Najib Tun Razak was sworn in as Malaysia’s sixth Prime Minister on 3 April 2009. He takes over the Prime Ministership of Malaysia at a critical juncture in the history of his political party and Malaysia. On the global front, Malaysia is battered by the worst global economic crisis since the Great Depression. Domestically, Najib’s ruling party, the United Malay National Organisation (UMNO) and the coalition that it leads, the Barisan Nasional (BN) are at their lowest ebb, suffering a backlash from citizens fed-up with the blatant abuse of power by a regime that has ruled Malaysia since independence in 1957.

Najib realises that reform of UMNO is critical for his and UMNO’s survival. He watched how Abdullah Ahmad Badawi’s fortunes turned from ‘party hero’, leading UMNO and BN to the resounding victory in the 11th general election in 2004 when Malaysian’s gave him the biggest mandate for an incoming administration ever, to ‘a failed leader’ in the 12th general elections where the electorate punished him, UMNO and BN for squandering the mandate given and betraying the people’s trust by not instituting the reforms that were promised. Badawi has since been removed as UMNO needed a scapegoat. Najib knows that he will face the same consequence if he does not deliver victory for UMNO. For all the promises of loyalty and the feudal mentality that pervades it, UMNO nonetheless is ultimately driven by money and power.

Najib, who headed BN’s operations during the election campaign in the 12th General Election in 2008, is aware of the following facts. BN lost four states on the more prosperous west coast of the Peninsular — Kedah, Penang, Perak and Selangor — while failing to retake poverty-ridden Kelantan on the east coast, which has been in opposition control since 1990. BN only obtained 49 per cent of popular votes on the Peninsular. Sabah and Sarawak saved BN. Although BN won 140 of the 222 Parliamentary seats, 54 of them came from these two states on the island of Borneo, confirming that Borneo island politics are not linked to the Peninsular. Most importantly, the popular vote obtained by UMNO in the Peninsular was 35.5 per cent which was matched closely by the combined votes of Anwar’s Justice Party (Parti Keadilan Rakyat) and the Islamist party (PAS).

This trend is also evident in that BN has lost all four by-elections in Peninsular Malaysia with a face saving win in Sarawak, the only by-election to date on the Borneo island. The three most recent by-elections were held simultaneously in an attempt to weaken the opposition’s campaign organisation (two in the Peninsular, one in Sarawak). It was held on 7 April 2009, four days after Najib was sworn in as Prime Minister. BN lost two with a face saving win through one of its component parties on the Island. BN and UMNO campaigned on the platform of giving the new Prime Minister and his policy of ‘One Malaysia, People First, Performance Now’ a chance; however this did not resonate with the electorate. Even more worrying is that in all these by-elections, the opposition’s winning margin increased over that in the General Election despite BN training all it’s and the state’s resources and machinery against the opposition.

Najib also understands that Malaysia’s economic fortunes, BN’s claim to legitimacy are trending downwards. Economic growth over the past 18 years has averaged just a little over 6 per cent while the average growth rate since the East Asian financial crisis of 1997/98 has been only 4 per cent. This is worrying as the performance has undershot all BN government targets. In the Vision 2020 Policy, economic growth was targeted at 7 per cent per annum from 1991 to 2020 and in the Industrial Master Plan III, the target was 6.3 per cent for the plan period from 2006 to 2020, while the 9th Malaysia Plan (2006 -2010) sets the target for 6 per cent. While the reasons for Malaysia’s lacklustre economic performance are varied, the Opposition have successfully laid the blame squarely on BN’s incompetency and corrupt practices as an electorate hard hit by the current global economic crisis and experiencing long term deterioration in government delivery of services have heartily accepted this proposition. This of course has raised serious questions about the credibility of the BN government’s ability to deliver on economic growth – BN’s final claim to legitimacy. The slowdown in the global economy has also made Najib’s task more difficult as Malaysia, the third most open economy in Asia, relies heavily on international trade.

Najib also faces a weakening domestic fiscal position. Ever since affirmative action was introduced in a big way through the New Economic Policy (NEP) in 1970, the government has never had a balanced budget or surplus except for the period 1992 – 1997, interestingly when Anwar was Finance Minister. Budget deficits have been the norm despite economic cycles and, since 1999, budget deficits have consistently exceeded forecast outcomes. While Federal government debt for the period 2000 – 2008 averaged at 42.6 per cent of GDP is manageable, it is steadily increasing as revenues progressively fall due to limited sources of new growth areas, higher thresholds before individuals are taxed, increased exemptions from taxable incomes, depleting natural resources and mismanagement and wastage of public funds.

Najib also realises that he comes with heavy baggage. He is the ultimate UMNO insider. He was ushered into politics upon the death of his father in 1976 at the age of 23, taking over his father’s Parliamentary seat. Najib, the son of the highly respected second Prime Minister, Tun Abdul Razak and the nephew of the third Prime Minister, Tun Hussein Onn, enjoyed a secure path up the ladder in UMNO. His tenure as Chief Minister of the state of Pahang and Deputy Minister or Minister of the various other ministries was lacklustre. Most telling was his tenure as Defence Minister, which was scandal-ridden with allegations of various shady defence deals, high numbers of deaths of Malaysian armed forces personnel while flying obsolete and poorly maintained fighter planes and helicopters (almost 90 military personnel and civilians are reported to have died flying Nuri helicopters) and a National Service program which has resulted in the deaths of 17 young Malaysians participating in the program and culminating with the allegation of being complicit in the murder of a Mongolian national.

With all these setbacks, Najib realises that the he must convince UMNO and BN that the critical challenge to his and their survival is to deliver on economic growth and improve race relations by ending or at least tempering patronage politics and improving government efficiency, which had been the hallmark of the successful BN machinery of yester-years. Najib’s policy slogan of ‘One Malaysia, People First, Performance Now’ may demonstrate that he (and UMNO) is beginning to understand that although Malaysian remains a country with deep-rooted racism, Malaysians of all races, creeds and colours are increasingly doubtful about BN’s continuing rule. The BN/UMNO’s strategy of dividing the races has not worked in the same way as in years gone by. Voting patterns especially among the younger generation (below 35) reveals the willingness of voters irrespective of race and social class to vote for opposition.

Najib may also realise that only substantive reforms will give him and UMNO a serious shot at redemption. Immediately after becoming the Prime Minister, he released 13 individuals (including three Hindu Rights Action Force (HINDRAF) leaders – a people’s movement advocating fair treatment for the minority Malaysians of Indian heritage) — held under the Internal Securities Act (ISA) — an Act that provides for detention without trial for unlimited period. Najib also revoked the suspension on the biweekly internal newspapers of PAS and PKR hoping to influence the by-election. It however had no effect. Najib correctly pointed out after the by-elections that BN had to ‘shape-up or ship out.’

Although 80 per cent of Najib’s Cabinet comprises ministers from the previous Badawi administration and many having dubious records, it is unclear how his administration will proceed in addressing the work that is needed given all the challenges UMNO, BN and Malaysia is facing. Najib, following previous trends have indicated that there is a need for reforms and has implemented some symbolic changes. Whether it is sufficient — only time will tell. But one thing is for sure, Malaysians will not tolerate ‘Business As Usual’.

Gregore Lopez is a PhD student at the Crawford School of Economics and Government, at the Australian National University.