Can Malaysia Be Saved?

A coalition of Malaysian politicians met over the weekend to discuss their plans to “save” the country by forcing the resignation of Prime Minister Najib Razak. It was a dramatic turn in an ongoing corruption scandal that has rocked Malaysian politics, undermined an already struggling economy, and revealed the fundamental weaknesses of Malaysia’s quasi-democratic system.

Malaysia has a fractured opposition and an institutional apparatus securely in the hands of the Prime Minister. Can the country, which until recently was seen as something of a regional success, still be saved?

Prime Minister Najib has been hounded by allegations of massive corruption since several news outlets, including The Wall Street Journal, reported last July that nearly $700 million from a state investment fund allegedly ended up in personal accounts linked to the Prime Minister.

The fund, known as 1 Malaysia Development Berhad, or 1MDB for short, was set up in 2009 following Najib’s election as Prime Minister, but has since suffered from severe mismanagement, accelerating debts, and swirling questions about transparency, which have spurred multiple investigations.

Najib claims there was no funny business. According to him, the $700 million was a donation from a Saudi royal with no connection to 1MDB. But the revelations have prompted calls for his resignation from all corners of the political spectrum, and, despite his attempts to tamp down the scandal, the controversy has just kept growing.

The financial scope of the case has now more than doubled to about $1.4 billion, and investigations into 1MDB-linked funds are underway in at least four countries, including the United States.

If the issue were just corruption, this might be little more than a salacious news story. Malaysia, however, has one of the worst performing economies in the region. The Malaysian currency, the ringgit, has plummeted in value, and the scandal has only fueled concerns about Najib’s handling of the economy. Many are worried that the controversy could further erode the confidence of potential investors.

Political pressure on Najib is rising as well. Among the attendees at this past weekend’s “Save Malaysia” gathering was former Prime Minister Mahathir Mohamad, who ruled the country for over two decades between 1981 and 2003 and is still highly respected by many Malaysians for his record of strong economic growth. He has been calling on Najib to step down for nearly a year and officially resigned in protest last month from the United Malays National Organization (UMNO)—the party that has ruled the country uninterrupted since independence from Britain in 1957.

But the implications of the ongoing crisis go beyond a struggling economy and the Shakespearean drama currently enveloping the political class. They strike at the heart of the Malaysian political system.

Until recently, Malaysia was hailed as a success story: a moderate Muslim country developing politically and economically at a rapid clip. But the 1MDB scandal has eviscerated this façade, as Najib wantonly demolishes the trappings of democracy and uses the system for a single purpose: maintaining power.

Government officials who questioned him have lost their jobs. Last July, Najib fired his deputy prime minister, Muhyiddin Yassin (now a prominent member of the “Save Malaysia” coalition), after Yassin called for more transparency around 1MDB. The attorney general who launched an investigation into the fund (and, as it was recently revealed, was planning to proceed with criminal charges against the Prime Minister) also got the axe that month.

The authorities have gone after journalists and media outlets covering the story, too. After the revelations last July, the Malaysian government blocked online access to one prominent news outlet with critical 1MDB coverage and suspended the publishing license of another. Two Australian journalists were recently detained for attempting to question the Prime Minister about the controversy.

The crackdown on criticism is, not unlike the economic crisis, about more than just this scandal. It is, in part, a response to the results of a hotly contested 2013 election, in which the opposition actually managed to win the popular vote. (It failed, however, to wrest control of parliament from the ruling party as a result of Malaysia’s heavily gerrymandered constituencies.)

Since the election, Najib’s government has stepped up use of the legal system to target government critics. The sedition law, a repressive British colonial-era statute that the ruling party strengthened last April despite Najib’s previous promises to ensure its repeal, has been used to sentence dozens since 2013. In December, the ruling party also pushed through a bill in parliament effectively expanding the Prime Minister’s emergency powers.

Najib has also moved to crush the opposition and prevent it from mounting another serious challenge to the ruling party’s supremacy. On that front, he has made some headway: Malaysia’s most prominent opposition leader, Anwar Ibrahim, is currently serving a five-year prison sentence on politically motivated charges. In a country that has been marked for decades by contentious racial politics, Najib has also appealed to deeply-rooted Malay nationalist sentiments to boost his flagging popularity among the ruling party’s base.

In sum, the government’s moves have left Malaysia with a crippled opposition, a persecuted media, a gerrymandered parliament, a judiciary eager to do the Prime Minister’s bidding, and a cabinet of yes-men who have little interest in tackling high-level corruption. These aren’t all the results of Najib alone—Malaysia has for years struggled to consolidate democracy. But it’s a striking indictment of the fundamental weakness of Malaysia’s democratic institutions that Najib has so easily bent them to his will.

It’s unclear where the story goes from here. The international investigations still hang over the case, but Najib has been cleared of corruption by Malaysian investigating authorities (thanks, in part, to his choice to replace key officials). There is scant hope of forcing Najib from power before the next election in 2018 given that the majority of his party still backs him and there is little procedural recourse for the opposition.

Even if Najib resigns, however, it is uncertain if a shaky opposition, with its main leader imprisoned, can really “save” the country. The 1MDB scandal is a symptom, not the cause, of Malaysia’s current woes, and Najib’s removal will not resolve the country’s long-term challenges. The problems Malaysia faces run deeper than Najib, and the country can’t be truly saved until political leaders undertake serious efforts to reform and democratize key institutions.