: Super User; Malaysia; 12 March 2012; Hits: 1783

UMNO Minister Resigns

Government supporters are no doubt hoping that the resignation of UMNO minister Shahrizat Abdul Jalil on March 11 will take some of the sting out of opposition claims that the government of Prime Minister Najib Razak is soft of corruption. But the damage may already have been done.

For some months now, the political career of Ms Shahrizat, who was minister for Women, Family and Community Development, has been under a cloud following allegations of corruption in what has become known as the "cows for condos" scandal. Members of Ms Shahrizat's family have been accused of misusing a RM 250 million (US$16.5 million) government loan meant for raising cattle. In October last year, the nation's auditor general said in his annual report that the project had fallen short of its production goals.

The loan had been given to the National Feedlot Corporation (NFC), an organisation run by Ms Shahrizat's husband. Several of her children also sit on the NFC's board.

For opposition leaders, the scandal was a golden opportunity to illustrate the claim that corruption is rife within the Najib administration. They began producing accounting and bank statements which, it was alleged, proved that the money had been used to buy luxury properties.

In November, the opposition Parti Keadilan Rakyat (PKR) alleged that part of the money was transferred from the NFC to companies owned by the minister's family, and used to buy a RM 10 million condominium unit in the Bangsar suburb of Kuala Lumpur. Another RM10 million, it said, was used to buy an apartment in Singapore's prestigious Orchard Scotts Residences.

Malaysia's Anti-Corruption Commission raided the NFC's office on December 23 last year.

Ms Shahrizat has always maintained her innocence. Announcing her resignation on March 11, she said: "I have nothing to do with the NFC. I just happen to be married to the chairman". She has also filed a RM100 million libel suit against the PKR.

Despite this, the reluctance of the prime minister to either sack or suspend Ms Shahrizat pending the outcome of investigations has encouraged the popular belief that - despite his protestations to the contrary - Mr Najib is reluctant to come down hard on corruption when it involves influential politicians. Ms Shahrizat is head of the women's wing of UMNO, the senior partner in the National Front coalition government.

Police recommended last month that the attorney general charge NFC directors with criminal breach of trust, but the AG instructed them instead to continue their investigations.

Ms Shahrizat's resignation will go some way to resolving the issue. But the way the prime minister handled the affair has been less then ideal. Speaking to the media after Ms Shahrizat announced her decision, Mr Najib thanked her for her "sacrifice" in the best interests of the government and the party. That comment is not likely to go down well with rural Malay farmers, many of whom reportedly have difficulty obtaining loans to fund their own operations.

The whole affair will almost certainly figure prominently in the coming election campaign.

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Key Political Risks

Now that the general assembly of UMNO, the senior partner in the ruling National Front coalition government, is over, the long-awaited general election could be held at any time. Constitutionally, Prime Minister Najib Razak has to call elections before April 21st 2012, after which the Elections Commission must hold the election within 60 days.

Widely expected to be the most hotly contested in Malaysian history, the polls will pit Mr Najib's government against a rival political coalition led by charismatic opposition leader Anwar Ibrahim.

While the opposition Pakatan Rakyat alliance attacks what is says are the corrupt and authoritarian ways of the government, Mr Najib has been describing the opposition coalition as an unnatural alliance of Islamic fundamentalists and multi-ethnic and liberal parties.

The strong economy is likely to favour the government.

WATCH OUT FOR:

The size of the expected government victory, particularly the ability of the ruling party to retake control of key states such as Selangor. Mr Najib needs to win convincingly if he is to implement long-delayed economic reforms. These include reducing oil and food subsidies and introducing a goods and services tax to boost government revenue.
The ability of Mr Najib to placate conservative elements of his Muslim-based UMNO party who disapprove of his policy of boosting national unity through greater inter-faith and ethnic tolerance.
The extent to which the government is able to convince the public that the coming elections will be free and fair. If the election result is close, influential organisation such as Bersih could declare them illegitimate, and stage major protests.