21-7-2023 (KUALA LUMPUR) As the August 12 elections approach, Prime Minister Anwar Ibrahim’s government is taking steps to boost support among rural Malays by writing off RM8.3 billion (S$2.4 billion) of debts held by land settlers in Felda plantations. The move is aimed at reducing financial burdens for settlers and gaining crucial support from this influential voting bloc.
Helping to alleviate debts in the Federal Land Development Authority (Felda) resettlement schemes has become a key objective for Prime Minister Anwar, especially as Umno, a pivotal member of his unity government, faces challenges in retaining Malay support.
In late June, Mr. Anwar announced the government’s plan to restructure Felda’s finances, with a major highlight being “the abolition of 80 percent of settlers’ loans worth RM8.3 billion.” On July 19, he issued documents providing evidence of signing government-guaranteed sukuk (Islamic bonds) and a RM990 million payment instruction to Felda for the redemption of its sukuk for 2023. The government will allocate RM990 million annually for ten years to support the debt write-offs.
The issue has sparked a political battle, with opposition alliance Perikatan Nasional (PN) chairman Muhyiddin Yassin claiming that the debts of the settlers were written off during his tenure as prime minister in 2021. The ongoing debate reflects the intense competition for votes between the ruling Pakatan Harapan (PH) government, led by Mr. Anwar, and the opposition led by Muhyiddin.
Felda voters, comprising rural Malay heartlanders, have historically been wooed by political parties ahead of major elections. Felda was established in 1956 to help underprivileged Malays own land and cultivate successful plantations, effectively creating a loyal vote bank for Umno.
The upcoming state assembly elections in six states on August 12 are particularly significant for the political landscape. Five of these states host Felda land schemes, with the Felda voters estimated to represent between 0.4 percent in Selangor to as high as 11.7 percent in Negeri Sembilan.
Anwar’s PH coalition aims to secure greater support from Malay voters, as it only won 13 percent of the Malay vote in the previous general election. PH is now relying on Umno’s support to bolster its standing among these voters.
However, Umno’s popularity has declined considerably due to the 1Malaysia Development Berhad (1MDB) corruption scandal involving former Prime Minister Najib Razak, who is the son of Tun Razak Hussein, the founder of Felda. Additionally, the rise of other Malay parties has weakened Umno’s dominance in Felda strongholds.
In the November 2022 general election, Umno won only 15 out of the 53 constituencies with Felda communities, marking a significant decline compared to previous elections. On the other hand, PN continues to maintain strong support in Felda areas in Kedah, Terengganu, and Kelantan.
PN is perceived as more aligned with race and religion issues, which resonates well with Felda farmers. The government’s effectiveness in addressing the needs of these communities, particularly the Malay majority, plays a crucial role in shaping voter sentiments.
