By Chris Wright | Australian Financial Review, February 2 2010

When Anwar Ibrahim walks into the Kuala Lumpur High Court today, he will at least know what to expect.

Anwar, Malaysia’s one-time deputy prime minister and now the de facto leader of the first credible opposition in Malaysia’s independent history, is facing the third incarceration of his life. The first was a 22-month detention when a student leader in the 1970s; the second a six-year stint in 1998 for sodomy (overturned in 2004) and corruption, during the administration of his one-time mentor, Mahathir Mohamed. Now, he faces another sodomy charge, and the potential of 20 years in jail. Locally the press are calling it Sodomy II, like a sequel. “They use the same script,” he tells the AFR in an interview in his Kuala Lumpur offices. “I’ll leave it to the lawyers. I don’t have any trust in the system.”

That’s no surprise. Anwar’s trial represents an enormously significant moment for Malaysia, because it could make or break the opposition movement at a time of intense racial tension on a scale the country hasn’t seen since the race riots of the 1960s. Malaysia, though a sometimes uneasy patchwork of a Muslim Malay majority and significant Chinese and Indian minorities, has for decades been amongst the most moderate and peaceful of Muslim nations. Yet in recent months it has become a place where churches are firebombed over the right for Christians to use the word Allah, and where cows’ heads are kicked around outside Hindu temples.

Some feel these forces have been inflamed by the country’s UMNO party, the leader of the ruling Barisan Nasional coalition, seeking to secure its hold on the Malay vote; Anwar calls it “desperate measures to frustrate this peaceful transition.” But at the same time Anwar’s own rise, with his multi-racial coalition securing one third of the votes and five out of 13 states in landmark elections in 2008, has become something of a catalyst for this expression of tension. “Yes, of course that is true,” he says. “You can see the press, controlled by UMNO, blaming me for causing this, for giving courage to non-Malays to express themselves. But I think the contrary: we are giving that right of expression to all. There is a new generation of Malays who are asserting themselves with greater confidence.”

Another jail term for Anwar could do one of two things. It could wreck his coalition, which despite its outstanding 2008 performance has widely been viewed as fragile: it unites a party formed by Anwar’s wife, Wan Azizah Ismail (who is still officially its president), during Anwar’s 1998 jail term, with a sometimes hard-line Islamic party and another whose key constituency is overseas Chinese. Lacking a charismatic leader to glue it together, the alliance could fail well before the next elections, due in 2013, although Anwar insists detailed contingency plans are in place among the three parties. “There is already an agreement what to do in the event – the unlikely event – I am convicted, yet again. The coalition will stay with or without Anwar.”

Alternatively, another conviction could unite opposition behind a cause and give it renewed momentum. It is also not likely to go down well overseas, where doubts over Anwar’s earlier conviction are already widespread; public figures who have already voiced their concern for him range from Al Gore to US Supreme Court Justice Sandra Day O’Connor and, right up to his death, former Indonesian president Abdurrahman Wahid.

The uncertainty is not helping Malaysia, where foreign direct investment numbers are flagging even after accounting for recession: from M$62.8 billion in 2008 to M$12.6 billion in the first nine months of 2009. “Foreign investors are asking me about Anwar and the firebombings all the time,” says one foreign banker in Kuala Lumpur who deals with major foreign investors. “If Anwar ends up back in the slammer it’s going to have major negative consequences on Malaysia. Whether or not it will mean riots on the streets I don’t know, but it will certainly harm the government.”

Anwar is an appropriate figurehead for his country’s painful change. It’s easy to forget it now, but he was once the chosen one to succeed Mahathir: he was deputy leader and finance minister through the Asian financial crisis and was trusted so implicitly he was made acting prime minister for two months in 1997 when Mahathir took a holiday. But he wanted reform in governance and institutions, and when he started linking Mahathir with improper contracts and bailouts for family members and cronies, his time in the sun came quickly and brutally to an end. His 1998 trial raised concerns worldwide; Amnesty International considered him a prisoner of conscience, and the injuries incurred in jail cause him back pain to this day.

Because Anwar’s corruption conviction was never overturned, he was banned from politics until April 2008, and took to teaching in the US. Malaysia’s then prime minister, Abdullah Badawi, timed the 2008 elections to be just one month before Anwar’s ban expired, fearing his popular voice, but it didn’t work: Anwar simply canvassed for his wife’s party, and when his ban expired she surrendered her seat and he won it in a by-election. For a time his momentum seemed unstoppable: by September 2008 he was claiming to have secured 30 parliamentary defections that would give his coalition a majority. He demanded a vote of no confidence.

But then things stalled. First, he couldn’t force that vote, and he says he couldn’t expect his converts to declare openly until the moment of truth on the parliament floor – consequently, there’s no proof that he ever had the numbers at all. “In any democratic country we would have taken over by now, because we had the numbers, but there’s no way to go about it,” he says. “In this climate of fear and repression you can’t expect people to declare openly now except for the critical moment when the motion is tabled.” By this he is referring to the string of opposition figures, including a number of state leaders, who have been comprehensively investigated by federal institutions since the election.

Momentum was further derailed when in June 2008 a new sodomy charge, from a young aide called Saiful Bukhari Azlan, appeared with a convenience of timing that many have found deeply troubling: the taint of sodomy, illegal in this Muslim country, is considered a death knell to an aspiring politician. Whether people believe the charge or not, defending it has been time-consuming and helped to take the wind out of the challenge’s sails. And many events in the build-up to the case – the team of commandos sent to arrest him when he was on his way to the police station to make a statement, the dispute over whether the prosecution should have to let the defence see evidence prior to the trial, confirmation that Saiful visited current prime minister Najib Razak’s residence days before filing his police report – seem to bode badly for him.

But while Anwar is under pressure in the court, it’s the incumbent government, and in particular the UMNO party at its heart, that is struggling, and not just with those election results. Even in a country with a largely compliant mainstream press (but a vibrant alternative media), the government and the country’s other key institutions have found themselves mired in scandal: the death of opposition political aide Teo Beng Hock, who fell from a 14th floor window during questioning by the Malaysian Anti-Corruption Commission (MACC). There’s the murder of the Mongolian model Altantuya Shaariibuu, the mistress of Najib’s foreign policy advisor, who prosecutors claim was killed by government commandos in 2006 and whose body was destroyed by C4 explosives. There have been scandals over contracts for French submarines, jet engines that have gone missing, and a dispute over the legitimacy of a state government in Perak.

And most recently, a court case regarding the use of word Allah by non-Muslims has flared up. In December the High Court, in dealing with a long-standing dispute between the government and the Catholic Herald newspaper, ruled that the government had no power to prohibit the use of the word Allah or to make it the exclusive preserve of Muslims. Numerous acts of arson on Christian churches have followed the ruling, while the original debate has become a somewhat farcical exercise in semantics, with the government – which, incidentally, is in the middle of a major public relations tilt called One Malaysia aimed at promoting racial and religious unity – ruling that Christians in East Malaysia can use the word Allah when speaking Malay, but that those in West Malaysia cannot.

Many of Kuala Lumpur’s business community are increasingly alarmed. “You see Najib on one hand talking about One Malaysia and a multi-racial tolerant country, and on the other you see the complete opposite of that driven by the establishment,” says a banker, who like all commercial figures in this article wished not to be named for fear of damaging relationships with government. “This may sound over the top but I would describe Malaysia as almost anarchy at the moment, because all the institutions of government believe that their job in life is to restore BN back to its previous power. The judiciary believes its job is to prosecute the opposition. The police: that their mission is to prosecute the opposition. MACC, the same. The guys in power are stoking racial unrest because they believe it’s one way of supporting the Malay vote.”

Anwar – who took some strident positions on Islam himself in his youth – has sought to preach a less radical middle ground. “I have asked the world’s most renowned authorities on Islam and nobody, not one, disputes the fact that Allah can be used by anyone,” he says. “It’s been a non-issue for 1,400 years among the Muslims.” Even PAS, the Islamic party in Anwar’s coalition, normally known as the voice of those with a more traditional and inflexible view of Islam, has publicly said they have no problem with Christians using the word: the fact that the purely Islamic party is now on more moderate ground than the government has cemented a feeling that the government has been playing the race card to try to win back disgruntled Malay voters.

The government has not been blind to change and has taken some reformist measures itself. The most significant concern the New Economic Policy, the measures enacted in the 1960s – by Najib’s father – in support of the local Bumiputra (“sons of the soil”, or Malay) population. It guaranteed them, among other things, a certain proportion of civil service jobs, and a minimum share of any stock market float. While understandable in the context of its time, many, Malays included, have come to see it as a crutch that has become a hindrance, damaging competitiveness and breeding complacency. Late last year Najib began some modest repeals.

So does Anwar believe change can be effected peacefully in Malaysia? “Well for the first phase, the five states [in the March 2008 elections], it did,” Anwar says. And despite doubts about his coalition’s durability, he argues its very cross-faith existence is enormously positive. “It means that in Malaysia, if political leaders don’t continue to incite hatred and use the race card in politics, we can survive,” he says. “The problem is UMNO: they have become an obsolete party of the past.”

But Anwar is not a Mandela and will never quite be embraced in that way. For a start, there is the fact that, having started out a somewhat radical student and youth leader, he switched allegiances to Mahathir in the 1980s and made his name soaring through the ranks of the party he now dismisses as “the last refuge of scoundrels”. He argues that when he joined Mahathir in 1981 he did so because the leader was talking about reform, and that through much of the 1980s they were effective; it was when a more authoritarian style came into effect that he objected, at great personal cost. “But can I absolve myself from the entire policy, decisions, excesses? No I cannot. I have made that very clear to the people.” Did he ever engage in the money politics commonplace in UMNO at that time? “When I announced my candidature (as deputy leader) 80% of the UMNO cabinet members, all chief ministers, were with me. So I didn’t need to go beyond that. The culture on the ground, you have big fees, but nothing compared with this cash being paid [in UMNO now].”

Additionally, some accuse him of opportunism in his career, and of inconsistency: a chameleon quality (he uses the word himself), saying what the audience of the moment want to hear, which raises questions about how he would fare in office when there can be only one decision for all audiences. Some say he is disorganised too, and unable to give his closest staff a clear mandate. “He is a great politician inasmuch as his oratory skills are fantastic, and he can definitely speak to a crowd,” says one observer. “But he can’t administer and he can’t organise.” Another stresses that “what happened in the election was a vote against government, not a vote in favour of the opposition.” On top of that mainstream media is unlikely to take his side, though the advent of Twitter, Facebook and blogs have helped dramatically, and it is noticeable how much stronger his support in well-connected and tech-savvy urban areas is than in rural Malaysia.

Listening to him in English, fluent but understated and sometimes a little unclear, one wonders how the chameleon projects to the heartland.

The answer comes later that night at a rally in a community hall in the Kuala Lumpur suburb of Cheras. Here, in the local Malay language of Bahasa, the delivery is utterly different, voice playing the ranges from aggression to a whisper, arms expressively aloft, the audience by turns brought to laughter, indignation and applause.

For sure, this is a home team crowd, but it’s largely a Malay Muslim crowd, supposedly the very core of UMNO’s appeal, and they are packed 50 deep outside the hall exits, arms folded, listening intently. Some have brought their children, drooping flopped on shoulders; it is 11.45pm on a Thursday night.

He will do the same on alternate nights leading up the trial, campaigning steadily when an election could still be years away. Over noodles with his chief ministers and supporters, well past midnight, he tells the AFR about the forthcoming weekend rallies where he expects crowds far greater than the 1,000 or so who turned up tonight.

It’s no surprise he looks tired. Earlier the AFR had thanked him for his time, remarking how busy he must be. “Not busy,” he says. “Under siege.”