Michael Backman on Malaysia

Malaysia's PM pays high price to stay in power
By Michael Backman
The Age
March 26, 2008

MALAYSIA'S hapless Prime Minister Abdullah Badawi got something right last week: he announced a radical reshuffle of his cabinet, which included dropping several ministers who had seemed untouchable. But what Abdullah got wrong was the timing. The reshuffle is about two years too late. Had he done it then, his coalition Government would not have done so badly at this month's elections. He would not now be staring into the political abyss whereby it is almost a certainty he will not be Prime Minister at the next election. It is a possibility that his party will not even be in office.

But Abdullah's new ministry is no clear-cut triumph. Two Government members named as ministers refused to serve, highlighting the sloppiness of the process of government in Malaysia. Why did Abdullah not check with them before announcing his ministry? This is the usual process in parliamentary democracies elsewhere. One, aged just 54, said he wanted to make way for a younger person. Did he sense a sinking ship?

The head of the Malaysian Chinese Association, a component of the ruling coalition, made it quite clear he didn't want to be considered for a cabinet post. He wants to spend more time watching his back. There is much bitterness in the MCA and a chance it will split.

Most interestingly, Abdullah appointed Muhammad Muhammad Taib as his Minister for Rural and Regional Development. What does such a minister do? He travels to Malaysia's more far-flung parts and hands out money for development. What he really does is to hand out contracts to politicians, their families and friends to keep them onside. This will be more important than ever now, as the ruling coalition does not have a majority of seats in Parliament drawn from peninsular Malaysia and can only rule with the support of the smaller, regionally based parties in Sarawak and Sabah states on the island of Borneo.

Muhammad Taib's job will be to fly to those states with suitcases of money to keep them onside. It's a role for which he's shown some talent.

In 1997, when chief minister of Selangor state, he was arrested at Brisbane International Airport with the equivalent of $1.26 million in currency in his luggage as he was about to board a plane for New Zealand.

Australian law requires that amounts above $5000 be declared. Muhammad Taib had no identifiable source of significant wealth and had been a lowly paid school teacher before entering politics. In addition to the cash, he and his wife were found to own property in Queensland and another six properties in New Zealand.

Muhammad Taib avoided prosecution for currency smuggling by claiming he misunderstood the customs declaration form because it was in English — a sad indictment of a former school teacher from a country where English is one of the main spoken languages.

Sabah and Sarawak hold the key to the longevity of Abdullah's Government. If the parties based there can be persuaded to leave the ruling coalition, then it will be out of office. It is for this reason that in the days after the election, opposition figure Anwar Ibrahim travelled to the two states for discussions with local politicians.

What would it take for them to change sides? No doubt Anwar gently inquired. And no doubt the answer would be no surprise.

The distribution of government contracts is the amalgam of any political coalition in Malaysia. And the principal figure when it comes to handing out contracts is the Finance Minister. It's not on account of his skills as an economist that Abdullah defied convention and made himself Finance Minister when he came to office. Indeed, I once asked a former finance minister Daim Zainuddin what he spent most of his time doing. His response was absolutely unequivocal: awarding contracts and making sure all those who politically needed pay-offs got them, took up most of his time.

What was Anwar before he was sacked from the government? He too was the finance minister. Essentially Anwar fully knows the grubby ins and outs of politics in Malaysia because, as finance minister for five years, he was the nation's chief dispenser of contracts. So in his discussions with the Sarawak and Sabah powerbrokers, he will know exactly what buttons to press and what promises to make. Don't expect high-minded principle to be behind any changes in alliances. Leopards do not change their spots, particularly when they are from Borneo.

Abdullah knows this too, which is why Muhammad Taib has returned to the ministry: Abdullah needs a bag man.

The battle for Sarawak and Sabah is going to cost Malaysia dearly. Sarawak especially, which has already experienced break-neck development, will be even more resplendent with contracts and infrastructure. Its politicians will grow richer and its jungles sparser. Projects that have been put on hold suddenly will be approved.

One project, a giant dam and hydro-electric scheme, which has been on and off for at least two decades, will be one of the bargaining chips. It will net the family of the Chief Minister of Sarawak hundreds of millions of dollars in supply and construction contracts. Indeed, in August Rio Tinto signed an agreement with a company controlled by the Chief Minister's family for an aluminium smelter in Sarawak. Other foreign contractors will also find rich pickings in Sarawak and Sabah.

Its not clear who will win control of the Malaysian Parliament, but the family businesses of the politicians of Sarawak and Sabah stand to profit handsomely no matter which side is victorious.

ends