Number 6 2024: Cabals, Feudalism, and Apartheid: Will these institutions damn Malaysia’s future prosperity?

“I am a businessman, not a politician” Tajuddin Abdul Rahman Deputy Minister of Agriculture and Agro-based Industry at the opening of Herbal Asia, Matrade Exhibition Centre, 1st October 2015.

Unlike most of the rest of the world that is heading along the track of multiculturalism, Malaysia seems to be locked in a limbo of racial introspection it cannot get out of.

This introspection is however more than mere racism, it is the overt part of an elaborate structure that has maintained a small elite in power for over 45 years, since the notorious May 13th riots back in 1969.

The direct discussion of this subject has basically been criminalized since the 1970s and deemed too sensitive to debate, which means there has been little public discourse on the matter of who really exercises power, how, and for whom within the country.

This has helped to enshrine a structure of political-cabalism, based upon a neo-Malay-feudalism, which has used a form of ‘Malaysian apartheid’ to support this elite in position and privilege over the rest of Malaysians they rule (as opposed to govern).

Ever since the British Colonial era, Malaysia has been divided and described through racial paradigms. The major races that represented the Malay Peninsula got together to negotiate and steer Malaya to independence in 1957, and into the Federation of Malaysia in 1963. Perhaps the most important artefact from this era is the race is still recorded on Malaysian Identity Cards today, which is hurting the sensitivities of a number of Malaysians.

However with a rekindled Malay nationalistic sentiment remerging in the 1960s, an opportunity after the 13th May 1969 racial riots arose for a group of Malay politicians to seize the reigns of power. Mahathir Mohamad, supported by a group of ‘ultras’ including Syed Nasir Ismail, Musa Hitam, and Tunku Razaleigh, moved to dispose of the then Prime Minister Tunku Abdul Rahman, representing the moderate Malay aristocracy.

(Tun) Abdul Razak Hussein (father of the current Prime Minister) was installed as Prime Minister in what some describe as a ‘coup’ to succeed Tunku Abdul Rahman in 1970.

As Tunku Abdul Rahman had already invoked a state of emergency in 1969 after the 13th May riots, and ruled by decree through the National operations Council, (Tun) Abdul Razak as Prime Minister through was able to use this short window was to pass through the New Economic policy (NEP) without any hindrance, as parliamentary approval wasn’t necessary. The NEP was based upon many ideas within Mahathir Mohamad’s book The Malay Dilemma, extremely controversial at the time.

At the time, the NEP was seen, even internationally as a necessary affirmative action policy. The NEP stipulated the use of quotas in granting educational places at school and universities, the use of quotas in the public service, favouritism to Malays in the granting of business licenses, the development of Malay reserve land restricting non-Bumiputera purchases, subsidies on the purchase of real estate, quotas on public equity holdings, general subsidies for Bumiputera businesses, and exclusive Bumiputera mutual funds (ASN, ASB), which gave better rates of return than commercial banks.

When the Malaysian Parliament was reconvened in 1971, both the Sedition and Internal Security Acts were strengthened to limit any discussion about matters concerning Malay special rights, the Malay rulers, and citizenship, under the premise of preserving ‘intercommunal harmony’. These restrictions also applied to members of parliament, thus weakening the principal of ‘parliamentary immunity’, i.e., the NEP was above parliamentary sovereignty, which attracted much international condemnation at the time.

It is during this time that a concerted covert effort was made to create a ‘secret leadership’ to maintain and support what was called the ‘Malay Agenda’. According to an interview with an anonymous high ranking official within the Razak Government at the time, most executive positions, civil service placements, and high ranking police and army personnel were filled with people sympathetic to the ‘Malay Agenda’.

The author’s source also stated that it was during the Razak era that selected bureaucrats and other people stated creating and acquiring corporate assets with the objective of channelling funds back to UMNO to fight future elections, to ensure victory.

The ‘Malay Agenda’ meant running government and agencies within government with the objective of looking after ‘Malay’ interests ahead of others. The ‘Malay Agenda’ was rarely spoken about in the open but had a wide appeal among all levels of Malay society, including some members of royal families, at the time.

This was the start of crony capitalism in Malaysia, the making of a kleptocracy. This loose ruling political-cabal was developed in the Malay-feudalistic tradition, in the sense that it required giving total loyalty to the leader of UMNO, the Prime Minister, without question.

A very small proportion of this group became very rich through the implementation of this special agenda. These original beneficiaries are now considered socially as the ‘old money’ in Malay society today.

Malaysia rejected multiculturalism for its own form of ethno-religious form of ‘Malaysian apartheid’, supported by the Malay-feudalistic social structure that was enhanced rather than dismantled over the two decades after independence from Britain. The mythology that the Chinese, who already control the economy, also aim to take political control of Malaysia was dissipated as propaganda to install a fear into the Malay population. Propaganda became one of the prime tools used by the government with the formation of the Biro Tata Negara (BTN) to indoctrinate civil servants and students on the “Malay agenda”.

Section 153 of the Malaysian constitution became the proclaimed legal basis of ‘Malaysian apartheid’ measures. The Reid Commission had only intended to be a temporary measure, to be reviewed by the parliament within 15 years. Section 153 states that “….it is the responsibility of the Yang Di-Pertuan Agong to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak”, thus turning Malay into political construct, as there is no single Malay tribal grouping. The authorities over the years attempted to Malayanize the indigenous peoples of the Malay Peninsula, the Orang Asli, through encouraging their conversion to Islam and adoption of Malays customs.

When Dr. Mahathir came to the Prime Ministership in 1981 due to then Prime Minister Hussein Onn stepping down because of poor health, he pursued an ambitious agenda which included extending the business interests of UMNO. Much of these business interests were controlled by proxies and nominees such as Tajudin Ramli and Halim Saad. Further, Dr Mahathir with his Deputy Prime Minister Anwar Ibrahim embarked on a program to produce Malay millionaires who would bring up other Malays into the business sphere.

Ironically under Dr. Mahathir, a period of liberalization came with Wawasan 2020, where the country grew very optimistic under the premise of ‘Malaysia Boleh’. There appeared to be a great working relationship between the different racial based parties within the Barisan Nasional, and Malaysian appeared to genuinely have pride in their nation.

These short ‘golden years’ for Malaysia were soon eclipsed by the Asian economic crisis of 1997 and the sacking by Dr. Mahathir of his then deputy Anwar Ibrahim in 1998. A bitter election was fought between the BN Government and newly formed Barisan Alternative in 1999, leading to the BN Government winning with a greatly reduced majority.

Many misread the Abdullah Badawi period as further liberalization, although he publically fought corruption. However, Badawi still cracked down hard on dissent such as not allowing open discussion on Malaysia’s ‘social contract’, and allowed the police to act heavy handed at the Bersih rally in 2007. A new group of entities entered into the corporate scene which led to a number of scandals, by the notorious ‘boys on the 4th floor’, who included Khairy Jamaluddin. Dr. Mahathir became Badawi’s chief critic. Badawi’s poor election performance in 2008, and criticism of his apparent enjoyment of the trappings of power led to his replacement with Najib Tun Razak in 2009.

Najib Tun Razak came to power promising a transformation of government and a completely new paradigm in race relations with the well promoted 1Malaysia slogan. However, after being the vanguard of moderation internationally, his actions domestically showed none of the moderation he had promised. Najib was totally silent when organizations like Pekasa made outlandish statements about race. His greatest modus operandi is silence when government organs and NGOs undertake extreme actions in defending Malays and Islam. Bajib’s persona as a moderate leader completely disappeared after the poor election performance in 2013, where he personally blamed the Chinese in his ‘Chinese Tsunami’ statement on election night.

Post GE13, has seen a definitive return to repression by the BN Government in power. Its closely aligned newspaper organ Utusan Malaysia has been continually allowed to publish headlines and statements, such as ‘Apa lagi Cina mahu’, which were inflammatory in the post-election environment.

GE13 also weakened the MCA, Gerakan, and MIC to the point where they no longer have any effective say in government, a far cry from their days of great influence within the cabinet during the 1970s and 80s. All political parties became totally subservient groups within an UMNO dominated BN. This is ironically a result of opposition electoral success in 2013.

Extreme groups have been allowed to make anti-Chinese rhetoric and racial insults with impunity under the Najib Government, thus keeping Chinese groups quiet through producing an atmosphere of fear and tension. This is a purposeful tactic to suppress any opposition.

In terms of popular vote, the BN Government is now in reality a minority one, capturing less than 50% of total votes cast. However through the first past the post voting system, the BN is almost ensured to continue winning elections in the future. This is especially the case with the poor electoral strategy that the Pakatan Rakyat employed last election, focusing on the urban areas, rather than the rural areas. To compete with the BN, the opposition must make major changes to its electoral strategy, but will come up against a ‘hardened Umno’ organization at grassroots level. In addition, the opposition today is in so much disarray, the effective leader of the opposition to the government appears to be Dr. Mahathir.

Rather than reaching out to win the ‘hearts and minds’ of all Malaysians, UMNO has seen the decline of electoral support for BN component parties as an opportunity to consolidate power within its own right. GE13 has allowed UMNO and the political-cabal that controls it to manoeuvre even more on the ‘Malay Agenda’.

Since 2013, economic and social policy has been allowed to degenerate into blatant racial discrimination, and now has become something even more sinister.

The Malaysian civil service is being cleaned out. For example in Sabah, civil servants from ethnic groups like Dusun/Kadazan are slowly being weeded out and replaced. A bureaucratic ethnic cleansing is going on within the civil service. Other indigenous ethnic groups are no longer acceptable. Likewise, the universities are being cleansed of dissidents. There is a purge going on in Malaysia that has even taken the Deputy Prime Minister and attorney general out. This is supplemented with a clampdown on ‘whistleblowers, and anybody within existing agencies that have potential to turn against the political-cabal. Any potential resistance, including reporters and the media, to the political-cabal that currently controls the country is being eliminated. Malaysia is now facing a repressive phase in government that one has not seen since Dr. Mahathir’s “Operation Lalang” in the late 1980s.Only this time it is much wider.

The effects of this imposed policy of ‘Malaysian apartheid’ upon the country today are profound, and can be summarized as follows:

1. A feudal social structure has been developed with four sections of populace;

i) The Malay elite who rules the country and their associates,

ii) A Malay middle class which is predominantly urban,

iii) A Malay rural class, and

iv) The rest of the Malaysian population.

Politically, this rural Malay class has kept the Malay elite in power, while the educated middle class is turning away from UMNO.

2. A brain drain is happening from Malaysia at present, which does not only include Chinese and Indian, but Malays as well. The political-cabal of elite leaders aren’t really concerned with this brain drain, as this seen as a good opportunity to weaken potential future opposition. This loss of creative and innovative people is leaving a rent seeking mentality within the country, at a time, creativity and innovation is really needed to develop the Malaysian economy. The leadership have intentionally nurtured the development of an unquestioning population, which is reflected in the Malaysian education system, as the best means to maintain a docile electorate that will not look at political issues like corruption very seriously.

3. There has been a general failure to eradicate poverty throughout rural Malaysia, as limited resources have been used to prop up the feudal warlords of UMNO through ‘white elephant’ rural development projects throughout the country. Many UMNO warlords have made it big through receiving contracts while their areas remain inadequate with basic infrastructure, and rural assistance such as farm extension services and even proper roads and irrigation. There are still large numbers of Malays who cannot afford to attend university, through the lack of any general assistance schemes available in most other countries. Poverty is still a major problem within Malaysia, where the government has been claiming undue successes.

4. The Malaysian economy is skewed with inefficiencies and market restrictions that hinder its transformation into a mature developed sustainable economic system. Companies are allowed to have monopolies, the restricted issuance of import permits has created inefficient markets, and general lack of transparency is making the Malaysian market unattractive to investors. A 2012 Asian Development Bank (ADB) report cites the two main reasons for Malaysia’s net capital outflow as the distortions introduced into the economy by the NEP, and the widespread presence and overbearing influence of Government Linked Companies (GLCs). The restriction of tenders to Bumi companies has created an inefficient Ali Baba business model, which raises the cost of both government and business. GLCs and other government owned companies openly compete with entrepreneurs in the market with an unfair advantage, thus stifling innovation, and the willingness of private individuals to take business risks. Malaysia still needs economic growth to absorb new entrants to the workforce in the coming decade.

5. Meritocracy doesn’t exist within the Malaysian civil service, universities, or other agencies. People are forced to adopt a feudal stance of seeking favour from superiors to get promotions and survive within these organizations. Under such an environment there is no chance for creativity, critical thinking, or even honesty. ‘Ketuanan Melayu’ is now turning hegemonic is a dangerous way that can spill off Malaysian shores. This stands Malaysian in a poor position to be internationally competitive in the future.

6. The divide and conquer political strategy of the Government, use of bullying through third party NGOs, and straight threats and arrogance has had a major effect upon the people of Malaysia. Many have lost hope and respect for the leadership of their country. Many are now resentful. There is potential for outbreaks of violence due to the uncontrollability of some extreme ‘ultra’ groups allowed to roam free in society today. The country thinks in terms of race, even to the point where a near diplomatic incident nearly occurred with China a few weeks ago, the second most powerful country in the world. This is not healthy and will not stand Malaysia well within the international community. The dissent generated by this ‘divide and conquer’ political strategy is fodder that allows the political-cabal to use state apparatus to strengthen their hold on power, as the current spate of arrests indicates.

7. What the policies of the Government and resulting social structure of society has created is a small elite class of rulers who act upon the axiom that ‘we are the law’. Comments by the Defence Minister Hishammuddin Hussein (a cousin of the current prime minister), indicate the ruling elite’s distain even for the constitutional monarchy of Malaysia. The elite is now in an unquestionable position of power unable to be dislodged by the rule of law. They are unashamed by scandal and control all the elements of power through their network of loyalists through the civil service, police, armed forces, and judiciary.

8. Finally, it could be argued that Malay self-confidence has been destroyed and replaced with a national inferiority complex, that the elite can use and play to at their whim. There is a condescending attitude by the elite that ’Malays are backward’ and need special protection by the BN/UMNO Government. Thus a whole section of the population is continually told they need help. The concept of ‘Ketuanan Melayu’, according to UKM Professor Noraini Othman has connotations of enslavement, with a Malay master and servant relationship implied. Tun Dr. Ismail Abdul Rahman went further and said that the ‘special position of the Malays’ in the constitution is a slur on the ability of the Malays.

The political-cabal that was set up in the 1970s by Prime Minister Tun Razak, has been transferred across from leader to leader since that time. Each prime minister inherited a complete network of loyalists to the ‘Agenda Melayu’.

This has been their strength. However cracks appeared in this political-cabal when Mahathir tried to make an agreement with both his successors, which according to him have not been kept. In addition, the scandals of the present prime minister are beginning to test those loyal to the “Agenda Melayu’, to the point where some may begin to feel guilty about their loyalty to the current leadership of the political-cabal and ‘spill the beans’. Hence the sackings, demotions, transfers and arrests of late.

This however will not mean self-destruction to Malaysia’s political-cabal. It’s a fight over control and not reform. Winner will take all. Perhaps Dr. Mahathir was naïve in thinking that he could still exercise control and influence over this political-cabal, once he stepped down from the leadership of UMNO and the nation. This is one of the biggest mistakes of his political career.

The very nature of UMNO itself, once a party of school teachers, junior civil servants, farmers, and fishermen, which transformed into a party of contractors, small entrepreneurs, and professional rent seekers, will serve Najib well as he tries to consolidate his position. The party is run along feudal lines where booty is distributed around the country through lucrative contracts to those who head the party at state and district levels to maintain their loyalty and support. The influence of this on public policy and development planning is rarely discussed, even though it leads to massive misallocations of funds into projects that have little, if any community or economic benefit. This prevents any policy approach to planning and implementation, drastically lowering the quality of government.

Najib can reward his warlords, maintain their loyalty, and even put more of his loyalists in place for the coming election, win it, and even end up having more power than he has now. This scenario is Dr. Mahathir’s worst nightmare, and why he is working so hard to remove Najib before the next election.

To date very few international bodies have heavily criticized this “Malaysian Apartheid”. The Malaysian Government will continue to get away with repressing its populace with divide and conquer tactics. There is no front against Malaysia, like there was against South Africa. No one interested in putting sanctions upon Malaysia.

However, Swiss Islamic intellectual Dr. Tariq Ramadan foresees a credibility gap for Malaysia in international affairs where he says “As Malaysian Muslims complaining about discrimination by the West, should first acknowledge the injustices against minorities in their own country”. Until Malaysia sorts out its own racism, any stand upon Israel and Palestine seeps into hypocrisy.

This Malaysian Apartheid will continue into the foreseeable future and anybody who tries to oppose it will meet the Roth of bullying tactics to subdue them, as is being played out now with the latest round of arrests. The Malay position will remain a taboo subject for years to come, hence Malaysian sensitivities when any non-Malaysian comments on Malaysian internal affairs.

This also means that the question as to whether the NEP/NDP has been protecting or marginalizing the Malays will not be discussed. This is an important question for the future of Malaysia and the challenges that lie ahead. As former Prime Minister Ahmad Badawi once said “Malays who can’t learn how to walk without crutches will end up in a wheelchair”. Dr. Mahathir took this further and said “Unfortunately, the protection and privileges accorded by the New Economic Policy (NEP) may weaken the Malays further by lulling the next generation into complacency, thinking that the

NEP’s affirmative action will always be there for them to fall back upon….. The NEP can make the users so dependent that their inherent capability regresses.”

This dooms the country into the ‘middle income trap’, where the capabilities, creativity and innovation needed to lift the Malaysian economy into high valued activities, does not exist. Economic and social prosperity is risked so that Kleptocratic rule can continue unabated in Malaysia. Malay self-respect has also been sacrificed in this quest to hold power.

The system of discrimination has only benefitted in preserving a feudal hierarchy within Malaysian society where the new lords are political dynasties which are now fighting each other openly using 1MDB as the platform. This is not about corruption, but which family dynasty and surrounding group rules, rather than any promise of social reform.

Originally published in Modern Diplomacy 14th October 2015

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