Najib Razak’s Malaysia: A solid economy on a foundation of political tension
Najib Razak began his term as Prime Minister of Malaysia in 2009 amidst a severe global economic crisis, concern over spiraling public debt and fears the country would fall into the ominous “middle income trap”.
Uncertainties abounded over the direction of the national economy, and in particular its capacity to face challenges associated with a significant opening-up and the strong power of the state, which itself was highly dependent on oil rents. But thanks to China, which has become Malaysia’s first trading partner, growth rebounded in 2010.
Accompanying the launch of the tenth five year plan, the government introduced a new economic model from 2011 and embarked upon a set of economic and bureaucratic reforms (Economic Transformation Program 2011-2020) in order to bring Malaysia up to the rank a fully developed country by 2020. Najib Razak also announced the implementation of a post-racial social policy (1Malaysia) and important reforms in the field of freedoms and fundamental rights.
But 2013 marked a turning point in the field of human rights, democracy and national harmony in this multi-ethnic and multi-religious country with a Muslim majority. Following the thirteenth general elections, the Barisan National coalition dominated by Najib’s Malay party (United Malaysian National Organization - UMNO) managed to hold on to power thanks to an ultra-favorable mapping of electoral districts, while the opposition won 51 % of the popular vote. In this tense political context, structural reforms would be pursued, leading to an economic consolidation and a rebalancing in terms of partners, industrial sectors, investments and role of domestic demand compared to external demand. However, political and democratic opening would be stopped. The financial scandal 1MDB, revealed on the international scene by the Wall Street Journal in the summer of 2015, led Najib Razak to harden his stance and pursue unprecedented political tightening in order to reassert his authority. If the national economy seems to be put on the right track and able to withstand to the drop in the oil prices and to the Chinese economic slowdown, parliamentary democracy and the political and social climate have been considerably degraded compared to the term of Najib’s predecessor, Abdullah Badawi.
Center for Asian Studies
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