Risk Professional: Malaysia's PM proposes political reform

PM Badawi's suggestion is that Barasian National, the ruling coalition of a variety of parties, including UMNO, the United Malay party which is almost exclusively Malay membership, and which has historically promoted Malay interests against those of other races, should be widened to become more "Malaysian" rather than "Malay.". UMNO dominates BN, and therefore has been seen by some as the organ of Malays' endeavours to have "Malaysia for the Malays," a cry not endorsed by UNNO's leadership and not supported by the vast majority of its parliamentary party and members.

In fact, it is the fact that other parties promoted "Malaysia for the Malays" manifestos that led to radical (by Malaysian standards, which in global terms is not very radical at all, in most cases) to desert UMNO in the elections earlier this year.

It is not the first time it has happened: in the late 1990s, Malays deserted UNMO in favour of Islamist party PAS in two eastern states; but the hard line adopted by PAS soon chafed and one of those states overturned its previous decision in the next election and the other reduced its minority significantly. It was widely said that the decision to switch to PAS was a widespread protest vote against then Prime Minister Mahathir's policies as applied in those states. It was those losses that began the process of Mahathir's retirement.

Therefore it is possible to see the poll earlier this year as a protest vote.

But it is more than that: Abdullah has delivered two things that Malaysians had been starved of: free and fair elections and free speech, allowing campaigning in a style not allowed since Independence. For sure, in recent weeks occasional hard-line action has given critics the ground to shout that free speech has been eroded - and relative to before the election there is an element of truth in that - but the reality is that such enormous change can never be along a straight-line curve: there will always be several steps forward and an occasional step back. To recognise that is to recognise the fundamentals of politics.

For sure, there were isolated incidents that undermined the credibility of the election but as against the problems in the past, they were minor. The genuinely independent Electoral Commission which has been very critical of several past elections had almost nothing to say about the one this year.

The biggest problem facing Abdullah has been institutionalised corruption. From junior government employees to the most senior of ministers, he took over a government where corruption was widespread. He arrived in office and took instant steps to act against ministerial and senior civil servant corruption. That has not gone down well. Underpinning the complaints about him are those whose gravy trains have been derailed.

He has reduced the opportunities for middle-ranking officers to take corrupt payments: "commissions" for organising government events in certain commercial venues were commonplace. He fixed that at a stroke: government events take place in government buildings which had been built for the purpose but were woefully under-used.

The biggest challenge, however, was thrown down for him by Mahathir. The architect of positive discrimination policies in favour of the Malays, Mahathir announced, just weeks before his pre-announced retirement took effect, that the pro-Malay policies should be dismantled.

The policies were, arguably, absolutely right when they were introduced but, as in all countries that have implemented such policies including South Africa, they did not include a "sunset provision." The result is that the policies are seen as a right not a privilege and because they have no horizon, they do not provide an imperative to work to provide financial wealth in anticipation of their end. As such, the full benefits have not materialised.

Surprisingly, PAS in states where it is strong, has sought in recent months to gain support from non-Malays by indicating a willingness to remove, in those states, some of the pro-Malay policies. But to a great extent, it's an idle promise because the laws providing most of them benefits are federal laws. Underpinning PAS's comments is a question-mark over its commitment to a Federal Malaysia.

But most of Malaysia's political parties are race-based with the MIC for Indians and HINDRAF ( for Hindus) and MCA for Chinese. MIC and MCA have historically been part of BN with UMNO.

But many HINDRAF supporters did not support MIC at the recent election, prefering instead to support the PKR (Parti Keadilan Rakyat) led by Anwar Ibrahim.

PKR claims that many previous supporters of MIC and MCA and other smaller parties are ready to switch their allegiance to a vote-buying manifesto that included, at the last election, a commitment to introduce a minimum wage of MYR1,500 per month. Given that across the country millions work in small businesses for around MYR250 to 400 per month, that seems attractive to them. The economic consequences of such a leap in pay were not explained to the electorate.

Mahathir announced that Malaysia was a Muslim country with a Malay majority but the figures used for that have often been called into question. Even so, the majority claimed was not substantial. That, given the widespread observance of other religions, protected in the constitution, created some resentment - although pragmatists soon learned that in practice it was not religion but race that were the basis of the pro-Malay policies.

The policies were needed: regardless of whether just over or just under half of the population is Malay, the reality is that the wealth in the country had grown over generations in the hands of the Chinese who were, primarily, in commerce. This was not something that particularly concerned most Malays who were primarily engaged in agriculture either as workers or as smallholders. The measures were designed to create a more advanced attitude amongst the Malays, and to turn them into business men. And to assist them in growing wealth, special savings accounts with higher interest rates than could be earned by other races, a forced housing development policy that a percentage of all new developments must be reserved for "bumiputra" (sons of the earth) and sold to them at a discount, policies that both private and public companies must have a set percentage owned by bumiputras and a range of special business opportunities set up by licensing schemes all provided special opportunity.

It is these that Mahathir set up, and announced should be reviewed, and it is these that Abdullah appears has in his sights when he talks about a more egalitarian approach to politics with multi-racial political parties at its heart.

Abdullah's announcement, then, to provide BN in general and UMNO in particular with a more "Malaysian" rather than "Malay" voting pattern is central to what he says is the greatest challenge facing his successors.

As soon as he announced his resignation, the word in Kuala Lumpur was of businesses assessing the likely result of any handover. Although his successor has been named as his current deputy, Najib, it is by no means certain that Najib will follow Abdullah's policies. It is also by no means certain that he will return to Mahathir's. But the question most asked was whether he would be in favour of measures to prefer the Malays.

This is why Abdullah's first statement on the issue after announcing his retirement was to refer to the challenge of national unity. Several months ago, his government renamed the national language, a form of Malay, changing from Bahasa Melayu (Malay's language) to Bahasa Malaysia (Malaysians' language).

In a statement yesterday, Abdullah made his concerns clear:in local media he is quoted as making the following points:

"Society has seen an alarming decline in inter-racial and inter-religious relations and various issues have cropped up which threaten to tear the very fabric of Malaysian life."

"We should focus on the points that unite us rather than the points that divide us."

"I have seen this country grow from a small, poor nation into the modern, prosperous Malaysia that we live in today. "Despite our successful track record, for the past few years I have firmly believed that our nation is standing at an historic crossroads."We must reform some elements of our nation. We must evolve and mature or we risk losing all that we have gained in over 50 years. Throughout this time of reform and transformation, we need to be united more than ever before."