Embattled Malaysia premier Najib aided by an opposition in chaos

The crisis is the biggest to engulf Najib since he came to power in 2009, leading a coalition that’s held power since independence in 1957. It has dented investor confidence and contributed to a fall in the ringgit as economic growth slows.

But while the allegations have been referred to a special task force and may prompt ex-leader Mahathir Mohamad to step up calls for the premier to resign, the fracturing of the opposition after months of infighting leaves Najib’s fate very much in the hands of his own coalition.

He retains support among rank and file ruling party members, and senior ministers have said the probe must be allowed to run its course.

“Within UMNO the division heads are very much united behind Najib,” said Andrew Aeria, an associate professor at Universiti Malaysia Sarawak, speaking of Najib’s United Malays National Organisation (UMNO). “It doesn’t help that the opposition has fallen apart.”

In March, 160 UMNO division leaders pledged their support to Najib after he committed to improve the finances of debt- ridden state investment company 1Malaysia Development Bhd.

Public discontent with the government -- which was returned to power in 2013 despite losing the popular vote -- has centered more on unpopular economic policies and less on 1MDB, whose advisory board Najib chairs.

The Wall Street Journal reported the US$700 million may have moved through agencies linked to 1MDB before apparently appearing in Najib’s accounts.

While Najib has faced criticism for links to the alleged funds among opposition lawmakers and on social media there have been no major rallies seeking his resignation. The Coalition for Clean and Fair Elections, or Bersih, plans to call a mass protest if investigations into the money trail don’t provide adequate answers, the Malay Mail Online reported.

“Najib will hold on,” said Oh Ei Sun, a political analyst at the S. Rajaratnam School of International Studies in Singapore. “He won’t step aside pending investigations because that hasn’t happened before in Malaysia, and it’s not in his character to do so.”

Najib retains the backing of lower-income Malaysians, according to Shamsul Amri Baharuddin, a professor at the National University of Malaysia. The premier has given bigger cash handouts to the poor this year to help them cope with higher costs.

“We see that support for Najib remains unshaken among the bottom 40 percent of the population,” said Shamsul, who has researched Malaysian politics and the impact of government policies as a social anthropologist.

While Deputy Prime Minister Muhyiddin Yassin has called on Najib to give a convincing explanation or denial, other ministers have publicly backed him. Home Minister Datuk Ahmad Zahid Hamidi said attempts to undermine a serving leader may be a risk to national security, while Defense Minister Hishammuddin Hussein said it’s reckless to criticize Najib as the truth has not been determined.

A poll by the Merdeka Center for Opinion Research in March showed 69 per cent of voters weren’t fully aware what the 1MDB controversy was about, while 75 per cent didn’t know its role.

The ringgit Monday tumbled to its weakest since a dollar peg was implemented in 1998, in part on concern the investment climate in the country may deteriorate and also as emerging market currencies fell broadly in the aftermath of a Greek referendum on a proposed bailout plan.

An opposition coalition that’s collapsed is one less worry for Najib. The alliance imploded in June after months of internal bickering including a disagreement over the planned implementation of shariah criminal law, and the jailing of leader Anwar Ibrahim for sodomy, a charge he has denied.

Mahathir has said Muhyiddin would be a good replacement as he wouldn’t repeat Najib’s mistakes, the Malaysian Insider reported in April. Muhyiddin is a deputy president of UMNO while Ahmad Zahid and Hishammuddin are vice presidents, putting them in line to replace Najib who is party president.

Even so, neither side of politics has a front-runner who might enact real policy change, said Aeria from the Universiti Malaysia Sarawak.