MALAYSIA’S CHINESE MINORITY: THE POLITICS OF MARGINALIZATION

C O N F I D E N T I A L SECTION 01 OF 04 KUALA LUMPUR 001975

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/18/2016
TAGS: PGOV PREL ECON MY
SUBJECT: MALAYSIA’S CHINESE MINORITY: THE POLITICS OF MARGINALIZATION

REF: A. KUALA LUMPUR 942


B. KUALA LUMPUR 1935

C. KUALA LUMPUR 1942

D. KUALA LUMPUR 1913

Classified By: Political Section Chief Mark D. Clark for reasons 1.4 (b
, d).

Summary
--------------


1. (C) Malaysia's Chinese minority struggles to find new
footing in national politics. In September Singapore's
Minister Mentor Lee Kuan Yew ignited a nation-wide debate on
the marginalization of Malaysia's Chinese minority. Leaders
from across the Chinese political spectrum agreed, at least
privately, with LKY's conclusion and confided that most
Chinese Malaysians feel marginalized by the United Malays
National Organization (UMNO)'s race-based, Bumiputera
policies. As the Chinese community grows restless, Chinese
parties of the UMNO-led National Coalition (Barisan Nasional,
BN) fear losses to opposition parties in the next general
election. The People's Movement Party (Gerakan) faces change
at the top and candidates have begun to vie for the coveted
chief minister's job in Penang. Many Chinese have questioned
their own leaders after Prime Minister Abdullah humiliated
current Penang Chief Minister and claimed the Gerakan-led
state government is marginalizing ethnic Malays in Penang.
The Democratic Action Party (DAP) stands to gain Chinese
votes, but remains unorganized and ill-prepared to capitalize
on Chinese discontent. Opposition parties in general fail to
present a valid alternative to the BN. A think tank report
on Bumiputeras' economic share created another rallying point
for the Chinese community's expressions of marginalization.
While post-Mahathir political openings allow Chinese
political discontent to bubble to the surface, ethnic Chinese
voters appear to have no realistic alternatives. End Summary.

Singapore's Lee Kuan Yew Ignites a Fire
--------------


2. (SBU) In September, Singapore's Minister Mentor Lee Kuan
Yew ignited a political firestorm when he commented during a
seminar that Singapore's neighbors, Malaysia and Indonesia,
systematically marginalized their Chinese minorities. Cries
of outrage were heard from Malaysia's ethnic Malay leaders.
Prime Minister Abdullah Badawi publicly demanded an apology
from Lee, and the two exchanged highly-publicized letters
demanding and feigning apology. Dozens of senior Malay
officials derided Lee for his comments and a few Chinese
members of the ruling Barisan Nasional (BN) coalition
government came to the defense of GoM and denied there was
any systematic marginalization of Malaysia's minorities. But
most Chinese Malaysians agreed with Lee, and Chinese
politicians that denied the accusation are now viewed with
growing disdain.

MCA admits marginalization and fears backlash
--------------


3. (C) Malaysian Chinese Association (MCA) Vice President
Ong Tee Keat, who also serves as the Deputy Minister of
Higher Education, was one of the few ministerial level
Chinese politicians who refused to deny publicly or privately
the fact that Chinese Malaysians are marginalized. In a
private meeting with poloff Ong commented that although
Chinese leaders from MCA and the People's Movement Party
(Gerakan) were bound to support government (i.e. UMNO)
positions, their Chinese constituents were not satisfied with
their responses. Ong commented that in cases such as this,
"silence is sometimes our only valid response." But he
acknowledged, "of course we are marginalized, big business to
small stall owners know that -- but MCA cannot admit it." So
when pressed by reporters for a public response to Lee's
accusation, Ong related an old Chinese proverb -- "Whether
the water in the tea cup is hot or cold, he who drinks it
knows best."


4. (C) According to Ong, MCA will face its greatest
electoral challenge ever in the next two years. In his
opinion, there was great dissatisfaction with the status quo
in the Chinese community that was only partially seen in the
Sarawak elections when the opposition Democratic Action Party
(DAP) won six seats (Ref A). "Sarawak was a wake-up call for
all Chinese parties," Ong told poloff. MCA and Gerakan have
studied the results of the Sarawak elections, but are not
sure they can counter the growing discontent in their
communities. The Chinese component parties of BN no longer
have community focused development projects to show their
constituents, as these have all been redirected to Malay
communities. "There was once a day in Malaysia when MCA
would get the left-overs, but now we are just hoping to get
some crumbs from the UMNO table," said Ong. Ong admitted
that an example of only getting the crumbs could be seen in
the Ninth Malaysia plan wherein the government planned for
the construction of 180 new elementary and secondary schools,
none of which would be vernacular schools for either the
Chinese or Indian communities. Only after loud outcries from
the Chinese community did the Ministry of Education "cave in"
and announce that two of the 180 schools would be designated
as Chinese vernacular schools. Again, MCA could not provide
a proportional voice for the Chinese minority, and Ong
believed the community took note.

Prime Minister claims Malays marginalized in Penang
-------------- --------------


5. (C) In an ironic exercise in hypocrisy and political
expediency prior to the UMNO district meetings in September,
Prime Minister Abdullah Badawi echoed the earlier remarks of
his son in law, Khairy Jamaluddin, and publicly charged
Penang's Chief Minister Dr. Koh Tsu Koon, with systematically
marginalizing the ethnic Malays of Penang. Penang is
Malaysia's only Chinese majority state (but only by a razor
thin margin) and is led by BN coalition partner Gerakan.
Despite the conflict resolution principles touted by the
Barisan Nasional, at an UMNO divisional meeting in Penang,
Abdullah publicly chided Koh and demanded immediate action to
address the needs of the marginalized Malay community.
Deputy Prime Minister Najib Tun Razak later called for the
Penang Chief Minister to more equally divide his executive
powers with the Malay deputy chief minister, while federal
Education Minister Hishamuddin Tun Hussein demanded Koh take
unconditional immediate action to address the needs of the
Malay community in Penang. According to sources who attended
the meeting, Koh was dumbfounded and unprepared to respond to
the Prime Minister's accusations. Penang State Executive
Councillor Dr. Toh Kin Woon later admitted in a private
meeting with poloff that the PM thoroughly humiliated Koh,
and although Malays in Penang have a higher per capita income
than Malays in many other states, Koh was unprepared and
unable to respond. Gerakan Central Committee member, Lee Kah
Choon, stated to poloff that Koh was viewed by the whole
Chinese community as weak: "it is just his personality, and
everyone comes to expect it." It was this type of weakness,
opined Toh, that places BN's Chinese component parties in
danger of losing ground to DAP or the People's Justice Party
(KeADILan) in more mixed districts. (Comment: Chief
Minister Koh is an intellectual, who holds a doctorate in
physics from Princeton. His technocratic style makes him
popular with corporate leaders, who appreciate his business
friendly approach to governing, but is ill-suited to the
cut-and-thrust of party politics. End Comment.)

Gerakan plans for leadership change
--------------


6. (SBU) Koh, who in addition to duties as the Chief
Minister of Penang is also Deputy President of Gerakan, is
expected to become the Gerakan president in April 2007 when
current president Dr. Lim Keng Yaik steps down. Koh's
elevation to party head will likely mean he will move from
state politics to a federal ministerial position, and several
Gerakan politicians are already jockeying for the anticipated
vacancy as Penang Chief Minister. The three front runners
for the job in Penang are currently Lee Kah Choon, Gerakan
Deputy Secretary General and Parliamentary Secretary for the
Ministry of Health; Dr. Teng Hock Nan, Gerakan Vice
President; and Chia Kwang Chye, Gerakan Party Secretary
General.


7. (C) In a separate meeting with poloff, Lee Kah Choon
admitted that, like MCA, Gerakan too would face a strong
political challenge in the next general election, as they
have not been able to overcome the perception that the
Chinese community is continually discriminated against by the
Malay majority government. Lee's only hope was that DAP
"would continue to run dishwashers and truck drivers" for
state and federal parliamentary seats, and thus would remain
uncompetitive in the general elections in Penang. In another
meeting, Dr. Toh Kin Woon lamented that UMNO was resorting to
"blatant racist tactics that Malaysia has not seen since the
late 1980s." He attributed the rise in UMNO's racist
rhetoric to PM Abdullah's weakness as a leader. "Malaysians
need a strong leader who knows when to be ruthless. Mahathir
knew how to be ruthless, but he became cruel, and that's when
he lost respect. Abdullah is not cruel, but neither is he
ruthless when he needs to be. He is just weak; so he resorts
to racist tactics to hold on to the majority Malays." He
faulted Koh for not standing up to Abdullah regarding his
accusations of the Chinese marginalizing ethnic Malays in
Penang, and opined that such weakness in the party opened the
door for the opposition to make significant gains in then
next general election.

The Democratic Action Party lacks a national strategy
-------------- --------------


8. (C) Notwithstanding their successes in the Sarawak
elections (ref A),DAP has not yet formulated a national
campaign strategy aimed at capitalizing on the growing
discontent in the Chinese community (also see ref B). In
Penang, Member of Parliament Chow Kon Yeow (DAP - Tanjong)
admitted to poloff that his party traditionally has had very
little success in recruiting high caliber candidates for
parliamentary elections. Such past failures have influenced
the party's motivation to recruit more viable and electable
candidates. According to Chow, DAP often struggled with
supporting issues germane to the Chinese community, such as
promoting vernacular schools, and therefore, at times seems
to alienate itself from its natural voting base. Chow
indicated that DAP's current plan was to continue to run
young party activists who had previously contested elections
in Penang and hope that discontent with BN policies would
draw voters to vote merely for the party rather than the
quality of the candidate. Since many of the seats in Penang
currently are held by third term parliamentarians, term limit
laws prevent the incumbents from seeking re-election. DAP
hoped for a more level playing field if their candidates were
not battling incumbents, Chow said, and thus anticipated
better electoral results in Penang and other metropolitan
areas of the country where Chinese voters are concentrated.


9. (U) DAP Secretary General Lim Guan Eng has completed his
term of exclusion following his conviction under the
publications act, and DAP insiders expected him to contest
for another seat in parliament in the next election. Lim and
his wife have fallen out of favor with party members in
Melaka, so Lim likely would challenge a seat in Penang or in
Kuala Lumpur. Such mobility is common among Chinese
candidates, and due to his relative popularity, party
officials were quite optimistic of Lim's election and ability
to join his father Lim Kit Siang as a leader in the
opposition.

Bumiputera Equity: Chinese cry foul
--------------


10. (SBU) The GOM's negative reaction to the recent public
release of the Asian Strategy and Leadership Institute
(ASLI)'s analysis of bumiputera equity in the marketplace has
stoked the fires of Chinese discontent (Ref C). With
characteristic cries of sedition for daring to challenge
government statistics, ethnic Malay politicians, including PM
Abdullah and DPM Najib have done all in their power to
discredit the ASLI report. Despite pressuring the Malay
president of ASLI, Mirzan Mahathir, to retract the report,
the Prime Minister and UMNO have not been able to quiet the
discussion of bumiputera equity and their race-based policies
aimed at perpetually increasing Malay market share.
(Comment: Mirzan Mahathir is the son of former Prime
Minister Mahathir Mohamad. Ironically, the elder Mahathir
and his two sons, Mirzan and Mukhriz, continue to publicly
champion bumiputera set-asides, leading one to question the
possible political maneuvers behind the release of the ASLI
report. End Comment.)


11. (SBU) Perhaps emboldened by his announcement that he will
retire as Gerakan president in April 2007, Dr. Lim Keng Yaik,
Minister of Energy, Water and Communications, stepped forward
to challenge the government to release its statistics and
explain how Bumiputera equity is only 18.9 percent rather
than the 45 percent ASLI found. DPM Najib replied that the
GoM can certainly release its methodology for its more
"exhaustive study" and that Lim should not imply that the
government is not transparent. Despite Najib's remarks, the
GoM has not released its methodology, and UMNO continues to
hope that this issue will die a quick and quiet death.
Chinese politicians and activists, however, do not yet seem
willing to let the issue die, and although the study
reiterates what many Chinese have long believed, it now gives
quantifiable evidence to support their feelings of
discrimination.

Comment
--------------


12. (C) The increasingly strong Islamic identity of the
dominant Malay population has a natural corollary -- an
increase in race based politics. As Chinese sensitivities
heighten regarding Malay-centric policies, discontent with
the status quo grows. Of note, political openings in the
post-Mahathir era have allowed greater public airing of such
discontent, albeit with limits. Abdullah's inability to shut
down the divisive debate stands in stark contrast to
Mahathir's firm control. Comprising 25 percent of the total
population, ethnic Chinese Malaysians have the most to lose
of all the minority groups from the Bumiputera policies aimed
at ever increasing Malay equity in the marketplace, often at
the expense of Chinese equity. While no one is yet
predicting the collapse of the coalition Barisan Nasional,
growing discontent in the Chinese community has led many
political pundits to forecast that many Chinese will abandon
MCA and Gerakan and vote for DAP in the next election. We
anticipate the next general election will be held in the
fourth quarter of 2007 or first quarter of 2008, and although
UMNO is not in danger of losing significant numbers of votes,
Chinese component parties fear they will take a hit.
Nevertheless, Chinese voters have poor alternatives. DAP and
KeADILan are not sufficiently organized to provide a real
alternative to BN, particularly given the disproportionate
powers wielded by the UMNO-led coalition. The Pan-Malaysia
Islamic Party (PAS),the strongest Malay-based opposition
party, holds no appeal for the Chinese electorate. Without
better alternatives, MCA and Gerakan will not lose their
dominance of the Chinese vote.

LAFLEUR