Malaysia opposition takes aim at cronyism
PENANG, Malaysia (Reuters) - The opposition took power inMalaysia's industrial heartland on Tuesday and immediately saidit will no longer follow the nation's controversial affirmativeaction policy in state administration.
"We will run the government administration free from theNew Economic Policy that breeds cronyism, corruption andsystemic inefficiency," said Lim Guan Eng, whose DemocraticAction Party (DAP) won control of the state at the weekend'swatershed general election.
Under the policy, majority ethnic Malays, whose politiciansdominate the ruling national coalition, receive preference interms of state contracts, jobs and financial assistance.
Penang is the only one of Malaysia's 13 states so far toopenly spurn the "Bumiputra" (sons of the soil) affirmativeaction policy.
Lim also said he wants to use cash from state oil firmPetronas to fund a new $940 million (468 million pounds) bridgeproject, and would seek a meeting on that matter with PrimeMinister Abdullah Ahmad Badawi.
"I shall be seeking an appointment to meet with the primeminister ... on listening to and addressing the needs of thepeople of Penang expressed in the general elections on 8 Marchsuch as using Petronas proceeds to fully fund the constructioncost of the federal government's second Penang bridge project,"he said.
Lim's government, led by his DAP party backed mainly by theethnic Chinese minority, was sworn into office on Tuesday inPenang in a quiet ceremony witnessed by sombre-looking civilservants who have only ever worked for the long-ruling NationalFront coalition.
The strongly Islamist Parti Islam se-Malaysia (PAS) willlead or share power in four states, including three -- Kedah,Perak and Kelantan -- that share borders with Thailand, whichhas been battling an Islamic insurgency with historical linksto Malaysia.
PAS and the DAP have vowed to review federal projects onthe drawing board in their areas, but said would not stand inthe way of projects that were already approved and werebeneficial to the people, and have warned they would nottolerate cronyism.
POLITICS OF PATRONAGE
Malaysia's politics of patronage, whereby state contractsare given to businesses aligned with ruling-party interests,has nurtured a powerful political-business establishmentwhereby contracts are often awarded without open, competitivetenders.
The Edge Financial Daily said in an editorial on Tuesdaythat was a major factor in Saturday's election, which handedthe ruling National Front its worst electoral setback inhistory.
"Indeed, one can say that one reason why the people votedso strongly for the opposition in the elections is to send amessage that they have had enough of political cronyism andawards of contracts and deals to politically connectedcompanies.
The prospect that this nexus could be cut, and thepossibility of policy gridlock now that the National Front haslost its iron-clad two-thirds majority in parliament and facesstrong opposition in heartland states, has spooked the markets.
Malaysian shares plunged 9.5 percent on Monday, wiping outsome $30 billion in market capitalisation, probably the biggestsingle-day loss in the market's history.
Stocks had rebounded 2 percent by 0445 GMT, but analystssaw it as a short-lived reprieve. "It's a dead cat's bounce,"said Kenny Yee, research head at OSK Investment Bank."Certainly our market will be undergoing lengthyconsolidation."
Prime Minister Abdullah Ahmad Badawi's National Front willbe undergoing consolidation as well in the days to come.
He has a tricky task ahead in fending off leadershipchallenges, especially with his UMNO party -- the dominantcoalition partner -- set to hold leadership elections in June.
He will also need to fill gaping holes in his Cabinet --four ministers lost seats in the weekend election, includingWorks Minister S. Samy Vellu, the head of the main Indian partyin the coalition, who lost his seat in the weekend debacle.
The winning opposition parties have a delicate task aheadas well. The Chinese-dominated DAP has long harboured deepsuspicions about the Islamist agenda of PAS, which advocatesIslamic law for Muslims, including punishments such as stoningand amputations.
The DAP, PAS and the People's Justice party of former PrimeMinister Anwar Ibrahim were still hammering out theirpower-sharing arrangements on Tuesday in Kedah, Perak andcentral Selangor state in the first test of how well they willgovern.
PAS kept power in Kelantan state and its government was dueto be sworn-in on Tuesday evening.
(Additional reporting by Y-Sing Liau and Niluksi Koswanage;Writing by William Tarrant; Editing by Alex Richardson)