A quiet but certain end of Mahathirism

It was April 2009 and an air of optimism captured Malaysia. We were on the cusp of only the 6th leadership change our country has witnessed in over 50 years.

Our new PM was Datuk Seri Najib Tun Razak. The reviews were glowing. Intelligent, cerebral, urbane, progressive and open-minded were the adjectives or terms used to describe him.

He arguably also had the longest on the job training, some 33 years – it is a generation in fact.

1Malaysia: People First, Performance Now was the galvanising slogan that inspired so many and Malaysians were once again hopeful after the shock results of the 12th General Election a year before.

Najib set out to remake Malaysia and prepare it for the challenges and opportunities of the modern world. Malaysia was also emerging from the 2008 global financial crisis. However, the largest obstacle was dismantling the rather entrenched but obsolete decisions and policies of the Mahathir era.

Tun Dr Mahathir Mohamad, our fourth Prime Minister, was our longest serving and electorally most successful Prime Minister.

He also had a soft spot for very large mega structures that put Malaysia on the map but they were also expensive and this put enormous stress on the government's finances and the economy at large.

Wages were suppressed to ensure factories could produce goods cheaply and export them and prices we controlled with active market intervention and subsidies.

So we all felt really good: goods and services were affordable, savings rates were high, properties were reasonably priced and we had the tallest twin towers in the world.

However, the Mahathir model was unsustainable.

First, the rise of China, India and other large countries created new demand and that caused a rise in the price of food and fuel sapped this feel-good factor.

Second, the government had to rationalise subsidies because it was getting very expensive to subsidise food and fuel. Disposal income lessened and suddenly everyone felt a pinch. Wages continued to remain low as businesses opposed any minimum wage.

Furthermore, Malaysia’s low wage and heavily subsidised model reliant on cheap labour and the manufacturing sector was no longer delivering the economic benefits needed to push Malaysia towards developed nation status.

Many economists argued that Malaysia was stuck in a “middle income trap” unable due to policy failures to forge ahead.

Najib took the bold step of convening a special economic committee to study Malaysia’s economic model and they proposed that a New Economic Model (NEM) be implemented which included liberalisation of the economy, ending needless protectionism that has stunted growth and ensuring opportunities were fairly distributed and greater market access for foreign firms whilst achieving social aims but not at the expense of sustainable economic growth and loss of talent or brain drain.

Mahathir donned the avatar of protector of the status quo that was failing. He used the Malay rights group Perkasa as his platform and stymied the New Economic Model and accused Najib of deviating from the national development policy and Bumiputera agenda.

For any Malaysian politician, such accusations can be debilitating.

Najib responded in his usual deference to Mahathir’s long service but stuck to his guns that reforms are needed.

The Economic Transformation Plan (ETP) was introduced that implemented most of the reforms proposed in the NEM including opening up of the banking, retail and insurance sectors but at the same time Teraju was formed to ensure Bumiputra economic interests were protected and advanced. This was a quintessential Malaysian approach of concord.

Najib then sought to free up the political space and repeal out-dated legislation like the Banishment Act and Restricted Residence Act.

The response from Mahathir and his supporters were tepid. However, the old guard fumed when Najib also repealed the much-maligned Internal Security Act that became a symbol of Mahathirism’s oppressive politics. Najib forged ahead and won plaudits nationally and internationally.

For the first time, the Malaysian government under Najib provided financial aid to Chinese, Tamil and Mission schools. Again, the vanguards of Mahathirism bristled at this. Najib also provided funds for temples and churches that have been neglected for years.

When Najib sought to repair Malaysia’s relations with her neighbours and the United States, immediately he was accused of kow-towing to the foreign powers.

But Najib displayed a canny pragmatism in foreign policy and his crowning achievement was welcoming the President of the United States to Malaysia twice.

Despite all the good work, the people were taken in by the divisive and emotionally charged rhetoric of the opposition coalition voted to punish Barisan Nasional (BN) further.

A rational look at Najib’s successes was completely ignored instead many urbanites decided it was time for a change.

However, for reasons unbeknownst to me, Mahathir became even more hostile and in 2015 openly called for Najib to resign. When his calls were unheeded by BN he worked with the opposition he once castigated and belittled.

And the opposition parties, to satisfy their avarice for power, sacrificed their dignity and started to work with the man they have long claimed is the symbol of what is wrong with Malaysia.

In adversity, I believe Najib sensed great opportunity to free Malaysia from the shackles of Mahathirism. Mahathir was removed as advisor to Petronas and later he resigned as advisor to Proton. His influence on these two companies seized and finally, especially Proton, could take the tough decisions to remain relevant.

Najib assured Proton and government-linked companies that they will be independently run and will no longer see active interference from the government.

Najib even went a step further and proposed further divestment in GLCs to ensure the government gets out of the way business and, enlarge and embolden the private sector.

In seven years as Prime Minister, Najib has quietly but certainly ended Mahathirism and put Malaysia on the right track towards achieving vision 2020.

He has done so minus the pomp and fanfare but I would argue, guided by a belief that the age of government knows best is over.

And the validation of this approach is evident from the results of the Sarawak State Election and the emphatic victories achieved by BN in the Sungai Besar and Kuala Kangsar by-elections.
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