Mar 31, 2010

Tun Mahathir : PM Najib needs to press reforms

KUALA LUMPUR, March 31 — Malaysia’s influential former premier Tun Dr Mahathir Mohamad said today the country’s current prime minister had yet to live up to promises, and urged him to forge ahead with pledged reforms.

A vocal government critic who led the push to oust his immediate successor and usher in Datuk Seri Najib Razak as premier in 2009, Mahathir also defended an affirmative action policy that favours the country’s Malay majority. Najib has pledged to roll back Malay privileges in a new economic model he released yesterday.

“One year is not enough (for an assessment), you are just learning to be a prime minister really,” Mahathir, 84, said in an interview on the sidelines of an investor conference.

“Najib has just released his economic policy, we need to see whether the performance is as good as promised.”

Najib took office in April last year pledging reforms to rejuvenate investment and reverse 2008 election losses suffered by the coalition that has ruled Malaysia for 52 years.

But his government has delayed the introduction of petrol and electricity price rises, road toll increases and a goods and services tax in a series of decisions that has undermined market confidence in his ability to deliver economic reforms.

That, Mahathir said, was no way to oversee change.

“I think that is a very bad way of doing things,” he said. “You make a decision, then you have to implement it, but before making a decision, you should think very carefully about it.”

Mahathir served as prime minister from 1981 to 2003 and still plays a major behind-the-scenes role in national politics.

The country’s next general election is due by 2013, but may be called as early as next year.

Analysts say that although Najib faces an opposition riven by divisions, he is wary of upsetting the Malay majority, the core of support for his United Malays National Organisation (Umno) party, mainstay of the ruling coalition. Many Malays could be hit by the proposed tax and subsidy reforms.

Najib announced a new economic model (NEM) yesterday to hoist the country’s trade-dependent economy to the ranks of developed nations by 2020 through liberalisation and a greater focus on services.

But doubts remain on how far he can succeed in overcoming a potential political backlash in rolling-back the four-decades old affirmative action policy favouring Malays.

Since taking office, Najib has rolled back parts of the old policy, ending requirements for a 30 per cent Malay equity ownership in some economic subsectors.

Signs of resistance have begun to emerge with the formation of a Malay rights group Perkasa (Strength) at the weekend.

It is not clear whether Perkasa enjoys widespread support, but Mahathir presided over its launch and he told Reuters the prime minister should take account of its demands.

“Try to do something to reassure them (Perkasa) and explain why the government is doing certain things,” he said.

“If they can accept your explanation, well and good, but if not it is important to take seriously their feelings of unhappiness.”

Ethnic and religions tensions have increased in the mainly Muslim but multiracial country following a court ruling allowing the use of the word “Allah” by Christians.

A rising tide of Islam also saw three Muslim women caned for the first time under strict Islamic laws, while another was sentenced to caning for drinking beer.

Mahathir presided over some liberalisation measures to the New Economic Policy (NEP), the reform plan of the time often criticised as an impediment to investment.

His changes allowed, for instance, 100 percent foreign ownership of some factories and he called for “adjustments” to be made, provided they did not increase income disparities between Malays and the wealthier ethnic Chinese community.

“The mechanism for implementing the policy is going to be very important if it is done correctly, I think even Perkasa would accept it,” Mahathir told Reuters. — Rueters

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