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"A penny for your thoughts"

Sunday, March 9, 2008

Malaysia's ruling coalition BN, lost its 2/3 majority hold

Updated 7:06 PM 13-Mar-08

Opposition leader Anwar Ibrahim also slams policy which favours Malays

Mr Anwar, who coordinated the opposition’s campaign said the opposition parties have held initial discussions about signing an agreement and creating a shadow Cabinet. DAP, PAS and PKR were hammering out power-sharing arrangements 11th March in Kedah, Perak and Selangor.Anwar see the crucial issue in a more cohesive working relationship for a united opposition would be a “government in waiting,”

Mr Lim Guan Eng, DAP, endowed with mandate of Penang, affirms that they will run the government administration free from the New Economic Policy (NEP) that breeds cronyism, corruption and systemic inefficiency.

In Kuala Lumpur, opposition leader Anwar Ibrahim states that the NEP benefits
the few family members of the ruling establishment and their cronies.It is essential to stem this practice of awarding tenders, projects and privatization to family related companies and cronies only in states where the oppositions are in charge, he added.

Many Malaysians, especially ethnic Chinese and Indians, say the plan four-decade-old NEP which was meant to fight poverty by steering resources to indigenous people, including Malays has strayed from its original aim of fostering
economic competition and is enriching a small elite, while rural Malays live hand-to-mouth in wooden huts. It has also been widely criticized abroad and was a key stumbling block in five fruitless rounds of talks with the United States on a free trade deal.

Mr Anwar has comes out with the opposition alternative which he called the Malaysia Economic Agenda which will protect the interests of "the Malays, the
poor and the marginalized” but will be a “competitive, merit-based system”.

PAS vice-president Husam Musa told reporters yesterday the opposition intended “to create an investor-friendly atmosphere...and that foreign investment and interests are guaranteed in the states where we are in power”.

DAP’s Mr Lim said he would lobby the prime minister to use cash from state oil company Petronas to fund a new US$940 million (S$1.3 billion) bridge project in Penang.

Petronas has long been seen as a cash cow for BN building projects, including the iconic Petronas Twin Towers.
Source: Reuter

Malaysia's opposition coalition disputes over racial policy

Malaysia's opposition was sworn in on the 11th March to power in Penang(DAP dominant), one of the nation's richest states, and swiftly announced plans to dismantle controversial race-based discrimination policies. The New Economic Policy was introduced in the early 1970s to bridge the wealth gap with ethnic Chinese who dominate business, by giving Malays advantages in education, housing and business. Penang, styled as Malaysia's "Silicon Valley", is Malaysia's only Chinese-majority state and is home to the manufacturing operations of electronic giants such as Intel and Sony.

Opposition alliance comprise of 3 parties namely Democratic Action Party lead by Lim Guan Eng, the Islamic party PAS lead by Abdul Hadi Awang and the Keadilan party lead by Anwar Ibrahim.

PAS Party President Abdul Hadi Awang said the NEP should not be abolished, though he stressed that the preferential treatments should not be at the expense of other races, a day after Democratic Action Party said it will dismantle the policy in Penang. Mr Abdul Hadi also insisted that there is no formal pact with the Chinese-controlled Democratic Action Party. He added that PAS only recognizes PKR defacto president Anwar Ibrahim as the representative in the three-party electoral pact. The PAS leader added that Mr Anwar will only be formally considered the head of the opposition coalition after he wins a by-election.

Former deputy premier Anwar, who was barred from contesting in the last election due to his corruption conviction, is widely expected to seek a by election after mid April in Permatang Pauh.His wife, daughter and other PKR MPs have expressed their readiness to step aside to make way for his formal return.

Political analysts foresee problems ahead for the opposition coalition especially without a common ideological platform.Associate Professor Khoo Kay Khim, University Malaya commented that the opposition coalition also known as Barisan alternative or the alternative front has difficulty to sort the NEP issue as they have different agendas.

Just how to support the NEP without having the preferential treatments be at the expense of other races is an agenda that needs to be addressed urgently. (Read Comment section below for NEP's corporate wealth yardstick flawed by Tang Ching Leng)

Of the parties drawing the biggest of the popular votes in Parliament, Umno leads at 35.51% (2,462,749) followed by PAS (21.65% - 1,501,800), PKR (13.15% - 911,761) DAP (12.76% - 884,941) and MCA (9.14% - 633,985).In the states, it was almost the same order with Umno leading at 29.99% (2,371,867) followed by PKR (18.6% - 1,471,150), PAS (14.75% - 1,166,918), DAP (14.01% - 1,107,960) and MCA (10.74% - 849,108).

However, the statistics show that Umno, PAS and PKR have greater popularity in Parliament while the DAP and MCA had greater popularity in the states.

In the four "new" states that Barisan lost - Kedah, Penang, Perak and Selangor - the decrease in popular votes for the MCA, Gerakan, MIC and PPP was less than that for Umno, which ranged from two percentage points in Perak and Selangor to five percentage points in Kedah and seven in Penang.

In the distribution of popular votes within the DAP-PAS-PKR loose coalition in those four states, the DAP topped the list in Penang (54.62%0 and Perak (42.42%) while PAS led them in Kedah (69.89%) and PKR in Selangor (35.93%). Stats VIA the star

Barisan Nasional (BN), the ruling & dominant coalition party suffered worst performance on Saturday in a general election since independence in 1957.It lost control of four state governments, Kedah, Penang, Perak and Selangor, while PAS secured two-thirds majority to keep its hold on Kelantan, and failing to win the crucial two-thirds majority in parliament.A two-thirds majority is needed to amend the Constitution. The last time the BN lost that majority was in the 1969 election.

Chinese and Indians account for a third of the population of 26 million and many complain the government discriminates in favour of Malays when it comes to education, jobs, financial assistance and religious policy.

About 70 percent of Malaysia's 10.9 million eligible voters had cast ballots, the country's top poll official.

Gag Video from Comedy Court
The 12th Malaysian general election was held on March 8, 2008, in accordance to Malaysian laws for national elections, which states that a general election must be held no later than five years after its last, since the previous general election was held in 2004. Malaysia's Parliament was dissolved on February 13, 2008, and the following day, the Election Commission announced nominations would be held on February 24, with general polling set for March 8. State assemblies of all states other than Sarawak were also dissolved and their elections will take place at the same time.

Political parties were reported to have began preparations for upcoming polls as early as January 2008. As in 2004, the incumbent Barisan Nasional coalition, as well as the opposition parties represented primarily by Democratic Action Party (DAP), PAS, and Parti Keadilan Rakyat (PKR) contested in the election.VIA

Related Post: Malaysian stocks take a beating in the aftermath of its 12th general election.

Read More:
2008 polls - interesting facts Malaysiakini
More at The Malaysian March 2008 Archive
Malaysia: Ruling coalition loses ground at he International Relations and Security Network (ISN).

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1 Comment:

Anonymous said...

letter To Malaysiakini by Tang Ching Leng | Mar 12, 08 5:25pm

(Malaysian New Economic Policy) NEP's corporate wealth yardstick flawed

All Malaysians, including myself, have been beneficiaries of the strong economic growth that Malaysia has enjoyed for the past few decades. Affirmative action in Malaysia, notably via the NEP, has never created any obstacles in my way – whether in pursuit of a good education or a good employment. If the NEP is designed to make Malaysia more equitable, without holding back any one particular group, I say, go for it. No nation can enjoy prosperity, hand-in-hand with peace, when the minority consumes a huge chunk of the national cake whilst the majority scrambles for scraps. Nor could any country claimed to be truly developed when a significant minority lives in squalor while the country can afford to build the tallest towers in the world or the most beautiful administrative capital.

The NEP has some measure of success. Poverty rate is down, and sizeable middle-class families are created amongst the bumiputera and across other ethnic groups. However, the NEP’s target of increasing bumiputera ownership in the nation’s corporate wealth to 30% still falls short. The question is; is corporate wealth an appropriate yardstick of Malaysia’s economic wealth? Put another way, is 30% of the nation’s corporate wealth equivalent to 30% of the nation’s economic wealth? Are there any other targets that the government should consider for inclusion?

Taking corporate wealth as the only yardstick is flawed. For one, it is ‘leaky’, ie shares and equity ownership is extremely fluid.It is difficult to ensure it stays within the intended beneficiary group, whether in bad times or in good times. In bad times, certain quarters are susceptible to liquidate their holdings even where the realised value is lower than the initial purchase price, in order to reap some temporary financial reprieve. In good times, some may sell equity/make redemptions to make quick profits, but the proceeds are not channeled to another class of assets which generates returns or capital gains. The fact that the bumiputera ownership of share capital declined during the 1997 Asian financial crisis indicates that wealth retention in the form of corporate equity is inherently unstable. A more ‘stickier’ class of assets needs to be included.

"Stickier’ assets in this sense must fulfill two conditions – firstly, it must not only retain its value, but the value should grow steadily over the owners’ lifetimes. Secondly, it must equip the owners with the lifetime ability to secure more income and wealth. Home ownership serves the first purpose; whilst education fulfils the second. Indeed, the previous NEP has incorporated programmes to provide housing and education entitlements for the poor. What is lacking, however, is a visible, concrete target for each of these enabling factors. A new programme of poverty eradication must include setting targets for, 1) percentage of home ownership among the low-income groups; and 2) percentage of education participation among children from low income groups.

A home is a basic necessity that every Malaysian household must possess. Good homes provide a conducive environment to raise harmonious and productive family units, in addition to providing a sense of financial security to the household. House values tend to appreciate, at least in tandem with inflation over a lifetime. As house purchases easily constitutes the largest lifetime expenditure of any families, it is even more critical to assist poor families to attain this basic right. The poor has almost no access to bank loans; hence the government has to step in to provide cheap housing loans to the poor to widen home ownership. Bumiputera house discounts should also be restructured. For homes prices exceeding, say RM300, 000, Bumiputera purchasers should pay the full price, and the discount proceeds are channeled to a central housing fund for the less fortunate bumiputera. It is surely an equitable and progressive move to ensure those who can afford expensive homes are not subsidised, whilst there are those who can’t even decent homes.

It is also important not to create clusters of cheap homes merely to fulfill the objective of increasing home ownership amongst the poor. Those from low-income groups also demand, rightfully, houses of adequate quality, and they do not wish to be segregated into ‘poor neighbourhoods’ reminiscent of the ghettos and slums in the US. The government must integrate poor families into the mainstream Malaysian society, and not sideline them into a separate environment where despair and low self-esteem is allowed to fester.

A second target, the percentage of children from poor families enrolled in primary to tertiary schools, must be defined. Households who fall below the poverty line (or indeed, just above) tend to neglect education for their children. Poor families tend to have larger families, and thus have a high dependency on their off-springs to bring home some income to sustain the whole family. Hence, these underprivileged children will never have the opportunity to break free from their parents’ financial predicament. Generations to come are mired in a low-income trap as their job opportunities are extremely narrow without any solid academic credentials. The enrollment percentages must be continuously monitored, to ensure every underprivileged child completes his or her education all the way to attaining a university degree. This can be achieved via an assortment of full scholarships; incentives to parents for every child put through school; and if necessarily, reserved quota of university places.

John F. Kennedy once quoted, ‘a rising tide lifts all ships’. The fruits of strong economic growth are spread, though not necessarily equitably, among the low-income groups to the high net worth individuals. When the national cake is expanding, each citizen’s slice, though unequal in size, gets bigger. That keeps most happy. Nevertheless, there will come a time when the Malaysian economy will stop growing strongly, or even contracts. When that happens, income and consequently wealth distribution will be even more skewed. Should the Malaysian economy stalls, then redistribution will be a zero-sum gain, a term economists coined which basically means someone else’ gain will be someone else’s loss. Poverty eradication works best when the economy is still expanding, and when measurable targets that matters to the man on the street are set. No Malaysians can be disenfranchised from the abundance of fruits that our blessed nation has to offer. The NEP, or any other poverty eradication programme, must be sustained until this poverty scourge is eliminated from our society, albeit with some serious policy changes.

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