How the Malay elite hijacked Malaysia

Malaysia’s privileged divide

With the United Malays National Organization, or UMNO back in political power with a firm and dominating position to the other Malay-centric political parties, kleptocratic practices are on the rise once again. The myth that UMNO is the defender of the marginalized Malays is clearly tarnished for all to see. The New Economic Policy (NEP), its derivatives, and the ideology of Ketuanan Melayu, or Malay supremacy have been exposed for what they really are.

The Malay polity and their cohorts once again control government administration and are clearly looking after their own. The rest of Malaysia’s citizens have been largely left to fend for themselves. Suffered greatly during the Covid crisis, the establishment have been getting richer. Corruption, enrichment, favouritism, and blatant disregard to the process of law is the signature of this government.

The Ismail Sabri government appears to represent patriarchal elite Malay society. At the centre are long established political families who have been involved in the forefront of political and government, since independence. They have appeased the royal families, which provide symbolic authority to give legitimacy.

This elite is supported by a nexus of political warlords spreading down to the village level across the Malay peninsula. These warlords operate under patronage and in-turn provide a powerbase to the leaders of political families. Then comes a large group of the country’s civil servants whose loyalty is to the Malay agenda rather than the government of the day. A professional class running the nation’s banks, GLC’s, and government agencies have strong vested interests with those of the ruling elites. Finally, the nation’s elites have made a pact with the Islamic clerics to create religious legitimacy.

A diverse feudal-like grouping

The Malay establishment is not a unified group. Its an umbrella of different institutions and organizations with varying missions and objectives. Most are in competition with each other for power and influence. Nevertheless, they are politically interconnected, and fall in and out of alliances with each other. Most often, the most powerful interconnections are informal and based on personal relationships rather than ideologies.

The Malay establishment is best seen as being a group of smaller empires that have their own sectional interests. Some of these institutions and organizations include, the Conference of Rulers, individual royal households, the prime minister, Malay-centric political parties, the Department of Islamic Development or JAKIM, the ministry of education, ministry of home affairs, ministry of finance, the civil service, some of the larger GLCs, the armed forces, and the police (special branch). Some more covert organizations like the Alumni, a group of Salafi-leaning Malay professionals entrenched within government and commerce also exercise considerable influence.

This all blends in to form the Malay establishment. The dynamics, interrelationships, and alliances continually change. For example, there is currently some friction between a number of royal households and JAKIM over the scope and jurisdiction of the later at state level. Relationships appear to be more transactional, than based upon any common visions about the future of Malaysia. Other organizations such as the judiciary, the Malaysian Anti-Corruption Commission (MACC), immigration, and local government are most often tools of the establishment. Any organization or individual outside these groupings is considered outsiders.   

UMNO is back as patriarchal head of the Malay establishment once again as it controls the government, GLCs, many of the state governments, and has good relationships with most of the royal houses.

The biggest assets: no accountability, no transparency

The Malay establishment is able to make decisions, implement policies, undertake business, and carry out corrupt practices without scrutiny from the public. Only brave journalists and news portals, most of who have been persecuted and prosecuted were able to expose a number of corruption scandals over the decades in Malaysia. These include Bumiputera Malaysia Finance scandal of 1982, Bank Negara Malaysia’s RM32 billion foreign exchange losses during the 1980s and 90s, the French Scorpene-class submarine scandal of 2002, the National Feedlot scandal of 2012, the 1MDB scandal going back to 2012, the Wang Kelian scandal of 2017, and the meat substitution scandal at the end of last year.

These are only the top of the iceberg. There are many other scandals the public doesn’t even know about hidden away within ministries, agencies and state government agencies, and GLCs. Most don’t come to light because of the harsh treatment of whistle-blowers, and the use of the Official Secrets Act (OSA) to cover up exclusive contracts given to favoured companies.

There is a growing clampdown on press freedom in Malaysia. Online news portals operate in the fear that their licenses won’t be renewed or shutdown the then provocative The Malaysian Insider in 2016. Most domestic news portals practice self-censorship due to harsh defamation laws that gravely hinder investigative journalism. Nothing has been officially done to investigate allegations against former Bank Negara Malaysia governor Zeti Akhtar Aziz and family members involvement in the 1MDB scandal.

There is no Freedom of Information legislation, and only scant details of Auditor General reports make public news. The standard operating procedure of government appears to be just allowing embarrassing news about corruption to publicly blow over and be forgotten by the public.

The anti-corruption framework is weak, grossly under-resourced and potential MACC prosecutions need approval from the Attorney General, who is a political appointment.

Many within the civil service caught undertaking illegal acts are not reported to anti-corruption investigators. Many scandals are just swept under the carpet to protect prominent people and the reputation of the institutions involved. This creates the belief among many in powerful positions they will not face any sanctions or justice, if caught out undertaking corrupt or illegal activities.

The cancer of crony capitalism

The depth and extent of crony capitalism practices have been well documented. It extends from Malaysia’s largest corporations down to class F contractors or petty traders, where may citizens are trying to scratch out a living.

Over the last 50 years, the establishment has looked after its own. Royal households have been given lucrative timber and other business concessions. Politicians have built up business empires and networks of associates benefitting from inside information and favoritism. A small group of connected businesspeople have been given choice monopolies, concessions, restricted business operating licenses, and allowed to takeover public assets and convert them into private assets by reigning prime ministers.

Crony capitalism is starving any sense of equality of business opportunities in the economy. Companies succeed through connections, not vision, superior products and competitiveness. So much of the economy is restricted to a few, market opportunity is certainly not equal for all. Even existing successful businesses are being forced to devest to Bumiputera equity holders, as was seen with the freight forwarding regulations, requiring companies with operating licenses to have 51 percent Bumiputera equity.

This has resulted in the Malay establishment becoming a class of rent-seekers, taking little, if any risk in their business undertakings. Some of those who fail have been bailed out. Not all Malays are equal. Many Malays themselves distinguish Bumiputeras from UMNO-putras, who are given unfair privileges. The 12th Malaysia Plan has been framed in such a way that it will benefit the connected, rather than equally among Bumiputeras, and other Malaysians. Malay businesses without connections are most likely to get little, if any assistance.

The ability of the Malay establishment to restrict economic opportunity has assisted in creating a patriarchal society based upon reward and punishment. Malaysia has slipped from the 3rd to the 6th largest economy within ASEAN since 2015.

Tearing down secularism

Although Malaysia has a primarily secular constitution, Article 3 states that Islam is the religion of the federation, but other religious may be practiced in peace and harmony. The supreme governing body of Malaysia is the parliament, which is made up of the Yang Di-Petuan Agong or king, the Dewan Rakyat or lower house, and the Senate or upper house. With the government coming from the lower house by popular vote, government is inferred to be of a secular nature.

The Rukun Negara or national principles is the declaration of a formal national philosophy, proclaimed on Merdeka Day in 1970. The five Rukun Negara principles are belief in God, loyalty to king and country, supremacy of the constitution, sovereignty of the law, and courtesy and morality.

However, Malaysia has been heading down an Islamization path since the 1970s. Nowhere has this been more apparent than in the education system. Education has been one of the major contributing factors in creating an Islamic identity within Malays. Over three generation this has led to a greater division of the community, which was up until the 1970s, an inclusive multi-cultural one. The former prime minister Mahathir Mohamed and his then deputy Anwar Ibrahim Islamized the civil service during the 1990s. Syariah laws have been strengthened and the Malaysia Islamic Development Department or JAKIM was formed in 1997 under the Prime Ministers Office to centralise bureaucratic control over Islamic affairs. The freedom of non-Muslims to express their respective faiths has been whittled away over the last two decades.

During the 1990s when UMNOs electoral nemesis was the Parti Islam Se-Malaysia or PAS, Mahathir declared that Malaysia was an Islamic state. Within the public sector, military, higher education, and across Malay led state governments, most employment positions exclude non-Malays. Even other Bumiputeras were at a disadvantage in career upward mobility, unless they were Muslims themselves. The community gulf between Muslims and non-Muslims is wider than ever. Malays themselves are under strong pressure to conform and be compliant to the exclusionist culture that has been developing over the last two decades.

The dismantling of secularism has enhanced the power of the Malay elite. The authority of the establishment is almost unquestioned today openly. Its not impossible to question the role of Islam in government and society. There is now little separation between Islam and government, with a state defined Islam forced upon the citizenry. Islam in Malaysia is not a spiritual undertaking, but a matter of compulsory adherence.

The great divide

The tangibles from the Malay establishment hijacking Malaysian politics, economics, and society have been to create a land of the privileged. The product of this is the rich are getting richer and the poor are getting relatively poorer. Islam and racial politics have just hidden the real divide, that being of class.

The Malay-centric political parties have been fighting for the spoils of office, while the country is facing health and economic crises. People are becoming destitute, even those who see themselves as middle-class. Many are struggling to even find enough food to eat, while the government through the 12th Malaysian Plan is planning to pump even more money into a bloated bureaucracy, and crony businesses. The 2022 budget has been il-designed to deal with rampant inflation and rising unemployment.

Privilege is the nation’s number one enemy. This is the source of corruption, crony capitalism, abuses of power, and denying equal economic opportunity to all in Malaysia. This is the cause of an unprecedented rise in poverty. None of the new political movements or those advocating a reset for Malaysia have even identified this as the key problem to solve.  

Originally published in the Eurasia Review 9th December 2021

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