From The Far Eastern Economic Review 14th December 2000

The ruling coalition suffers a shock election loss, revealing racial and political tensions that could become even bigger problems for Malaysia's prime minister

By S. Jayasankaran in KUALA LUMPUR

AN ELECTION IN THE poor, rural district of Lunas on November 29 may prove a watershed in Malaysian politics. For--to almost universal surprise--the opposition National Justice Party, known as Keadilan in Malay, beat Prime Minister Mahathir Mohamad's ruling National Front coalition.

The election of Saifuddin Nasution to the Kedah state assembly in a by-election was a four-fold blow for Mahathir in his home state. First, Saifuddin, a Malay, beat an ethnic-Indian candidate for the National Front. Second, it was the first defeat in Lunas for the ruling coalition since independence in 1957. Third, it cost the National Front its two-thirds majority in the state assembly. And fourth--and perhaps most importantly--it triggered accusations within Mahathir's dominant United Malays National Organization that he is a political liability.

Shortly after the defeat, Shahrir Samad, a member of Umno's powerful Supreme Council, told the REVIEW that Mahathir, 75 and prime minister for 19 years, had been in charge "long enough to take some credit" for the loss. "Perhaps he's been too long as the PM as to have lost touch with the people."

The by-election is an indicator that the political fallout from the sacking and arrest of former Deputy Prime Minister Anwar Ibrahim is still strong, that it's continuing to weaken support for Umno, and that it may now be having a longer-term impact on the country's politics. Malaysia's population comprises 64% bumiputras (indigenous people, largely Malays), 27% ethnic Chinese and 9% Indians and others.

Mahathir uncorked a racial genie in the months before the election, angering many ethnic Chinese with what they considered to be offensive remarks. Mahathir likened an influential Chinese grassroots organization's demands to those of communists and condemned mainly Chinese opponents of "Vision Schools," designed to encourage interracial mixing from an early age, as extremists. In Lunas, Chinese voters swung against the National Front.

Paradoxically, it was massive Chinese support for the Front that gave it an emphatic two-thirds parliamentary majority in last year's general election.

Mahathir conceded he may have hurt his coalition's chances but was characteristically unrepentant. "I didn't criticize the whole community . . . only those who are extremists," he snapped at reporters. "Can't I criticize? I criticize everyone--the Malays, even the U.S. president." Instead of turning down the volume after the drubbing, he has amplified attacks on the "extreme" positions of Chinese educators.

Mahathir has said he will stand down before the next general election, due in 2004. Ironically, in the twilight of a career devoted to developing Malaysia, he may now have to use all his skills to unite an increasingly fractured society. But with political passions running high and a reputation for not bowing to pressure, Mahathir may just push himself and Umno deeper into a corner.

The defeat also puts pressure on Mahathir's designated successor, Deputy Prime Minister Abdullah Ahmad Badawi. He was one of the leaders who spearheaded the Lunas campaign, and in an interview with the REVIEW before the by-election he was sober and realistic about the problems facing Umno (see interview on page 20).

As usual, though, Mahathir is unlikely to change his policies or tone down his strong rhetoric, which worries allies in the National Front. If he continues speaking out bluntly, it may precipitate a slow haemorrhage of support from his coalition, especially by young voters. Most analysts estimate that over 80% of the 2,700 first-time voters in Lunas rejected the ruling coalition.

The National Front is made up largely of race-based parties that have traditionally avoided using ethnicity as an election card. The coalition adheres to the principle of power-sharing, believing that Malays loyal to Umno will vote for ethnic-Indian or -Chinese candidates for National Front seats even in areas where Malays are the strongest ethnic group. Saifuddin's win upset that principle by appealing to Malay sentiment.

Race relations weren't helped by Umno-controlled Malay newspapers that accused the National Front's Chinese parties of not working hard enough to win the by-election, called after the murder of the National Front incumbent. Malay commentaries also questioned the loyalty of the Malaysian-Chinese, unsettling the community further.

But the Malay dailies had missed the real point: Umno simply proved unable to win the Malay vote in Lunas, where 48% of voters are Malays. Says Azim Mohamad Zabedi of the Umno Supreme Council: "What concerns me is that Umno did not deliver the goods."

It didn't, and in a big way. Saifuddin won by a narrow 530 votes over the National Front out of more than 20,000 votes cast. But Lunas was a ruling coalition stronghold, where in last year's general election the Front took the seat by a 4,800-vote margin.

The country's racial harmony could be disrupted by what Lunas underscored: Malay disunity, an evolving but increasingly credible opposition and the emergence of Malaysian-Chinese as power-brokers. Maintaining a delicate racial balance will require substantial compromise by all sides. In turn, the potential marginalization of minorities in politics could also harm race relations.

Lunas, where the opposition chose a Malay over an Indian to stand as its candidate, could also be the start of a new realpolitik under which the opposition alliance, formed last year, will choose only candidates from the local racial majority to ensure the best chance of winning seats. That has sparked worries that it could politically sideline minorities, mainly Indians. Encouragingly, though, there's so far no sign that the National Front might follow the opposition lead.

Lunas also showed how Anwar, now serving 15 years in jail, remains a political force among Malays. Many analysts had thought the Anwar issue was waning. The victorious Keadilan is led by Anwar's parliamentarian wife, Wan Azizah Wan Ismail. Anwar's dismissal by Mahathir in 1998 and trials on sodomy and corruption charges divided Malays and the wound

hasn't healed. "Anwar was definitely a factor," says Maznah Mahmood, a political-science lecturer at the Science University of Malaysia in Penang. "It was what catalyzed the Malay split in the first place."

The conflict loomed large over Lunas, where Malay areas were plastered with posters of Mahathir and Anwar instead of the candidates. Analysts estimate that more than 60% of Lunas's Malays voted for Keadilan.

Within the opposition coalition, race also was the key issue in reshaping the balance of power in Lunas and shaking the principle of racial power-sharing that has underpinned Malaysian politics for decades. The opposition coalition, called the Alternative Front and formed last year, consists of the Islamic Party, or Pas; the largely Chinese Democratic Action Party; Keadilan and the small urban, middle-class People's Party.

Because the National Front's candidate was Indian, the DAP held that it should field an Indian against him. But its coalition partners prevailed, arguing that only a Malay candidate from Keadilan, a largely Malay but ostensibly multiracial party, could win in Lunas. The DAP's Indian members protested fiercely at being pushed aside.NATIONAL FRONT UNRUFFLED

But Saifuddin was picked. Since his victory, the DAP has begun reviewing its stance within the opposition coalition and some of its leading Indian members have resigned. This may be the start of a decline for the DAP. Until the last general election, it had grown used to being the largest opposition party. Since then it has lost influence, while Malays have moved to dominate the opposition since Anwar's fall.

Analysts say only Keadilan could have stopped the National Front in Lunas. Pas, the Islamic Party, which with the support of disaffected Malays made big gains in last year's election, had the best party organization but apparently cannot grow sufficiently outside areas that have an overwhelming Malay majority.

For all this, however, the National Front hasn't shown any great alarm. In previous by-elections, the government has lost seats only to regain them in general elections, suggesting that voters may be more interested in a temporary protest than permanent change.

But perhaps the Front should worry. The poll showed that voters are growing more sophisticated. In typical National Front pork-barrel politics, an estimated 21 million ringgit ($5.5 million) was spent in constituency improvements in nine days up to the election. Mahathir encourages voters to be grateful to the government for what it gives them. Says Maznah of the Science University: "It shows this politics of gratitude doesn't wash any more."

The new voting patterns are also a cause for concern. By the general election in 2004, the electorate will be swollen by 1.5 million new voters--60% of them young Malays with no built-in loyalties to Umno. "I think that's the most significant aspect of this election," says Malek Munip, a senior Umno official from the southern state of Johor. "We need to address it."

Mahathir has said he wants to present a united party to his successor. But this defeat makes that task harder.