Malaysia's ruling party meets to usher in new PM

KUALA LUMPUR, March 24 - reported by : malaysianinsider- source : Reuters

Malaysia's main ruling party meets this week to usher in a new prime minister amid what the opposition says are growing signs of a return to the authoritarian rule of former premier Mahathir Mohamad.

The United Malays National Organisation (Umno) annual congress starts later today and will culminate on Thursday with Deputy Prime Minister Najib Razak being handed the party presidency, a move that will make him premier some days later.

The start of the meeting comes a day after the banning of two newspapers linked to opposition political parties and the use of police to break up an unlicensed political meeting attended by opposition leader Anwar Ibrahim.

Najib needs to re-energise Umno, which is seen as arrogant, corrupt and chauvinist by non-Malays in this Southeast Asian nation of 27 million people, and also breathe life into the 12 parties that are partners in the National Front coalition.

At the same time he needs to meet head on a global economic crisis that has hit Malaysia harder than expected, pummelling exports, and which will push the economy into its deepest recession since the Asian financial crisis a decade ago.

"The congress will decide whether Umno can regain its direction because people are now questioning the very relevance of the party," said Mohammad Agus Yusoff, political scientist at the National University of Malaysia.

Umno was set up to represent the 60 percent of the population that is Malay and has led the National Front coalition that has ruled Malaysia for 51 years, presiding over the implementation of policies giving economic and social privileges to Malays.

Critics say those policies have impeded economic development and fostered corruption, but Najib has signalled he will drop them even as he seeks to liberalise other areas of the economy and clamp down on corruption.

Najib also comes to office encumbered with the kind of baggage that none of his predecessors had as lurid allegations of his involvement in the murder of a Mongolian model largely on opposition-supporting websites have tainted his image.

Najib denies the charges, for which no evidence has been presented, but political analysts say they will burden his premiership and opinion polls show he is less popular than Abdullah Ahmad Badawi, the man he will replace.

"Najib will not have a 100-day honeymoon as PM. He needs to show results weeks after he takes office and create an impact," said Mohammad, the political scientist.

A SERVICE ECONOMY AND A CRACKDOWN?

Najib, 55, has already articulated a vision of what he wants for the economy which has grown at an average of 5.4 percent a year since the Asian financial crisis a decade ago.
He wants to use the global economic downturn to move Malaysia into the services sector and away from electronics, oil and commodities which have made the country the third most dependent on exports in Asia after Hong Kong and Singapore.

Exports have plunged by a third in 12 months and Najib two weeks ago unveiled a budget with a RM60 billion in new spending and loans over two years to try to prop up economic growth and forestall job losses.

But with his energies diverted into UMNO, a well as a parliamentary by-election and three state seat elections on April 7, it is moot whether he can stay on top of the economy.

"Developments on the political front over the next three weeks or so will likely be critical in gauging the level of public and party support for the incoming prime minister, and by extension, the effectiveness and speed of fiscal implementation," Citigroup economist Wei Zheng Kit wrote in a note today.

There is also a risk that clashes between government and the country's vocal opposition, which feels it is on the verge of seizing power, will grow in the wake of Najib's appointment.

Malaysia's opposition fears the relative liberalisation of Abdullah's rule which saw some press restrictions lifted and Anwar released, may be reversed in favour of an approach more like that Mahathir who ruled for 22 years until 2003.

"Najib could either allow dissent and manage it through debate, or he could use strong arm tactics to silence dissent, and the latter is what he appears to be choosing," Dzulkifli Ahmad, an official with Malaysia's Islamist opposition party said after his party's newspaper was banned.