Malaysia in 2015: Crises of Confidence

In his 2015 New Year message to the nation, Malaysian Prime Minister Najib Razak called 2014 the most challenging year of his career, with the twin airline tragedies — the disappearance of MH370 in March and the downing of MH17 in July in Ukraine — and the worst floods to hit the country in decades, which displaced more than 200,000 people, dampening the country’s economic outlook.¹

But 2015 proved that Najib may have spoken too soon. At home, Malaysia and its embattled Prime Minister spent most of 2015 muddling through a daunting set of political, economic and social challenges, all made worse by the long shadow of one of the country’s biggest scandals directly implicating Najib himself. And though 2015 was an important year for Malaysia’s regional and international diplomacy, with the country’s chairmanship of ASEAN and a non-permanent seat on the United Nations Security Council (UNSC), the spillover from its domestic politics along with a series of crises put a dent on some otherwise notable achievements.

Political Turmoil and Turbulence

For much of the year, Malaysia was consumed by allegations that Najib had mismanaged funds linked to debt-ridden state investment fund 1Malaysia Development Berhad (1MDB). 1MDB had long been under assault, weighed down by 42 billion ringgit ($11.4 billion) in debt. But the scandal truly rocked the country following a 3 July report by the Wall Street Journal which disclosed that investigators had found that nearly $700 million from entities linked to 1MDB was deposited into Najib’s private bank account.² Najib denied using government funds for personal gain. But revelations — including the fact that the money had come from an unspecified Middle East donor prior to Malaysia’s 2013 general elections — only raised more questions in what some began calling the biggest scandal in Malaysia’s history.

Some expected the 1MDB scandal to be the death knell of Najib, especially since his approval ratings in February had already plunged to their lowest levels since he assumed office in 2009.³ Indeed, there was initial speculation about his removal either by opponents within his party, the United Malays National Organization (UMNO), or through a no-confidence vote tabled in parliament.⁴

Yet Najib turned out to be far more ruthless and resilient than his opponents anticipated. He moved quickly to suspend publications which reported extensively on the scandal, push back intra-party elections by eighteen months, and remove members of his Cabinet — including his own Deputy Prime Minister Muyhiddin Yassin — following their criticism of his handling of the scandal. He also undermined parallel 1MDB probes by subjecting the anti-corruption agency to disruptive police interrogations, arrests and raids; sacking the attorney general who headed a high-level task force; and co-opting the chairman and three members of a parliamentary committee into his administration. Arrests of whistle-blowers — including those trying to leave the country — continued through the year.

By August, even former Prime Minister Mahathir Mohamad, one of Najib’s fiercest critics, admitted that it was very difficult to remove Najib following the scandal as almost all the UMNO members seemed beholden to him and the opposition did not have enough support to pass a no confidence vote.⁵ The opposition did end up filing a no confidence vote against Najib in November, though it had little chance of passing since its 88 seats were still well-short of the simple majority required in the 222-member parliament. At the UMNO General Assembly in December, Najib’s rallying cry for party unity went virtually unchallenged, indicating that he had largely neutralized threats to his leadership and secured sufficient backing within UMNO.

While Najib managed to contain the fallout of the 1MDB scandal at home, he could do little about it abroad. During the year, several international probes were opened as well, including in Switzerland, Singapore, Hong Kong, the United Arab Emirates, and the United States. As the scandal continued to dominate the headlines, there were also signs that Najib was gradually losing the confidence of important sectors of society and the Malaysian public at large. On 6 October...