Partyforumseasia:  Cleaning up Malaysia’s Wild East – style political finances? 

The National Consultative Committee on Political Financing, established in August 2015 after the 1MDB-Scandal had come to light, has proposed 32 recommendations last Friday, 30 September. Its chairman, Minister in the Prime Minister’s office and former Transparency International Malaysia head, Paul Low, stated that “The good governance of the nation cannot be resolved unless we have political integrity and as such we need regulations for political funding”. Nobody would deny that, but what can be expected if the recommendations will be implemented?

The background: Malaysia’s Prime Minister Najib Razak has come under pressure since The Wall Street Journal revealed in June 2015 that the unbelievable sum of nearly 700 million US$ had been found in his personal accounts. So far, he surprisingly got away with the unbelievable explanation that it was a personal donation from the Saudi royal family for his support of Islam. The international pressure is not yet over. Several countries, including the USA, are investigating the obscure money flows, because at the same time billions are missing from 1MDB, a sovereign wealth fund deep in debt, whose chairman of the board of advisers happens to be PM Najib Razak.

What the commission recommends: The media headlines are all highlighting the proposed ban on foreign donations. Surprise, surprise, should Saudi largesse no longer be accepted? Of course, it won’t come again so handily, so better ban it… A new law, the Political Donations and Expenditure Act, will regulate the patronage and money politics heaven the country has been so far, clean it up and control it ever after. According to Mr. Low donations to political parties and individuals will be “robustly regulated” with all donations deposited into a specific designated bank account set up at the federal, state and divisional level. Donations in cash or in kind above MYR 3,000 (725 US$) per annum must be declared to the Controller.

What can be expected in real life: Committee chairman Paul Low carries the Transparency International label, but as Minister in the Prime Minister’s office his neutrality may be questioned. The recommendations will be vetted by the cabinet which decides which to implement and which to drop. The legislative process will take time so that full implementation cannot be expected for the next general election due by 2018 but anticipated much sooner to take advantage of the divided and weak opposition.
On the background of UMNO’s patronage system, e.g. the 50.000 MYR (12,100 US$) which go monthly to the 190 branch leaders for expenses, the cash flows can hardly be changed overnight. In a regional and world wide comparison, political parties have always found their way to cut corners and find the money they felt were needed to win.

The increasingly turbulent domestic scene: With the festering 1MDB corruption scandal, criticism of the ruling coalition has reached new hights. Prime Minister Najib has weathered the storms with remarkable cold-bloodedness, firing internal dissidents and installing cronies wherever needed, but calls for his resignation are multiplying. Since 1 October, a broad reform movement called Bersih (Malay for clean) prepares rallies against Najib. While Bersih supporters wear yellow shirts, an organized counter movement of UMNO supporters wear red shirts and provoke clashes. The development reminds of the infamous street fights in Bangkok which led to the military coup in 2014.

Useful related articles:
Channelnewsasia, Malaysian political financing body recommends new laws, ban on foreign donations (LINK)
Intelligent Money, Political Donations Here & Other Countries: Where Does Malaysia Stand? (Link)
International Idea, Political Finance Data for Malaysia (LINK)
Sachsenröder, Wolfgang,  Political Party Finances in Southeast Asia (LINK)