps also financially, of the ruling party’s pernicious attempts to cling onto power was becoming ever more apparent to Malaysians. 

What will happen next

In most developed countries, an allegation of such financial misappropriation would stifle a leader, at the very least forcing him to stand aside while the mechanisms of the state investigate and rule on any corrupt conduct. But this is Malaysia, a country without an effective leader or a functioning opposition.

The recent splintering of the opposition coalition, the “People’s Alliance”, has left a political vacuum that, until new alliances form, has rendered opposition to Najib’s ruling UMNO coalition toothless. But Najib’s rivals have other problems. Opposition groups have long been plagued by accusations of failing to capitalise on the political opportunities made abundant by UNMO’s misrule, of operating in a policy vacuum and of lacking political nous.

The big question now is what will happen next? Can Najib survive?

Malaysian leaders have stood down before but if Najib chooses to fight, and it seems likely that he will, there are limited options to dislodge him. 

 Malaysian leaders have stood down before but if Najib chooses to fight there are limited options to dislodge him [Reuters]
 Malaysian leaders have stood down before but if Najib chooses to fight there are limited options to dislodge him [Reuters]

Although an option, it seems unlikely that he will be voted out by Parliament as the Barisan Nasional, of which UNMO is the largest party, holds the greatest number of parliamentary seats – 134 out of 222. 

Although this would not automatically trigger a fresh election, the last thing that Barisan Nasional wants to be faced with is another election that they must surely fear they will lose. But a greater problem is also lurking – can they face the next election with Najib in place?

Likely scenario

The more likely scenario is that Najib’s party could finally smell the political rot and oust him. As UMNO is the largest party and its president automatically becomes the prime minister, this could see Najib replaced by another senior UMNO contender.

But the internal party rules are complex and this route remains unlikely at this stage. For now, at least, Najib appears secure. No other significant UMNO figures are seen to be publicly challenging his rule. In a country where generations of dominant one-party rule has strengthened patronage politics, the welfare – and wealth – of many in Najib’s inner circle are tied to his survival and to the survival of the ruling party.

What’s clear is that Najib now lacks credibility and moral authority. Perhaps the unfolding scandals are the inevitable end point of the failure of democracy and of the increasingly desperate attempts to prop up the increasingly frail ruling party.

In a political realm in which the leadership has co-opted many and used the mechanisms of the state to effectively quell the opposition and imprison its leader, it is increasingly difficult to gauge just how much more they can get away with.

Anneliese Mcauliffe is a journalist who has worked across Asia and the Middle East for the past two decades for the BBC, Al Jazeera, ABC and the Associated Press. She has worked extensively in both Indonesia and Australia.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.