NEW OPPOSITION-CONTROLLED STATES PUSHING THE RIGHT

UNCLAS SECTION 01 OF 03 KUALA LUMPUR 000334 SIPDIS SENSITIVE SIPDIS DEPT FOR EAP, EAP/MTS E.O. 12958: N/A TAGS: PGOV PHUM MY SUBJECT: NEW OPPOSITION-CONTROLLED STATES PUSHING THE RIGHT BUTTONS, FOR NOW REF: 2007 KL 1647 ) HINDRAF RALLY Summary -------------- ¶1. (SBU) Following the March 2008 election, four new opposition-controlled state governments assumed power in Selangor, Perak, Penang and Kedah, while in Kelantan the opposition Islamic Party of Malaysia (PAS) significantly increased a previously thin majority. In their first weeks of power, these new state governments have taken numerous steps to reassure non-Muslims their rights will be respected, and in some cases have resolved long-standing grievances of minority communities. They have also pledged to promote clean governance, attempting to draw contrasts in that regard with the previous Barisan Nasional (BN) regimes. Clearly seeking to win over middle class voters, these new opposition-controlled administrations, and the re-elected PAS government in Kelantan, have all announced populist oriented economic reforms. This report is based on media reports and contacts with some key figures in the states concerned. End Summary. PAS Kedah: We will do it the Kedahan way -------------- ¶2. (SBU) The three opposition parties, grouped after the election under the Peoples Alliance (PA),wrested control of Kedah in the March 2008 general election, winning 21 of 36 state seats. PAS, which took 16 seats, received 7 of the 11 state executive council positions, the other four going to the Peoples Justice Party (PKR). PAS state leader Azizan Abdul Razak became Chief Minister. Azizan, who has impressed us in the past with his flexible approach to issues, quickly announced a reduction of state taxes by 30 percent across the board. While noting that he saw Kelantan,s economic policies as a good model, Azizan stressed in public statements that Kedah would not emulate Kelantan,s cultural policies (e.g., restricting liquor sales, discotheques, and gambling). Noting that around 30 percent of Kedah,s population is non-Muslim, Azizan said any cultural or religious policies would be implemented based on Kedah,s &social fabric,8 and only after discussions with the Chinese and Indian communities and other parties in the opposition front. ¶3. (SBU) The new Chief Minister met representatives of the Kedah Hindu Association, assuring them that the state government would consider their long-standing request to declare the Hindu festival &Thaipusam8 a state public holiday. Hindu Association President Vaithalingam told reporters that this was the first time a Kedah Chief Minister had ever received a delegation from his group. One Kedah PKR representative told poloffs that to the pleasant surprise of Hindus, PAS leaders have been attending thanksgiving prayers at Hindu temples, something no UMNO leaders had ever done. Perak: &Justice, transparency, and accountability.8 -------------- -------------- ¶4. (SBU) In Perak, the PA unexpectedly won 31 of 59 state seats (Democratic Action Party, DAP-18, PKR-7,PAS-6). Malays initially feared that DAP would push for the appointment of a Chinese Chief Minister but in the end the choice was left up to the Sultan, who picked the well-educated PAS candidate Nizar Jamaluddin. DAP, however, obtained six of the ten state executive council positions. For the first time in Malaysian history, a Malaysian Indian, V. Sivakumar of the DAP, was appointed Speaker of the state legislative assembly. Chief Minister Nizar assumed office promising to rule by &universal values of justice, transparency, and accountability.8 One of his first moves was to approve issuance of permanent land titles to scores of farmers, including Chinese relocated during the communist insurgency. One MCA leader told poloffs that with the stroke of a pen the PA government achieved what the BN component parties had failed to do for 50 years. The Chief Minister also announced direct elections for village chiefs in Perak, previously appointed by the ruling coalition parties. The state executive council has slashed land taxes for non-profit religious and educational institutions to a nominal RM 1. ¶5. (SBU) Nizar has stated an intention to review certain decisions of the previous BN government that were &unfair and robbed others of their rights8 and to quickly approve KUALA LUMP 00000334 002 OF 003 applications for projects deemed &fair and right for the people.8 Perak DAP leader Ngeh Koo Ham has promised that in awarding contracts the new government &will not discriminate based on race, religion or political beliefs,8 a policy that if implemented would be a significant departure from policies of the previous BN government. Selangor: Temples, churches and free water -------------- ¶6. (SBU) Selangor, contributing 35 per cent of Malaysia,s GDP, was UMNO,s crown jewel until the March election when the PA captured the state, winning 36 (PKR 15, DAP 13 and PAS 8) of 56 state legislative assembly seats. Former PKR Secretary General Khalid Ibrahim was appointed Chief Minister SIPDIS and for the first time in the state,s history the 10 state executive council positions were equally divided between Malays and non-Malays with PKR allocated four, DAP 3 and PAS ¶3. Another first was the selection of a non-Malay, veteran DAP state assembly member Teng Chang Khim, as Speaker of the State Legislative Assembly. ¶7. (SBU) Khalid has quickly undertaken numerous initiatives to address concerns of minorities. He announced plans to fund rebuilding the Hindu temple controversially demolished by the previous BN government, an event that led to the November 2007 Hindu Action Force (HINDRAF) rally in Kuala Lumpur (reftel). Khalid is forming a special committee to regularize the status of temples and churches located on private properties or in squatter settlements. He also has stated that his government would not prolong or impose conditions on construction and renovation of temples and churches. As in Perak, the State government has decided to impose only a token RM1 tax on registered religious and educational institutions. ¶8. (SBU) The new state government is considering a bylaw compelling plantation owners to provide land or mid-cost houses for displaced workers, and also plans to provide Chinese new villages with 99-year leases. The BN attempted to politically exploit the new government,s announcement of a RM100 million pig-farming project but backed off when it was revealed that the previous BN government gave the initial approvals. The state also announced in March a scheme to provide free water that would benefit 1.5 million consumers in the state. Penang: &Competency, Accountability, and Transparency8 -------------- -------------- ¶9. (SBU) The PA captured Penang, the only state with a non-Malay majority and non-Malay Chief Minister, winning 29 of 40 seats in the state assembly. DAP won 19 seats while PKR and PAS took nine and one seat respectively. Lim Guan Eng, the DAP,s Secretary General, became Chief Minister and for the first time in Malaysia,s history a Malaysian Indian, Dr. Ramasamy, was appointed Deputy Chief Minister II, while a Malay from PKR received the Deputy Chief Minister I slot. DAP claimed seven state executive council seats with the remaining three going to PKR. The new Penang state government has pledged to dismantle BN policies that bred &cronyism, corruption, and systemic inefficiency,8 and to promote &competency, accountability, and transparency.8 It has announced several initiatives, including open tenders for all projects, and a ban on state party leaders applying for state land (rampant during the BN era). The PA government has appointed at least one BN figure, former Gerakan Deputy Secretary General Lee Kah Choon, appointed director of the SIPDIS Penang Development Corporation (PDC) and executive chairman of &InvestPenang8, a state owned investment promotion agency. ¶10. (10) In unprecedented moves, the state government has appointed NGO representatives to the Penang Municipal Council, and pledged to restore, before the next general election, local government elections suspended in 1965 and later abolished in 1976 by the Federal government. Lim announced the establishment of an Inter-Religious Goodwill Council to ensure that &racial and religious issues would not be exploited by certain quarters.8 Kelantan: &We are all brothers and sisters8 -------------- ¶11. (SBU) The Islamist opposition party PAS retained Kelantan for the fifth consecutive term, but significantly increased KUALA LUMP 00000334 003 OF 003 its previous two seat majority, winning 38 seats in the 45 seat Kelantan state legislative assembly. PKR won one of the five seats the party contested. PAS retained all ten state executive council positions and PKR members gained some places on local councils. Chief Minister Nik Aziz thanked all races for this victory and added, &From an Islamic point of view this means everyone is equal. We are all brothers and sisters and there should no more dividing people according to racial lines.8 He nevertheless defended PAS,s Islamic state concept, urging critics to ask the eight percent non-Muslims in Kelantan whether they had faced discrimination under the PAS government. Non-Malay businessmen have told poloffs that since PAS took control of the state in 1990, the state government has relaxed laws on land ownership by non-Malays and non-Kelantanese compared to the previous BN government. Nik Aziz also announced April 21 that PAS would allow non-Muslim Chinese to contest under the PAS banner in future general elections. ¶12. (SBU) The Chief Minister added that since PAS, March 8 general election manifesto focused on creating a &welfare state,8 state policies will be fine-tuned towards this direction. In this context, the state government has abolished state property taxes that are below US$18 and announced a review of water tariffs in the state. COMMENT -------------- ¶13. (SBU) The new opposition controlled state governments are clearly trying to push the right buttons, for now. Except in Kelantan, the opposition has little experience in governing, and bumps along the way can be expected. Potential problems in holding opposition coalitions together in these states could exacerbate any difficulties. In addition, the BN already has made clear that, as in the past, it will use all available powers of the central government, including its financial leverage, to undermine these opposition-controlled state governments. KEITH