Enter Najib, with baggage

Nov 6th 2008 | BANGKOK
From The Economist print edition

A new leader mired in accusations

ONE could certainly say that Najib Razak was born to be Malaysian prime minister. He is the son of Abdul Razak, the second man to hold that job following independence from Britain, and the nephew of his successor, Hussein Onn. Elected to parliament aged 23, on his father’s death, he rose to become deputy to the present prime minister, Abdullah Badawi. However, Mr Najib, expected within months to become the country’s sixth post-independence leader, will enter under a cloud of allegations, including ones linking him to a murder case, all of which he categorically denies. But some Malaysians will be wondering if he is a fit person to lead them.

BloombergThe quizzical Mr Najib

Facing a revitalised opposition, in an election earlier this year the governing coalition, led by the United Malays National Organisation (UMNO), lost the two-thirds majority it needs to change the constitution. Since then, the knives have been out for Mr Badawi. Despite his efforts to cling on he is being forced to quit next March. The contest to succeed him as party president, and thus prime minister, at first promised to be lively. But party officials, fearful of the challenge from the opposition leader, Anwar Ibrahim (a former UMNO deputy leader), chose to hang together rather than hang separately. By November 2nd Mr Najib had won enough nominations to block his only rival, Razaleigh Hamzah, a former finance minister, from getting on the ballot-paper.

Like Mr Badawi before him, Mr Najib comes to the job promising reforms, including of the system of preference for members of the ethnic-Malay majority for state contracts and jobs. Mr Badawi achieved little, though he allowed a bit more freedom of expression than had his predecessor, Mahathir Mohamad. Expectations for Mr Najib are lower still. It is possible, notes Edmund Gomez, a political scientist, that he will use the worsening economic outlook as a pretext for reverting to Mahathir-style repression.

Mr Anwar has failed to carry out his threat to topple the government through a mass defection of parliamentarians. Even so, there is a palpable fin de régime air around UMNO. Mr Badawi, Mr Mahathir and other leaders are publicly lamenting how corruption and cronyism are rife in the party. But his opponents say Mr Najib is hardly the man to restore confidence. In the latest scandal to which they are linking him, the defence ministry (which he oversaw until recently) has deferred a big order for helicopters following questions about their high price. A parliamentary committee this week cleared the government of wrongdoing, but admitted not investigating whether “commissions” were paid.

In an earlier case, a company the opposition claimed was linked to Razak Baginda, an adviser to Mr Najib, was paid juicy fees for services provided over a contract for the purchase of French submarines. A Mongolian woman, said to have worked as a translator in the negotiations, was shot dead and her corpse destroyed with explosives in 2006. Mr Razak was put on trial over her killing, along with two policemen. The case has dragged on for months and seen various odd goings-on, including changes of judge, prosecutors and defence lawyers at the start of the trial. A private detective signed a statutory declaration implicating Mr Najib, retracted it the next day, saying it had been made under duress. Calls by the victim’s family for Mr Najib to testify were rejected. On October 31st the judge ruled that the prosecution had failed to make a prima facie case against Mr Razak.

The policemen’s trial will continue. A blogger who linked Mr Najib's wife to the case is on trial for criminal libel. None of this, however, seems likely to interfere with Mr Najib’s accession to the prime minister’s job. A bigger threat may yet emerge from the resurgent opposition and Mr Anwar, who nurtures a long-thwarted ambition to take the job himself.

The Economist: All together now

Oct 22nd 2008
From Economist.com

Beware the temptation to gloat

ON SEPTEMBER 26th, as America’s Congress was meeting to debate its bail-out, Dr Mahathir Mohamad, Malaysia’s former prime minister, wrote on his blog: “We cannot forget how in 1997-98 American hedge funds destroyed the economies of poor countries by manipulating their national currencies. When as a result of the so-called trade in currencies the companies in the poor countries faced bankruptcy, the governments were told not to bail out any company or bank which was in deep trouble...Yet today we see the US Government readying $700 billion to brazenly bail out banks, mortgage companies and insurance companies...Desperate to avoid a serious recession the US has abandoned all its principles.”

It was an authentic voice of Schadenfreude, comparable to the contemporaneous jeering of Argentina’s president, Cristina Fernandez, who mocked “the era of the Washington Consensus, when we heard that the market would solve everything, that the state was unnecessary” or Bolivia’s president, Evo Morales, who claimed that there are “uprisings against a capitalist economic model around the world and if no one understood that capitalism is destroying the planet, then major problems will go unresolved.”

BloombergNo trumpets here

Yet what is most striking about Dr Mahathir’s gloating is how unusual it has been in Asia. Compared with Latin Americans, Asians have been reluctant to blow their trumpets over the bleeding figure of American capitalism. There have been no anti-capitalist riots in South Korea, for example (and South Koreans take to the streets at the drop of a hat). Chinese officials seem anxious to tone down any suggestion of triumphalism at the thought that the rich world’s implosion vindicates China’s cautious liberalisation.

But perhaps the Chinese—like everyone else—are just anxious. On Monday, China announced that its gross domestic product had grown by 9.9% in the first nine months of 2008, compared with 12.2% during the same period in 2007. By anyone else’s standards, that was a lot. But not by China’s. It means growth has now fallen for three quarters running: it was 12% from January to March but about 9% in July-September. Other indicators, notably property and steel prices, suggest the slowdown may be getting worse. Li Xiaochao, a spokesman for the National Bureau of Statistics, admitted the impact of the global financial crisis has been far worse than the government’s had expected.

And China is usually regarded as the country which, thanks to the buoyancy of domestic demand, is more likely than most to have managed to “decouple” itself from the recession gathering pace elsewhere. South Korea, which launched a $130 billion bank and corporate rescue package on October 19th, has been hit harder. So have Thailand, the Philippines and Malaysia, all of which have domestic political worries to add to their imported economic ones. With their deep integration with the world economy, their reliance on exports and their huge foreign-exchange reserves held mostly in dollars, Asian countries know they cannot escape the consequences of a recession in the West.

But while they are right to eschew regional gloating, flopping around in an unproductive, unco-ordinated fashion is surely taking ineffectiveness a step too far. That is what seems to be happening. On October 24th, Asian and European leaders are due to meet in Beijing for their seventh regular Asia-Europe Meeting (ASEM). It is threatening to descend into farce. The president of the Philippines, Gloria Macapagal Arroyo, said the region had agreed to set up its own version of America’s TARP (troubled assets relief programme). No one else could remember any such deal. China, the host nation, seems more interested in bilateral talks with EU members and ASEAN countries than with the larger grouping. After the crisis of 1997-98, Asian countries were criticised for failing to produce a co-ordinated regional response. So far, they have done no better this time.

source:
Beware the temptation to gloat
Economist, UK