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Malaysia's New Political Divide

Malaysia's New Political Divide

In late August and September, hundreds of thousands of protesters took to the streets of Kuala Lumpur and other cities across Malaysia to rally against or in support of the current government. Many layered elements of the protests, however, spoke of broader simmering discontent and ethnic, societal or economic imbalances.


The Bersih 4 rally – following more inclusive ones in 2007, 2011 and 2012 – was a series of protests on August 29 and 30 in major cities such as Kuala Lumpur, Kota Kinabalu and Kuching, followed by similar rallies in 70 cities around the world. Organized by Gabungan Pilihanraya Bersih dan Adil, or the Coalition for Clean and Fair Elections – shortened to Bersih (clean) – the rallies called for clean and transparent governance in Malaysia and the strengthening of parliamentary democracy.


The Bersih 4 rally, however, seemed the first with a noticeable ethnic imbalance, with Chinese Malaysians and other minorities dominating the rally. Organizers said that numbers topped 200,000 yellow-clad protesters, while the police said the turnout was 25,000. Most news outlets estimated at least 100,000. The highest profile protester was 90-year-old former Prime Minister Mahathir Mohamad, who also called on the current prime minister to step down.


Discontent with Prime Minister Najib Razak, who took office in 2009, is concentrated in urban areas, amid accusations that he cheated to win the elections and continues to hijack democratic processes. The main impetus for the rally were accusations of government corruption, including that Najib took almost $700 million from the state fund 1 Malaysia Development Bhd (1MDH) for personal use. Malaysia’s anti-graft agency claims the money came as a political donation from the Middle East, but no further explanations were given. 1MDB was launched in 2009 by Najib, but with the lack of transparency it is easy to assume corruption.


The political uncertainty comes at a difficult time. A slowdown in China, a major export market, weak oil prices and the selling of emerging-market stocks have combined to hurt Malaysia’s economy, while the cost of living is rising. The Malaysian ringgit is Asia’s worst performing currency in 2015, losing a third of its value against the US dollar in a year, and is now trading at levels not seen since the Asian financial crisis almost 20 years ago.


Add political turmoil to the business mood, and Malaysia’s economic prospects at the start of the ASEAN Economic Community (AEC), which involves greater regional integration from the end of the year, are bleak. And Thailand, mired in its own economic and political doldrums, will not be able to help ease the transition for other members.


Thailand’s political woes have been particularly intense since 2006, with rallies and counter rallies seeming to become an annual tradition. The current military government has been able to put a hold on these only through draconian authoritarian policies. Without democratic reforms, increased transparency and strengthening of the independence of the judiciary and other institutions, the discontent can only be postponed.


Malaysia finds itself in a similar situation, with dissatisfaction taking on ethnic and class factors that point to more fundamental problems in society. Even the colours on opposite sides of the divide are eerily reminiscent, with supporters wearing yellow or red T-shirts to show their affiliation.


On the eve of the inauguration of the AEC, all is not well in Malaysia. And due to longstanding structural problems and factional politics, and the cooling of a Chinese juggernaut once able to drag ASEAN economies along with its own, the outlook for 2016 is somewhat bleak for much of the region – but for Malaysia and Thailand in particular.