KUALA LUMPUR (Reuters) - A volley of insults hurled by ruling party officials in Malaysia at 94-year-old ethnic-Chinese tycoon, Robert Kuok, has exposed a racial and religious divide ahead of elections due by August.

FILE PHOTO: Malaysian tycoon Robert Kuok attends a meeting in Fuzhou, Fujian province, China April, 18, 2005. REUTERS/China Daily/File Photo

Leaders from UMNO targeted Hong Kong-based Malaysian billionaire Robert Kuok in the last two weeks, accusing him of funding a majority-Chinese opposition party to overthrow Najib’s government.

The attacks stopped after Kuok, Malaysia’s richest man, threatened legal action against a website he said had cast aspersions on his commitment to democracy. Prime Minister Najib Razak also stepped in to calm the waters.

Many in Malaysia’s economically powerful ethnic Chinese community saw the criticism against Kuok as racial dog-whistling ahead of a very close and hotly contested election.

A polarized electorate poses risks for Southeast Asia’s third-largest economy.

Malaysia’s ethnic minorities may end up with the short end of the stick if this year’s electoral results remains racially split, warned Abdul Rahman Dahlan, strategic communications director for Najib’s coalition.

“Of course we’ll be happy we win the election. But it will be better if the support comes from a broad base of support from the communities of all kinds, then everybody’s voice will be represented,” said Abdul Rahman, who is also an UMNO member of parliament told Reuters.

AFFIRMATIVE ACTION

Najib’s United Malays National Organisation (UMNO) has increasingly relied on majority Malay Muslims to stay in power, after minorities deserted the ruling coalition the past two general elections. An election won entirely with the support of ethnic Malays could stall reform of a decades-old race-based affirmative action policy favoring indigenous groups, officials and analysts warn.

The policy, which grew out of 1969 race riots, reserves a large share of government contracts for Malay businesses. It remains in effect, even after it was due to expire in 1990.

Najib proposed a new economic model soon after taking power in 2009, aimed at speeding Malaysia’s transition to a higher-income, knowledge-based economy, but rolled back some of those plans after a backlash from the Malay-Muslim community.

Ethnic Malays and other indigenous groups account for about 69 percent of the population, with Chinese making up 23 percent, and ethnic Indians and other the remainder. Opinion surveys have found indigenous groups robustly support affirmative action policies.

UMNO has also been courting hardliners on the religious right, seeking support from the Islamist opposition Parti Islam se-Malaysia (PAS), which advocates a strict Islamic penal code that religious minorities fear could infringe their rights.

Divisions among ethnic and religious groups are intensifying in Malaysia, said the Eurasia Group, whose list of top risks for 2018 includes the growth of identity politics in Southeast Asia.

“There is a trend towards a more conservative interpretation of Islam and the key Islamic party PAS will play a significant role during the upcoming election,” Eurasia Group said in a recent research note about Malaysia.

SUGAR KING

Dubbed the “Sugar King of Asia”, Kuok became Malaysia’s richest man by expanding a commodities-based business to an international empire that includes the Shangri-la hotel chain, plantations, property development and entertainment.

He has iconic status in the Malaysian Chinese community.

“Kuok is a successful man, and a true Malaysian,” said 52-year-old Eric Hun at a tea shop in Kuala Lumpur’s Chinatown. “This kind of comment will win them (UMNO) the Malay votes in the kampung (village). That’s all they want ... they stopped caring about us a long time ago.”

Ethnic Chinese voted heavily for the opposition camp in the last election in 2013, handing the UMNO-led coalition its first-ever loss of the popular vote. Najib called it a “Chinese tsunami”.

Two years later, thousands of UMNO supporters marched through Chinatown to support Najib, and assert Malay political power threatening to burn down shops in a racially tinged rally that prompted blunt criticism from China’s ambassador to Malaysia.

With national polls just months away, the attacks on Kuok has strained relations with the Chinese party in Najib’s ruling coalition, the Malaysian Chinese Association (MCA).

The MCA has demanded an apology from Malay leaders who criticized Kuok.

“Right now we’re on extreme ends, with the government on the extreme right and the opposition on the extreme left,” said Kong Len Wei, youth leader at MCA, whose parliamentary seats halved to just seven in the last election.

Najib tried to calm tensions by saying later in the week that Kuok’s success as an entrepreneur is an inspiration for other entrepreneurs to succeed. The government ordered the news blog that published reports on Kuok to pull down the stories.

Opposition parties, led by Chinese-based Democratic Action Party (DAP), have also ramped up the racial rhetoric.

“The Robert Kuok incident is not an isolated incident,” said DAP’s National Political Education Director Liew Chin Tong.

“It is just another example of the past decade or so in which UMNO survives on manufacturing fear among Malays towards others, in the hope to consolidate Malay support for UMNO.”

Najib is still widely expected to win the elections on the back of a rebound in the economy and the support of rural Malay voters. Parliament is also expected to approve a periodic redrawing of electoral boundaries, which critics say would also favor the ruling coalition.

BRAIN DRAIN

Disillusioned ethnic Chinese have been voting with their feet over the past two decades, migrating to neighboring Singapore and Western countries in a troubling brain drain of talent and capital.

A total of 56,576 Malaysians gave up their citizenship between 2006 and 2016 with over 90 percent of them being ethnic-Chinese, Malaysia’s Deputy Prime Minister said in parliament in 2016, The Star newspaper reported.

Thirty-one year old Oh, who stayed back in Melbourne after her graduation there said she won’t return to Malaysia unless meritocracy is restored.

“It is the race-based policies that are causing a brain drain and holding back the advancement of the nation,” said Oh, who is a senior designer at a Melbourne-based architectural studio.