Banking executive Nazir Razak, the Malaysian prime minister’s brother, has been quietly meeting with business leaders in his UK headquarters and in Kuala Lumpur to attempt to form a well-funded new, nonpartisan political entity to reach out to all races and to end the divisive racial politics that have poisoned the atmosphere of the country.

Nazir, 49, is said to have been meeting with moderates including Chinese leaders in the campaign to formulate the new entity, which would, if successful, dramatically redraw the country’s political landscape, fracturing party lines laid down before the British colonists handed Malaysia back to its own people in 1957. In later comments to local media, Nazir denied the entity would be a political party but rather a non-governmental organization.

The plan is considered a long shot. But as an indication of how desperate the group is over the current situation, Nazir would be not only going against his brother but against the legacy of his own father, Tun Abdul Razak Hussein, one of the founders of UMNO who served as the country’s second prime minister.

Public face to be Saifuddin

Nazir is said to want to remain in the background, restrained by sentiments over his father’s role in the founding of the country. However, reports of the plan have been widely circulated in Kuala Lumpur although Nazir is expected to publicly deny involvement. Instead, the public face is expected to be Saifuddin Abdullah, a former UMNO minister described as one of the more moderate and liberal-minded politicians in the party.

After leaving parliament, Saifuddin joined the University of Malaya as a research fellow but resigned to protest the forced resignation of Mohamad Redzuan Othman, a social sciences professor who was directed to quit after conducting studies that were critical of the government. However, Nazir’s friends have advised him that he must emerge as the prime mover or it won’t work. Saifuddin, as much as he is respected as a moderate, doesn’t have the widespread clout to attract support.

The apparent collapse of the Pakatan Rakyat opposition coalition on May 16 appears to set the stage for a possible major political realignment, with the hardline element of fundamentalist Parti Islam se-Malaysia, or PAS, seeking to make common cause with UMNO on the theory that the two could take the preponderance of the votes of the 60.1 percent of the population who are ethnic Malay, and preserve ethnic Malay political dominance.

Moderates to abandon traditional vehicles

That scenario is equally likely to drive moderates and ethnic minorities now aligned with UMNO – the Malaysian Chinese Association and the Malaysian Indian Congress – to seek a different and more viable political vehicle. The two wings of the opposition coalition, the Democratic Action Party and Parti Keadilan Rakyat, the centrist vehicle set up by the now-jailed Anwar Ibrahim, are expected to stay together although Parti Keadilan is riven by infighting as Mohamad Azmin Ali, the Selangor chief minister, vies for power with Anwar’s wife, the party president, Wan Azizah Ismail.

Without Anwar, the party seems headed for paralysis, especially with the departure of PAS. Lim Kit Siang, the longtime leader of the Chinese-dominated DAP, has repeatedly called for a unity government but has been ignored. Tony Pua, a rising figure in DAP politics, has reportedly been approached by the moderates.

Nazir is the chairman of CIMB Group, one of the country’s biggest financial services providers, and one of its most respected businessmen. For months, he has been on the edge of an open break with his brother, Najib, over the scandal surrounding the 1Malaysia Development Bhd state-backed investment fund, which has RM42 billion [US$11.2 billion] in liabilities, perhaps as much as RM25 billion of that unfunded.

There is widespread concern that the potential collapse of 1MDB could bring down the country’s financial system. Indeed, at the same time he is contemplating the formulation of a unity government, Nazir is scrambling along with Najib to find the money to save 1MDB, including meeting in London earlier this week with billionaire Ananda Krishnan, one of Malaysia's richest men.

Rosmah a lightning rod

Along with his brothers, Nazir is also said to be deeply concerned about the effect on the family’s reputation of the profligate spending of Najib’s wife Rosmah Mansor. Lurking in the background are questions former Prime Minister Mahathir Mohamad has raised about the ultimate individuals behind the murder in 2006 of Mongolian translator and party girl Altantuya Shaariibuu, who played a minor role in the US$1 billion purchase of submarines from France when Najib was defense minister. UMNO is said to have harvested US$141 million in kickbacks on the deal.

The one thing that sets Nazir’s effort apart from previous unsuccessful ones to start new parties is that he and his associates, crucially including top Chinese businessmen, have a formidable capability to raise money. They also have the advantage of facing a political system that has degenerated into nothing more than desire to stay in power to steal money – often by using racial tensions in a volatile mix that could, if it got out of hand, generate bloodshed.

The move for a moderate non-religious entity has been given new urgency with moves by PAS to push through hudud, a 7th-century system of Islamic punishments including stoning for adultery, limb amputation for theft and others, in the east coast state of Kelantan. Those efforts, according to many members of the opposition, have had Najib’s behind-the-scenes backing in an attempt to wreck the opposition coalition, the most successful threat to the Barisan Nasional since independence – which it apparently has done.

Traditional politics comes apart

In the past two to three years, both the ruling coalition and the opposition have descended into a stew of ethnic and religious tensions that have brought the country to a near standstill. UMNO is enmeshed in the coils of deep corruption that has been exacerbated by the 1MDB mess. Mahathir has vowed to do anything but bring the pillars of UMNO down around the cadres’ ears in the attempt to drive Najib from power. There is a growing feeling of crisis born of concern that the long-running dispute is tearing the country’s political fabric apart.

Because the political process has become so completely stalled, last week a group that may or may not be aligned with Nazir, went to one-time Finance Minister Tengku Razaleigh Hamzah in an attempt to put together a unity government. The effort appears to have fizzled, although one source says the move may still be alive and there are some indications that the two may be intertwined. However, an attempt to put together enough parliamentary clout to force a vote of no confidence in the 222-member body appears to have failed.

Mahathir himself is willing to wait until UMNO’s annual general meeting late this year to vote out Najib and install Deputy Prime Minister Muhyiddin Yassin as prime minister. Muhyiddin is hardly acceptable to Nazir’s moderates. He is a Malay nationalist himself and, at age 67, has amassed a fortune of suspicious size. His son, Fakri, is also involved in many business deals, including a RM4.1 billion contract supplying 4G computers and Internet study to rural schools.

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