Who funds political parties?
In recent years, the official media in Malaysia has been devoting much zealous attention to the question of how some non-governmental organisations, alternative media and other independent civil society groups are funded, as if the official media always pay their journalists for the many trips to Washington DC, New York, London, Canberra, Melbourne, Manila, Bangkok or Jakarta to attend seminars, conferences, courses and workshops.
Inspired, backed or encouraged by ruling politicians such as Umno president and Prime Minister Dr Mahathir Mohamad to investigate or condemn the sources of funding of some NGOs, alternative media and other civil society independent groups, the official media has also conveniently — or selectively forgotten, to put it mildly — the larger (and more problematic) question of who funds Umno, MCA and other component parties in Barisan Nasional.
Do we honestly believe that Umno, MCA and other ruling parties operate solely on the membership fees collected? Who pays for their administrative, organisational and campaign personnel and machineries?
To many leaders, members and supporters of the opposition parties, as well as many sceptical and even cynical voters, the answer is almost self-evident. Older generations of Chinese Malaysians, for example, remember how MCA obtained a licence from the British in 1949 to run a lottery to raise political fund and recruit members.
After the gambling licence was withdrawn in 1953, MCA has been successively setting up a gamut of business enterprises like Multipurpose Cooperative (M) Ltd (1968), Multi-Purpose Holding Bhd (1975) and Huaren Holdings Sdn Bhd to generate more 'honourable' or 'moral' funds for its political activities.
Huaren which owns the English daily, The Star , became publicly controversial last year when it acquired two Chinese dailies amid widespread public protest.
Business failures
Many Chinese Malaysians in their 40s or above also remember the sufferings, both financial and psychological, caused by the failures of MCA businesses in the late 1980s, and how their 'economic saviours' were suddenly arrested, charged for fraud, misappropriation and criminal breach of trust, and subsequently convicted and jailed.
Popular memories, by nature, are always incomplete, scattered and incoherent. In an age of information explosion as well as confusion, unprocessed or unstructured memories, however morally and intellectually instructive, are often under-valued.
Fortunately, a patient and meticulous political economist, Edmund Terence Gomez, has been devoting his academic career as well as intellectual vocation for the past 15 years or so to collect and collate detailed information on the ups and downs of the political businesses and enterprises of Umno and MCA, and process and structure the otherwise unintelligible mass of corporate and political details into coherent theories, or what journalists term as 'stories'.
In his latest article, 'Political business in Malaysia: party factionalism, corporate development and economic crisis', Gomez has articulated his studies of the political businesses and funding of ruling parties in Malaysia, within the highly contemporary and relevant frameworks of the 1997 Asian Financial Crisis and the 1998 Anwar Ibrahim saga.
Inspired, backed or encouraged by ruling politicians such as Umno president and Prime Minister Dr Mahathir Mohamad to investigate or condemn the sources of funding of some NGOs, alternative media and other civil society independent groups, the official media has also conveniently — or selectively forgotten, to put it mildly — the larger (and more problematic) question of who funds Umno, MCA and other component parties in Barisan Nasional.
Do we honestly believe that Umno, MCA and other ruling parties operate solely on the membership fees collected? Who pays for their administrative, organisational and campaign personnel and machineries?
To many leaders, members and supporters of the opposition parties, as well as many sceptical and even cynical voters, the answer is almost self-evident. Older generations of Chinese Malaysians, for example, remember how MCA obtained a licence from the British in 1949 to run a lottery to raise political fund and recruit members.
After the gambling licence was withdrawn in 1953, MCA has been successively setting up a gamut of business enterprises like Multipurpose Cooperative (M) Ltd (1968), Multi-Purpose Holding Bhd (1975) and Huaren Holdings Sdn Bhd to generate more 'honourable' or 'moral' funds for its political activities.
Huaren which owns the English daily, The Star, became publicly controversial last year when it acquired two Chinese dailies amid widespread public protest.
Business failures
Many Chinese Malaysians in their 40s or above also remember the sufferings, both financial and psychological, caused by the failures of MCA businesses in the late 1980s, and how their 'economic saviours' were suddenly arrested, charged for fraud, misappropriation and criminal breach of trust, and subsequently convicted and jailed.
Popular memories, by nature, are always incomplete, scattered and incoherent. In an age of information explosion as well as confusion, unprocessed or unstructured memories, however morally and intellectually instructive, are often under-valued.
Fortunately, a patient and meticulous political economist, Edmund Terence Gomez, has been devoting his academic career as well as intellectual vocation for the past 15 years or so to collect and collate detailed information on the ups and downs of the political businesses and enterprises of Umno and MCA, and process and structure the otherwise unintelligible mass of corporate and political details into coherent theories, or what journalists term as 'stories'.
In his latest article, 'Political business in Malaysia: party factionalism, corporate development and economic crisis', Gomez has articulated his studies of the political businesses and funding of ruling parties in Malaysia, within the highly contemporary and relevant frameworks of the 1997 Asian Financial Crisis and the 1998 Anwar Ibrahim saga.
The article is included in a book titled Political business in East Asia (London, Routledge, 2002) and edited by Gomez himself. Besides Gomez's article and the introduction he wrote, there are nine articles penned by other prominent political economists, on similar themes in Taiwan, China, South Korea, Indonesia, Thailand, Singapore and Japan.
Dramatic changes
While the other nine articles serve as excellent tools for contrast and comparison, what interests this writer in Gomez's is simply because it deals with Malaysia, our own country that is now undergoing drastic and dramatic changes, for better or worse, in its political economy, and witnessing a severe contest of powers, influences, wills and skills among the forces of progress and reform, conservation and even reaction.
According to Gomez, like those in other East Asian countries, the political economy of Malaysia has always had the "state-business linkages, particularly ownership of private companies by public enterprises", but in Malaysia, "there is another dimension to such linkages", and "that is that political parties in the ruling coalition have owned or controlled major enterprises". (p 82)
He then traces the root of the 'unique' phenomenon to the 1940s when Umno, MCA and MIC were founded, and the institutionalisation of that root in the New Economic Policy (NEP) and the responses to it. However, for first-time readers and students, the historical account is unfortunately too brief or sketchy.
For a complete account, one has to refer to an earlier book authored by Gomez, Money politics in the Barisan Nasional (Kuala Lumpur, Forum, 1991) which was written in a more lively and less theoretical manner.
In any case, Gomez proceeds from that brief historical account to a really detailed examination of the political businesses and enterprises under the 20-year period of NEP when Umno established and consolidated a vast business empire through the state it dominates, in the name of 'uplifting the Malays'.
Money politics
It was during that period that 'money politics' began to emerge on a large, systematic and institutional scale not only in Umno but also in MCA. The relationship between ruling politicians and businessmen is not difficult to understand.
For the businessmen, they need to have easier access to top decision-makers in order to gain opportunities and favours, and for top decision-makers who are also leaders of the ruling parties, they need money and financial resources to fund the activities of the parties and to reward supporters, and to buy votes in elections, especially party elections.
Top decision-makers who also include senior public servants also court businessmen with the expectation of obtaining employment and appointments in the private sector after they retire from politics and public services.
Gomez not only theorises, he names names, like former deputy prime ministers Ghafar Baba and Musa Hitam, ex-Inspector-General of Police Haniff Omar and ex-Attorney-General Abu Talib Othman who is now the chairperson of the Human Rights Commission of Malaysia (Suhakam).
For readers who want figures, numbers, charts and diagrams, Gomez does not disappoint. These are aplenty but only to the extent of illustrating the essential arguments.
Gomez also does not stop at history. With intellectual courage, he confronts the contemporary and current problems, especially the 1997 Asian Financial Crisis and its aftermath in Malaysia.
As expected, Mahathir and his former finance minister, Daim Zainuddin are repeatedly mentioned as the defenders of the system of political business in Malaysia, but he does not spare Anwar either.
According to Gomez, Anwar was part of the system of patronage, although "there was no evidence that Anwar had benefited corruptly — by legal definition — from the patronage he disbursed". However, "in Mahathir's case, there is evidence of extensive nepotism". (p108)
Challenging questions
The other nine articles collected in the book are equally informative as well as thought-provoking. They also offer materials and case studies for comparison and contrast with the Malaysian experiences.
Above all, the 10 articles as well as the introduction pose two challenging questions to Malaysians and East Asians that need sincere and honest reflection as well as public discourse.
One, why was the opportunity for reform in business and in politics not taken advantage of after the 1997 Asian Financial Crisis?
Two, what is it about the nature of politics and of business in East Asia that has restrained the fundamental changes shown to be necessary?
The book should indeed be read by Malaysians who are concerned with the future of the country, but who are not content with merely receiving and producing slogans.
Although it is admittedly written in a dry manner, once the arguments and reasoning are understood, the ideas are refreshing and rejuvenating. Patience always pays.
JAMES WONG WING ON is chief analyst of Strategic Analysis Malaysia (SAM) which produces the subscriber-based political report, Analysis Malaysia. Wong is a former member of parliament (1990-1995) and a former columnist for the Sin Chew Jit Poh Chinese daily. He read political science and economics at the Monash University in Melbourne, Australia. While in Sin Chew, he and a team of journalists won the top awards of Malaysian Press Institute (MPI) for 1998 and 1999.
