A Stink Is Brewing in UMNO: How Will the Chips Fall?

As Malaysia moves into the last stretch of an inevitable political transformation, the risks of civil unrest and emergency rule have increased, and neither appearances nor declarations made by its ruling elite - whether verbal or written - can be taken at face value or for granted anymore..

By Wong Choon Mei (Harakah)

So when Umno Youth chief Khairy Jamaluddin urged his party to return to the middle ground, warning that its current hard line approach over the Allah issue may spell political doom, quite a few pundits were surprised by his courage and questioned his motives.

KJ - as the son-in-law of former premier Abdullah Badawi is also known - was stating what was obvious to most Malaysians and issuing a most needed wake-up call to his party, which has ruled Malaysia since independence in 1957. However, his remarks came at a time when his bosses, including Prime Minister Najib Razak and Deputy PM Muhyiddin Yassin, have chosen to bury their heads in the denial mode perfected decades ago by leaders such as former premier Mahathir Mohamad.

Unlikely therefore that KJ's comments will bear any fruit for moderate Malaysia, which is trying to fend off yet another attack from a bullying Umno against its constitutional rights - this time, the religious freedom guaranteed by the Federal Constitution.

So whatever Khairy's motive was - whether to pose as a moderating light amidst the groundswell of Umno belligerence or to signal to these hawks (some say on behalf of Najib) that it is time to cool down - is immaterial. Because above him, a bigger game with higher stakes is being played, and unfolding much quicker than anticipated.

Hard-nosed Malaysia

Weeks before the December 31 High Court ruling allowing non-Muslims to use the word Allah, rumblings were already growing in Umno that a power tussle at the very top - between Najib and Muhyiddin - may finally be breaking into the open.Two incidents fired the rumours. One was the sudden call by Defence Minister Zahid Hamidi - previously regarded as a Najib loyalist but lately believed to have switched over to Muhyiddin - for Gerakan to surrender the Penang BN chair to Umno. The other was the messy way in which Zahid chose to expose the theft of two jet engines from a military base.

Both incidents embarrassed Najib. The Umno president is really not sitting as pretty as his minders have tried to make it appear. No doubt there have been gushing news reports and 'independent' polls that try to portray growing popularity, but the reality is that hard-nosed Malaysians have already had a whiff of the future and they don't like what they smell.

In 2009, along with Umno cronies and several Government-Linked-Companies, Malaysians shifted billions out of the country - about 50 percent of its GDP, which in 2008 was some RM739 billion. In its latest report, UBS Securities Asia wrote: "Question: which Asian country had the biggest FX reserve losses in 2009? The answer is Malaysia, and by a very wide margin; we estimate that official reserves fell by well more than one-quarter on a valuation-adjusted basis."

"Why is this bizarre? Well, in the first place because Malaysia runs a current account surplus - and not just a mild surplus but rather the largest in Asia, around 17% of GDP. Other structural surplus neighbors like China, Hong Kong, Singapore, Taiwan and Thailand have all seen sizeable increases in FX reserves over the past 12 months and yet Malaysian reserves nearly collapsed. How did this happen? In short, Malaysia must have seen massive foreign capital outflows - and sure enough, when we measure implied net flows, the numbers are simply

stunning: peak outflows of nearly 50% of GDP, i.e., more than twice as large."

Indeed, it would appear that hard-nosed Malaysia is not at all convinced that Najib can hold the fort. Neither is it willing to bet that Muhyiddin can do better. And judging from the massive outflows recorded, it would seem that neither the cronies nor the GLCs have faith either.

Will Umno be matured and civilized?

The future may be more complex than we can imagine. Even if Pakatan Rakyat fails to sweep to federal power in the next general election, it can still win further ground.

Can Umno accept this, when already it has shown itself prepared to push to the limit its war to regain Selangor, as witness the Teoh Beng Hock catastrophe? When it has shown itself ready to turn upside-down the judiciary and the Federal Constitution just to grab and cling to power in Perak?

Should the Pakatan win decisively - and this is looking more and more probable - will Umno be matured and civilized enough to accept such an outcome? Seriously, what are the odds that Umno can rise above brute force and intimidation? Small and as of now, it would be fairer to say that civil unrest and emergency rule are the more likely scenarios to follow a Pakatan victory at the next general election.

Indeed, these are the eventualities that Malaysians must confront and prepare themselves for. They must overcome their fear of trouble and think of the type of future they want for the children.

Otherwise Malaysia will become whatever the hawks in Umno say it is supposed to be, and this will be whatever they believe is to their advantage and not the nation's - both politically and financially.

The new Pak Lah vs the new Mahathir

Already, the country's largest political party is being overtaken by opportunists who see nothing wrong in using strong-arm tactics to maintain their positions and benefits. Former premier Mahathir, who still wields considerable influence, is also plotting his next move.

In his corner is Muhyiddin, who has been alarming moderate Malaysians with a rash of hawkish statements. He has made it clear that he is DPM for the Malays first, and only then the other races. Will this be palatable to the non-Malays, should they accept him as the next Prime Minister?

As for Najib, it is obvious that he has been playing a double game, but can he hold out against their onslaught?  Born into a privileged background, Malaysia's sixth PM is - at the personal level - liberal and progressive. But he also believes that he has to show that he is willing to play hardball to keep his party in power. Or be ousted like his indecisive predecessor Pak Lah, who won himself the nickname Sleeping Beauty during his four years in office.

So for Najib, it has been a case of trying to do both. Win the hearts and minds of Umno and also the rest of the country. Unfortunately, the two prongs cannot meet or be reconciled, simply because the Umno of today has more political thugs than talent on its membership lists.

The Umno president may have found out the hard way that when you give an inch, they want a yard! This has left the PM's 1Malaysia, People First, Performance Now stuck and unable to get off the ground.

Just as Najib is now increasingly seen as another Pak Lah, Muhyiddin is regarded as a new Mahathir. But neither men are the solutions that Malaysia needs. Neither men can take the country forward.

For now, only one thing is clear - Malaysians need to be brave if the current tailspin into backwardness and poverty is to be arrested and reversed. Otherwise, from becoming a developed country by 2020, we may well slip further in the ranks of the third world, economically overtaken by Vietnam and politically comparable to Myanmar.

(Wong Choon Mei is a Consultant Editor for Harakahdaily)