Bloomberg News

Anwar Says Divisions Won’t Threaten Malaysian Opposition

May 30, 2012

Malaysian opposition leader Anwar Ibrahim. Photographer: Goh Seng Chong/Bloomberg

Malaysian opposition leader Anwar Ibrahim. Photographer: Goh Seng Chong/Bloomberg

Malaysian opposition leader Anwar Ibrahim, who is aiming to end the National Front’s 55-year hold on power, said the divisions within his coalition won’t prevent it from ruling effectively should it win in national polls.

“There is intense debate and differences, but never to the extent that the coalition will break,” Anwar said yesterday in an interview in which he also discussed issues including subsidies and the budget deficit.

The Anwar-led People’s Alliance opposition, which shares the goal of ousting Prime Minister Najib Razak, hopes to build on gains it made in 2008 when it held the ruling coalition to its slimmest election victory since independence in 1957. Should the opposition emerge victorious, ideological fissures will make it difficult for the various parties to remain united, said Clive Kessler, emeritus professor at the University of New South Wales in Sydney.

“Within a week of getting the numbers and setting up the government they would be at one another’s throats,” Kessler said in a phone interview. “There is no way they could work out a common policy that they would implement.”

Within the coalition, the Pan-Malaysian Islamic Party wants to impose hudud, a class of punishments under Shariah, or Islamic law, that allows for stoning of adulterers, while the Democratic Action Party, pointing to the almost 40 percent of the population who are Christians, Buddhists and Hindus, opposes the proposal. The Islamic party criticized Anwar earlier this year for remarks supportive of Israel.

Hudud Law

Hudud law is unlikely to be implemented in Malaysia as a consensus would be needed, Anwar said during the interview. He said he expects elections may be held in July.

Although Anwar didn’t run in the March 2008 general elections, he still led the opposition coalition to win control of five of Malaysia’s 13 states and denied the ruling National Front coalition a two-thirds majority in parliament for the first time since 1969.

While an election isn’t due until 2013, Najib announced a budget in October that stoked speculation that he would call an earlier vote. The plan gives cash to low-income families, raises civil servants’ pay and boosts spending on railways to spur growth at a time when global economic risks cloud the outlook for Malaysian exports.

Malaysia’s budget deficit is forecast to narrow to 43 billion ringgit, or 4.7 percent of gross domestic product in 2012, from an estimated 5.4 percent last year, the finance ministry said Oct. 7. The deficit will be reduced to 4.4 percent of GDP, according to the People’s Alliance coalition’s budget for 2012.

Growth Slows

Malaysia is “well-placed” to achieve a medium-term deficit target of about 3 percent of GDP by 2015, Najib said yesterday. Economic growth slowed last quarter as the protracted European debt crisis sapped demand for its exports. GDP rose 4.7 percent in the three months through March from a year earlier, after expanding 5.2 percent in the previous quarter, the central bank said on May 23.

Najib, 58, has sought to broaden the appeal of the ruling party, rolling back decades-old protectionist policies, opening up service industries to foreign investors and easing rules on ethnic-Malay ownership in companies. He has also replaced security laws which allowed for detention without trial for up to two years, and revamped media legislation.

Budget Deficit

If it wins power, Anwar’s coalition would trim the budget deficit, curb corruption and reduce state subsidies to corporates, transferring savings to the people, he said.

It plans to renegotiate contracts with independent power producers who he claims get up to 20 billion ringgit in gas subsidies. It may also review sugar subsidies and plans by Australian miner’s Lynas Corp. (LYC) to start rare-earth refining in the country, Anwar said.

“It is not the business of a new government to go and dismantle all agreements,” said Anwar. “But if we find, take Lynas for example, if you can’t convince us of the safety of the citizens, then of course we have to review.”

Once the designated successor of Prime Minister Mahathir Mohamad, who ruled from 1981 to 2003, Anwar was removed from office and tried in 1998 for abuse of power and having sex with a man, which is an offense in Malaysia. He was imprisoned for six years before the sodomy charge was overturned.

Corruption Conviction

The corruption conviction barred him from holding office until April 2008, after which he won a by-election in August. His wife, Wan Azizah Wan Ismail, vacated the Permatang Pauh constituency in the northern state of Penang so he could compete.

“We want to restate our commitments, in so far as the market economy is concerned, to be more competitive, to dismantle obsolete policies based on race, including the New Economic Policy,” said Anwar, speaking in his office in the headquarters of the People’s Justice Party in Petaling Jaya, near Kuala Lumpur.

The New Economic Policy, initiated in 1971 by Najib’s father, Malaysia’s second Prime Minister Abdul Razak Hussein, has provided Bumiputeras, or ethnic Malays and indigenous people, with cheap housing and priority for university places, government contracts and shares of publicly traded companies. About 55 percent of Malaysia’s 29 million people are Malay.

“At the same time we want to be quite clear that the positions and problems of the poor and marginalized, mainly among the Malays and indigenous tribes and pockets of Chinese and Indians particularly in the estate sector, must be recognized, which means affirmative action policies must continue based on need, not on race,” Anwar said.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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