KUALA LUMPUR (Reuters) - Malaysia's Prime Minister Najib Razak on Wednesday pledged to stay true to a decades-old positive discrimination policy for the country's majority ethnic group, ahead of national polls that could be called in the coming months.
The next election, which must be called by mid-next year, would be the toughest yet for Najib as he grapples with a mutli-billion dollar financial scandal, simmering discontent from rising living costs and a growing challenge from his former mentor turned foe, Mahathir Mohamad.
Najib said on Wednesday that the government had already handed out 15 billion ringgit (£2.7 billion) in projects to firms owned by the majority Bumiputera or "sons of the soil", in line with the goal of uplifting the economic standing of the ethnic group.
"This is a huge amount as a commitment to this project and the value that is distributed to Bumiputera companies will continue to rise in the future," Najib was quoted as saying by local newswire Bernama.
The government also began releasing the third and final payout under the annual 1Malaysia People's Aid or BR1M programme this week. A total of 6.8 billion ringgit was allocated under the 2017 budget for BR1M, targeted at 7 million recipients.
Najib lost the popular vote in the 2013 polls, and is expected to roll out a people-friendly budget this October targeted at the rural Malay electorate.
The prime minister, however, faces the threat of losing support from his core base if Mahathir successfully convinces the rural electorate that their plight in dealing with a rising cost of living has much to do with the scandal-ridden state fund 1Malaysia Development Berhad (1MDB).
1MDB is the subject of money-laundering investigations in at least six countries. The U.S. Justice Department alleged in civil lawsuits that about $4.5 billion of funds were misappropriated from the fund.
Najib denies wrongdoing.
The U.S. Justice Department said in its latest court filing on Thursday it was conducting a criminal investigation of 1MDB and asked for a stay on civil lawsuits it had filed to seize assets allegedly bought with money stolen from the fund.
Najib denied taking money from 1MDB after it was reported that investigators traced nearly $700 million to his bank accounts. Authorities cleared him of any wrongdoing, saying the money was a donation from Saudi Arabia.
(Reporting by Joseph Sipalan; Editing by Robin Pomeroy)