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Knives out as Malaysia's ruling party gears up for election

Najib recruits 'cyberwarriors' to help fend off Mahathir's opposition

Malaysian Prime Minister Najib Razak, left, inspects an honor guard during the ruling UMNO's general assembly in Kuala Lumpur on Dec. 7.   © Reuters

KUALA LUMPUR -- Malaysia's ruling camp is condemning its longtime superstar, former Prime Minister Mahathir Mohamad, as the country hurtles toward a lower house election that will test the popularity of scandal-tainted leader Najib Razak.

"This man has crossed the line," Najib said on Thursday at the United Malays National Organization's annual meeting, referring to Mahathir, who was once his mentor. Mahathir quit the UMNO last year to unseat Najib, accusing him of corruption.

The 92-year-old Mahathir is eyeing the premiership once again, this time as a candidate for the opposition Pakatan Harapan, or Alliance of Hope, which he now chairs.

Onward, soldiers

Over 5,000 UMNO leaders from across the country have gathered at the party's headquarters in Kuala Lumpur for a five-day meeting to prepare for the general election, which must be held before August 2018.

UMNO members listen to Najib's address on Dec. 7.

The UMNO and other parties in the ruling alliance -- collectively known as the Barisan Nasional, or National Front -- have ruled the country since independence in 1957. Prime Minister Najib, who is facing his second election as leader of the Barisan, regards the upcoming poll as his "utmost" challenge. The eldest son of the country's second prime minister has faced calls for resignation over the alleged fraud involving state fund 1Malaysia Development Berhad.

Both Najib and 1MDB have denied any wrongdoing in the multibillion-dollar scandal, which has also sparked investigations in Singapore, Switzerland and the U.S. and prompted charges against various individuals. The U.S. Department of Justice called the case "kleptocracy at its worst," as 1MDB officials allegedly laundered more than $4.5 billion in funds through a complex web of transactions involving everything from real estate and artwork to a yacht in the U.S.

The cloud of suspicion could make it harder to fend off Mahathir, who won five elections during his 22-year tenure and is still widely revered.

Mahathir and his coalition appear to be making some headway in rural areas, according to political analyst James Chin of the University of Tasmania. Still, they may find it hard to break into constituencies controlled by Najib's Barisan, which has the backing of government machinery like the media and civil services.

Chia Shuhui, a senior analyst at Fitch Ratings unit BMI Research, said the UMNO is closing ranks around Najib, who expelled the party's deputy president, Muhyiddin Yassin, and another senior leader for questioning his role in the 1MDB affair.

At Thursday's gathering, which was broadcast live on TV, Najib asked the party's more than 3 million supporters to use their smartphones and become "cyberwarriors," spreading information about the government's track record.

"Are you ready for the battlefield?" Najib called out.

Economically, at least, the 64-year-old prime minister has the wind at his back. Growth has been better than expected and unemployment is low. Gross domestic product expanded at its fastest pace in three years in the third quarter, at 6.2%, mainly thanks to private investment.

To help shore up his base, Najib has maintained annual cash handouts next year to the bottom 40% of households -- those earning less than 4,000 ringgit ($985) a month. Other assistance is targeted at the ethnic Malay majority.

In an apparent attempt to deflect pressure back on Mahathir and potentially weaken the opposition, Najib's government is calling for the former leader to be probed over 31.5 billion ringgit in foreign currency trading losses the central bank incurred from 1992 to 1994.

Bread-and-butter issues

BMI Research is keeping Malaysia's political outlook "broadly stable" ahead of the election.

Despite Mahathir's star power, the opposition remains fractured. Many of its leaders were once jailed under Mahathir for their anti-government stances in the 1980s. Each party within the Alliance of Hope is focused on ethnic concerns and adheres to a different ideology. Any sense of unity stems from their desire to dislodge Najib.

Most Malaysians, particularly in rural areas, appear focused not on 1MDB but on bread-and-butter issues like rising living costs.

In a recent survey by global market research company Ipsos, Malaysians identified immigration control as the issue they cared about most, The Edge daily reported. Lower income earners from ethnic Malay communities and rural residents feel they are losing job opportunities to laborers from abroad, who number 4 million by some estimates -- including people staying in the country illegally.

The question on both sides of the political divide is how to win over these voters, who form the bulk of the electorate.

Nikkei staff writer Takashi Nakano in Singapore and researcher Ying Xian Wong in Kuala Lumpur contributed to this article.

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