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Page last updated at 00:01 GMT, Monday, 14 April 2008 01:01 UK

Change in the air after Malaysia polls

By Robin Brant
BBC News, Kuala Lumpur

For almost 40 years businessmen like Rizal Faris Mohideen have had the Malaysian government on their side.

A woman votes in Kelantan, Malaysia, on 8 March 2008
Elections in March put the opposition in a much stronger position

He is a developer, and a controversial policy has guaranteed him a slice of government business - because of his race.

It is called the New Economic Policy (NEP) and it has made him a wealthy man.

The NEP has also helped provide hundreds of thousands of new homes for Malaysia's new urbanites. But its days are numbered.

There is a new wave of people in power in parts of Malaysia and they want to abandon most of the NEP.

'Gravy train'

The opposition emerged from last month's general election with unprecedented support; more MPs in parliament than ever before and control of five of Malaysia's 13 states.

In Penang the victory was overwhelming and the new government is pushing ahead with immediate, radical change.

When you have privileges and tendering where you want to give it only to some people then you breed cronyism
Ramon Navaratnam

The state dubbed Malaysia's "silicon valley", where high tech manufacturers like Intel and Motorola have plants, is scrapping the idea at the heart of the NEP.

"The NEP was established with noble intentions," said Penang Chief Minister Lim Guan Eng, "but many years down the road it has changed and it has been perverted to be a big gravy train."

"Those who want to get rich, those who want to exploit the government's resources use the NEP as a shield for what we consider corrupt practices."

The New Economic Policy is not new - it has been around since 1970. For decades it has been the backbone of the government's economic agenda.

It was created after race riots between two of Malaysia's main ethnic groups, the Malays and Chinese.

The Malays are the majority but they make up the bulk of the poor. The Chinese dominate business. The NEP was supposed to change that.

Ethnic Indian protest in Malaysia (February 2008)
Malaysian Indians held a series of street protests recently

For almost 40 years under the plan the bulk of government building contracts have gone to Malay business. But there has been widespread abuse.

The Penang Malay Chamber of Commerce estimates that almost RM 1 trillion ($330,000m, 165,000m) has been invested by the government since the period when the NEP was established.

But some of that has not gone where it was intended to go.

"If you were to look at areas of corruption... I think it is a known fact that it is an area where we need to look at how do you put in controls where corruption can be eradicated in the system," said developer Rizal Faris Mohideen.

Ramon Navaratnam was one of the civil servants who helped draw up the NEP in 1969.

"When you have privileges and tendering where you want to give it only to some people then you breed cronyism and that's what actually happened," he said.

Mr Rizal and the Chamber of Commerce have supported the new reforms. They have little choice really.

But he thinks the playing field is far from level.

"There is a vast gap for example between the Chinese race and the Malay race. This gap if it persists to go on will create a very unhealthy environment among the races," he said.

His prediction is exactly the same as the future some were predicting before the NEP was established; "It's basically a social time bomb waiting to just blow up."

Revitalised opposition

The change has been quick and not just in Penang, the scene of the most overwhelming opposition victory.

There has been talk of restrictions on alcohol or entertainment in states won by the opposition.

Prime Minister Abdullah Ahmad Badawi
PM Abdullah Badawi rejected calls to resign and promised reform
That is what some in the Party of Islam want to see. But the man who steered the opposition to its unprecedented performance has warned against "populist" change.

"There should be a shift here in the manner we run these governments, not some of these more popular simplistic issues that could be termed or deemed more Islamic or less Islamic," said Anwar Ibrahim.

He was once Malaysia's deputy prime minister, and then he was sacked and subsequently jailed for corruption and sexual assault.

Now he is back, at the head of the newly named People's Alliance - although he is not yet its official leader as he is banned from standing for public office until 15 April.

Reforming the NEP is the type of over-arching change which he wants to focus on. The opposition strategy is to concentrate on governing in the states it controls, to show voters that it can be a viable alternative government.

Malaysia now has a coherent and invigorated opposition, a first. It is early days, though.

Maintaining discipline will be crucial if the People's Alliance is to build on its success at the election. The three main component parties all made significant compromise before the election so that a united front could be agreed. That is likely to come under pressure.

On the government side there is bitter in-fighting as an in-depth post-mortem continues.

At the top there is an ambivalent prime minister. In the days after the election Abdullah Badawi conceded that "a message" had been sent by the people. He signalled that his own version of change was on the way.

He made a major cabinet reshuffle. His new judiciary minister hinted at long-awaited reforms of the courts. At the same time the prime minister announced several new economic reforms, and signalled further liberalisation would follow.

Then he seemed to change tack. He has blamed "saboteurs" in his own party for the drubbing it received.

It seems that the battle for survival has come out on top of the need to push ahead with significant change after that "message" from the people.

Abdullah Badawi is fighting for his political life. He has resisted calls for his resignation and he has also managed to delay internal elections in his own party, providing some breathing space. But there are almost daily reports of a growing rebellion in the ranks.

Change is in the air in Malaysia. Some are pushing ahead with it, others are resisting.



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