Financial Times
August 9, 2015

UMNO should lance scandal and overhaul the nation’s rotten system

Fifty years ago, Malaysia expelled Singapore from the federation and the two entities went their separate ways. So distraught was Lee Kuan Yew, then Singapore’s chief minister, that he shed tears in public for the first and last time in his long and extraordinary career. Half a century later, it should be Malaysians who are crying.

Undoubtedly, Singapore has its problems. Its brand of authoritarian guided development has delivered prosperity and produced the world’s slickest city state. But many Singaporeans feel something is missing in their controlled society, a hole that cannot be filled by economic growth. Yet whatever difficulties Singapore faces, these pale in comparison with those of Malaysia. Not only is Malaysia going through its worst political crisis in years after hundreds of millions of dollars found their way into the bank account of Najib Razak, the prime minister. More critically, Malaysia has been undergoing a long-term meltdown in which the political, religious and ethnic compact that has underpinned the country since independence groans under its own rotten contradictions.

For all the doubts that nag at Singapore, from democracy to demography, the city has been an incredible success. Its per capita gross domestic product, $56,000 in nominal terms, is more than five times that of Malaysia’s $11,000.

True, in the post-Lee era, Singapore’s People’s Action party, which has held power since independence, has lost its aura of infallibility. Nearly 40 per cent of Singaporeans voted against it in the last elections. Yet, the PAP is still widely regarded as honest and competent. The same cannot be said for the United Malays National Organisation, which has clung on to power for nearly six decades. Its leader is now embroiled in a scandal linked to state investment fund 1Malaysia Development Berhad, which has racked up $11bn in debt. The country’s anti-corruption agency has denied media allegations that $675m in Mr Razak’s account came from 1MDB — it says the money came from an unnamed Middle East donor. Mr Razak denies any wrongdoing. But whatever the truth in that case, UMNO has long fronted a thoroughly corrupt political system. Malaysia’s public senses this. In the 2013 election, UMNO lost the popular vote but scraped into power thanks to an electoral system stacked in its favour. Since then, the state, too often synonymous with UMNO, has turned its guns on the opposition, jailing its leader Anwar Ibrahim, on charges of sodomy.

In one sense comparing the two countries is unfair. Singapore, with a population of only 5m, is a city. Malaysia, with 450 times the land area and a population of 30m, is harder to govern. Lee, Singapore’s founding father who died in March, held Singapore tightly in his mostly benevolent grip. It is hard to see how such micromanagement could have worked in a much bigger country.

Still, both countries have potentially combustible ethnic mixes. Singapore has done better at forging a sense of fairness and national unity, through language, meritocracy and incorruptibility. Malaysia, in the name of protecting Malays through positive discrimination, has by contrast created a crony capitalist state. It should learn from Singapore. It should show zero tolerance for corruption, starting with Mr Najib, who must clear his name or step down. Preferential treatment for Malays should be phased out and the government should forge policies of national unity, not ones of division based on religion or Malay ethnicity. Singapore has created a strong foundation from which it can move forward. Malaysia must stop the rot, or slip disastrously backwards.