Malaysian Leader Opens Door for Reforms

By James Hookway, Wall Street Journal

Malaysia’s Prime Minister Najib Razak opened the door to major political changes in this Southeast Asian nation Thursday by saying the government would abolish a decades-old law that allows for detention without trial and pledging not to hold anybody in custody because of their political beliefs.

Instead, the country’s draconian Internal Security Act will be replaced by new legislation targeted at detaining terrorists. Mr. Najib also said newspapers and broadcasters would be able to operate indefinitely without renewing their license each year, as is the case now, unless those licenses are revoked.

Mr. Najib’s moves could help redefine his troubled premiership if he delivers on his pledges, political analysts say, and could revive his own political standing in the run-up to new elections that must be held in the next 18 months.

The new measures also could help steer Malaysia toward a more open political and economic environment and head off the kind of pressures that have destabilized parts of the Middle East this year.

People familiar with Mr. Najib’s thinking say his remarks, which were broadcast on live television, are part of a wider—but cautious—reform program that is calibrated to liberalize this racially and religiously diverse nation of 28 million people and reinvigorate its economy without provoking a backlash from powerful conservative bureaucrats and grass-roots activists.

“Many will question whether I am moving too far, too fast. Some will say reforms should only be carried out in small steps, or not at all,” Mr. Najib said of his planned political changes. “There may be short-term pain for me politically, but in the long term the changes I am announcing tonight will ensure a brighter, more prosperous future for all Malaysians.”

Some activists and observers, however, are already questioning the reach of Mr. Najib’s reforms. Nalini Elumalai, secretary of the Abolish the ISA Movement, said she welcomed Mr. Najib’s speech but questioned whether the new laws that will replace the Internal Security Act might also be used against political targets, as the ISA has been used in the past. There are currently 37 people held in Malaysia under the law.

Bridget Welsh, a professor at Singapore Management University and a longtime observer of Malaysian politics, meanwhile notes that Mr. Najib didn’t mention any changes to one of the government’s most powerful tools: Malaysia’s sedition laws—which criminalize speech that generates ill-feeling toward the government or disharmony among the races—have also been used to silence critics.

“Mr. Najib is making a really important first step. He is embracing reform as a political idea—but it’s still an idea at this point,” Ms. Welsh said. “To garner long-term support he needs to really deliver substantial change.”

Mr. Najib’s speech on Thursday didn’t touch on the other key issue that frequently defines politics here: race. Since coming into power in April 2009, Mr. Najib, the 58-year-old son of Malaysia’s second prime minister, has rolled back parts of a wide-reaching affirmative-action program that for decades has been used to give a leg up to Malaysia’s majority-Muslim ethnic-Malay population and underpinned support for the ruling United Malays National Organization party. Many ethnic-Chinese and ethnic-Indian Malaysians say the program is unfair, and some prominent ethnic Malays argue that the policies have held back Malaysia’s economic potential.

Mr. Najib has responded by making it easier for all Malaysians to secure overseas scholarships and places at local universities, while stopping short of changing other core elements of the affirmative action program. He also has opened up barriers to investment in sectors such as finance and laid out plans to reduce the influence of powerful government investment funds, though some investors have asked for more.

Opposition politicians, meanwhile, have questioned Mr. Najib’s commitment to economic reform. While welcoming Mr. Najib’s early efforts to roll back the affirmative-action policies that have held sway here since deadly race riots in the late 1960s, opposition leader Anwar Ibrahim said in a recent interview that Mr. Najib rarely seemed convinced of his own policies. “They are a result of focus groups and consultative meetings and he doesn’t really prepare the government to implement them,” Mr. Anwar said.

The impact of these so-far modest changes also has been blunted by Mr. Najib’s government’s response to political dissent.

Last month, Mr. Najib announced plans to explore possible changes to Malaysia’s election laws after police broke up a pro-reform rally with water cannons and tear gas. More than 20,000 people attended the rally for a more transparent electoral system, the biggest political demonstration in the country since 2007. Amnesty International described the crackdown as the worst political repression in years.

Malaysia’s standing in the international community also has been badly eroded by the continuing trial of the opposition leader, Mr. Anwar, who is accused of violating Malaysia’s strict sodomy laws. Mr. Anwar denies having sex with a former male aide, saying the case is politically motivated. He was imprisoned on similar charges in 1998 before his conviction was overturned six years later.

Mr. Najib denies having anything to do with the case, pointing out that the complaint against Mr. Anwar was brought by his aide, Saiful Bukhari Azlan, not the state.

Political analysts said Mr. Najib’s speech could help him seize back the middle ground of Malaysian politics and regain territory lost to Mr. Anwar’s opposition alliance in the 2008 national elections. Mr. Najib by law must call new elections by spring 2013 and is widely expected to announce a vote before then.

At the same time, pledging fresh political reforms might also enable Mr. Najib to distance himself from the right wing of UMNO. Key members of UMNO remain reluctant to opening up the political environment or leveling an economic playing field that has long been weighted heavily in favor of Malaysia’s ethnic-Malay population through the use of the affirmative-action rules.

By introducing an ideological gap between himself and his opponents within the ruling party, Mr. Najib could make it more difficult for his rivals to counter his leadership and derail his plans to open up Malaysia, some analysts suggest.

*Celine Fernandez and Ankur Relia in Kuala Lumpur contributed to this article.