How an ill-fated stock listing could sway Malaysia’s election
The controversial listing of the Federal Land Development Authority’s commercial arm has left many of the Malaysian government’s key supporters – the rural poor – rethinking their allegiances
Viewed from afar, Malaysia’s ruling party, the United Malays National Organisation (Umno), might seem nigh-on unchallengeable in the general election expected as early as this year. After all, it has been in power since the country’s first such election in 1955 – two years before the country’s independence from Britain.
Yet, while it is undeniably strong, its armour is not without chinks. The party cannot afford to lose the support of Malaysia’s rural constituencies – a dependency that has entwined its fate with that of the Federal Land Development Authority (Felda) for the past 60 years and may now represent just such a weak spot.
Felda was created by Umno a year after its maiden election win to handle the resettlement of rural poor into newly developed areas and smallhold farms. It went on to alter the development of Malaysia beyond recognition as large swathes of unused land became well-irrigated plantation schemes that transformed both agricultural exports and the incomes of its rural communities.
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Settlers on Felda land have remained fiercely loyal to Umno, which forms the backbone of the ruling coalition Barisan Nasional (National Front), ever since and have played no small part in defending Umno’s grip on power. Of the party’s 86 parliamentary seats, 54 are from constituencies on Felda-developed land.
But there are signs Umno’s grip may now be loosening with opinion among its erstwhile diehard support base now deeply divided by the government’s handling of the listing of Felda’s commercial arm – Felda Global Ventures (FGV) – on the Kuala Lumpur Stock Exchange in May 2012.
While savvy investors who bought FGV shares in November 2016 may be laughing all the way to the bank with returns of 36 per cent (the uptick followed a management reshuffle), those who bought at the time of the listing have seen their investments cut in half.
