18 September, 2008

Anwar seeks censure of Malaysian government

Malaysia's opposition leader demanded Thursday an emergency Parliament session for a no confidence vote in the government, insisting he has secured enough defections from the ruling coalition to topple it.

Anwar Ibrahim said he sent a letter to Prime Minister Abdullah Ahmad Badawi, asking that the special session be held no later than Tuesday. Parliament is currently in recess until mid-October.

"Any delay in his response would be interpreted as nothing short of sabotage of democratic process and abuse of executive powers," he told reporters. "It is therefore critical for the prime minister to respond."

If Abdullah fails to call a session, Anwar said, his three-party coalition, the People's Alliance, will meet to figure out the next course of action. One of his options would be to approach the constitutional monarch and stake claim over the government after proving he has the required majority.

Abdullah has dismissed Anwar's claims as a "mirage," branding him a liar and a threat to the economy and security of the country.

If Anwar Ibrahim is successful in his historic bid to form a reformist government in Kuala Lumpur, he will likely owe much to the country's Borneo states of Sabah and Sarawak.

The large, lightly populated and culturally distinctive states on the northern coast of Borneo island, separated by the small oil rich Sultanate of Brunei, are now key to Anwar's ambitions. Should their members of parliament shift their loyalties away from the ruling Barison Nasional (BN) coalition government, their defections would be decisive for Anwar's Pakatan Rakyat alliance.

The country’s first ever coalition defection has improved his chances of success. Wednesday’s walk-out by the Sabah Progressive Party from the ruling Barisan Nasional (BN) coalition guarantees that the country’s six-month long political limbo will continue.

The decision by the Sabah Progressive Party’s two parliamentarians to leave the coalition is an unprecedented move in Malaysian politics. No member of the ruling 14-party BN coalition has ever defected in the coalition’s 39 years of leadership.

Wednesday’s move is the latest in a series of political blows to BN’s leadership since the coalition lost its two-thirds majority in the March 8 elections.

So far, the country’s economic indicators have remained strong and according to Bank Negara Malaysia, Malaysia’s central bank, the ringgit closed up less than 1% against the dollar at M$3.4470 on September 17. As of August 29, the latest available date, Bank Negara had M$400.2 billion ($122.6 billion) in foreign reserves.

But observers argue that a prolonged lack of political certainty will not go unnoticed.

Standard & Poor’s equity research vice-president and head of research, Lorraine Tan, says that while the rating agency believes Malaysia is “fundamentally attractive”, the continuation of political uncertainty is “weighing on sentiment (and) raising risk perception”.

Surprise, confusion and uncertainty.

These are the words used by the investment community to describe the swapping of portfolios between Prime Minister Datuk Seri Abdullah Ahmad Badawi and Deputy Prime Minister Datuk Seri Najib Razak.

As Najib takes on the mantle of Finance Minister as a prelude to his ascension to the premiership, most fund managers and analysts say it is too early to tell whether this will help stabilise a market that has been battered and bruised by political uncertainty and the meltdown on Wall Street.

While some say that it represents an effort to smooth ruffled feathers in a cabinet that is becoming increasingly divided, others say it could be the start of a comprehensive revamp of the current administration.

Abdullah, who now holds the Defence Ministry portfolio, had said that he could step down as prime minister even sooner.

Most fund managers polled by The Edge Financial Daily said that they would only pass judgment if and when the new finance minister makes his first move.



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