from Asia Unbound

Najib Faces Trouble on All Fronts

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October 21, 2015

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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Since July, when the Wall Street Journal and other publications broke stories alleging that hundreds of millions of dollars, possibly from a Malaysian state fund, had been deposited into Prime Minister Najib tun Razak’s personal accounts, the prime minister has been struggling to hold onto his job, and to keep more scandals from erupting. The FBI, Hong Kong authorities, and Swiss authorities reportedly are investigating the troubled 1MDB state fund and the deposits into Najib’s accounts. Since July, Najib has sacked the country’s attorney general, attempted to shut down a leading Malaysian financial publication that had run more stories alleging improprieties in the state fund, removed a deputy prime minister who had become critical of his leadership, and overseen the arrest of protestors holding large rallies demanding cleaner government. Allies of Najib’s have insinuated that the large demonstrations in Kuala Lumpur are a plot by ethnic Chinese and other minorities to undermine ethnic Malays.

But even as he pushes back, Najib faces more and more challenges to his survival as prime minister---challenges that also suggest that some of Malaysia’s institutions are more independent that many Malaysians had previously imagined. And with Parliament back in session this week, the focus will be on Najib even more. Despite reports of intense pressure on the central bank to end its own investigation of the state fund, the head of the Malaysia’s central bank earlier this month announced that it would continue investigating 1MDB. In early October, Malaysia’s sultans, traditional rulers from each of the country’s constituent states, released an unprecedented joint statement saying that a lack of clear answers about 1MDB and the money in Najib’s accounts has led to a “crisis of confidence” in Malaysia. The sultans, who normally do not intervene in politics, also called for a rapid and transparent investigation into where Najib’s money came from, and what it was used for. Perhaps unsurprisingly, a recent survey of the Malaysian population by the Merdeka Center found that only 31 percent of Malays now trust in the government.

Malaysia’s opposition will try now to fatally weaken Najib through a no-confidence motion filed this week, but this strategy is probably not going to succeed. The opposition is hoping that some critics of Najib within the governing coalition will either support the no-confidence motion or abstain, giving the motion enough abstentions to pass. Although critics of Najib within the governing coalition, like former deputy prime minister Muhyiddin Yassin, have harshly condemned the prime minister, they are unlikely to join the no-confidence vote, since they do not want to be responsible for aiding the opposition in any way. Without picking off a few members of the governing coalition, the opposition will be at least twenty-five votes short of carrying the no-confidence motion.

But as a profile of the prime minister by Reuters notes, Najib faces other problematic votes in the coming months. He could find himself without enough votes from his coalition to pass the next fiscal year’s budget or to approve Malaysia’s participation in the Trans Pacific Partnership, since the TPP is not popular with many members of the governing coalition. “Losing either of those votes [on Najib’s proposed budget or the TPP] would significantly weaken the prime minister’s [political] position,” Reuters notes.

A loss on the budget or TPP vote also would create challenges for Najib at December’s general assembly of UMNO, the dominant party in the ruling coalition. An even weaker Najib could prompt challengers to emerge at the general assembly.

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