Malaysia Matters Podcast

The top job is seemingly Najib’s to loose. But criticism of the government’s handling of the current economic condition exposes an area where he must be careful. In response to prodding that he should show more leadership, Najib has said that a plan will be unveiled along with the 2009 budget this Tuesday, November 4^th. Simultaneously, he is playing down the impact that economic news from abroad is having on the Malaysian economy. Najib…

…reiterated that Malaysia would not face recession this year and the gross domestic product would remain around five per cent.

He noted that in the last two or three days, the volatile global financial market had seen many countries being affected financially and economically.

“We should be grateful that the pressure on Malaysia is not so bad compared with other countries.”

But Najib needs to be careful. His own government - Badawi himself – recognizes the need to tighten the belt a bit.

A 1.7 billion ringgit (470 million dollar) deal to buy 12 military helicopters from Eurocopter because of the bleak global economy.

“At the moment, we have decided not to purchase the helicopters. We need to delay it … because of the financial crisis. We need to have money,” Prime Minister Abdullah Ahmad Badawi told reporters.

Abdullah’s decision to scrap the deal for the 12 Cougar EC725 helicopters awarded to the European company is one of the government’s first major cost-cutting move as it re-prioritises its budget to cope with the worsening global financial crisis.

“We just cannot be borrowing every time. We need money. The best thing to do now is to reallocate our budget,” said Abdullah, who is also defense minster.

There is much that Najib might get wrong, but still get away with. Mishandling the government reaction to the current economic crisis is not one of them.

Next week’s announcement will be critical.

In a clear attempt to curry favor amongst the Indian electorate, Malaysian Prime Minister Abdullah Ahmed Badawi orchestrated a pre-Deepavali festival release of ten Indian protesters that bad been arrested late last week while presenting a petition at Badawi’s office for the freedom of five activists that have been jailed since November of last year. Their group has been outlawed for about a month now.

As reported by the Economic Times:

Those held included K. Shanti, wife of Hindraf chairman P Waythamoorthy, who is in self-exile in London, and their six-year-old daughter Vwaishhnnavi. Shanti was released on police bail Thursday night and Vwaishhnnavi left with her, official news agency Bernama said. 

A police spokesman said all of them were freed to enable them to celebrate Deepavali. “Although the police, under the law, could extend their remand orders to facilitate investigations, yet on humanitarian ground they were released to enable them to celebrate the festive occasion,” the spokesman added. 
‘ 
Home Minister Syed Hamid Albar last week said in an interview that the action against the banned movement should not be construed as a clampdown on Indians orHinduism. The action taken so far, he said, was simply because of their association with militancy and their extremist views. 

Badawi spoke to a group on Sunday saying: “In the spirit of Diwali, that good will always prevail. Malaysians must remain together and not allow extremist groups and individuals to cause tensions to rise. “We are mature and united enough to recognise that the vast majority of Malaysians, regardless of race or religion, all aspire to achieve the same objectives for our families and for our country.”

For bloggers, an interesting profile is up on former PM Mahathir Mohamed, who has become a vocal blogger in Malaysia:

Earlier this year, like many other inconvenient critics, he joined what seems to be a political wave of the future, creating his own acerbic blog - www.chedet.com - an online journal where he vents in both English and Malay several times a week.

Around the region, bloggers like him are becoming a fifth estate, challenging the government’s monopoly on information in Singapore, evading censors in Vietnam and influencing events in places like Thailand, Cambodia and China.

In March, political experts say, Malaysia’s bloggers helped tip the balance, contributing to the biggest upset the governing party, the United Malays National Organization, had suffered since independence in 1957. For the first time in decades, it fell below two-thirds of the seats in Parliament, and it lost control of 5 of 13 states.

Two months after that, in May, Mahathir went digital, cutting and thrusting with elan.

“It is time the so-called intellectuals realize they were being duped by the Master of Spin,” he wrote on Aug. 21, referring to his bitter enemy, Anwar Ibrahim, who was his deputy prime minister and now leads the opposition.

“The pious Muslim, who is also the bosom pal of Paul Wolfowitz, the neo-con Jew, the killer of Muslims,” he said, referring to the former U.S. deputy secretary of defense.

The article also speaks about Jeff Ooi, one of Malaysia’s first political bloggers, who decided to run for Parliament, and won. It turns out, that it was Ooi who persuaded Mahathir to take up blogging.

Mahathir Mohamad’s blog: Che Det.

Jeff Ooi’s blog: Screenshots.

Aiming to prop up some companies deemed undervalued, the government earlier this week announced that it would utilize the national pension fund as the source for a loan that would pump 5 billion ringgit ($2.1 billion) into the Malaysian stock market. This would double the resources available to ValueCap Sdn. Bhd, a state agency chartered to invest in the stock market. 

But critics argue that risking pension funds in the marketplace is unsound and that there is too great the potential for conflict of interest associated with companies well-connected to the government.

A call for greater transparency of Valuecap’s business practices was a concern raised by Lim Kit Siang, head of the opposition Democratic Action Party, who was reported to as saying that  ’Valuecap has operated in secrecy since it was set up in 2003 and that its accounts have not been audited.’

This are the people’s money. In order to ensure that this is not a bailout…there should be a public scrutiny’ of Valuecap’s accounts, he said.

Anwar rebuffed the plan saying that the impact would total 1% in market equity and no real effect. 

It ’serves no logical purpose other than to prop up some companies in the stock market,’ he told reporters in Parliament.

In an interview with Bloomberg news, Anwar admits that he is fighting an uphill battle. “I’m not saying we have no options left, but I’m saying it’s getting to be much more difficult.”

Anwar is still saying that he’ll get 30 members of parliament to leave UMNO for the opposition, but having broken more than one pledge on when he would do this, Anwar is keeping tight lipped about further details, only to say again that the takeover will be “peaceful and orderly” and adhere to the constitution. 

Tricia Yeoh, the director of the Centre for Public Policy Studies, an independent research institute in Kuala Lumpur advised that the opposition “…should focus on administering the five states well and strengthening the bonds within the parties. This will demonstrate that they can be a formidable alternative federal government.”

That sounds about right. Nothing builds credibility like leadership by example. As a party, PKR would do well to heed Yeoh’s advice.  And in the meantime, perhaps the dip in grandstanding will help to stabilize the economy. 

After reading through an article about the prognosis for the Malaysian economy, which basically surmised that the Malaysian banks could weather this storm, I came across a blog post written by Hantu Laut, which gave a down to earth viewpoint of not only Malaysia’s economic situation. Luat ends his post with the following:

The government should not listen to Anwar Ibrahim asking for review of the budget.Any cut in development expenditure would dull economic activities and bring about economic downturn, which was exactly what he wanted to happen just to discredit the government and gave him opportunity to take over.What the government need to do is to trim operating expenditure and downsize the civil service.A chance I believe the government wouldn’t dare take.

However, it would be imperative for Prime Minister Abdullah Ahmad Badawi and his successor Najib Tun Razak to ensure that money are wisely spent and ensure less wastage through corruption,nepotism and cronyism.

Majority of Malaysians are fed up with the excesses of those in power.Now is the time to show the people that the government is capable of change.

This is a follow-up to an article Luat wrote in the Asia Sentinel, back in January.

Anwar is leading the opposition’s criticism of the government’s budget, and thereby calling into question whether it’s approval will be delayed beyond year’s end.  As reported by Reuters:

The expansionary budget featured a number of populist steps following the government’s electoral debacle in polls last March, including tax cuts, higher pension payments, and billions of dollars to improve food security and rural infrastructure.

But Anwar claims that all this will be hampered as crude and palm oil prices have declined as well as demand for manufactured exports, cutting government revenue just as spending is increasing at a faster than expected pace. 

Anwar, still seeking the top government post, is firing a shot over the bow directed at Malaysian Finance Minister Najib Razak, who is slated to become Prime Minister upon Abdullah Ahmad Badawi’s departure early next year.

Anwar has promised yet another deadline by which he will take control of the government - the end of the year - and says that the ball will get rolling when parliament re-convenes this Monday, claiming once again that he has the numbers to do so. “We have built our base to go forward, if it (taking power) does not happen this week or next week, it can possibly happen before Eid al-Adha festival.”

At a rally, Anwar said Badawi’s turning the reigns over to Najib wold not affect his plan, also clarifying that it would be peaceful as Malaysia cannot afford the type of conflict seen recently in Malaysia or the Philippines.

Clearly, he will use the financial crisis to his advantage, 

Speaking in English for a foreign media in attendance, Ibrahim said he was addressing the crowd at a critical time in the country’s history amid the global economic crisis and Najib’s ascension as prime minister, The Star newspaper said Saturday.

Prime Minister Ahmad Abdullah Badawi has effectively anointed Najib Razak the next prime minister with his announcement that he will resign from the position of leader of UMNO this coming March.  

It is hoped that Badawi’s resignation will stabilize the Malaysian political scene and, in turn, Malaysia’s economy.

“It would not only bring an end to much uncertainty, but also herald a new era of pro-business policies,” Stephen Hagger, a Credit Suisse analyst in Kuala Lumpur, wrote in a report. “The political situation has resulted in a complete lack of confidence.”

But the wrangling for lesser posts in the government brings the prospect of further graft and thereby an increased distrust. Najib’s challenger, former finance minister Tengku Razaleigh Hamzah, is making use of this already. 

“I have received numerous complaints of money politics, and I hope the Anti-Corruption Agency will take action against the culprits,” Razaleigh was quoted as saying in the Star paper.

Aside from Najib’s low popularity amongst ethnic Chinese and Indians, of even greater concern is the allegation that Najib was involved in the murder of a Mongolian model, who had been found shot and blown up in the jungle. Najib denies these charges, but it provides an easy point for Anwar to pick at.