COMMENT “It’s an incestuous relationship,” Lim Kit Siang said in expressing his disgust over the intercourse between political and business bodies.
He made that remark in 1990, when Dr Mahathir Mohamad was prime minister and Umno president.
It was during Mahathir’s tenure that Umno transformed itself into a huge and powerful corporate player, with interests spanning the entire economy. Hence, when Transparency International quotes him as saying “politics is money”, many hear an admission of guilt although his tone during the interview was that of a complainer.
Critics say many of the problems the nation faces today are traceable to the time when Mahathir was in power. It was then, they allege, that the causes and catalysts were put into play.
By 1990, it had become common knowledge that Umno, the lynchpin of the Barisan Nasional coalition, exercised proprietorship through individual shareholders and directors in well over 100 companies. Umno nominees reportedly held shares worth about RM4 billion in total.
With hindsight, Malaysians are getting a clearer picture. The New Economic Policy was the springboard that launched the Umno elite into big business. That quantum leap could have been made only by ignoring conflict-of-interest situations and allegations of favouritism, corruption and exploitation of government-owned agencies.
The politicisation of the economy fuelled political patronage and Umno came to be seen as an avenue for wealth expansion.
Particularly during the 1980s and 1990s, many Malaysians wondered aloud whether the numerous Umno-controlled businesses were being run for the enrichment of the party or for the benefit of all shareholders.
Umno’s investment arm, Fleet Holdings, emerged in the 1980s. In 1991, the control of Fleet was passed over to Renong Bhd, a public-listed company with interests in the media, construction and financial sectors.
Privatisation came in as an economic weapon, politically linked and with easy access to capital provided by government-controlled banks. Trust agencies and institutions allegedly protecting Bumiputera interests grew in number.
Nothing has changed
In a 1990 edition, the Far Eastern Economic Review commented: “The concentration of so many sensitive assets in the hands of so few people, let alone those so closely associated with the leading partner in government, leaves the party open to charges of conflicts of interest.”
In a well-written 1989 publication, “Political Parties in Business: A Case Study”, Edmund Gomez wrote: “With political power in the hands of Umno, government licences, contracts, finances and other concessions could easily be awarded in the party’s interest or to individuals aligned to it.
“The government apparatus could thus be used to secure income, not just for the party, but also for personal interests, which establishes a base for accumulation of corporate wealth by the ruling elite.”
Rent-seeking, political patronage, profit-seeking individuals and powerful elites are by-products of a system that spurns meritocracy and healthy competition and corrupts a fair and level playing field in the landscape of business and commerce.
Nothing has changed. The money machines are still around, churning out funds for political purposes. And other BN component parties have their ATMs, too. However, Umno continues to dominate with political power concentrated in its hands. Government licences, contracts, financing and other business-facilitating instruments are still awarded in the party’s interest or to individuals aligned to it.
Mahathir made an understatement when he said Umno had to raise money from members of the public, resulting in rent-seeking behaviour.
More truths can be found in what he did not say in the Transparency International interview.
He is on record as saying that he wanted to create Malay millionaires. To support that determination, his regime introduced laws and implemented policies that in effect were well suited to Umno’s economic interests and ended up creating monopolies. It disregarded the potential repercussions, including the risk of breeding greedy profit-seeking groups.
Is it therefore surprising that Umno and money politics go together in the eyes of the public?
And yet the former prime minister laments the corruption prevalent in the party that he led for more than 20 years.
During his tenure, Malaysia’s stock market virtually became a war chest for BN, a source of cash for election campaigns and other political activities.
While opposition parties struggle to raise election funds, Umno and its BN partners have no limits on their expenditure.
In many general elections, such as the one in 1990, wrote the Far Eastern Economic Review, “Everyone in the rural kampung knows that politics is now money business.”
One observer said: “It used to be a coffee and a curry puff. Now a vote costs RM15 to RM20.”
Flimsy excuses
Economist KS Jomo in 1990 estimated that Umno had spent an average RM2 million per parliamentary constituency. “Other estimates put the (ruling) coalition’s campaign chest as high as RM1.5 billion,” he added.
Today, 20 years later, as witnessed in the recent Hulu Selangor and Sibu parliamentary by-elections, BN continues to spend staggering amounts — with no questions asked by the toothless Election Commission.
Should political parties be involved in business? Is it against national interest?
Politicians choosing to ignore ethics in the interest of practicality and selfishness will always try to justify their attitude by saying that politics needs money. But the crux of the matter is not about politics needing money; it is about the buying and selling of politicians and other forms of money politics. This undermines and corrupts democratic institutions.
It does not make sense that some politicians distinguish their personal views from their official views.
Said one politician: “My personal opinion is that political parties should not get involved in business but from the official point of view, a political party needs funds to run activities. Nothing is free.”
Such flimsy excuses are no longer acceptable in our changing political landscape, where more and more are demanding ethics in governance, associating it with accountability, transparency and integrity.
When powerful institutions are manipulated by influential ruling elites under the pretext of helping others but yet filling their own or their cronies’ coffers to the brim, it is corruption which is detrimental to national interest.
It is also an inescapable fact that as the degree of government control over economic resources increased, so did the abuse of power of those in control of the government.
Over the decades, this has allowed the ruling clique to tighten its power grip and abuse the system— both at the personal and party levels.
The burden to transform the nation has thus fallen heavily upon the shoulders of civil society and NGOs. Without a doubt, Malaysian voters must decide through the ballot box whether the politicisation of the economy should continue, knowing that the nation has seen spectacular business and financial failures that can only be blamed on nepotism and cronyism.
Should political parties continue to exploit and abuse power for one group at the expense of another?
Should political patronage continue to be the holy mantra in government policies involving businesses and industries?
What about political control of the press and other strategic levers of the media industry?
Yet, the larger question for us to ask is: “Can or will the ruling Barisan Nasional government be willing to reform its political financing?”
Well, all of us can vote on this single issue through the ballot box.
Stankey Koh, a former head of research at MCA, is a Free Malaysia Today contributor.
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