Political revolts around the world have targeted what are widely seen as corrupt and unaccountable political and business elite -- the elite that pursue their own interests globally at the expense of ordinary citizens and regulatory regimes in nation-states. The result has often been the elevation of demagogues stoking xenophobic passions against not only the elite, but minorities and immigrants. Yet one case -- Malaysia -- shows that demagoguery doesn’t have to be the inevitable consequence of elite misrule.

The scandal at 1Malaysia Development Bhd., the state investment fund more commonly known as 1MDB, has offered up a classic cast of apparent villains, from former Prime Minister Najib Razak and his wife, accused of siphoning hundreds of millions of dollars from the fund, to the bankers who allegedly helped them. Last month, for instance, the US Department of Justice implicated at least three senior bankers at the Goldman Sachs Group in the alleged fraud.

Two of them are accused of bribing officials in Malaysia and laundering hundreds of millions of dollars, while underwriting lavish lifestyles. One, former Southeast Asia chief Tim Leissner, has pled guilty to two counts of conspiracy. One of their Malaysian associates allegedly paid $27.3 million to a New York jeweler to design a pink diamond necklace for Najib’s wife, Rosmah Mansor. Goldman Sachs, which raised $6.5 billion for 1MDB and earned hundreds of millions of dollars in fees and commissions, now faces hostile scrutiny from federal prosecutors.

Demagogues tend to profit from the exposure of such blatant venality. And they often do so by feverishly circulating nasty conspiracy theories about rootless cosmopolitans and invoking the rights of the presumably rooted ethnic or racial majority.

Malaysian Prime Minister Mahathir Mohamad, who ousted Najib in elections last spring in part because of public outrage over the 1MDB scandal, would seem tailor made for that role of rabble rouser. As prime minister during the Asian financial crisis in the late 1990s, Mahathir railed against Western “currency speculators” and blithely played with anti-Semitic stereotypes as he blamed George Soros for Malaysia’s troubles.

During his first stint in power from 1981 to 2003, Mahathir was also an unabashed exponent of racial nationalism, elevating the Malay majority over the country’s sizable Chinese and Indian minorities. He cracked down on the media, imprisoned his opponents on flimsy charges, and presided over a regime of crony capitalism.

Given this record, his re-election could have stirred fears that Malaysia was following its neighbors -- Thailand, Cambodia, Myanmar -- down the dark path of authoritarian rule. Instead, a remarkable political alignment has occurred in Malaysia, as the old autocrat and racialist has reinvented himself as a democrat and multiculturalist.

In his election campaign, Mahathir effectively mined discontent among Malaysians of all ethnic and racial backgrounds, especially the young. Presiding over a unique coalition of parties and personalities, including people he had viciously persecuted, the former Malay nationalist delivered his country’s first multiethnic vote.

In office, Mahathir has sought to reassert his country’s political and economic sovereignty. Whether re-examining extravagant Chinese-sponsored projects or demanding refunds from Goldman Sachs, he’s doing what every politician today must do: attend to the welfare of the many, as opposed to the enrichment of the few. He has focused on specific cases of malfeasance, rather than demonizing whole segments of society or creating faceless bogeymen. The goal is transparency, not score-settling, and support for him is widespread.

It’s entirely possible, if not probable, that in the few months that remain to him in office, Mahathir lapses into his former authoritarian ways. Hopefully, though, the broad-based movement he has led will outlast his worst instincts.

Certainly, it offers an instructive lesson to all those who despair at their polarized societies and their out-of-control hatreds: Tthat angry political movements provoked into being by a venal and dysfunctional ruling class need not start civil wars or trade wars. Instead, the discrediting of the old ruling elite can open up scope for a demographically diverse and politically progressive coalition. It might even give democracy another chance.


Pankaj Mishra
Pankaj Mishra is a Bloomberg Opinion columnist. -- Ed.

(Bloomberg)