— Greg Lopez
The Malaysian Insider
Jun 19, 2012

JUNE 19 — Malaysia’s 13th general election, which must be held by April 2013, has been the most anticipated in Malaysian history, given the megatrends that are occurring in the country and the ability of the two main contenders to manage them.

Barisan Nasional (BN) and Pakatan Rakyat (PR) are the main contestants. BN — currently the longest-ruling coalition in the world — is a 13-party coalition based mainly around ethnic and regional interests. Umno is the single most important political party in the ruling coalition, dominating not only the coalition, but all major institutions in Malaysia except in the state of Sarawak. Najib Razak, son of Malaysia’s second prime minister, has led the coalition since becoming Umno president through an interparty compromise.

PR, in turn, is a new and informal coalition, set up in the euphoria of the opposition’s historical performance at the March 2008 12th general election. None of its three component parties has a clear majority, and all understand that their success is predicated on their ability to work together. PKR’s unelected leader Anwar Ibrahim leads the coalition by virtue of his ability to hold together three disparate groups — the Chinese-dominated DAP, the Islamists party PAS and his own band of largely ex-BN/Umno members.

Five critical megatrends face the contenders at the national level: economic performance, demographic changes, urbanisation, Islamisation and an island/peninsula divide.

The middle-income trap: The popular diagnosis for Malaysia’s stagnating economic performance is that Malaysia is caught in a middle-income trap, where it is unable to compete with low-cost producers on cost, but also by not having the institutions, human resources and technological capabilities to compete with advanced economies in innovative products and processes.

A young nation: 71 per cent of Malaysians are under the age of 40, with 34 per cent aged between 20 and 40.

An urban nation: 71 per cent of Malaysia is now urban, with only Kelantan, Pahang, Perlis, Sabah and Sarawak still being largely rural. Urbanisation rates are below 55 per cent.

An Islamic nation: The pervasiveness of Islam as a political tool and the increasing piety among Muslims have reached unprecedented levels.

Two nations: The politics of Peninsular Malaysia starkly differ from that of the island of Borneo. Political leaders and citizens in Sabah and Sarawak continue to distrust peninsula politicians, and all politics in these two states is local.

These trends translate into electoral issues in the following ways. Most critically for BN, its successful economic strategy is now being questioned on several counts. First, Malaysia’s low-cost, export-oriented economic model has seen wages for 80 per cent of Malaysian households stagnate for the past three decades. These households earn less than RM3 000 a month, in a country where the average monthly income is RM4,025. More critically, the bottom 40 per cent of Malaysian households earn RM1,440 a month. Seventy-one per cent of this bottom 40 per cent are Bumiputeras — a Malay term translated literally as “prince of the land”. The average monthly income of the top 20 per cent of households is RM10,000.

Second, in politicising education, BN has sacrificed quality for quantity. International benchmarks and surveys consistently show that the quality of education in Malaysia, at all levels, cannot match the successful East Asian economies. Eighty per cent of Malaysia’s labour force has no more than the Sijil Pelajaran Malaysia (SPM) qualification (SPM is equivalent to Year 10), and the 57 universities and the more than 500 colleges are producing large numbers of poorly equipped graduates. This has led to a poorly skilled labour force and unemployed graduates, with the economy facing severe skills shortages in a tight labour market.

This has had a significant impact on Malaysia’s young voters. The majority of local graduates utilise a government loan scheme. With limited employability and mediocre wages, they end up saddled with enormous debts. The problem is exacerbated by high unemployment. Graduates accounted for more than a quarter of those unemployed in 2007, while unemployment among new graduates was 24.1 per cent in 2008.

The public sector, at the federal and state level, and government-linked corporations (GLCs) have long been used to mop up Bumiputera graduates as part of an implicit contract between Umno and the Malays. With the country experiencing economic stagnation, rising public debt, depleting natural resource rents from fossil fuels, the bloated civil service and GLCs are now a severe drag on the Malaysian economy and can no longer function as a source of employment opportunity for the thousands of Bumiputera graduates. Many non-Bumiputera graduates also suffer the same predicament, as they are locked out of the public sector and the GLCs. Many are also ill-equipped to meet the demands of the private sector, especially in businesses exposed to international competition.

Increasing urbanisation has led to a greater interaction between Malaysians of different races and also between Malaysians and the outside world. Although there is still significant segmentation among the races and social classes in urban areas, this has meant greater interaction at work and global development that have produced varied results. Most importantly, the interactions have has forced Malaysians to focus more on the issues that affect their daily lives, such as the quality of life, the cost of living, or global events such as the Arab Spring.

Urbanisation also challenges the BN’s monopoly on information. In 2010, 65 per cent of Malaysians were using the internet. Cyberspace has been a boon for the opposition and civil society, and is an arena the BN has yet to effectively control. High urbanisation rates, which are driven primarily through rural–urban migration, also connect rural areas and urban centres more strongly through social networks. Families and individuals returning to their rural homes for festivities bring with them the latest political developments, made more accessible by the internet. This is further challenging the BN’s control in rural areas.

Islamisation of the public sphere — despite Malaysia’s secular constitution — has taken a concrete foothold in Malaysian society, due mainly to the contest between Umno and PAS for the Malay votes. Global developments have also influenced this trend. Islamic fundamentalism now pervades all aspects of Malaysian life, both public and private. While Islam had always mattered in the political and social sphere as an ideology, it is now also encroaching into the economic sphere.

Politics on the island of Borneo is based on local issues and mistrust of the federal government. The 2008 general election established the importance of Sabah and Sarawak in forming federal government. Sabah and Sarawak have become increasingly assertive since. As all politics on the island is local, and as a result of their strengthened bargaining position, Sabah and Sarawak — long considered fixed deposits for BN — are no longer a foregone conclusion.

The response from the contenders is influenced primarily by their incumbency — or lack of it.

The component parties of the BN, until the 2008 general election, had long-serving leaders, which impacted severely on inter and intraparty dynamism. The incumbency of these leaders and the BN resulted in a disconnect between entrenched party leaders and grassroots leaders, as well as members and supporters. Interparty competition for resource rents and for patronage has also resulted in leaders leaving the party or being put away in “cold storage”. The incumbency of these leaders has also limited the ability of the parties to attract new members and develop new and dynamic second-echelon leaders. Most damaging has been Umno’s increased strength: this has relegated other coalition partners to minions, effectively making elite bargaining redundant — the hallmark of the BN.

In contrast, PR, despite strong leadership, has marginally more democratic processes, due mainly to limited opportunities to access and distribute resource rents. The Reformasi, Bersih and Hindraf movements, Anwar Ibrahim’s charisma, and most importantly, the government’s inability to manage the megatrends, have seen young people flocking to the PR.

The two main contenders have framed their arguments for support in a contrasting manner. Umno, through the BN, has argued that social stability delivers economic growth and that only a strong Umno can guarantee social stability.

At the 13th general election, Umno will be arguing that it has the track record in delivering social stability and economic growth. PR, instead, is arguing that good governance and social justice are critical to Malaysia’s continued economic growth and social stability. PR argues that the persistent weakening of the Malaysian economy, and social unrest, are due to BN’s mismanagement of the economy, its divisive racial and religious politics, and the abuse of the rule of law.

The 2008 general election solidified the two-coalition system, and this is unlikely to be reversed. The surprising aspect of this development is that it took opposition parties 50-odd years to co-operate effectively, considering that Malaysians never given BN, on average, more than 57 per cent of the popular votes — with its best-ever result of 65 per cent achieved only in the booming ‘90s, at the 1995 general election.

Malaysians have demonstrated time and again that, despite its hegemony, the BN is not an overwhelmingly popular coalition. While the results of the 13th general election will depend mainly on the leadership abilities of Najib Razak and Anwar Ibrahim to manage their coalitions in addressing issues, neither coalition will remain in power for long—even with the support of a rigged electoral system—if it fails to address these megatrends effectively. — Asia Currents

* Greg Lopez is the editor of New Mandala’s Malaysia section, an academic blog hosted by the College of Asia Pacific, the Australian National University, and a PhD candidate at the ANU’s Crawford School of Public Policy.