By Liew Chin Tong

For reference, see the first part of this article here.

As I walked from my hotel room to a meeting in Port Dickson in July 2005, I remember holding a newspaper with a photo of Hishammuddin Hussein brandishing a keris on its cover. At that moment, I knew UMNO was kissing goodbye to its non-Malay support.

Indeed, in hindsight, it was the pivotal moment of the decade: UMNO had turned to the right permanently while the then-Prime Minister Abdullah Ahmad Badawi lost control over his reform agenda. The demise of Abdullah’s premiership, arguably UMNO’s last chance to reform, began in July 2005.

Today, unless Prime Minister Najib Razak can stare down the right wing of his party as effectively as Dr. Mahathir Mohamad’s Vision 2020 grand compromise and turn the clock back by seven years to restore its centrist credential, the events of July 2005 will culminate in UMNO and Barisan Nasional’s eventual electoral collapse.

As a reminder to Najib, his great leader Mahathir painfully discovered in the 1990 general election that the 1970s assumption that UMNO could win 70 percent of Malay support was no longer tenable. Malays in general have received better education and exposure, hence they have become more politically sophisticated.

The high rate of urbanisation among the Malays also pulls the rug from under the feet of UMNO, the rural machinery party par excellent.

UMNO’s Malay base has been further eroded by the ever-ready availability of popular alternative Malay leadership in the forms of a revived PAS and Semangat 46 in the 1990s and Anwar Ibrahim since his sacking in 1998.

It was the non-Malay middle class which Mahathir won over through his Vision 2020 grand compromise that sustained UMNO and BN in power from February 1991 to July 2005.

But why was UMNO so foolishly turning right at its general assembly in July 2005?

The reasons why

After having been in power for 21 months since 31 October 2003, the novelty factor of the Abdullah premiership waned and his leadership weaknesses became too glaring.

Abdullah’s all-talk-no-show attributes didn’t help. Making it worse, from the point of view of the UMNO-putra rentiers, were the subjects he chose to talk about.

Abdullah fired his first policy salvo in the “First-world Infrastructure, Third-world Mentality” speech at the Oxbridge Society in March 2003 when he was acting Prime Minister during Mahathir’s two-month absence, foreshadowing his key priorities, among others, doing away with the government-driven construction craze, paring down fiscal deficits, and the anti-corruption drive.

As Prime Minister, Abdullah cancelled several of Mahathir’s pet projects and put most spending commitments under review. The gravy train for many suddenly stopped. It doesn’t help that some of the projects were allegedly revived with the intervention of “the Fourth Floor boys” – the office of Abdullah’s young advisors in Putrajaya.

“The hardest thing I’ve had to do as Prime Minister so far is to reduce the budget deficit,” he said at the first anniversary of his premiership.

Abdullah told the audience at the Harvard Club on 5 May 2005 that “the economy has been used for government pump-priming since 1998 and so the decision to reduce the budget deficit was, for many, like taking away a comforting source of income”.

He was aware that, for the rentier class, there was a “general feeling that things are not moving as fast as they were before” while those who wanted to see genuine reform were “growing impatient to see various things happen”.

Abdullah asked for patience. “I am committed to seeing through my policies, strategies and promises to fruition. I am not only a man of intentions, I am also a man of deeds. I am not one for display or fanfare or harsh words, so perhaps I don’t give away many signs, but that is an issue of style, not substance.”

Mahathir’s attacks

One of those who lost their patience with Abdullah was Mahathir. Rumours of Mahathir airing his frustration privately were quite widespread from the second half of 2004, especially after the release of Anwar Ibrahim on 2 September 2004.

But Mahathir only launched his public attack on the Abdullah administration in late May 2005 by training his gun on his fomer loyalist Rafidah Aziz over the issue of approved permits (AP) for imported cars. The issue dominated the public domain for months.

Mahathir became the focal point of dissent among UMNO rentiers while Abdullah’s reformist credential was tainted, finding himself between a rock and a hard place. Mahathir crossed the line to attack Abdullah personally a year later.

At the same time, there was a lot of hype surrounding the Ninth Malaysian Plan, which would be released in the following year. Abdullah was more or less postponing all decisions in the name of the plan. The rentier class was eager to have a slice of the pie and thus was eager to use the UMNO general assembly to make a point.

Abdullah’s presidential speech on Thursday 21 July 2005 continued his line of thought since 2003 that “the Government cannot play the role of Santa Claus, perpetually handing out gifts. Contractors should have taken this as a signal to diversify to other sectors”.

According to Abdullah, “in 1992, there were only 2,049 Bumiputera contractors. By 2005, the figure had reached 46,000 – an increase exceeding 2,000 (two thousand) per cent in 13 years. Of these, more than 42,000 were registered as Class F contractors.

“Almost all these contractors expected government contracts. There are 63,000 contractors of all classes in a nation of 25 million. This equals to one contractor for every 350 Malaysians. In comparison, Japan, whose contractors participate successfully in international tenders, has a ratio of only one contractor to 10,000.”

It was too late. No one in UMNO was interested in Abdullah’s edicts and those outside the party had lost faith in Abdullah’s reform agenda.

Hishammuddin and his keris

A day earlier at the UMNO Youth assembly, Hishammuddin Hussein unwittingly stole the limelight with his keris. Being an English-educated elitist, Hisham is always under pressure to show off his Malay credentials. And being called pondan (sissy) by his PAS counterpart probably drove him to use the language of threats and violence.

Hisham’s brandishing of the keris was packaged with a “Malay agenda” and the call to revive the New Economic Policy (1970-1990), which Mahathir toned down with the National Development Policy (1991-2000) and the National Vision Policy (2001 onwards).

By then Abdullah’s voice had all but disappeared. Everyone at the July 2005 UMNO general assembly sang the racial tune as if it was in UMNO’s glory days of the 1970s. It was a downhill spiral for Abdullah, his agenda and his grip over the party.

Looking back, the private meeting in Port Dickson which I attended turned out to be an important one which I will write about it in the final instalment of this article next week. –The Rocket