Malaysia steps on the path to state failure
Malaysians in distress have taken waving white flag windows and walkways. At the most basic level, it’s surrender and a cry for help: food, some money to help pay the rent. Thanks to social networks, the banners have taken on an iconic life. Not quite a movement; people have no hope, and not much desire, to overthrow the government, and it is not clear these days that there is one to overthrow. It’s more of a shortcut for dissatisfaction with the atrophied state and struggling economy.
The country’s prime ministers have already been reluctantly credited with stable leadership, albeit with authoritarian traits. However, lawmakers have proven to be breathtakingly unable to unite around a number or program to guide Malaysia through this critical situation. The nation is in the throes of multiple crises – social, economic and political – fueled and aggravated by each other. It is perhaps only a slight exaggeration to invoke the dreaded label of a failed state.
Civic life suffers from many mishaps. The last twist of a saga that has lasted since at least early 2020 arrived in the wee hours of Thursday. The United Malay National Organization, the party that ruled Malaysia from independence until power loss in 2018 the day after the 1Scandal of Malaysia Development Bhd., said he would leave the ramshackle coalition chaired by Prime Minister Muhyiddin Yassin and urged him to resign. This may not be the end of the machinations; The UMNO itself is divided between a group that wants to regain its dominant position and lawmakers eager to keep the fine ministerial posts that Muhyiddin has entrusted to them.
There is no easy way out of this mess. Malaysia’s difficulties go beyond one person. No potential leader appears to have sufficient backing in parliament, let alone a mandate from the population of 32 million, to replace the weak prime minister and ensure stable administration. An election is supposed to take place once the pandemic has passed, a determination difficult to quantify. The monarchy, alternated between the hereditary sultans of nine states, is in the process of being forced to leave ceremonial shadows to arbitrate, something royal households seem less comfortable doing.
Thus, the flag of surrender captures the end of a strut, do, or “boleh” mentality. Citizens are stepping in where authorities have failed, as the pandemic has caused seemingly endless misery. Southeast Asia was rocked by the delta variant. Malaysia added nearly 9,000 cases of Covid on Thursday. As of Monday, just over 8% of Malaysians received both vaccines. Some of the toughest shutdowns have taken place in Kuala Lumpur and the nearby Selangor state trading hub, and have taken their toll. At worst, factories have been closed, public transport has been running on reduced hours, and the military has set up roadblocks. Some measures have been relaxed, but large parts of the country remain closed.
Asia, at large, is in the midst of a strong economic recovery. However, this recovery has not yet fully affected Southeast Asia, a region of over 650 million people. In its latest World Economic Outlook, the International Monetary Fund forecast a 6.5% growth in Malaysia this year. Gross domestic product fell by more than 5% in 2020, the worst performance since the Asian financial crisis of 1998. To respond to such bullish projection or even approaching it, the second half of 2021 must be stellar. Further cuts in interest rates and budget spending are almost assured. But whatever the numbers say, many Malaysians are nowhere near feeling the benefits. same manufacturers of rubber gloves worried; they appealed to authorities this week to lower Covid restrictions and let them continue to produce.
The last decades of the 20th century offered a different route. During Mahathir Mohamad’s tenure as Prime Minister from 1981 to 2003, Malaysia was an icon of emerging markets. The country has grown rapidly with relatively low inflation and stable budgets. Mahathir liked to push the West, but he opened up markets and privatized state enterprises. He resisted IMF aid and challenged orthodoxy by impose capital controls and fix the exchange rate during the Asian crisis. Contrary to predictions that the efforts would fail, they made Malaysia stronger.
But it started to go wrong. Scrambles like a conspicuous new airport and the soaring Twin Towers funded by state oil giant Petronas have suggested waste. One of Mahathir’s successors, Najib Razak, missed the Malaysia Airlines flight 370 disappears in front of the cameras of the world. Najib led UMNO to defeat in 2018 and was convicted of corruption related to 1MDB. Mahathir’s return to the head of an opposition bloc offered a brief moment of renewal. But he couldn’t give up political maneuvering – even until he was 90 – and opened the door to Muhyiddin to kick him out of office.
For a long time ethnic and religious fault lines have been compounded in recent years by an urban-rural divide and a generation gap that no political organization has managed to overcome. The credibility of the ruling class will continue to erode the longer it takes to vaccinate against Covid and for a recovery to take hold. The current intrigues unfortunately seem far removed from the daily needs of business, finance and even the dinner table.
No country can continue on this path indefinitely and be a model for anything other than dysfunction.