Malaysia's heated political climate raises risk of racial or religious violence: Analyst

SINGAPORE • Malaysia's heated political climate raises the scope for racial or religiously charged violence if the public feels that the investigations into the affairs of troubled state fund 1Malaysia Development Berhad (1MDB) is inadequate, said a senior regional analyst for a risk consultancy firm.

Writing in Forbes magazine on Wednesday, Ms Giulia Zino of Control Risks said such social unrest was also possible due to the political uncertainties surrounding the leadership of Prime Minister Najib Razak and the "siege mentality" nurtured by his party Umno.

She said while Malaysia has generated "a considerable volume of negative press coverage over the past year", the most eye-catching concerns the scandal linked to 1MDB, especially after the Wall Street Journal reported on July 2 about the alleged transfers of nearly US$700 million (S$960 million) in Datuk Seri Najib's private accounts.

With calls by critics led by former premier Mahathir Mohamad for the Prime Minister to step down, "Najib appears far too compromised to see the end of his term in 2018, even if the multiple ongoing investigations do not directly implicate him in wrongdoings within 1MDB", Ms Zino wrote.

"Perhaps more worryingly, the heated political climate increases the scope for religiously or ethnically motivated acts of violence, like the riots earlier this month in the Bukit Bintang neighbourhood of Kuala Lumpur," she added, referring to the racially tinged brawls at tech mall Low Yat Plaza.

UMNO'S SIEGE MENTALITY

Umno has increasingly nurtured a siege mentality and presented the party as the only true protector of Malay interests, worsening communal tensions.

MS GIULIA ZINO, Control Risks analyst

"Umno has increasingly nurtured a siege mentality and presented the party as the only true protector of Malay interests, worsening communal tensions," said the Control Risks analyst.

The 1MDB scandal, she said, is "greatly distracting" the government from dealing with the country's broader economic problems.

"Malaysia has been the biggest loser in the Asia-Pacific from lower global prices for oil and particularly natural gas, and is grappling with high government debt, a large fiscal deficit, Asia's highest household debt and one of its worst-performing currencies," Ms Zino wrote.

A version of this article appeared in the print edition of The Straits Times on July 24, 2015, with the headline 'Malaysia's heated political climate raises risk of racial or religious violence: Analyst'. Print Edition | Subscribe