Tuesday, October 24, 2006

After the 'peace talks'

Editorial in Singapore's BT today.

After the 'peace talks' in Malaysia

FORMER Malaysian premier Mahathir Mohamad met his successor Abdullah Ahmad Badawi in closed-door 'peace-talks' over the weekend to help resolve their differences. While nobody has the full transcript of their two-hour discussion, Dr Mahathir described the meeting as 'worthwhile' in that it gave him the opportunity to pour out his grievances, after having criticised his successor in public for many months.

However, he added that he will continue to criticise Mr Abdullah if he finds something is done that does not benefit the country. Mr Abdullah has not made any official statement on the meeting yet. So what can we surmise from the meeting? Does it suggest continued acrimony between the two leaders? More importantly, will Mr Abdullah change course now to placate the influential Dr Mahathir ahead of the crucial national assembly of the ruling party United Malays National Organisation next month? Some of Dr Mahathir's complaints can be addressed without too much difficulty.

For example, Mr Abdullah can speed up the award of government contracts under the Ninth Malaysian Plan. Many politicians and businessmen have complained that the pace of government spending is too slow.

Another pet peeve of Dr Mahathir is the lack of support for national carmaker Proton and the abuse of the car import quota system, which seems to have benefited a small group of Malay businessmen. Mr Abdullah can fix the problem by making the distribution of the so-called Approved Permits more equitable - although finding a foreign partner for Proton might be more difficult.

Dr Mahathir has also been critical of Malaysia's free trade pact with Japan and the on-going talks with the United States. While it is too late for Mr Abdullah to roll back the agreement with Japan, which took effect in July this year, he could fine-tune the draft of the trade pact with the US to ensure a greater balance of benefits. But Mr Abdullah may not find it so easy to deal with some of Dr Mahathir's other grievances, such as his incessant complaints about the premier's influential son-in-law Khairy Jamaluddin, his allegations of nepotism, and the postponement of some major projects that were awarded on the eve of Dr Mahathir's retirement in 2003.

Mr Abdullah's shelving of the bridge project to replace the Causeway to Singapore has drawn particularly strong criticism from Dr Mahathir, who said he had hoped that the project would help boost Johor Baru as the country's southern gateway. It won't be easy for Mr Abdullah to jumpstart the bridge project as that would require the agreement of Singapore, which owns half of the Causeway. There is little prospect of Singapore agreeing as yet.

With so many unresolved issues, Mr Abdullah has his work cut out. The premier's future course of action will determine whether his predecessor will re-emerge as his political backer or continue to undermine him from the sidelines. The next act in Malaysia's long-running political drama will be closely watched, including by investors.

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