Umno's Plan B for Malaysia

By the time Prime Minister Najib Razak announced his newly tweaked National Economic Model, Malaysia had experienced net capital out flows in the excess of US$27 billion from mid-2008 to mid-2009. Foreign Direct Investment had slowed to a trickle, US$15 billion of portfolio investment departed in 2009 and was slow to return.

This means that, despite the hype, Najib’s plan to revitalize the Malaysian economy was already too little and too late. And the greatest obstacle to economic reform and change was UMNO itself.

US Embassy cables made available via WikiLeaks pointed to the various initiatives Najib had planned and was working on. At the core of these initiatives was a need to reform the whole economic model Malaysia had been relying on. In layman terms, this meant dismantling the NEP, a brainchild of former premier Mahathir Mohamad.

The turn of events ruffled feathers within UMNO itself, especially amongst the ruling elite, as these power barons depended on the various economic packages in the NEP to line their nests.

That's right, the ruling elite at UMNO with all their Ferraris and mansions in the UK, Europe and what-not had more to lose than the fishermen and the rubber tappers that the NEP had been intended to help. It was the super-rich rather than the poor who would suffer.

At that time, the opposition front welcomed the idea of reforms in Najib's New Economic Model and voiced their willingness to co-operate and support the plan. But though Najib seemed to be headed in the right direction, some of the most powerful elements within UNMO were against it. He was forced to U-turn and the rest as they say is history.

Plan B

If UMNO wants to salvage itself as a political party within the changing Malaysian landscape, it must choose to reform. Like PAS did at its 57thMuktamar or annual congress last weekend. That landmark decision tore to shreds UMNO's prized plan to drive the Islamist party back to Stone Age fundamentalism.

In the face of that rout, and the clear and present danger that a more 'centered' PAS now poses, UMNO is left with no political choice but to reform. It must revert to Plan B. It must claw back the middle ground as well as regain the hearts and minds of the minorities it chased away with the help of units such as Utusan, Perkasa and Pembela.

But reform means change, and many within the party are still not willing to accept a new reality or to give up their comfort and luxuries. Economic reforms would mean death for the wealthy barons within UMNO and their crony tycoons as well. Who these crony tycoons are, most Malaysian already know. As to why should they be hurt by reform, the answer is simple.

So far, these 'pals' of the UMNO elite have been granted a monopoly on the economy. Sure, smaller firms have been able to gain and become rich too. But nowhere on the scale of this privileged group. Reform would entail opening up the market to all. These guys would have to compete and compete honestly, words that they may have forgotten or completely chucked out from their dictionaries long ago.

In the face of the sheer amount of raw talent the Information Age is dredging up by the day, these cronies and their offspring might as well pack up and leave. Many already have and it is actually their outflow to the Swiss bank accounts, to the Cayman Islands, to Bermuda and everywhere else that has exacerbated the huge outflow.

Yes, they see the writing on the wall and can smell their own fates. But after decades of endemic greed, their instincts are to hang around and help the elite dig the final graves of the masses.

This is the nature of cronyism and corruption. This is the meaning of the phrase Absolute Power Corrupts Absolutely. Faced with the prospect of finally losing their silver spoons, they fight with the riches they stole from the very people they are trying to keep poor - so that they can continue to amass wealth beyond imagination.

Two old-boys clubs

Malaysians now have no choice but to fight and dismantle two old-boys clubs. One at the corridors of power in UMNO and the other in corporate Malaysia.

But who will be the man to do that. Will it be Najib Razak, or will he himself be forced to maintain the status quo and let Malaysia be driven to bankruptcy? Time will tell, but for sure, the answer will come very soon.

In the best scenario, where there is market reform, the non-Malays and non-Bumiputeras will be the ones who may benefit the most. Initially, that is. They have been held back for so long, they would naturally garner pole positions at the start. But again, market forces and demographics will soon even that out.

What is less visible, much less glamorous but all important is that the wealth of the country finally gets to be distributed. It actually gets to trickle down because the choke or stranglehold is gone at last. And this means it will be the Malays, who now form the bulk of the poorest strata, who would benefit the most.

It is hard to imagine a Malaysia without greedy and 'politically-created' tycoons and over-powerful UMNO warlords. No wonder, the elite in UMNO are going all out to thwart the thrust for reform. Sad to say, it is this unwillingness to change that will be the death of UMNO.

Plan C

Economic revitalization and policies should then be done based on what is good for the nation and what is fair for all parties who qualify to compete. Opposition Leader Anwar Ibrahim seems to have an idea what should be done. He is ready to debate Najib on the economic direction for the country. But sad to say, Najib is not.

The Pakatan Rakyat already have their Orange solution, in the form of theBuku Jingga list of socio-economic reforms. They have said they plan to implement these once they wrest the federal government. But where is the Barisan Nasional's?

BN boss UMNO is still too busy hatching the next bout of shenanigans. UMNO leaders are still at the rhetoric stage, flinging words of contempt at PAS for not agreeing to a merger that would have bought them a few more years of power. It does not look like UMNO is ready for reform yet. Reforms are just too scary for them.

Even so, UMNO’s Plan B has to be to reform. But if the UMNO elite reject this option, and the chances are extremely high that they will, we expect them to jump to Plan C.

Plan C is actually more or less the same as Plan A - more trickery, more conspiracies, more gutter-politicking. Anything to delay, while the greedy elite - with the help of their crony tycoons - continue to stuff their pockets.

Some differences in Plan C though. Force may be used, not of the economic kind, but of the machine-gun sort. Strange it may seem that despite all of Najib's rhetoric, Egypt's Tahrir Square is actually just a stone's throw away and poised to become a reality here in Malaysia.

When that happens, Malaysians must rise to the occassion. - Malaysia Chronicle