United We Stand: Mahathir’s Resignation

At one o’clock local time on the 24th of February, Malaysia’s 95-year-old Prime Minister, Tun Dr. Mahathir bin Mohamad, shocked the world by announcing his resignation. The two-time Prime Minister is the single most powerful post-independence political figure in Malaysian history, and his resignation has thrown the country’s political future into turmoil as all sides struggle to react to the news.

Not only was Mahathir Prime Minister from 1998-2003, but he was also a founding member of the United Malay Nationalist Organization (UMNO); a component of the Barisan Nasional (BN) coalition that led the government from independence in 1957 until it was finally superseded in 2018 by the Pakatan Harapan coalition. Not incidentally, Pakatan is led by Mahathir’s long-time Deputy Prime Minister, Anwar Ibrahim, who was ousted from UMNO in 1998 after a falling out with Mahathir. Anwar’s subsequent journey through the political wilderness is itself an amazing story of persecution, incarceration, and a determined return to power, which may have something to do with Mahathir’s surprise move yesterday.

Power Play

The drama between Anwar and Mahathir goes back to the then-Deputy Prime Minister’s rising ambitions in the late 1990s. Having risen to prominence partly due to his stringent Islamic politics, Anwar’s increasing popularity among the majority Malay voters began to strain the relationship with his boss. When the Asian Financial Crisis rocked the emerging economies of Southeast Asia, Mahathir took a controversially unconventional approach. He pegged Malaysia’s currency, the Ringgit, to the US Dollar and severely restricted its fungibility on world markets. Though the move was ultimately the right one for Malaysia’s economy, Anwar’s vocal opposition to it finally destroyed his relationship with Mahathir.

Sensing that Anwar was using his criticism not just to fight Mahathir’s currency policy but to build a political coalition against him, Mahathir reacted with surprising fury. He ousted Anwar from his position and from UMNO, charged him with sodomy – a move designed to hurt his standing with Malays – and jailed him under the Internal Security Act (ISA). The ISA is a successor to similar laws enacted during British rule and conceived as powerful but necessary tools for fighting a longstanding and very effective Communist insurgency. The ISA’s use as a political tool against Anwar cast a shadow over Malaysian governance until 2012 when the ISA was repealed and replaced by two other laws ostensibly written with greater accountability in mind.

Mahathir finally felt prepared to retire from politics in 2003 once Anwar was safely in prison. However, Mahathir did not go quitely into a post-political life. Through his influence in UMNO, Mahathir first maneuvered to place Badawi — and unlikely candidate — in the Prime Minister’s post before later turning against him in favor of Mohammad Najib bin Razak, scion of a political family and son of the country’s second Prime Minister. Aside from these maneuvers, there were constant declarations from Mahathir himself opining on all manner of subjects. His statements had a tremendous impact on UMNO’s leadership in particular, constraining their freedom of action and bending the party to his will despite his status as a private citizen.

Najib, a compelling politician in his own right, began to exert himself more independently than Mahathir was comfortable with. Public disagreements between the two occasionally caused concern within UMNO, especially as Anwar’s leadership of a series of opposition coalitions began to erode BN’s dominance of Malaysian politics even as he served a second prison term for new charges of sodomy starting in 2015. When emerging details about the massive 1 Malaysia Development Berhad (1MDB) corruption scandal began to implicate Najib himself, Mahathir again intervened boldly.

Bersatu

Translated from Malay, “Bersatu” means “united” and was the short name Mahathir selected for an entirely new political party he would use to take on Najib. Though the party drew some prominent defectors from UMNO, it appeared to have the narrow political goal of saving Malaysia from Najib’s corruption by replacing him with Mahathir. To accomplish this, he made a pact with Pakatan, presenting Anwar as the victim of a politically motivated conspiracy and promising to pardon him if they successfully contested the 2018 general election. With pressure mounting from 1MDB, Pakatan managed to win a substantial majority in the parliament. For the first time in Malaysia’s history, BN was no longer in power. Mahathir assumed duties as the country’s seventh Prime Minister on the 10th of May 2018. Anwar was pardoned and released on the 16th and Najib was arrested for corruption in July.

Though their victory seemed complete, there were cracks. As part of the deal with Pakatan, Mahathir was supposed to serve temporarily until some undefined milestone would signal the ascendance of Anwar to the post of Prime Minister. Though both men talked openly about this inevitable transition and their personal reconciliation at the time, Mahathir’s remaining in the position for nearly two years may have exacerbated distrust between them going back to 1998. These well-known animosities have led to speculation that Mahathir’s resignation today may have had more to do with holding onto power than relinquishing it. According to the popular Malaysian newspaper, The Star, a “well-placed source within Bersatu” alleged that Mahathir’s resignation was the result of an internal split over whether to remain in the Pakatan coalition. Leaving the coalition would have likely forced the King to allow Anwar to form a new government, a move Mahathir ostensibly opposed.

Malaysian politics is now at a crossroads. With Bersatu officially out of Pakatan, nearly a dozen Bersatu officials have resigned along with Mahathir. Though this would typically be a strong signal Anwar will finally achieve his dream of becoming Malaysia’s Prime Minister, the King this afternoon announced Mahathir would continue as “interim Prime Minister” until a new one can be chosen. This is an odd decision considering Anwar remains the leader of the largest party in Parliament, and the Deputy Prime Minister (Anwar’s wife, Wan Azizah Wan Ismail) is a legitimate politician in her own right. What happens next will be an intense interaction between the King, Anwar, Mahathir, and various factions within Bersatu and Pakatan.


Lino Miani, CEO Navisio Global LLC

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.

Lebanon’s Prime Minister-Delegate Faces Long Odds

This article has been republished with permission from our partner, Stratfor. The original version was first published in Stratfor’s WORLDVIEW and can be found here.
HIGHLIGHTS
  • Hassan Diab, who is set to become Lebanon’s new prime minister, will not overcome the country’s political, economic or security challenges.
  • Prolonged political paralysis will heighten Lebanon’s economic crisis, and potentially spark violence as major factions like Hezbollah struggle to hold onto power.
  • Heightened tensions between the United States and Iran could also lead to more sanctions on Lebanon, or even to open conflict there.

Lebanon’s new candidate for prime minister, Hassan Diab, stands little chance of breaking Lebanon’s political deadlock. And he will face even greater challenges than political paralysis, such as a worsening economic crisis and security crises as Hezbollah turns to stronger tactics to maintain its influence and as the chances grow of a U.S.-Iran regional conflict that could draw in Lebanon.


The Big Picture
Lebanon is engulfed in political paralysis and economic crisis, and its prime minister candidate, Hassan Diab, will not have many ways to overcome either. As the economy worsens, Lebanon’s security situation will become even more precarious. Meanwhile, rising tensions between Iran and the United States could spark a conflict that brings a regional war to Lebanon itself.
 

Daunting Prospects for Domestic or Foreign Support

Diab, who is set to succeed longtime Prime Minister Saad al-Hariri as prime minister, will face substantial hurdles. These include winning the support of a protest movement that will not accept a prime minister with ties to the establishment, which they blame for Lebanon’s economic crisis and long-standing corruption. They also include simultaneously winning the support of either the country’s March 8 alliance, to which Hezbollah belongs, or the March 14 alliance, to which al-Hariri’s Future Movement belongs. To maintain the support of either of the alliances, Lebanese prime ministers must dole out state support to them and their adherents. But it is precisely that sort of insider activity that is motivating protesters to take to the streets. Protests have helped accelerate Lebanon’s economic crisis by disrupting the economy, driving away tourists and causing capital flight. By pleasing either protesters or politicians, a prime minister angers the other, making it much harder to govern. At the same time that securing domestic support will prove daunting, foreign support will be harder to find. Lebanese prime ministers have often been able to govern thanks to foreign largesse. That support, which in the past has taken the form of direct U.S. or French aid and favorable bond purchases from Gulf Arab states, has allowed the government to spend lavishly to keep its own supporters happy, often through providing government jobs or favorable contracts. But foreign benefactors have become unwilling to grant Lebanon new aid unless it enacts austerity measures, a requirement that would cut the funds the government needs to maintain patronage networks.
This will undermine the political consensus among Lebanon’s major parties (and their associated militias) that has kept them from challenging the sectarian political system, which since independence has guaranteed that a Christian will serve as president, a Sunni as prime minister and a Shiite as speaker of parliament. Moreover, the nonsectarian nature of the Lebanese protest movement undermines Lebanon’s sectarian political system, challenging traditional political players.

Few Good Options for Politicians

Lebanon’s government and political insiders have little recourse. They cannot rally protest movements against their political enemies, like the March 8 and March 14 alliances did in 2005 after Prime Minister Rafik Hariri’s slaying created a political crisis. Today, with the bulk of the protesters angry at all political parties, the alliances don’t have the same rallying power. Beirut can’t increase spending to alleviate the country’s economic woes either, given the drop in foreign aid, the government’s indebtedness and its dwindling foreign reserves. Diab is not immune to these challenges. Though a relatively apolitical Sunni, he faces strong resistance from the protest movement in large part because he’s seen as too close to Hezbollah — and therefore as too much of a political insider. He also lacks the kind of foreign allies to tap for aid that al-Hariri had, though even if Diab did ask, aid would probably not be forthcoming anyway. He is therefore likely to struggle to accomplish much once in office, and may not stay there long. But even obtaining and exercising power effectively would still not solve three other major problems bedeviling the country: the economy, Hezbollah and potential U.S.-Iranian conflict.

The Economy, Hezbollah and U.S.-Iranian Conflict

Lebanon’s deeply unstable economy is worsening. Some major Lebanese bonds are due as early as March, and foreign exchange reserves, a bulwark the country had built up in case of a crisis, are strained by a combination of U.S. banking sanctions aimed at Hezbollah and the deteriorating economy. The United States has broken with its previous policy by bringing sanctions against Lebanese banks and upsetting the country’s delicate internal balance. In 2020, it is likely to seek to further sanction Hezbollah — and by extension Lebanon’s economy, since Hezbollah is entangled with much of Lebanon’s business. These sanctions would worsen Lebanon’s economic situation and complicate any potential foreign bailouts. The longer the economic crisis goes on, the more likely Lebanon is to run short of basic goods and be unable to pay state worker salaries, issues that will impact all sects and political parties. That will weaken the insiders’ hold on their old loyalists and strengthen the protest movement. In a bid to salvage whatever legitimacy they can, Lebanon’s factions — especially Hezbollah — will pivot from financial incentives to physical intimidation, potentially sparking a civil crisis. Hezbollah and its allies would prefer to avoid civil conflict, but they do not want to lose their gains from the May 2018 election, when a Hezbollah ally became the country’s health minister, giving him significant patronage powers. They also do not want to see the emergence of a less sectarian Lebanon, since this could cause voters in Hezbollah turf to consider backing another party. To prevent this outcome, Hezbollah has already sought to cow Shiites into not participating in protests.
Hezbollah will not purposefully stoke a civil conflict lest things get out of hand, but its increased use of physical intimidation may spawn one anyway. 

But while Hezbollah will not purposefully stoke a civil conflict lest things get out of hand, its increased use of physical intimidation may spawn one anyway, by setting up potential clashes between Hezbollah and protesters, the Lebanese army or other armed political factions. Any ensuing confrontations could eventually spark civil conflict. If that happens, foreigners are likely to get involved. The Americans, the Israelis, the Iranians, the Gulf Arabs and even the Syrians, Russians, and Turks all have an interest in shaping the country’s security situation. Meanwhile, no Lebanese faction has the power to stop the U.S.-Iran conflict, the ramifications of which could hit Lebanon, whether via sanctions or outright military conflict. Should this come to pass, Lebanese political paralysis would get even worse, while the country would face an economic and security crisis unlike anything since its 2006 war with Israel. Moreover, Hezbollah, Tehran’s most capable proxy, could find itself as the spearhead of Iranian retaliation against Israeli or American targets. Doing so, however, would invite a massive Israeli and/or U.S. response in Lebanon. And a military conflict of that scale would usher in yet another troubling chapter in Lebanon’s crisis-ridden history.
 
Editor’s Note: The map accompanying this assessment has been replaced to correct a mislabeled city name.

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Engulfing Natuna: Indonesia and the 9-Dashed Line

Last month, a small fleet of Chinese fishing vessels escorted by the Chinese Coast Guard began fishing the waters of the Indonesian island of Natuna, making it the latest center of tension in the South China Sea. Natuna and the exclusive economic zone around it sit very close to the infamous 9-dashed line China claims as its maritime boundary in the region, raising the risk of confrontation over where Beijing decides it can send its trawlers. Though Indonesia denies it is a South China Sea claimant, Jakarta is discovering the South China Sea controversy may claim Natuna anyway.

Origins of the Dispute

Though territorial disputes in the South China Sea are not new, the coming into force of the United Nations Convention on the Law of the Sea (UNCLOS) in 1986 codified an array of customary international laws regarding maritime boundaries. While this solved a great many problems, it created others. One of those was the need for China (and others) to establish their baselines in the South China Sea. China did this by reviving an old map featuring nine dashes in a line extending far to the south of Hainan Island, the now infamous 9-dashed line.

The South China Sea is now one of the world’s most heavily disputed areas. No fewer than six states have overlapping claims on all the resources within exclusive economic zones (EEZ) that extend 200 nautical miles from their UNCLOS-defined baselines. Not only does the 9-dashed line put China at odds with all of these claimant states, the ambiguity of using a dashed line as an international boundary enables Beijing to flexibly interpret its claim, including the EEZ around Natuna.

Claims in the South China Sea that affect NatunaShortly after the Chinese flotilla arrived in mid-December, Indonesia registered a complaint with the Chinese ambassador. The response from Beijing provided no legal argument, saying that their fisherman “have long been active in the area.” This, however, is not the first time Jakarta faced problems with Chinese encroachment. Since October 2014, the administration of Joko Widodo (Jokowi) has sunk well over 500 foreign vessels caught fishing illegally in Indonesian waters. Most of those were destroyed in spectacular controlled explosions broadcast on the internet to maximize their deterrent effect.

Though, the vast majority were not seized near Natuna, nor were most of them Chinese. Still, Beijing has been careful to avoid triggering Indonesia’s inherent right to self-defense through the use of tools like the Chinese Maritime Militia, a fleet of civilian craft that operate in a coordinated manner to disrupt and intimidate non-Chinese shipping. The ambiguous status of the Maritime Militia protects it from military responses and instead pits it against coastal law enforcement agencies that are less well-equipped to deal with them. The deployment of the Chinese Coast Guard – rather than the Maritime Militia – from the outset of the Natuna drama suggests Beijing does not believe ambiguity will protect it from Indonesian reprisals.

Jakarta’s Natuna Response

The Indonesian response was substantial despite being slow to gather. After receiving the unsatisfactory reply from Beijing on January 1st the Jokowi administration increased naval patrols in Natuna on January 3rd. Then it dispatched two additional warships followed by four F-16 fighter aircraft to Indonesia’s brand-new military base on the island. By the time of Jokowi’s visit on the 8th, where he delivered a defiant speech in defense of Indonesian sovereignty, Natuna was host to the F-16s and seven warships, more than double its usual complement.

Though China withdrew its flotilla to the boundary of Natuna’s EEZ on January 9th, Indonesia’s Chief Security Minister, Mahfud MD, announced the Navy would sustain increased patrolling for a time. Additionally, in a move that echoes the ambiguity of China’s Maritime Militia, the Indonesian Fisherman Association sent some 500 fishing vessels to Natuna to deter further incursions. Though it is not clear exactly how this will work or how effective this type of response will continue to be in the future, for now, Jakarta has made the point that it does not take incursions into its waters lightly. That it did so without regional partners suggests this will not be the last time China attempts to push the limits.

ASEAN Leadership

Many observers believe a strong Indonesian response will stiffen the resolve of other claimant states to stand up to China. Still, that kind of unity on South China Sea issues has been elusive at best. China adopted a divide and conquer strategy early on, insisting on negotiating disputes bilaterally. Beijing wields its economic power as a foreign policy tool, granting or withholding commercial assistance in accordance with its priorities. As this element of Chinese influence grows, so, too, does its impact and effectiveness on its rivals. The strategy has been successful thus far. ASEAN has been unable to agree on a declaration regarding the South China Sea and still hotly debates a less muscular “code of conduct.”

Indonesia is the largest ASEAN member state in almost every measurable way. While its leadership in the region is real and significant, Natuna is not even a unifying issue within Jokowi’s government. While he and Foreign Minister Retno Marsudi focus on the sovereignty of Indonesia’s EEZ, the powerful Defense Minister, Prabowo Subianto, downplays the issue and frames it as an economic one. Prabowo’s rhetoric when he ran for President against Jokowi positioned him as a virulently anti-Chinese candidate. His transformation illustrates the sensitivity of this issue to domestic politics.

Indonesia, like every other South China Sea claimant state, must determine how to defend its sovereignty against an increasingly powerful and assertive China. Bandwagoning with other ASEAN member states is clearly not an option. Balancing behavior and alliances with regional and global powers can help prevent the situation from escalating to armed conflict. Still, both are problematic for the island nation with a defiantly independent tradition. In Natuna, Jakarta elected to employ a show of military force as a deterrent, and it worked…this time. However, Beijing has proven adept at applying all its elements of national power to achieve its goals. As the 9-dashed line creeps forward and the South China Sea dispute threatens to engulf Natuna, Jakarta will find its military power stretched in ways it is not designed to operate.


Lino Miani, CEO Navisio Global LLC

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.

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