Dynasties Reinforced as Mahathir Son in UMNO Bid: Southeast Asia

A delegate takes a souvenir photo with her digital camera during the general assembly of ruling party United Malays National Organization (UMNO) in Kuala Lumpur, Malaysia. (AP Photo/Lai Seng Sin) Close

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A delegate takes a souvenir photo with her digital camera during the general assembly of ruling party United Malays National Organization (UMNO) in Kuala Lumpur, Malaysia. (AP Photo/Lai Seng Sin)

Mukhriz Mahathir, the 48-year-old son of Malaysia’s longest-serving prime minister, will tomorrow contest the vice presidency of the nation’s biggest political party, staking his claim as a potential future national leader.

The United Malays National Organisation, or UMNO, which has led coalitions to govern Southeast Asia’s third-biggest economy since independence from Britain in 1957, will elect party leaders who typically hold their posts for three years. As UMNO seeks to shore up its base after a May general vote that saw the government returned by its smallest margin, the meeting will provide an insight into policy priorities and leadership style ahead of the next election due in 2018.

One of those who may play a role in setting the party’s course is Mukhriz, whose 88-year-old father, Mahathir Mohamad, led Malaysia for 22 years until 2003. Prime Minister Najib Razak is the third from his family to be premier, while UMNO’s youth wing is headed by Khairy Jamaluddin, son-in-law of former Prime Minister Abdullah Ahmad Badawi.

“It’s a family affair,” Bridget Welsh, associate professor of political science at Singapore Management University, said by phone. “It’s not just about the sons, it’s about who your business partners are, who you are married to. It’s an inter-woven elite. Mukhriz stands for his father. He stands for the race policies of the past.”

Mukhriz Mahathir, son of former Malaysian Prime Minister Mahathir Mohamad, speaks during a press conference in Kuala Lumpur, Malaysia. (AP Photo) Close

Mukhriz Mahathir, son of former Malaysian Prime Minister Mahathir Mohamad, speaks... Read More

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Mukhriz Mahathir, son of former Malaysian Prime Minister Mahathir Mohamad, speaks during a press conference in Kuala Lumpur, Malaysia. (AP Photo)

Mukhriz Prospects

Mukhriz, whose elder brother Mokhzani Mahathir is vice chairman of SapuraKencana Petroleum Bhd. (SAKP), declined to be interviewed. While acknowledging a need to rejuvenate the party, he told state-owned Bernama television on Oct. 16 he thought younger leaders need to refer to people with more experience.

“The chances of him one day becoming party president are very good,” Wan Saiful Wan Jan, chief executive officer of the Institute for Democracy and Economic Affairs, said in an interview. “The question of whether UMNO is still in government then is a different thing.”

Mahathir senior’s rise to power was marked by his push to deepen policies favoring ethnic Malays and other indigenous people, who make up the majority of Malaysia’s 29 million-strong population. He enforced an affirmative action program to increase their wealth compared with the minority ethnic Indian and Chinese communities.

IDEAS’s Wan Saiful foresees a potential future showdown for the party presidency between Mukhriz and Khairy. “They have slightly different visions,” he said. “Mukhriz represents a more conservative side of UMNO, i.e. those who demand more protection for the Malays. The other side sees UMNO as a party for everyone regardless of ethnicities.”

Photographer: Saeed Khan/AFP/Getty Images

Mukhriz Mahathir, attends a gathering in Kuala Lumpur on March 25, 2009. Close

Mukhriz Mahathir, attends a gathering in Kuala Lumpur on March 25, 2009.

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Photographer: Saeed Khan/AFP/Getty Images

Mukhriz Mahathir, attends a gathering in Kuala Lumpur on March 25, 2009.

Inclusive, Moderate

Khairy, 37, who was brought into cabinet after the last election as youth and sports minister, said he advocated an “inclusive, moderate, centrist” agenda.

“It doesn’t mean that we are any less committed towards the Malay community but it has to be all-encompassing, it has to be not at the expense of other people,” Khairy said in an interview yesterday. “While we still fight for the Malay community, it’s in terms of empowerment, it’s in terms of capacity building, it’s not free handouts. We must not allow the conservative right-wing forces to dominate the narrative within the party.”

Family links are not unusual in democratic politics. Japanese Prime Minister Shinzo Abe is the grandson of a former premier, while former U.S. President George H. W. Bush’s son George W. Bush also became U.S. leader. Philippine President Benigno Aquino is the son of the late leader Corazon Aquino.

Affirmative Action

Najib, 60, and Deputy Prime Minister Muhyiddin Yassin, 66, aren’t being challenged for UMNO’s top two posts this weekend, even after the May election saw the coalition lose the popular vote for the first time. Najib oversaw a 60-fold expansion in the pool of UMNO members who pick its leaders in 2009, in a move against so-called money politics. His personal popularity ratings have routinely exceeded those of his government in opinion polls carried out by the Merdeka Center for Opinion Research.

Even so, Najib sought to bolster support from rank-and-file members last month by boosting privileges for the core base of ethnic Malays and indigenous people. The extra aid included a 10 billion ringgit ($3.2 billion) unit trust to support skills training, education and home ownership, and a pledge of more government-linked concessions and contracts.

“When the affirmative action program was first started in Malaysia it had a lot of merits and was fairly justified,” Rahul Bajoria, a Singapore-based economist at Barclays Plc, said by phone. “There’s more room to make it more targeted and a more level playing field. It has probably held Malaysia back a bit, but even without it I don’t see a great difference.”

Cash Handouts

Najib, whose younger brother Nazir Razak is chief executive officer of Malaysia’s second-biggest lender CIMB Holdings Bhd. (CIMB), rolled back some preferences for so-called Bumiputeras to encourage investment after becoming leader in 2009, including doing away with a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 percent of their equity for the group. He also made periodic cash handouts to the poor of all races.

The prime minister denied last month’s additional assistance amounted to a policy reversal.

“One of the cornerstones of our policy is to help the marginalized people,” he said in an Oct. 11 interview in Putrajaya, the country’s administrative center near Kuala Lumpur. “In Malaysia the people who are in a way not doing as well constitute the majority of the people. The Bumiputeras form 67 percent of the population and they are only asking for 30 percent of the country’s wealth. That’s more than reasonable.”

Ethnic Riots

Najib was a teenager when riots erupted between Muslim Malays and ethnic Chinese in Kuala Lumpur in 1969. His father Abdul Razak Hussein became prime minister the following year and responded with a program to reduce Chinese dominance in business.

Malaysia’s potential growth is lower because of affirmative action policies which “amount to a tax on capital and discourage work and innovation,” said Chua Hak Bin, a Singapore-based economist at Bank of America Corp. “Malaysia risks being stuck in a middle-income trap, so long as race ranks above ability,” Chua said via e-mail from New York.

Gross domestic product growth may reach the higher end of the government’s 4.5 percent to 5 percent forecast for this year if exports recover further, central bank Governor Zeti Akhtar Aziz said in an Oct. 12 interview in Washington. Malaysia posted average annual growth of 6 percent in the three years through 2012.

Rising Stars

Mukhriz is one of six contenders vying for three vice presidency slots at UMNO. Isa Abdul Samad, chairman of palm oil producer Felda Global Ventures Holdings Bhd. (FGV), and former Malacca Chief Minister Mohd Ali Rustam are also challenging the three incumbents, including Hishammuddin Hussein, Najib’s cousin who is Malaysia’s defense minister and acting transport minister.

Khairy said UMNO needed to look for the “second echelon of leadership” within the youth ranks. “I’ll have to start looking for succession planning to ensure that there are many more young UMNO members who can be elevated into positions of influence.”

Asked to name UMNO’s rising stars, Najib said that’s “a dodgy thing” to do. “Sometimes you’re not doing the person any favor.”

“The challenge with the fact that we have been around such a long time holding power in this country is how to continue to reinvent UMNO so that there is a freshness,” said Najib. “We need to attract new talents, but at the same time we need people who have the experience to be in UMNO to make sure we are able to deliver.”

To contact the reporter on this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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