OPPOSITION CALLS FOR PROTESTS OVER FUEL PRICES

C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 000482

SIPDIS

STATE FOR EAP/MTS

E.O. 12958: DECL: 06/10/2018
TAGS: PGOV ASEC ECON MY
SUBJECT: OPPOSITION CALLS FOR PROTESTS OVER FUEL PRICES

REF: KL 476 -- MALAYSIA RAISES GAS PRICE

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

Summary
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1. (SBU) Malaysia's sudden and drastic increase in fuel
prices has given the Opposition a rallying point and new
means to direct populist pressure against the incumbent
National Front (BN) government. Opposition groups announced
plans to stage a nation-wide series of protests, with the
first large demonstration slated for June 13 in Kuala Lumpur.
Anwar Ibrahim reiterated the Opposition's determination to
take power by September 16. End Summary.

Protests Planned
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2. (SBU) The Government's drastic 41 percent fuel price
increase, initially planned for August but suddenly announced
on June 4 (reftel),has given the Opposition a new rallying
point and led to calls for protests. Thus far there have
been only small demonstrations, but opposition parties, NGOs
and civil society groups are planning nationwide
demonstrations against the increase. On June 7, "PROTES," an
anti-inflation coalition of opposition parties and
non-governmental groups, announced plans for demonstrations
in each Malaysian state, starting with Negeri Sembilan on
June 14, and climaxing with a "mass demonstration" in Kuala
Lumpur on July 12. In a separate initiative, Islamist
opposition party PAS Youth Chief Salahuddin Ayub stated June
7 that the opposition coalition Peoples Alliance will hold
peaceful protests "until the government does something to
address this issue and review their decision." He added that
PAS and Peoples Justice Party (PKR) de facto leader Anwar
Ibrahim would hold a rally of 10,000 people on June 13 at the
capital's Petronas Twin Towers. In a June 10 statement, the
Peoples Alliance youth wing reaffirmed plans for the June 13
protest.

Political Opposition Takes Advantage
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3. (SBU) In urging Malaysians not to rely on the opposition
views of the price hike, PM Abdullah in a June 7 speech
stressed the global nature of the oil market and GOM plans to
provide assistance to lower income groups to offset the price
increases. The political opposition is citing GOM
mismanagement and corruption as factors behind the price
hikes. PKR activists hung banners around Kuala Lumpur to
counter the Government's assertion that the new petrol price
of RM 2.70 per liter remains low relative to other countries.
The banners noted that other petroleum producing countries
such as Egypt, Nigeria and Venezuela still have much lower
fuel prices.


4. (SBU) Poloffs attended a June 8 rally organized by the
opposition alliance in a predominantly Malay neighborhood in
Kuala Lumpur where several speakers from PAS and PKR combined
expressions of outrage at the price hikes with calls for the
ouster of the current government. PKR's Vice President Azmin
Ali told the gathering of some 5,000 enthusiastic and mainly
Malay supporters that price increases were to sustain "a
corrupt government" and urged the people to participate in
demonstrations. He also reiterated opposition leader Anwar
Ibrahim's assertion that the Peoples Alliance would take over
the government by September 16.


5. (U) Anwar told reporters June 8 that the government's
unpopular decision will hasten its fall. Describing the
decision to hike fuel price by 41 percent as "the highest
single increase in fuel prices around the world," an "ill
conceived plan," and an economic disaster, he called on the
government to resign. Reiterating the party's March 2008
general election pledge, Anwar stated that if the Peoples
Alliance forms the new government, it will cut fuel prices,
adding that "I will immediately resign, if I do not keep my
word." Responding to questions on the previously announced
target of bringing down the BN government by September 16,
Anwar said, "our timetable (for party crossovers) is still
on. It's on schedule and now it's more attractive after the
price hikes." Opposition Democratic Action Party (DAP)
advisor Lim Kit Siang described the price hike as
"unconscionable, unjustifiable and deplorable," especially in
view of earlier GOM pledges that there would be no price
hikes until August.

Mahathir Piles On

KUALA LUMP 00000482 002 OF 002


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6. (U) Former PM Mahathir, who continues to lobby for PM
Abdullah's removal, argued in his blog that the Government
should have cut subsidies gradually to allow people to adjust
to high fuel prices. Mahathir maintained that Malaysia can
still afford subsidies because Petronas, the state oil
company, is making good profits from strong global oil
prices, while high commodity prices for such exports as palm
oil and rubber have boosted government revenues. His son
Mukriz Mahathir urged the GOM and other governments to speak
out against "artificially inflated fuel prices" that were
"actually helping the U.S. finance its occupation of Iraq and
Afghanistan."

Comment
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7. (C) Political momentum enjoyed by the Opposition after
their unexpected gains in the March 8 election subsequently
lagged as PM Abdullah's government weathered the initial
parliamentary session and Anwar failed to capitalize on
immediate threats that government MPs would cross over to the
Opposition camp. PM Abdullah's unpopular decision to slash
fuel price subsidies now presents opposition parties with a
ready opportunity to reignite their public calls for a change
in government. Steep increases in fuel prices and concerns
over resulting inflation in other areas hit a raw nerve among
the Malaysian public, particularly lower income groups. The
Opposition has yet to prove, however, that it can sustain
repeated major protests in the face of determined government
counter-actions.
KEITH