12 September, 2008

Malaysia's Credibility Crunch

Malaysia lost credibility with investors after a recent policy misstep. A reversal may not be enough to win it back.

The government retreated from a controversial tax on power producers this week that had contributed to foreign outflows in the country's stocks, bonds and currency holdings in recent weeks. Power companies and market watchers said the tax would have severely hampered the power companies' ability to continue making debt payments-a situation that would have affected about $2.89 billion in bonds.

That measure wasn't the only reason investors worry. Malaysia's currency, the ringgit, is weakening against the U.S. dollar. Inflation is at a 27-year high. A net exporter of oil and natural gas, Malaysia remains vulnerable to fluctuating fuel prices. Aggravating the situation is the political uncertainty, with growing opposition to Prime Minister Abdullah Ahmad Badawi's National Front government.

Foreigners have pulled about $330 million out of Malaysia-focused equity funds since June, or around 25% of the funds' Malaysia stock holdings, according to the Boston-based fund-flow tracker EPFR Global. Bond markets in some Asian countries have been a standout source of corporate finance, but Malaysia's has slowed to a crawl.

While Malaysia's move this week was a positive one for investors, it adds to the overall feeling of uncertainty that can plague developing nations with on-again, off-again policies. In a more dramatic example, Thailand jolted investors nearly two years ago with new capital controls designed to staunch rapid appreciation of its currency and make its economy more competitive. The government changed course after one day, but not before the local stock market dove 15%, erasing $22 billion in market capitalization. Investors were slow to return.

In a potentially positive sign, the Kuala Lumpur Stock Exchange ended Friday up a slight +0.3%. Shares of private power companies also rose. But not all investors were celebrating: shares of state-run utility Tenaga Nasional, which wouldn't have paid the tax, dropped 8.9%. Western analysts had seen the tax as a government effort to discourage hard-bargaining by private electricity producers in negotiations with Tenaga over power prices. The government shelved negotiations Thursday.


ISA ? Ops Lalang ?

“For a country to progress, drastic measures need to be taken so that these efforts are not derailed,”

- DR Mahathir

Raja Petra Kamaruddin has been detained under the Internal Security Act, reported Malaysiakini.

Raja Petra, popularly known by his initials RPK, is also alleged to have allowed comments to appear on his website that degraded Islam and Prophet Muhammad in an article entitled "Not all Arabs are descendants of the Prophet".

This is the second time Raja Petra, a father of five and part of the Selangor royal family, has been detained under ISA, which allows for indefinite detention without trial.

His first arrest under the tough security law was on April 11, 2001. RPK was detained as part of a crackdown against reformasi activists in which nine others were also held.

At that time, he was webmaster for the now defunct FreeAnwar.com site.

Raja Petra was subsequently released after 53 days in detention. However, six of the reformasi leaders were eventually sent to the Kamunting Detention Centre in Taiping where they were detained for two years.

The controversial blogger has earlier been charged with sedition and defamation after linking Deputy Prime Minister Najib Razak and his wife to the sensational murder of a Mongolian woman.

Abdul Razak Baginda, a close friend of the deputy premier, has been charged with abetting the murder of 28-year-old Mongolian woman Altantuya Shaariibuu, whose body was blown up with explosives.

Two police officers from an elite force, whose duties included guarding the prime minister and his deputy, were also charged with the killing.

The ISA, which human rights groups have pushed to have abolished, provides for renewable two-year periods of detention without trial and is normally used against suspected terrorists.

It has also been used to lock up opponents of the government, and last year five Hindraf leaders were detained three weeks after mounting a mammoth rally in the streets of Kuala Lumpur on Nov 25.

Three newspapers - Sin Chew Daily, The Sun and Suara Keadilan - have also been issued show cause letters.

In the case of Sin Chew, it is understood that the authorities were unhappy with its report on the racist remark made by Bukit Bendera Umno division chief Ahmad Ismail. Editors at the newspaper said the show cause letter alleged that the report had caused racial tension.

Coming October 27th marks the 21st anniversary of Ops Lalang, just a friendly reminder ....

Release Raja Petra and retract show cause letters

RPK’s detention is unjust as it denies him his democratic right to defend himself. He should have been charged in open court in relation to the earlier charges made against him under the Sedition Act. By resorting to the ISA, his innocence can no longer be proven. This is indeed undemocratic, unjust and un-Islamic.

That is why we, other civil society groups and concerned Malaysians have opposed the use of undemocratic and unjust laws such as the ISA and the Sedition Act. Even individuals who express and do things that may cause anxiety and pain among the people and possibly inflame ethnic and religious sentiments should be accorded their right to natural justice and be allowed to defend themselves in an open court. They deserve this in any democratic society.

Moreover, the government’s drastic action makes us wonder whether this is a politically motivated prelude to a 1987-type of political clampdown, which involved mass detentions of innocent individuals most of whom were not even remotely involved in creating the supposed ethnic tension at that time.

The government’s latest moves reinforce the suspicion that these are desperate measures taken to undermine what is seen as the unstoppable Anwar Ibrahim and his Pakatan Rakyat mounting a real challenge to the Barisan Nasional..

Whatever the case may be, we urge the government to release Raja Petra unconditionally and also retract the show cause letters issued to the three brave newspapers so that democracy can flourish and justice be served.

Aliran Executive Committee

12 September 2008

Press Statement on Arrest of Raja Petra by the Leader of Opposition, Anwar Ibrahim



I condemn the arrest of social activist and blogger Raja Petra Kamaruddin under the draconian and infamous ISA. By sanctioning the use of the ISA to avert the process of transformational change in Malaysia, the UMNO-led BN government is confirming that it has lost touch with the will of the people and is no longer capable of leading within the framework of a just and democratic society.

Raja Petra should be released immediately and any allegations leveled against him by the Ministry of Home Affairs must be resolved swiftly by the due process of the law. Raja Petra should be given access to proper legal counsel, and his wife and children should not be denied an opportunity to visit him while he is held captive under this illegal detention.

Raja Petra’s detention and the show cause letters issued today to Sin Chew Daily, The Sun and Suara Keadilan, and its earlier banning of prominent political websites, demonstrate clearly the government’s willingness to subvert the freedom of speech at a time when expression of dissatisfaction with the government’s policies is at an all time high.

In the aftermath of the March 8th elections and the Permatang Pauh by-election the Malaysian people have demonstrated their courage and commitment to building a mature democratic society. The dastardly act of detention without trial will do nothing to abate the current government’s declining credibility, and in fact will likely hasten its eventual collapse.

KeADILan reiterates its vehement opposition to the practice of arbitrary detention without trial. We have consistently called for the immediate release of all ISA detainees, as such practices have no place in a democratic society. The ISA is used to quash dissent and smother those who in exercising their right to free speech voice opinions contrary to the preferred views of the ruling clique.

Invoking the ISA just days before September 16th is clearly an attempt to engineer an atmosphere of fear and instability that would justify the government’s heavy-handed tactics against those aligned with the political opposition.


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