Mahathir back in the saddle?

Last week, the Malaysian government announced its allocation of public university seats for the upcoming academic year. Only 19 percent of Chinese students got places, along with 4 percent of Indians despite the fact that the two together make up about 30 percent of the student population. Last year, Chinese students got 23 percent, in line with their proportion of the overall population.

That was the first tangible fallout from the 13th general election held on May 5, in which the BN, the ruling national coalition, won 133 of the 222 seats in the Dewan Rakyat, or Parliament, preserving its majority despite the fact that it only received 47.38 percent of the popular vote against 50.87 for the opposition Pakatan Rakyat coalition headed by Anwar Ibrahim.

The second came yesterday with the revelation by DAP national publicity chief Tony Pua of the award of a RM1 billion (US$314 million) commuter railway project in the massive government-backed Iskandar development in the southern state of Johor to Metropolitan Commuter Network Sdn Bhd, a 60:40 joint venture between Malaysian Steel Works Sdn Bhd and KUB Malaysia Bhd, both of which are linked to Umno, to build and operate a 100km inter-city rail service in Johor.

According to an official with the company quoted in local media, Masteel will receive a 37-year build-own-transfer arrangement on the project despite the fact that it is slated to break even in 12 years. Although Masteel says the project was a private sector initiative dating from 2008, it is inconceivable that it would have been granted without the imprimatur of the government.

The common denominator appears to be the return of Dr Mahathir Mohamad, the 88-year-old former prime minister, and his close friend and ally, former finance minister Daim Zainuddin, at the top of the power structure in Umno, politically emasculating current Prime Minister Najib Razak.

Despite the loss of the popular vote, the majority of the rank and file inside Umno believe it was Mahathir's strident racial politics that preserved the BN's - and particularly Umno's - place at the top of Malaysian politics, and that it was Najib's attempt to reach out to the other races that cost them.

Ethnic Malays make up 60.3 percent of Malaysia's population, Chinese 22.9 percent and Indians 7.1 percent, according to the latest census. Malays and Indians dramatically abandoned the BN in the May election, with the MCA hit so hard that the party, once the second-biggest in the coalition, refused all cabinet positions. The MIC fared somewhat better, but not much.

Mahathir, Daim are in charge

"Najib was a good prime minister. But instead of strengthening his hand, the Chinese and non-Malays and non-Muslims weakened him. But Umno is strong. So Najib is out of steam," said a lawyer with close contacts to the Mahathir wing of the party.

"Najib has lost energy, lost his mandate, lost respect. Mahathir, Tun Daim and the Umno grassroots are in charge."

The practical effect is likely to be felt sometime around the Umno annual general meeting later this year, he and other sources say. The party appears to be following the dictates of Malay nationalists such as the firebrand Ibrahim Ali, the head of the NGO Perkasa, and will seek to cut further into Chinese opportunities in commerce, education and other fields.

In particular, several sources said, Najib's attempts to broaden the investment horizon in Malaysia through cutting back on ethnic Malay ownership privileges are dead, along with his 1Malaysia attempts to reach out to other races.

Najib himself has gone silent, leaving his faction in the party distressed and at sea, believing he was so discouraged with the election results that he has basically given up. After the election, he left for an extended government trip to Tanzania and London, followed by a holiday on the French Rivera, then returned to Malaysia after two weeks to continue to remain mute.

For more, go to Asia Sentinel.