The Economist - USA (2020-08-01)

The EconomistAugust 1st 2020 Asia 31

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painting byMonet and a superyacht.

Diamond jewellery and a transparent

piano. Many of the things that were bought

with the $4.5bn that America’s Department

of Justice says disappeared between 2009

and 2015 from 1mdb, a Malaysian sover-

eign-wealth fund, were rather flashy. The

spree attracted investigations in at least six

countries.

On July 28th a court in Malaysia convict-

ed Najib Razak, the former prime minister

who co-founded and chaired the fund, of

seven charges of abuse of power, breach of

trust and money-laundering relating to the

scandal. The court sentenced him to 12

years in prison and fined him 210m ringgit

($49m). Mr Najib will remain free pending

his appeals, which will probably drag on for

months. The verdicts came days after Gold-

man Sachs reached a settlement with Ma-

laysian authorities related to its underwrit-

ing of three bond-offerings that raised

$6.5bn for 1mdb. The bank will hand over

$3.9bn: it is paying $2.5bn in cash and pro-

mising to return at least $1.4bn in assets

linked to the bonds.

The trial was the first of several facing

Mr Najib, who denies wrongdoing. This

one concerned payments totalling 42m

ringgit made to him by srcInternational, a

former subsidiary of 1mdb. After hearing

evidence for almost 16 months, the judge

poured cold water on the argument that Mr

Najib had been deceived by associates. He

also questioned Mr Najib’s claim that he

thought the money was a donation from

Saudi royalty. He noted that the former

prime minister never sent King Abdullah

(who died in 2015) a note of thanks.

The verdicts arrive at a tumultuous time

in Malaysian politics. When the scandal

became public in 2015 it caused ructions

within Mr Najib’s party, the United Malays

National Organisation (umno). He fired

Muhyiddin Yassin, his deputy prime min-

ister, who was demanding an explanation

of the affair. At a general election in 2018

voters ousted Mr Najib and umno, which

had led every Malaysian government for 61

years. They gave power to a coalition called

Pakatan Harapan. Its partners included

Bersatu, a new party founded as an alterna-

tive to umnoby Mr Muhyiddin and Ma-

hathir Mohamad, another former prime

minister.

Their government lasted 22 months be-

fore collapsing amid squabbles. Mr Muhy-

iddin and a group of renegades, including

SINGAPORE

Najib Razak is convicted on seven

charges in the 1mdbscandal

Malaysia

Down and out

O

n the eveof an election, what might a

political party wish for? A strong brand,

an effective party machine, plenty of mon-

ey, a sympathetic press and a charismatic

leader? How about a rival that is tired and

discredited after a lacklustre term in office,

and has split into factions that hurl more

mud at each other than at you?

Such are the advantages enjoyed by the

Sri Lanka Podujana Peramuna (slpp) as it

coasts towards a general election on Au-

gust 5th. The question is not whether it will

win. It is whether votes alone will secure

two-thirds of the 225 parliamentary seats,

or whether the Rajapaksa family—a power-

ful political dynasty from the south of the

island for which the slppis essentially a

vehicle—will need to coax defectors from

other parties to form a supermajority.

Either way, the stage is set for what

might be called Sri Lanka’s Second Empire

as the Rajapaksas, who ruled in regal fash-

ion from 2005-15, resume unbridled con-

trol. They lost this five years ago when the

present head of the clan, Mahinda Raja-

paksa, then the president, narrowly failed

to win a third successive term. During the

hiatus, the coalition headed by the rival

United National Party (unp) changed the

constitution to trim presidential powers,

put in a two-term limit and strengthened

independent oversight bodies such as a na-

tional election commission. 

The Rajapaksas launched a relentless

comeback. The youngest brother, Basil Ra-

japaksa, stitched together the slppin 2016.

By 2018 it had won big victories in local

council elections. A year later another

brother, Gotabaya, was elected president.

He profited not only from a reputation

built as the defence chief who, in 2009,

brought a bloody insurgency of almost

three decades by minority Tamils to a gory

end, but also from the haplessness of the

unpgovernment in the face of an attack by

Islamist terrorists that killed more than

250 people on Easter Day in 2019. Gotabaya

promptly appointed his brother Mahinda

prime minister, at the head of a minority

government.

The election is sure to strengthen the

Rajapaksas’ hand. Should the slpp win

enough seats, it plans to rewrite Sri Lanka’s

constitution. The present one “is like a

building where the foundation was built

for something else and lots of floors have

been added later,” said Basil Rajapaksa re-

cently. “One day that building will collapse

andpeoplewilldie.”

The constitution has its faults. But op-

position parties and human-rights activ-

ists fear that the Rajapaksas will recon-

struct it so as to guarantee their hold on

power. The previous period of Rajapaksa

rule was marred by the persecution of dis-

sidents, the promotion of sectarian trium-

phalism, opaque financial dealings and a

foreign policy of cozying up to dictator-

ships, particularly China.

So far in his presidency Gotabaya Raja-

paksa has put army officers in control of

things ranging from the printing of driving

licences to a presidential task force em-

powered to “Build a Secure Country, Disci-

plined, Virtuous and Lawful Society”.

Asked how he envisaged the slppas a rul-

ing party, Basil Rajapaksa blithely respond-

ed that the Chinese Communist Party was

an admirable model.

Unless a drubbing jolts the opposition

into a wrenching overhaul, the Rajapaksas

will face little challenge in the medium

term. Of the two parties that dominated Sri

Lankan politics for a generation, one has

been largely absorbed into the slppas a ju-

nior partner and the other, the unp, has

withered under an old guard that failed to

reform. Long allied with the unp, parties

representing minority Tamils and Mus-

lims may now be forced into an accommo-

dation with the Rajapaksas. 

This may be bad for pluralism, given the

ruling family’s tendencies. But Sri Lanka, a

relative success in measures of human de-

velopment, is in a delicate state. Last year’s

terror attacks wrecked two tourist seasons.

Even as crushing foreign-debt repayments

loomed, Gotabaya Rajapaksa slashed taxes,

creating a 25% revenue shortfall. Now the

pandemic has hammered tourism again.

Remittances, the island’s other main

source of income, have plummeted. Per-

haps a period of political calm, even under

the Rajapaksas, is what Sri Lanka needs. 7

COLOMBO AND DELHI

A parliamentary poll will probably

consolidate one family’s power

Sri Lanka’s election

Pax Rajapaksa

Making a din for the dynasty