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COMMENT | Najib Abdul Razak has an opportunity to reinvent himself. The caretaker prime minister's reputation took a battering after billions of dollars were allegedly siphoned from sovereign wealth fund 1MDB.

Still, a general election in a few weeks will likely give him a fresh mandate that he can use to secure a much-coveted legacy as a reformer.

Coalitions led by Najib's Umno have run the country since independence in 1957. Najib himself has been in power for almost a decade. In the 2013 election, the ruling BN coalition retained a parliamentary majority but lost the popular vote.

Since then, Najib has been engulfed by allegations of corruption related to 1MDB which he has strenuously denied. For most Malaysians, however, these woes have been overshadowed by more prosaic worries.

The US$300 billion economy of roughly 30 million people is growing at a decent near-six percent overall, but not everyone is benefitting.

According to pollster Merdeka Centre, economic concerns, like rising prices and jobs, rank top for voters.

Incredibly, BN still has the upper hand. That is thanks, in part, to a split in the opposition, where the main charge is now led by 92-year-old Dr Mahathir Mohamad, who was prime minister for over two decades with the incumbent party before switching.

He hopes to woo away the ethnic Malay, Muslim population that make up Malaysia's majority but is unlikely to win over enough of them.

Najib has also promised more generous handouts to the country's poorest and will benefit from redrawn constituency boundaries. A last-minute push to curb “fake news” might help his reelection bid too.

Affirmative action

Even so, a win by Najib could be economically beneficial if the British-educated son of Malaysia's second prime minister can fight established interests and embrace the ambitious reforms he articulated when he first came to power. One goal was to reduce the role of the Malaysian state in business.

Back in 2010, he called for an end to "rent-seeking and patronage" and promised to reduce state involvement in "activities that compete directly with the private sector".

There have been efforts to improve governance at sovereign fund Khazanah Nasional and oil and gas group Petronas. There have also been some stake sales - including shares in hospital operator IHH Healthcare and, less successfully, palm oil group Felda Global.

Yet such entities continue to crowd out private investment, reduce competitiveness, and hold back faster growth. Government-linked companies and funds own shares worth almost US$130 billion in the top 30 firms, roughly 40 percent of their market capitalisation, Reuters Breakingviews calculations show.

More progress is needed if Malaysia wants to hit its lofty target of becoming a high-income economy by 2020.

The threshold is a gross national income of US$12,236 per capita. According to the World Bank, Malaysia was at US$9,660 last year.

Najib can set the tone for the course ahead by separating his own role as prime minister from that of finance minister.

Bringing in clear rules to govern party funding would also help reduce the rent-seeking he described, and help lift Malaysia up the transparency league tables.

Vested interests

Ultimately, the extent of Najib's desire to change his legacy will dictate his willingness to push against vested interests and reform. It is easier to promise favors to win voters when a government has a large hand in business.

The caretaker prime minister has shown himself capable of reform, as with the introduction of the goods and service tax and moves to roll back some perks for ethnic Malay and indigenous people, known as bumiputra, replacing them with more targeted subsidies.

But efforts to pull back the long arm of the state will face resistance. China - a growing influence in Malaysia, after helping to mitigate the financial fallout around 1MDB - may also be happy with the status quo.

Surrounded by neighbours less friendly with Beijing, Malaysia sees itself as a Southeast Asian gateway for China. That is starting to pay off, with significant state-led and private investments in recent months, including Alibaba's move to set up a regional distribution hub in the country.

The sale of a stake of just under 50 percent in Proton, the national car brand, to China's Geely in 2017 offers some hope the government will offload even larger iconic assets - perhaps Malaysia Airlines, banks or even shares in Petronas, which has some listed units.

Not everyone is happy about closer ties to the People's Republic, however. If elected, Mahathir pledges to review Chinese investment in everything from flats in Johor state to the East Coast Rail Link.

There are political risks to Najib if he pushes for change. But if he can battle the status quo to reform and adroitly handle the Beijing connection, that will pull many more Malaysians up the economic ladder and perhaps help him win a more flattering write-up in the history books.


CLARA FERREIRA-MARQUES is a Reuters BreakingViews columnist.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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