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The past few weeks could not have been better for Malaysia's opposition. Just a month ago, the biggest issue the Opposition could hit the government with was the 'nude squat' issue. Many people were angry that the police had forced a young Malay woman to strip naked and perform ear squats. The police claimed it was 'SOP' (standard operating procedure) while many critics claimed it showed, once again, that the police were acting outside the law and do not respect human rights. The opposition had started the whole issue by showing a covert video clip of the nude woman allegedly taken by a policeman who was spying through a window at a police station in Kuala Lumpur.
Just as this controversy was dying down, the government announced, without warning, a petrol hike on 27 February 2006. The price of petrol and diesel increased by 30 Malaysian cents a litre, the highest increase in the past two years. The government also announced that transport operators like bus companies could get diesel at a lower price if they apply for a 'fleet card'. It went out of its way to explain that the increase does not mean that the government had stopped subsidising petrol prices, rather it merely took off some of the subsidy. It argued that it had to 'act' and had 'no choice' given the rising oil prices. Since Malaysia had 'no control' over the international price of oil, it had to increase pump prices to stop the subsidy getting out of hand. The deputy prime minister appeared on all television channels (including cable TV) during prime time calling on the people to accept the modest price rise and reiterated that the government was still spending 15 billion ringgit (about US$4 billion) a year on subsidies. Without the government's subsidy and tax exemptions, the retail price of these products would be higher. The government also promised that major food items and public transport will not cost more as the fuel hike would not significantly increase internal costings.
Despite the best efforts of the government, opposition to the petrol hike was swift. The Malaysian Trade Union Congress (MTUC), the largest trade union grouping in the country, said it will not accept the price hike unless the government forces employers to give a COLA (cost of living allowance). Many NGOs also denounced the price hike as an unnecessary burden on the poor. For the first time in months, the Opposition was able to mount a fairly sizeable demonstration in front of the KLCC, site of Petronas Twin Towers. The size of the demonstration was big enough for the police to use water cannons to disperse the crowd.
The location was no accident. The trade unions, NGOs and the Opposition are all asking the same question: How can the government raise petrol prices given that Malaysia is a net exporter of oil? Moreover, the petroleum industry in Malaysia is monopolised by the government through Petronas, a government-owned company with monopoly rights to all petroleum found in Malaysia. Petronas is one of Malaysia's best-run companies and, on the back of record oil prices, had just declared a profit of RM35.6billion (about US$9.6 billion) for the financial year ending 31 March 2005. For the Opposition, the solution was obvious: Why doesn't the government simply use Petronas' massive profits to maintain the old fuel prices? This sort of simple logic resonates with the ordinary folk who are under pressure to maintain their households.
The anger over the fuel increase is also, in part, linked to the issue of poor public transport infrastructure. The government's call on the public to use less fuel by using public transport to get to work caused more anger as public transport in major urban corridors like Kuala Lumpur and Georgetown are poor to non-existent. Buses seldom run on time, break down often, are old and often driven by what one commuter called a 'F1' (Formula One) driver. In Kuala Lumpur (KL), every bus and train operator uses their own ticketing system and it is not uncommon for a commuter to use three different fare cards before reaching the destination. The situation is so bad that the government was forced to establish a new company that 'bought back' all of KL's bus and train companies. The new entity, run by an expatiate, has promised that by the end of this year, KL commuters will be served by an integrated bus and train service, with only one ticket for the entire network. Unfortunately commuters interviewed by the major newspapers don't believe the government is capable of delivering an integrated transport system.
Malaysians' love affairs with their cars is also due to government policies in the 1980s when the national car project was launched. The idea, although not said in public, was for every Malaysian household to eventually own a Proton, or two. This would ensure the economic viability of Proton. Soon thereafter, a second national car project was launched. Easy credit was given to just about anyone who wanted to own the national car. Overnight even office boys and tea ladies gave up their motorcycles in favour of national cars. This has contributed to KL's reputation as 'jam city'.
The other problem is that many people do not believe that the government is being totally upfront on the fuel hike. The rumour mill has gone into overdrive insisting that the fuel hike is due to Malaysian Airlines (MAS). MAS, which used to be profitable, is now almost insolvent due to bad management and political interference. Under new management, MAS says it may need RM4billon over the next two years to restructure so as to return to profitability. Many people think the savings from the fuel subsidy will go straight to 'rescue' MAS despite an outright denial by the Prime Minister.
The government is fighting back. For the first time it has set up a 'SMS hotline' for people to give their views on major government policies. At a special briefing for ruling Barisan Nasional (BN) representatives, PM Badawi ordered every BN party 'to go to the grassroots' and explain 'the real picture' behind the fuel hike. At the same time, UMNO Youth announced that it had set up special squads to keep an eye on traders to make sure that they do not raise their prices solely on the back of the fuel hike.
WATCHPOINT: The Opposition is on a winning issue here. A fuel hike will hurt the lower strata of society more than the upper class. If the government loses the public relations war on this issue, it will have an impact on the next election. The next scheduled election is the Sarawak state election, which must be held by November 2006.
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