Malaysia’s political crisis threatens a return to kleptocracy

With former Malaysian prime minister Najib Razak set to find out his fate in his high-profile 1MDB corruption trial on July 28, this once-assured conviction is looking less certain as his party regains some of its influence over the country's political landscape

Jake Black
July 27, 2020
Malaysia’s political crisis threatens a return to kleptocracy
Photo: Office of the Prime Minister of Malaysia

When Najib Razak was ousted as Malaysia’s prime minister and arrested in 2018 over a corruption scandal involving the plundering of billions of dollars from 1Malaysia Development Berhad (1MDB), a government-run strategic development company, it seemed as though change was in the air.

The new prime minister, Mahathir Mohamad, promised a new investigation into the 1MDB scandal, providing hope for a new future free from kleptocracy. But two years later, a political crisis is posing a serious threat to that future.

Najib’s trial began in April 2019 and saw the former prime minister plead not guilty to all charges, pinning the blame on financier Jho Low, with Najib’s defence saying he was the “victim of a scam”. Low, who is noted for investing US$100 million of funds allegedly stolen from 1MDB in the production of movie The Wolf of Wall Street and hosting lavish parties with Hollywood stars, is thought to currently be in hiding in China.

Najib’s trial concluded in early June 2020, with a verdict scheduled for tomorrow (28 July).

While Najib’s trial was proceeding, political infighting within Mahathir’s Pakatan Harapan coalition culminated in a significant political crisis in early 2020. A dispute between Mahathir and political ally Anwar Ibrahim caused the coalition to weaken, paving the way for a new coalition, Perikatan Nasional, to form.

The new coalition, featuring neither Mahathir nor Anwar, formed government, with Muhyiddin Yassin sworn in on 1 March as Malaysia’s new prime minister. Crucially, the new coalition government includes Najib’s United Malays National Organisation (UMNO), which had not been in government since Najib was ousted in 2018.

The delicate political situation has made Najib’s prosecution in the 1MDB scandal anything but certain. Najib’s position as prime minister was well protected until the 2018 general election, even as accusations intensified and the scale of corruption grew. The Malaysian Anti-Corruption Commission, the very agency that arrested Najib in 2018, had in 2015 stated that the hundreds of millions of dollars in Najib’s personal accounts had come from donors, not 1MDB.

The return of UMNO to government raises the possibility that Najib will be acquitted or otherwise pardoned, and even the possibility that he may attempt to reclaim the prime ministership if he avoids prison.

In May 2020, Malaysian prosecutors dropped charges against Riza Aziz, stepson of Najib and a producer of The Wolf of Wall Street. Then, just days after Najib’s trial closed in June, the Kuala Lumpur High Court withdrew charges against Musa Aman, a senior figure in UMNO and a key Najib ally. The acquittal of these two high-profile associates of Najib may be a mere prelude to what would be a momentous acquittal of the former prime minister himself.

If Najib is acquitted, questions will abound as to what extent the decision was influenced by the new government’s dependence on the support of UMNO

Malaysia will be watching as the verdict in Najib’s trial is announced in July. If he is acquitted, questions will abound as to what extent the decision was influenced by the new government’s dependence on the support of UMNO. But even if he is found guilty, uncertainty will linger as long as UMNO remains in government and Malaysia braces for the next twist in its ongoing political crisis.

It appears that the next twist may not be too far away. In an interview in June, Mahathir made it clear that he is hoping to once again repair his relationship with Anwar and stage a counter-coup to unseat the Perikatan Nasional government with the aim of preventing a potential return of Najib.

In what has already been an unpredictable year in Malaysian politics, it seems as though almost anything is possible, and the country’s escape from kleptocracy is not a foregone conclusion.

This story was originally published on the Young Australians in International Affairs blog. Jake Black is a graduate from the University of Melbourne, having recently completed a Master of International Relations degree with a strong focus on the Indo-Pacific region.

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