By Joshua Kurlantzick
In a result few pollsters and analysts predicted, including myself, last week Malaysia’s opposition coalition, led by 92-year-old former Prime Minister Mahathir Mohamad, defeated the ruling coalition of Prime Minister Najib Razak in national elections that marked the first transfer of power in Malaysia’s modern history. The long-dominant United Malays National Organization, or UMNO, and the coalition it leads, Barisal Nasional, have governed Malaysia since its independence in 1957.
To the Najib government’s credit, despite rumors on election night and the following morning that it would take measures to defraud the voters, or prevent a change of government, the transition process was completed in an orderly and largely peaceful manner. The Election Commission, seemingly stacked with Najib loyalists, announced that the opposition coalition had won a majority of parliamentary seats, and the Malaysian king provided an audience to Mahathir and named him prime minister.
Yet despite jubilant scenes in many parts of Malaysia, hard questions now confront the winning Pakatan Harapan coalition, which includes an array of parties that draw on disparate groups of voters and have different platforms. United by an unlikely figurehead in Mahathir, who ruled semi-autocratically as prime minister from 1981 to 2003 when he repeatedly cracked down on his own political opponents, they shared the goal of defeating the divisive and scandal-plagued Najib. Mahathir came out of retirement and ran against his old party because he was supposedly shocked by the actions of Najib, who had served in his Cabinets in the 1990s and 2000s and whom Mahathir had picked as a possible successor.
Now unexpectedly running the government, Mahathir and his coalition will face huge challenges in staying together and developing coherent policies to roll back the Najib era’s climate of authoritarianism, promote investment in Malaysia, address the country’s weak education system, and manage its delicate economic and strategic ties with both China and the United States.
Pollsters and analysts believed, even before the election, that Najib and the ruling coalition had weaknesses. Najib, though, had erected a range of obstacles to an opposition victory, including massive gerrymandering and the jailing of longtime opposition leader Anwar Ibrahim on questionable charges of sodomy. The obstacles seemed so great that several pollsters predicted Najib would lose the popular vote but still win a parliamentary majority.
Yet Barisan Nasional’s flaws turned out to be huge. Mahathir was able to rally a key voter bloc: ethnic Malays from more rural areas. They added to the opposition coalition’s existing strongholds among ethnic Chinese voters and many younger, urban Malays. Pollsters apparently also underestimated how furious Malaysians were with Najib’s corruption scandals concerning billions that were allegedly bilked from the state investment fund known as 1MDB. Najib had skated past any charges for years, shielding himself from accountability by reining in civil society, media outlets and dissident members of his own party.
This was the first chance voters had to weigh in on the 1MDB allegations. Despite a relatively strong economy, Najib’s policies, including an unpopular goods and services tax, were seemingly fostering inequality and squeezing voters, particularly lower-income Malays. In the face of gerrymandering and barriers to turnout, the opposition was able to use social media and other tools to keep turnout high—around 70 percent, according to multiple reports—and engage critical young voters.
A sharp reversal by Mahathir in policy toward China would likely be met with a tough and painful response.
Since the election, Mahathir has made several promises. He has vowed to serve as prime minister for a limited time, telling reporters, “I’ll stay for as long as my experience is needed—but not too long.” He has said he will seek a full pardon for the popular Anwar, so that he can return to politics. Malaysia’s king, Sultan Muhammad V, supposedly said he will pardon Anwar, while Mahathir has suggested he eventually wants to hand power to Anwar, his one-time protégé. Mahathir has promised to bolster the rule of law, damaged under Najib, and aggressively investigate the 1MDB scandal. Since his surprise loss, Najib has been banned from traveling from Malaysia, amid speculation that he would flee to avoid possible prosecution. Najib had essentially frozen the domestic investigation into 1MDB, even as Singapore, Switzerland, the United States and other countries continued their own probes of the alleged $4.5 billion in misappropriated funds.
Before the election, Mahathir also indicated his government would take a harsher approach to Chinese aid and investment in Malaysia, and possibly even to overall relations with Beijing, which have soared in recent years. Under Najib, China and Malaysia vowed to cooperate on multiple infrastructure projects related to China’s huge Belt and Road Initiative, and private Chinese investment flowed into Malaysia.
But the elderly prime minister faces multiple challenges from the start. He can fulminate against Beijing and question whether the Najib administration, in accepting major China-backed infrastructure projects, may have given up control of critical ports and railways. His administration could even cancel some of the planned projects. But the fact remains that China is Malaysia’s largest trading partner, and Malaysia is China’s biggest trading partner in Southeast Asia. In recent years, Beijing has become much more skilled at using its aid and investment as tools of coercion in the region; a sharp reversal by Mahathir in policy toward China would be met, most likely, with a tough and painful response.
Mahathir only has a weak hand to play if he wants to offset Chinese aid and investment. The Trump administration and its partners will not be able to launch a rival to the Belt and Road Initiative, and the White House appears mostly uninterested in pushing Southeast Asian economic integration or new trade deals. The Trump administration enjoyed a close relationship with Najib, despite the Justice Department’s investigation into 1MDB, and it is unclear how it will work with the historically mercurial Mahathir. Foreign investors generally view Malaysia as an attractive environment, so Mahathir may be able to stump for new investment from Malaysia’s neighbors. But the country’s weak education system and longstanding domestic brain drain still limit economic growth and are a turnoff for high-value ventures.
Mahathir also has to navigate multiple minefields in Malaysian politics. Although he and Anwar have publicly ended their feud over Anwar’s previous jailing during the earlier Mahathir era, there will undoubtedly be tensions between Mahathir and Anwar loyalists in the Cabinet. The longer Mahathir stays as prime minister, the more likely those tensions will increase.
In addition, Mahathir may struggle to maintain cohesion in what is now a coalition government. The rural Malay voters who supported his party may not want to reform the longstanding economic policies that are essentially affirmative action for the majority ethnic Malays. But such reforms are necessary for the country’s long-term development and have the support of many leaders within Anwar’s party, the People’s Justice Party, which actually won 34 more seats in the new parliament than Mahathir’s Malaysian United Indigenous Party.
Then there is the 1MDB scandal and Malaysia’s general climate of autocracy, which worsened under Najib. Although the Pakatan Harapan coalition appears united in its desire to pursue 1MDB investigations once again, Najib stacked many government agencies with his loyalists. How will they respond to a plan to prioritize 1MDB, and even Najib’s possible indictment?
And although Mahathir has said that he wants to oversee a return to the rule of law, will he really reverse the stultifying political climate of the Najib era? The laws and restrictions limiting writers, civil society members and other activists should be eased or lifted. But what if those people then criticize Mahathir’s government? In the past, Mahathir’s response to dissent has been swift: crack down hard. Malaysia appears to have changed. It remains unclear whether Mahathir has, too.
Joshua Kurlantzick is senior fellow for Southeast Asia at the Council on Foreign Relations.