Odette commentary :If the opposition had not pressured for disclosure, I wonder.....
___________________________________________________________________
Port project in deeper woes 10 min-->
KUALA LUMPUR - A SCANDAL-PLAGUED port project that has embarrassed the Malaysian government amid accusations of mismanagement is in worse financial trouble than thought, according to an auditor's report released on Thursday.
The Port Klang Free Zone - a 1,000-acre industrial and trading hub that opened in November 2006 - has been a publicity nightmare for the government over the past two years after Malaysia's main port authority incurred massive cost overruns to develop the project.
The government approved a loan in 2007 to rescue the Port Klang Authority from debts exceeding US$1 billion (S$1.5 billion), raising opposition allegations of corruption and a lack of transparency in government-linked projects.
The port authority might have problems paying the loan installments, which would result in additional interest and send the project's bill soaring to 12.5 billion ringgit, according to a report by accountancy firm PriceWaterhouseCoopers, which was appointed in October to audit the project.
The project had originally been targeted to cost 1.8 billion ringgit, but the figure ballooned to 4.6 billion ringgit by the time it was ready to open, officials previously said.
The auditor's report listed a wide range of missteps, saying there was 'a general lack of board oversight and governance.'
It also noted there could be 'potential conflicts of interest' in company officials involved in land acquisitions for the project.
Transport Minister Ong Tee Keat had promised on Wednesday that the government would act on the report and take action against anyone involved in wrongdoing.
Dozens of companies involved in manufacturing, trading and logistics have set up shop at the Klang zone. It is targeted mainly at investors from the Middle East, China, Japan and India.
Government bailouts of prominent companies occurred regularly in the 1990s, damaging public confidence in big state projects. The opposition blamed the bailouts on corruption and undisciplined spending. -- AP
Saturday, May 30, 2009
PFFZ - The Straits Times coverage - Part 1
Odette's commentary :
Such cases are shameful for Malaysia and a deterrent for foreign direct investments
I welcome transparency but hope that real action will be taken - based on past history, this will be the acid test.
The deal breaker/ maker will be how the present government deals with those who were responsible.
What I wonder is how many other similiar situations exist?
___________________________________________________
Port Klang scandal a key test 10 min-->
KL may be saddled with $5b losses; project audit report alleges irregularities
By Leslie Lopez, Senior Regional Correspondent
Analysts said the move by the government to make the report public is likely to be welcomed. But they said Prime Minister Najib Razak's real test will be whether his government will pursue legal action against those responsible for the huge losses. -- PHOTO: REUTERS
KUALA LUMPUR - A FINANCIAL crisis at Malaysia's main port agency, which could saddle the government with losses exceeding RM12 billion (S$5 billion), is shaping up as a major policy test for the administration of Prime Minister Najib Razak.
Senior government officials told The Straits Times that the soon-to-be-released audit report on a foray by the Port Klang Authority will show that losses stemming from bonds issued to finance the project could plunge it into insolvency by 2012.
The report, which is expected to be released later this week, also details an array of alleged management irregularities at the free-trade zone development, the officials who are familiar with the report said.
The Port Klang Free Zone project includes industrial buildings, offices and an exhibition centre.
The alleged problems began during the final years of the Mahathir Mohamad government, and continued during the Abdullah Badawi administration, the report by accounting firm PricewaterhouseCoopers will show.
Datuk Seri Najib, who took over early last month, must now deal with the fallout from the deepening scandal. It is set to expose the government to the repayment of the bonds that could exceed RM12 billion because of mounting interest charges.
Analysts said the move by the government to make the report public is likely to be welcomed. But they said that Mr Najib's real test will be whether his government will pursue legal action against those responsible for the huge losses.
That is because the PricewaterhouseCoopers report alleges serious conflict-of-interest breaches between officials of the port authority and executives of private companies with close ties to the ruling Barisan Nasional (BN) government.
'It is a tough situation for the PM,' said a chief executive of a state-controlled commercial bank who is familiar with the audit report. 'But the best thing to do is to come clean because it didn't happen during his watch.'
Among other things, the report will show that the Port Klang Authority failed to carry out detailed studies before pushing ahead with the project and that major decisions were made without consultation with relevant government agencies.
Read the full story in Thursdays edition of The Straits Times.
Such cases are shameful for Malaysia and a deterrent for foreign direct investments
I welcome transparency but hope that real action will be taken - based on past history, this will be the acid test.
The deal breaker/ maker will be how the present government deals with those who were responsible.
What I wonder is how many other similiar situations exist?
___________________________________________________
Port Klang scandal a key test 10 min-->
KL may be saddled with $5b losses; project audit report alleges irregularities
By Leslie Lopez, Senior Regional Correspondent
Analysts said the move by the government to make the report public is likely to be welcomed. But they said Prime Minister Najib Razak's real test will be whether his government will pursue legal action against those responsible for the huge losses. -- PHOTO: REUTERS
KUALA LUMPUR - A FINANCIAL crisis at Malaysia's main port agency, which could saddle the government with losses exceeding RM12 billion (S$5 billion), is shaping up as a major policy test for the administration of Prime Minister Najib Razak.
Senior government officials told The Straits Times that the soon-to-be-released audit report on a foray by the Port Klang Authority will show that losses stemming from bonds issued to finance the project could plunge it into insolvency by 2012.
The report, which is expected to be released later this week, also details an array of alleged management irregularities at the free-trade zone development, the officials who are familiar with the report said.
The Port Klang Free Zone project includes industrial buildings, offices and an exhibition centre.
The alleged problems began during the final years of the Mahathir Mohamad government, and continued during the Abdullah Badawi administration, the report by accounting firm PricewaterhouseCoopers will show.
Datuk Seri Najib, who took over early last month, must now deal with the fallout from the deepening scandal. It is set to expose the government to the repayment of the bonds that could exceed RM12 billion because of mounting interest charges.
Analysts said the move by the government to make the report public is likely to be welcomed. But they said that Mr Najib's real test will be whether his government will pursue legal action against those responsible for the huge losses.
That is because the PricewaterhouseCoopers report alleges serious conflict-of-interest breaches between officials of the port authority and executives of private companies with close ties to the ruling Barisan Nasional (BN) government.
'It is a tough situation for the PM,' said a chief executive of a state-controlled commercial bank who is familiar with the audit report. 'But the best thing to do is to come clean because it didn't happen during his watch.'
Among other things, the report will show that the Port Klang Authority failed to carry out detailed studies before pushing ahead with the project and that major decisions were made without consultation with relevant government agencies.
Read the full story in Thursdays edition of The Straits Times.
A good summary of the PKFZ debacle - from Yahoo Asia News
Q+A-Why is Malaysia Port Klang scandal important?
Reuters - Thursday, May 28
KUALA LUMPUR, May 28 - Malaysia's government is to unveil later on Thursday an independent auditors report into the construction of a free trade zone in Port Klang, a project aimed at boosting capacity in the port.
What started off as a 1.8 billion Malaysian ringgit ($516.2 million) project has ballooned into one which could cost more than 10 billion ringgit following an acrimonious pullout by the project's Dubai-based international partner.
The issue raises the question of risk foreign investors face when doing business in Malaysia. It has been used to attack the integrity of the government by the opposition at a time when Malaysia's new prime minister is still reeling from losses in the 2008 general election.
The port authority is due to release the auditor's report at 3.30pm . Some members of the ruling coalition have been pressing for disclosure to prevent the project from tarnishing the government's image.
Transparency in the way Malaysia does business will be a major factor in whether it can attract much-needed foreign direct investment.
WHAT IS PKFZ? The Port Klang Free Trade Zone started as a joint venture between the Port Klang Authority and the promoters of the Jebel Ali Free Trade Zone in 1999 to attract foreign investment and promote Malaysia's main ports situated near Kuala Lumpur.
HOW DID THE SCANDAL UNFOLD?
Land for the project was acquired by a company, Kuala Dimensi, whose shareholders include senior politicians from the ruling United Malays National Organisation , the lead party in the National Front coalition that has ruled Malaysia for 51 years, as well as politicians from other Front component parties.
The port authority reportedly ignored advice from the government chief legal adviser and bought the land from the company in 2002 for 1 billion ringgit, or about 25 ringgit per square foot, compared with the 3 ringgit per square foot which the company acquired the land for.
The company was later awarded sole rights to develop the zone without competitive bidding. Kuala Dimensi later raised funds through the issuance of bonds backed by the Transport Ministry.
PricewaterhouseCoopers was later called in by the Port Klang Autrhority to prepare a report amid mounting public anger.
PKFZ came under public scrutiny due to its escalating cost. Previously, the government had said the project would not cost more than 4.6 billion ringgit.
On 5 May, MPs briefed by the authority told reporters that the cost of the project could exceed 10 billion ringgit.
WHY DID THE FOREIGN PARTNER PULL OUT?
Jebel Ali Free Zone Internation , the Dubai-based company appointed to managed PKFZ terminated its 15 year-contract, withdrew from the project in July 2007, citing "strategic purposes".
A newspaper report on Jafza's pullout, which cited documents relating to the project, said the separation was acrimonious and due among others to interference by politicians and others with vested interests.
BOND LIABILITIES
The Port Klang Authority paid RM1.09 billion for the land to be settled over 15 years in a deal that was backed by a government guarantee and Kuala Dimensi sold bonds worth 1.3 billion ringgit. Kuala Dimensi sold 1.4 billion ringgit of bonds, again backed by a government guarantee to develop the site.
Two more tranches of bonds with a total face value of more than one billion ringgit were then sold.
POLITICAL DIMENSION
The heads of the PKA have all been senior leaders from the Malaysian Chinese Association, the second largest party in the National Front coalition.
Among its board members, Kuala Dimensi has Azim Zabidi, who was a one-time treasurer of UMNO. Tiong King Sing is director of Kuala Dimensi and treasurer of the Sarawak Progressive Democratic Party, another member of the coalition.
Also involved in the project are a former UMNO youth leader from Selangor state, Faizal Abdullah, whose father-in-law, Onn Ismail, is another influential figure in Selangor UMNO, was a former chairman of the cooperative that sold the land to Kuala Dimensi.
Reuters - Thursday, May 28
KUALA LUMPUR, May 28 - Malaysia's government is to unveil later on Thursday an independent auditors report into the construction of a free trade zone in Port Klang, a project aimed at boosting capacity in the port.
What started off as a 1.8 billion Malaysian ringgit ($516.2 million) project has ballooned into one which could cost more than 10 billion ringgit following an acrimonious pullout by the project's Dubai-based international partner.
The issue raises the question of risk foreign investors face when doing business in Malaysia. It has been used to attack the integrity of the government by the opposition at a time when Malaysia's new prime minister is still reeling from losses in the 2008 general election.
The port authority is due to release the auditor's report at 3.30pm . Some members of the ruling coalition have been pressing for disclosure to prevent the project from tarnishing the government's image.
Transparency in the way Malaysia does business will be a major factor in whether it can attract much-needed foreign direct investment.
WHAT IS PKFZ? The Port Klang Free Trade Zone started as a joint venture between the Port Klang Authority and the promoters of the Jebel Ali Free Trade Zone in 1999 to attract foreign investment and promote Malaysia's main ports situated near Kuala Lumpur.
HOW DID THE SCANDAL UNFOLD?
Land for the project was acquired by a company, Kuala Dimensi, whose shareholders include senior politicians from the ruling United Malays National Organisation , the lead party in the National Front coalition that has ruled Malaysia for 51 years, as well as politicians from other Front component parties.
The port authority reportedly ignored advice from the government chief legal adviser and bought the land from the company in 2002 for 1 billion ringgit, or about 25 ringgit per square foot, compared with the 3 ringgit per square foot which the company acquired the land for.
The company was later awarded sole rights to develop the zone without competitive bidding. Kuala Dimensi later raised funds through the issuance of bonds backed by the Transport Ministry.
PricewaterhouseCoopers was later called in by the Port Klang Autrhority to prepare a report amid mounting public anger.
PKFZ came under public scrutiny due to its escalating cost. Previously, the government had said the project would not cost more than 4.6 billion ringgit.
On 5 May, MPs briefed by the authority told reporters that the cost of the project could exceed 10 billion ringgit.
WHY DID THE FOREIGN PARTNER PULL OUT?
Jebel Ali Free Zone Internation , the Dubai-based company appointed to managed PKFZ terminated its 15 year-contract, withdrew from the project in July 2007, citing "strategic purposes".
A newspaper report on Jafza's pullout, which cited documents relating to the project, said the separation was acrimonious and due among others to interference by politicians and others with vested interests.
BOND LIABILITIES
The Port Klang Authority paid RM1.09 billion for the land to be settled over 15 years in a deal that was backed by a government guarantee and Kuala Dimensi sold bonds worth 1.3 billion ringgit. Kuala Dimensi sold 1.4 billion ringgit of bonds, again backed by a government guarantee to develop the site.
Two more tranches of bonds with a total face value of more than one billion ringgit were then sold.
POLITICAL DIMENSION
The heads of the PKA have all been senior leaders from the Malaysian Chinese Association, the second largest party in the National Front coalition.
Among its board members, Kuala Dimensi has Azim Zabidi, who was a one-time treasurer of UMNO. Tiong King Sing is director of Kuala Dimensi and treasurer of the Sarawak Progressive Democratic Party, another member of the coalition.
Also involved in the project are a former UMNO youth leader from Selangor state, Faizal Abdullah, whose father-in-law, Onn Ismail, is another influential figure in Selangor UMNO, was a former chairman of the cooperative that sold the land to Kuala Dimensi.
Thursday, May 28, 2009
More on taxi's...
This time, it concerns the Airport Limo driver. Pakcik is my regular driver and picks me up whenever I need to go to the airport or return from the airport. He diligently takes receipts from the limo company instead of trying to solicit his own business which many of the limo drivers are inclined to do. In short, he is an honest, hardworking man.
I spoke with him regarding the terms and conditions for driving the airport limo. He drives a Proton Waja which costs approximately RM40-50 k per car. Pakcik pays RM142 per day (RM100 for daily rental, Rm42 for misc. maintenance charges). He has to pay the rental 364 days a year with only 2 days free (New Years Eve and Day) - at this rate, per Proton Waja, an whopping amount of RM251,000 is paid to the company over a period of 5 years.....
Gas, petrol , tolls are all borne by the driver.
They get 8 sets of tyres per year but when they request for the tyres - sometimes the company replies that stocks are limited....
There are also stiff fines to be paid for late delivery, pick up etc.
I asked if the Waja will eventually be transferred to the driver after a reasonable duration. Apparently I was told that none of the drivers has ever taken ownership of an airport limo vehicle
Naturally I asked if he had a copy of the Agreement that was signed between the company and himself..
He wasn't given a copy....AND he had to bear the stamping fee for the agreement of RM100... I thought to myself..RM100 for ad valorem stamping? Hmmmm..... shouldn't it be Rm25 only?
Of course, though he feels cheated, he is afraid to complain - his bolder colleagues have tried to voice their grievances but these "brave" people were terminated hence losing their livelihoods, a fate that he cannot afford to have seeing as he has to support a family of 8.
He silently brooded that the owner of the company is a crony of UMNO ..........
Hmmmm....Rm251,000 over a 5 year period for one Waja......
The license holder for the Airport Limo company is getting a rather good deal, if I may say so but who has the short end of the stick again?
I spoke with him regarding the terms and conditions for driving the airport limo. He drives a Proton Waja which costs approximately RM40-50 k per car. Pakcik pays RM142 per day (RM100 for daily rental, Rm42 for misc. maintenance charges). He has to pay the rental 364 days a year with only 2 days free (New Years Eve and Day) - at this rate, per Proton Waja, an whopping amount of RM251,000 is paid to the company over a period of 5 years.....
Gas, petrol , tolls are all borne by the driver.
They get 8 sets of tyres per year but when they request for the tyres - sometimes the company replies that stocks are limited....
There are also stiff fines to be paid for late delivery, pick up etc.
I asked if the Waja will eventually be transferred to the driver after a reasonable duration. Apparently I was told that none of the drivers has ever taken ownership of an airport limo vehicle
Naturally I asked if he had a copy of the Agreement that was signed between the company and himself..
He wasn't given a copy....AND he had to bear the stamping fee for the agreement of RM100... I thought to myself..RM100 for ad valorem stamping? Hmmmm..... shouldn't it be Rm25 only?
Of course, though he feels cheated, he is afraid to complain - his bolder colleagues have tried to voice their grievances but these "brave" people were terminated hence losing their livelihoods, a fate that he cannot afford to have seeing as he has to support a family of 8.
He silently brooded that the owner of the company is a crony of UMNO ..........
Hmmmm....Rm251,000 over a 5 year period for one Waja......
The license holder for the Airport Limo company is getting a rather good deal, if I may say so but who has the short end of the stick again?
Friday, May 22, 2009
Saturday, May 16, 2009
A good read....
Tunku Aziz, one of the prime movers in setting up Transparency International Malaysia, in happier times was regarded by Prime Minister Abdullah Badawi as "one man (who) was able to harness his personal passion and deep commitment to the values of ethics and integrity, give it a larger purpose and meaning, and turn it into a force to transform society for the better." Why then was he left out of the MACC Advisory Group? He is regarded as being too outspoken for comfort and, therefore, difficult to handle.
MAY 7 – I never for a moment thought I should live to see the day when a traditional hereditary ruler of a Malay State has taken such a rapid slide in his people’s estimation, approbation and adulation as has the Sultan Azlan Shah of Perak. It took one unfortunate, ill-conceived and ill-considered decision over a petition by the Pakatan Rakyat Mentri Besar Datuk Nizar Jamaluddin, to dissolve the Perak State Assembly that has turned Perak into a politically difficult and dangerous situation.
His Highness Sultan Azlan Shah is no ordinary ruler. As a former Lord President and head of the Malaysian judiciary, he ascended the throne of Perak as someone well-qualified by education and training for what, for all practical purposes, is a largely ceremonial sinecure. Be that as it may, the position carries a heavy constitutional responsibility.
It has become quite apparent that while his legal knowledge may be assumed to be extensive, his training more than adequate, his wisdom in dealing with a delicate and important political matter of public concern, on reflection, has in my humble opinion, turned out to be questionable. A great deficiency in a ruler who showed so much early promise of being a wise, liberal minded and benevolent leader.
When the final chapter of the Perak constitutional fiasco comes to be written, the country, and the world, will be able revisit and understand better the magnitude of the debilitating effects of the royal decision on the Malaysian body politic. Malaysians, in particular, will view with horror the ugly scars left on their nation’s nascent democracy, and they will be constantly reminded how one hasty error of judgement was enough to trigger a political tragedy of the worst imaginable kind. A Greek tragedy pales by comparison.
The saddest part of all is that the resultant unseemly legal wrangling could have been avoided. The fact that the flawed decision was not reversed, within a day or two when it became abundantly clear that the decision not to dissolve the Assembly and call for fresh elections was manifestly unfair and unethical, was nothing if not sheer carelessness, in all the circumstances. I maintain that even now it is not too late to reverse that politically fatal decision and bring to an end this disgraceful episode in the history of participatory representative government in our country.
There is no disgrace or humiliation in coming to terms with one’s honest mistake. No one, even the wisest among us, is infallible. If the Sultan believes, as we know he does passionately, that his royal duty is to serve the public interest, then NOW is the time to give that commitment practical effect.
The Perak fiasco is not about to run out of steam. We must accept that the situation will get worse before it gets better. I saw the images from the State Assembly “sitting” on national television at lunch time today (7 May 2009) with a sense of unbounded revulsion. The scene of warring politicians shouting invective was not a joy to behold.
To use a medical analogy, the Perak affair will be a running sore. Only the Sultan of Perak can provide an effective cure. To ignore what is obviously an untenable constitutional position is an act of grave irresponsibility, and while the Prime Minister thinks it is a great idea for him to give the impression that he is above it all, I should like to remind him that he is not blameless, far from it. It was his active act of muddying the Perak political waters that brought about this current crisis in the first place.
He now has a chance to show that he is not a partisan prime minister, but a national statesman who is prepared to intervene decisively to put matters right in fairness and equity.
Looking back, it was not such a clever personal coup after all. His machination was so abysmally repugnant even judged by the consistently low ethical and moral political standards of UMNO/BN that I find myself wondering whether I could trust him enough to buy my next second-hand car from him; this is the same man trying to persuade us to buy his 1 Malaysia. What a man! (With apologies to G.B.Shaw)
MAY 7 – I never for a moment thought I should live to see the day when a traditional hereditary ruler of a Malay State has taken such a rapid slide in his people’s estimation, approbation and adulation as has the Sultan Azlan Shah of Perak. It took one unfortunate, ill-conceived and ill-considered decision over a petition by the Pakatan Rakyat Mentri Besar Datuk Nizar Jamaluddin, to dissolve the Perak State Assembly that has turned Perak into a politically difficult and dangerous situation.
His Highness Sultan Azlan Shah is no ordinary ruler. As a former Lord President and head of the Malaysian judiciary, he ascended the throne of Perak as someone well-qualified by education and training for what, for all practical purposes, is a largely ceremonial sinecure. Be that as it may, the position carries a heavy constitutional responsibility.
It has become quite apparent that while his legal knowledge may be assumed to be extensive, his training more than adequate, his wisdom in dealing with a delicate and important political matter of public concern, on reflection, has in my humble opinion, turned out to be questionable. A great deficiency in a ruler who showed so much early promise of being a wise, liberal minded and benevolent leader.
When the final chapter of the Perak constitutional fiasco comes to be written, the country, and the world, will be able revisit and understand better the magnitude of the debilitating effects of the royal decision on the Malaysian body politic. Malaysians, in particular, will view with horror the ugly scars left on their nation’s nascent democracy, and they will be constantly reminded how one hasty error of judgement was enough to trigger a political tragedy of the worst imaginable kind. A Greek tragedy pales by comparison.
The saddest part of all is that the resultant unseemly legal wrangling could have been avoided. The fact that the flawed decision was not reversed, within a day or two when it became abundantly clear that the decision not to dissolve the Assembly and call for fresh elections was manifestly unfair and unethical, was nothing if not sheer carelessness, in all the circumstances. I maintain that even now it is not too late to reverse that politically fatal decision and bring to an end this disgraceful episode in the history of participatory representative government in our country.
There is no disgrace or humiliation in coming to terms with one’s honest mistake. No one, even the wisest among us, is infallible. If the Sultan believes, as we know he does passionately, that his royal duty is to serve the public interest, then NOW is the time to give that commitment practical effect.
The Perak fiasco is not about to run out of steam. We must accept that the situation will get worse before it gets better. I saw the images from the State Assembly “sitting” on national television at lunch time today (7 May 2009) with a sense of unbounded revulsion. The scene of warring politicians shouting invective was not a joy to behold.
To use a medical analogy, the Perak affair will be a running sore. Only the Sultan of Perak can provide an effective cure. To ignore what is obviously an untenable constitutional position is an act of grave irresponsibility, and while the Prime Minister thinks it is a great idea for him to give the impression that he is above it all, I should like to remind him that he is not blameless, far from it. It was his active act of muddying the Perak political waters that brought about this current crisis in the first place.
He now has a chance to show that he is not a partisan prime minister, but a national statesman who is prepared to intervene decisively to put matters right in fairness and equity.
Looking back, it was not such a clever personal coup after all. His machination was so abysmally repugnant even judged by the consistently low ethical and moral political standards of UMNO/BN that I find myself wondering whether I could trust him enough to buy my next second-hand car from him; this is the same man trying to persuade us to buy his 1 Malaysia. What a man! (With apologies to G.B.Shaw)
Thursday, May 7, 2009
Commentary from The Straits Times on the Perak situation
What does the Malaysian standoff in Perak mean?
KUALA LUMPUR - MALAYSIAN police arrested at least a dozen anti-government protesters in Ipoh, the capital of the northwestern state of Perak on Thursday at a rally to coincide with the first sitting of the state assembly since the state government was ousted in February.
Perak was one of five of Malaysia's 13 states ruled by the opposition until a putsch organised by Najib Razak, who became prime minister a month ago.
Here are some of the questions and answers about what the protest could signal:
WHY PERAK? The ousting of the state government appeared to be an attempt by Mr Najib, who was then deputy prime minister, to show he would be a strong leader and came just a few months before he took power, replacing Abdullah Ahmad Badawi.
It came after a series of by-election losses for the coalition that has ruled Malaysia for 51 years.
The Perak takeover has a powerful mix of race, religion and Malaysia's royals. The Islamist opposition has even accused the new chief minister of using black magic, which he denies, and the takeover is subject to court action.
A PERFECT STORM BREWING? Malaysia's politics are becoming increasingly bitter and the opposition questions Mr Najib's character and his ability to deliver reforms on racial equality and the economy.
Tensions look set to remain high with opposition leader Anwar Ibrahim due to appear in court in July on what he says are trumped up sodomy charges.
Mr Anwar was deputy prime minister until he was imprisoned in the late 1990s for sodomy and corruption. His jailing caused tens of thousands of people to protest and united the reformist opposition that is challenging the National Front's hegemony.
IS MALAYSIA THE NEXT THAILAND No. Street protests are not widespread and the National Front has a firm grip on all state institutions as well as a wide range of laws to punish dissenters, including detention without trial.
For all that, simmering discontent between the majority Malays and smaller ethnic Chinese and Indian communities has broken out into street protests in the past and the recent series of arrests for sedition has ended any hopes that Mr Najib could undertake serious political reforms to unite the country.
WHY SHOULD IT MATTER TO INVESTORS? Reforming Malaysia's race-based political system is one of the keys to unlocking economic reforms. A system of economic and social privileges for Malays has been blamed by many for hurting the country's competitiveness and fostering corruption.
With rising political tensions, Mr Najib may not be able to reform without risking a backlash from Malays, the core voter base of his party, the United Malays National Organisation.
Malaysian bonds yield more than those in Thailand, largely reflecting the country's rising budget deficit and bond issuance.
Malaysian five year paper yields 3.813 percent against 2.55 percent for 5-year Thai debt despite the country's A-credit rating compared with Thailand's BBB-rating.
Malaysia wants to attract more foreign investment, especially in the services sector so as to reduce its reliance on exports. The country is the third most export-dependent economy in Asia and has been hit hard by the global economic downturn.
There has been some relaxation in rules that stipulate ethnic Malays must own 30 per cent of certain businesses. Moves so far have been to avoid antagonising Malays at a time when the country is entering its worst downturn since the 1998 Asian crisis. -- REUTERS
KUALA LUMPUR - MALAYSIAN police arrested at least a dozen anti-government protesters in Ipoh, the capital of the northwestern state of Perak on Thursday at a rally to coincide with the first sitting of the state assembly since the state government was ousted in February.
Perak was one of five of Malaysia's 13 states ruled by the opposition until a putsch organised by Najib Razak, who became prime minister a month ago.
Here are some of the questions and answers about what the protest could signal:
WHY PERAK? The ousting of the state government appeared to be an attempt by Mr Najib, who was then deputy prime minister, to show he would be a strong leader and came just a few months before he took power, replacing Abdullah Ahmad Badawi.
It came after a series of by-election losses for the coalition that has ruled Malaysia for 51 years.
The Perak takeover has a powerful mix of race, religion and Malaysia's royals. The Islamist opposition has even accused the new chief minister of using black magic, which he denies, and the takeover is subject to court action.
A PERFECT STORM BREWING? Malaysia's politics are becoming increasingly bitter and the opposition questions Mr Najib's character and his ability to deliver reforms on racial equality and the economy.
Tensions look set to remain high with opposition leader Anwar Ibrahim due to appear in court in July on what he says are trumped up sodomy charges.
Mr Anwar was deputy prime minister until he was imprisoned in the late 1990s for sodomy and corruption. His jailing caused tens of thousands of people to protest and united the reformist opposition that is challenging the National Front's hegemony.
IS MALAYSIA THE NEXT THAILAND No. Street protests are not widespread and the National Front has a firm grip on all state institutions as well as a wide range of laws to punish dissenters, including detention without trial.
For all that, simmering discontent between the majority Malays and smaller ethnic Chinese and Indian communities has broken out into street protests in the past and the recent series of arrests for sedition has ended any hopes that Mr Najib could undertake serious political reforms to unite the country.
WHY SHOULD IT MATTER TO INVESTORS? Reforming Malaysia's race-based political system is one of the keys to unlocking economic reforms. A system of economic and social privileges for Malays has been blamed by many for hurting the country's competitiveness and fostering corruption.
With rising political tensions, Mr Najib may not be able to reform without risking a backlash from Malays, the core voter base of his party, the United Malays National Organisation.
Malaysian bonds yield more than those in Thailand, largely reflecting the country's rising budget deficit and bond issuance.
Malaysian five year paper yields 3.813 percent against 2.55 percent for 5-year Thai debt despite the country's A-credit rating compared with Thailand's BBB-rating.
Malaysia wants to attract more foreign investment, especially in the services sector so as to reduce its reliance on exports. The country is the third most export-dependent economy in Asia and has been hit hard by the global economic downturn.
There has been some relaxation in rules that stipulate ethnic Malays must own 30 per cent of certain businesses. Moves so far have been to avoid antagonising Malays at a time when the country is entering its worst downturn since the 1998 Asian crisis. -- REUTERS
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