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Since Mahathirís resignation announcement last year, Kuala Lumpur has been full of rumours that an early general election will be called. The reasoning was simple: first, Abdullah Badawi, Mahathirís anointed successor, needed a mandate from the people; second, the economy is doing fairly well; third, two big international conferences will be held in KL this year: the Non-Aligned Movement (NAM) summit and the Organisation of Islamic Conference (OIC) conference.
If the rumour mill is correct, a general election will be held sometime between June and September, or just before the OIC conference. There are signs that an early election may indeed be the case. Consider the following:
(a) UMNO (and other ruling National Front parties) have activated their poll machinery
(b) A RM10 billion (about AUD$4.8 billion) state-controlled fund, ValueCap Sdn, has been established to buy stocks deemed 'undervalued'. Since 10 January this year, when it started operating, the KLSE Composite Index has gone up by at least two per cent. Anecdotal evidence from past elections indicates a direct link between a healthy stock market with a healthy vote for the government.
(c) The opposition is in disarray. The two biggest opposition parties, the Democratic Action Party (DAP) and the Islamic Party (PAS) cannot work together, while Keadilan (the National Justice Party) looks set to be obliterated in the coming election.
(d) The governmentís stand in opposing the war on Iraq has received considerable support from the populace, so much so that the government has backed The People's Alliance for Peace Malaysia. Although it claims to be apolitical, its ability to hold rallies and other high profile activities throughout the nation suggest that it is being used to gather support for the ruling coalition.
(e) UMNO appears to have the upper hand against PAS, its traditional nemesis. It has cleverly used the media to link PAS and its leaders to terror activities and corruption. For example, recent headline stories have highlighted (PAS president) Abdul Hadi Awang's attendance at an Islamic conference in Makassar, Sulawesi, in October 2000, in which Jemaah Islamiah leader Abdu Bakar Ba'asyir and Laskar Jundullah (Army of Allah) leader Agus Dwikarna also took part; the alleged use of Zakat (religious tithes for poverty alleviation) funds by two PAS state ministers and a former PAS executive council member to finance their children's studies abroad; police statements that the majority of those arrested for Islamic militancy in the past year were either former or current PAS members and included even the son of the Niz Aziz, PASís spiritual advisor; and, criticism of the approval by the PAS-led Terengganu state government of 20 per cent salary increments for the chief minister and state executive councillors, while the state has one of the highest levels of poverty in Malaysia.
(f) A police raid on Malaysiakini.com, an independent online newspaper, which has been highly critical of the Mahathir regime. Malaysiakini had played an important role supporting the opposition in the 1999 election.
(g) Mahathirís statement to the press that when he goes, he expects all his cabinet colleagues to also hand in their resignations in order to give Badawi a free hand in picking his own team.
(h) All Islamic religious schools (sekolah agama rakyat) were shut down in January this year. These schools were a major bastion of support for PAS.
If an election is to go ahead, it will probably be held when Mahathir comes back after two months leave in May 2003.
WATCHPOINT: If there is going to be a general election, Mahathirís role will be closely scrutinized. Will he let Badawi take the lead in the campaign or will he still be the main drawcard?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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