The 1 Malaysia Development Berhad (1MDB) scandal has allegedly seen US$3.5 billion in tax dollars misappropriated by elites, revealing high levels of political corruption in the country. The issue is hidden by the dominance of race and religion in political debate.

All eyes have been on Malaysian Prime Minister Najib Razak who remains unaccountable for the 1MDB scandal, which the FBI states has ‘defrauded the Malaysian people on an enormous scale’. In a classic strategy of divide-and-conquer, Najib and his supporters have disguised economic issues as racial ones by reigniting a historically entrenched resentment between the Malay Muslim community and ethnic minorities. The manoeuvre has ultimately shifted attention away from failings of governance in Malaysia.

Since the 1MDB scandal surfaced, racial and religious issues have been at the forefront of Malaysian politics. Consequently, a country once known for its ‘harmonious diversity’ is now headed by a Prime Minister who depends on divisiveness to stay in power.

Malaysia is a multi-racial society where the ethnic majority is the Malay Muslim community. The Chinese and Indian ethnic minorities first arrived in Malaysia in the 19th century and practice Buddhism, Hinduism and Christianity. Enshrined welfare policies provide tertiary education and cheaper housing for the Malay Muslim community, which allowed for them to break out of poverty and join the ranks of prosperous Chinese Malaysians.

However, Malaysia’s ethnic minorities still struggle to buy homes and access higher education. Malays suffer too. Welfare has been ineffective in reducing poverty for Malays who still constitute 70% of the poorest Malaysians. Still, backed by nationalist politicians and the Malay majority vote, discriminatory welfare policies remain a means for financing benefactors and affirming Malaysia’s status as a Muslim country.

The overarching objective of welfare was to make Malaysia a cosmopolitan society that still incorporated the best aspects of local culture. This objective was misinterpreted as pro-Malay politicians used the introduction of discriminatory welfare to affirm Malays as the ‘true owners’ of Malaysia. This narrative has facilitated the rise of pro-Malay policies which include the introduction of barriers preventing ethnic minorities from working in the civil service. Over time, Malays have been encouraged to gain a tertiary education and attain high levels in government while minorities are pushed into low level positions.

Criticising Malay supremacy is taboo in Malaysia. In a country where welfare and political authority are increasingly perceived to be an unchecked inalienable right of Malays, a protest by ethnic minorities to hold Najib accountable for financial corruption may constitute a threat to Malay political authority.

That’s what happened last year when 200,000 Malaysians—most of whom were Chinese Malaysians—protested in Kuala Lumpur to demand transparency and accountability of Najib and his government. The movement was orchestrated by an organisation called Bersih. The protest was declared an illegal act of sedition and Bersih’s website was blocked. Najib publicly stated that Bersih protestors threatened the Malay Muslims’ right to welfare and that a demonstration of ‘Malay pride’ was required to counter the threat.

Fuelled by Najib’s message, the pro-Malay Red Shirts movement took to the streets to denounce Bersih. Unlike Bersih, the Malaysian government declared the Red Shirts’ protest legitimate. Politicians seeking to avoid scrutiny continue to promote the narrative that pro-democratic movements threaten Malay Muslims’ rights to welfare, as well as legitimising pro-Malay movements and punishing anti-corruption initiatives.

That sense—that power is slipping into the hands of minorities—exacerbates racial divisiveness in Malaysia. Red Shirts now target Chinese and Indian neighbourhoods as venues for mass gatherings, igniting fears of ethnic violence. When questioned, one protestor stated the Red Shirts’ protest ‘shows support for Najib and reaffirms that the official religion of this country is Islam. Malays are the rightful owners of this country.’ Malaysian diversity—once an asset for sustaining a cosmopolitan society—is now the government’s tool for cultivating problems around social cohesion and security.

More recent cases such as the Mara property scandal, where government officials pocketed (Malaysian Ringgit) RM13 million, reveal that despite wide criticism, corruption still exists as a pervasive part of Malaysian politics. Unpunished corruption provides a breeding ground for deeper levels of misappropriation, to the detriment of the Malaysian people.

The decision to delegitimise anti-corruption initiatives and support a Malay nationalist counter-movement creates a politically explosive environment where entrenched resentment between racial groups fosters violence and stagnates economic growth. Hidden behind the chaos are anonymous elites hoarding growing piles of missing tax money. In the ultimate game of hide-and-seek, politicians continue to shield their wrongdoings behind scapegoats like minorities and protestors, while angry citizens continue to look for an all-elusive justice.