Political Risk in Malaysia

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  • Topic: Anwar Ibrahim, Singapore, Mahathir bin Mohamad
  • Pages : 7 (2824 words )
  • Download(s) : 188
  • Published : May 16, 2011
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Political risk in Malaysia

Executive Summary

• The fact that Prime Minister Mahathir has seen fit to take a two month vacation is the strongest evidence in a long time that his position within UMNO remains unchallenged. The political succession issue also seems clearer now that Mahathir has permitted his deputy to assume the title of Acting Prime Minister. Such a privilege was not given to trusted lieutenant Ghafar Baba in 1989, when the prime minister was recovering from a coronary bypass operation. Anwar's performance will be watched closely in the coming weeks. Another test of the extent to which Mahathir is at ease with Anwar will be the degree to which the prime minister gives Anwar free reign to deal with any public controversies which arise while he is on leave. • The by-election victory of the opposition Democratic Action Party in Perak in mid-May surprised many observers. However, it would be an exaggeration to suggest that the result portends a significant shift of ethnic Chinese support away from the government in the nation as a whole. Local issues were paramount in the campaign, and voters knew that they could support the opposition without threatening the National Front's two-thirds majority in parliament. • The differing approaches taken by Malay politicians (who have been calling for a tough stand against Singapore) and the Chinese business community (which has been urging moderation) has not yet led to any appreciable rise in ethnic tension. However, the situation could change quite significantly should Malay leaders suggest that the nation's ethnic Chinese were siding with Singapore. • Tension between Singapore and Malaysia has remained remarkably persistent, over the last few weeks, egged on by the semi-official press in both countries. An informal boycott of Malaysia by Singapore travel agencies during the school holiday season has been followed by a variety of tit for tat moves in Malaysia aimed at reducing Malaysian exports through Singapore and cracking down on Singaporean professionals working illegally on social visit passes. While politicians on both sides of the causeway have been more careful in their public statements, it is difficult to believe that the critical tenor of the reporting by the mass media of both countries does not have at least the tacit support of the two governments. Even so, things are unlikely to be allowed to get out of hand. • Relations with the US, however, are improving. Once a staunch opponent of an American security presence in Asia, Kuala Lumpur now appears quite willing to cooperate with the US military in the region, with a number of US warships making high-profile calls at Malaysian ports in recent months. The policy shift appears to be related to efforts by Prime Minister Mahathir to woo US companies to invest in his pet project, the Multi-Media Super-Corridor (MSC). By providing facilities to US forces, Kuala Lumpur hopes to send a reassuring signal to the American companies it hopes to attract to the MSC. [pic]

Near-Term Outlook

Steady as she goes

Given a choice, Mahathir would probably very much like to concern himself with foreign policy issues in the coming months. However, it is very likely that domestic issues will continue to push their way to the top of the political agenda, forcing the prime minister to intervene belatedly to settle various issues which emerge while he is overseas. To the extent that the prime minister will want to show any serious interest in domestic affairs, his attention will probably be focused on corruption. Mahathir appears to have concluded that graft -- and Malaysia's growing reputation for it -- is becoming an increasingly serious obstacle to his efforts to win the country the international respect and admiration he believes it deserves as a result of its economic achievements. Meanwhile, Deputy Prime Minister Anwar Ibrahim's grip on the finance portfolio is under threat, with rumors...
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