Big pay hike for Malaysia workers

Abdullah Ahmad Badawi said economic growth permitted the rises

Malaysia has approved pay rises of up to 35% for civil servants, their first increase for 15 years, from July.

Analysts have linked the move to speculation that the prime minister may call an early general election.

The increase means the lowest-paid workers will receive about $180 (£90) a month, rather than $140.

Cost of living allowances will also be increased by as much as 100%, while about half a million pensioners will also receive greater pay-outs.

Prime Minister Abdullah Ahmad Badawi said the government decided it could award the rises because of the country's strong economic growth.

GDP has increased by more than 5% on average over the past five years.

"I am sure this pay revision will help reduce the burden faced by the public sector worker, especially those who are in the lower income groups," Mr Abdullah told civil servants, who cheered when he announced the rise.

"At the same time I wish to remind all civil servants that with this pay increase the government's and the people's expectations of the public sector will increase."

There will be four tiers to the raises, form 7.5% to 35%, with the greatest increase given to the lowest-paid sector.

Political experts said the rises may be a sweetener ahead of a general election, which is not due until 2009 but may be called sooner.