In his bid for re-election, Malaysian Prime Minister
Najib Razak has dispensed with all shame. Vote for me, he has
essentially declared, or
Malaysia will suffer “catastrophic ruin” and an “Arab Winter” of the kind that has undone economies from
Egypt to Libya.
Both
warnings are ludicrous -- signs of how worried Najib’s National Front
coalition is of losing power for the first time since 1957. They speak
to the desperation of a government that has come to serve itself, not
Malaysia’s 29 million people. And they are emblematic of a leader whose
talk of bold change hasn’t been matched by action.
Najib’s claim is this: Giving the opposition, led by former
Finance Minister Anwar Ibrahim, a chance to lead on May 5 would reverse
all the gains Malaysia has made since the 2008 financial crisis. The
economy would crater, stocks and the currency would plunge, and chaos
would reign.
Change through the ballot box in a democracy should
never be disruptive or chaotic, and rhetoric suggesting otherwise is
disingenuous. Najib likes to say: “The time has come for Malaysians to
make a decision.” Actually, the time has come for Malaysia’s government
to grow up.
Najib’s scaremongering, some of which came out of an April 17 Bloomberg News
interview,
smacks of the re-election campaign run almost a decade ago by then U.S.
President George W. Bush. Instead of this
vote-for-me-or-you’re-in-danger appeal, Najib should scare up some
headline-grabbing reforms that leave Malaysia better off in the future.
Developing Complacency
The
country’s biggest problem is complacency. Malaysia Inc. can be a
slow-moving, change-resistant animal in a very dynamic neighborhood.
Nations as diverse as
China,
Indonesia, the Philippines, Thailand and
Vietnam
are evolving in ways that have enabled them to leapfrog peers in a few
years. They are all competing for the same infrastructure dollars,
factory projects, bond deals and stock issues.
Singapore,
meanwhile, has become the beneficiary of many of Malaysia’s best and
brightest, who have emigrated in search of a more merit-based economy.
Malaysia
is a resource-rich nation with huge potential. But it remains shackled
to a four-decade-old affirmative-action program -- favoring ethnic
Malays -- that turns off foreign investors and undermines national
productivity. This so-called
New Economic Policy was devised by Najib’s father, Abdul Razak Hussein, the country’s second prime minister.
Najib,
59, has indeed rolled back some of those preferences to encourage
investment. He did away with a requirement that foreign companies
investing in Malaysia and locally listed businesses set aside 30 percent
of their equity for ethnic Malays and indigenous peoples known as
“bumiputera.” It’s time to go much further and dismantle all race-based
policies.
Little Difference
When, for example, can more
ethnic Chinese expect to start winning the really big government
contracts? Here, Najib’s real quarrel may be with his own government.
Anwar is pro-markets and pro-investment, too. When you look at the core
of what Najib is promising voters -- less corruption and higher living
standards -- it’s not wildly different from the opposition’s message.
The trouble is, Najib is navigating a 13-party coalition whose interests
are as entrenched as any in the world. His partners are pushing back
quite assertively, afraid of losing the Malay vote they could once take
for granted.
Money Politics
The opposition has gained
traction with its claims that Malay-run companies, from power producers
to toll-road operators, unfairly benefit from their ties to the
government. Najib’s pledges to clamp down on crony capitalism and to
instill greater transparency have been undercut by measures such as the
ban on street protests that passed on his watch. Now, many voters hope
to wipe the slate clean.
When he’s not trying to frighten voters, Najib is touting Malaysia’s 6.4 percent
growth
as proof he is a radical-change agent. In fact, much of Southeast Asia
also is booming, and the government is helping to artificially fuel
growth with populist handouts. Even more than the $444 billion of
private sector-led projects ranging from oil storage to a mass-transit
railway that Najib has championed, the country needs reforms that will
revitalize the system as a whole. The government should be encouraging
more startup companies, widening the tax base and hacking away at
subsidies that institutionalize complacency.
All too often, rapid
gross-domestic-product growth is used as a smoke screen to hide
underlying cracks in an economy’s long-run potential. In Malaysia’s
case, the numbers mask a government too focused on staying in power to
do its job. If anything should be scaring Malaysian voters, it’s that.
(William Pesek is a Bloomberg View columnist. The opinions expressed are his own.)
To contact the writer of this article: William Pesek in Tokyo at
wpesek@bloomberg.net
To contact the editor responsible for this article: Nisid Hajari at
nhajari@bloomberg.net