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Embattled Malaysia premier Najib aided by an opposition in chaos

SINGAPORE — Malaysian Prime Minister Najib Razak, under fire for claims that US$700 million (S$946 million) in funds ended up in his personal accounts, may yet weather the political storm with the help of an opposition in disarray.

Malaysia’s Prime Minister Najib Razak arrives for a news conference at a mosque outside Kuala Lumpur, Malaysia, July 5, 2015. Photo: Reuters

Malaysia’s Prime Minister Najib Razak arrives for a news conference at a mosque outside Kuala Lumpur, Malaysia, July 5, 2015. Photo: Reuters

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SINGAPORE — Malaysian Prime Minister Najib Razak, under fire for claims that US$700 million (S$946 million) in funds ended up in his personal accounts, may yet weather the political storm with the help of an opposition in disarray.

The crisis is the biggest to engulf Mr Najib since he came to power in 2009, leading a coalition that has held power since independence in 1957. It has dented investor confidence and contributed to a fall in the ringgit as economic growth slows.

But while the allegations have been referred to a special task force and may prompt ex-leader Dr Mahathir Mohamad to step up calls for the premier to resign, the fracturing of the opposition after months of infighting leaves Mr Najib’s fate very much in the hands of his own coalition. He retains support among rank and file ruling party members, and senior ministers have said the probe must be allowed to run its course.

“Within UMNO the division heads are very much united behind Najib,” said Universiti Malaysia Sarawak associate professor Andrew Aeria speaking of Mr Najib’s United Malays National Organisation (UMNO). “It doesn’t help that the opposition has fallen apart.”

In March, 160 UMNO division leaders pledged their support to Mr Najib after he committed to improve the finances of debt-ridden state investment company 1Malaysia Development Bhd (1MDB).

Public discontent with the government — which was returned to power in 2013 despite losing the popular vote — has centred more on unpopular economic policies and less on 1MDB, whose advisory board Mr Najib chairs. The Wall Street Journal reported the US$700 million may have moved through agencies linked to 1MDB before apparently appearing in Mr Najib’s accounts.

‘HOLD ON’

While Mr Najib has faced criticism for links to the alleged funds among opposition lawmakers and on social media there have been no major rallies seeking his resignation. The Coalition for Clean and Fair Elections, or Bersih, plans to call a mass protest if investigations into the money trail do not provide adequate answers, the Malay Mail Online reported.

“Najib will hold on,” said Dr Oh Ei Sun, a political analyst at the S Rajaratnam School of International Studies in Singapore. “He won’t step aside pending investigations because that hasn’t happened before in Malaysia, and it’s not in his character to do so.”

Mr Najib retains the backing of lower-income Malaysians, according to National University of Malaysia professor Shamsul Amri Baharuddin. The premier has given bigger cash handouts to the poor this year to help them cope with higher costs.

SENIOR MINISTERS

“We see that support for Najib remains unshaken among the bottom 40 per cent of the population,” said Prof Shamsul, who has researched Malaysian politics and the impact of government policies as a social anthropologist.

While Deputy Prime Minister Muhyiddin Yassin has called on Mr Najib to give a convincing explanation or denial, other ministers have publicly backed him. Home Minister Ahmad Zahid Hamidi said attempts to undermine a serving leader may be a risk to national security, while Defence Minister Hishammuddin Hussein said it’s reckless to criticise Mr Najib as the truth has not been determined.

A poll by the Merdeka Centre for Opinion Research in March showed 69 per cent of voters were not fully aware what the 1MDB controversy was about, while 75 per cent did not know its role.

The ringgit yesterday (July 6) tumbled to its weakest since a dollar peg was implemented in 1998, in part on concern the investment climate in the country may deteriorate and also as emerging market currencies fell broadly in the aftermath of a Greek referendum on a proposed bailout plan.

CREDIBLE ALTERNATIVES

An opposition coalition that has collapsed is one less worry for Mr Najib. The alliance imploded in June after months of internal bickering including a disagreement over the planned implementation of shariah criminal law, and the jailing of leader Anwar Ibrahim for sodomy, a charge he has denied.

Dr Mahathir has said Mr Muhyiddin would be a good replacement as he would not repeat Mr Najib’s mistakes, the Malaysian Insider reported in April. Mr Muhyiddin is a deputy president of UMNO while Mr Ahmad Zahid and Mr Hishammuddin are vice presidents, putting them in line to replace Mr Najib who is party president.

Even so, neither side of politics has a front-runner who might enact real policy change, said Assoc Prof Aeria from the Universiti Malaysia Sarawak.

“That’s the real tragedy of Malaysian politics, that we can’t come up with credible alternatives in the opposition or within the Barisan Nasional” ruling coalition, Assoc Prof Aeria said. “We are being led down a blind alley.” BLOOMBERG

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