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Ringgit sukuk sales head for record as Gulf taps market

Posted: 19 Aug 2011 04:33 PM PDT

Malaysia's government announced a spending program in 2010 to build roads, electricity plants and a rail-transit system aimed at easing traffic congestion in Kuala Lumpur, over the next decade. Prime Minister Najib Razak said in March that Islamic bonds would be sold to fund the 48 billion-ringgit rail project, without saying when the debt would be sold or how big it would be. The Treasury has sold 26 billion ringgit of sukuk in 2011, up from 18.5 billion a year earlier, according to Bank Negara data.

(Bloomberg) - Sales of ringgit-denominated Islamic bonds are headed for a record this year as Malaysia's $444 billion development plan boosts borrowing and Persian Gulf issuers tap the world's biggest sukuk market.

Malaysian companies have announced plans to sell at least 6 billion ringgit ($2 billion) of sukuk by the end of 2011, on top of the 30.6 billion ringgit already raised in 2011. That will bring the total close to the record 38.7 billion ringgit raised in 2007, according to data compiled by Bloomberg. Offerings totaled 10.9 billion ringgit in the year-earlier period.

Maybank Investment Bank Bhd., the top sukuk underwriter this year, Bank Muamalat Malaysia Bhd. and Asian Finance Bank Bhd. all say they expect a record year for issuance. Investors have bought Malaysia's investment-grade Islamic debt amid political turmoil in the Middle East, and signs that Europe's debt crisis is spreading and that the world is headed for recession.

"With Europe and the Middle East in crisis, money is looking at emerging markets, including Asia, and the appreciating ringgit offers good returns," Ahmad Najib Nazlan, deputy treasurer in the treasury and capital markets division at Kuala Lumpur-based Bank Muamalat, said in an Aug. 17 interview. Lower borrowing costs and the economic transformation program were also driving issuance, he said.

The ringgit has strengthened 2.6 percent against the dollar this year to 2.9870 Friday. Malaysia is rated A3 by Moody's Investors Service and A- by Standard & Poor's and Fitch Ratings, the fourth-highest investment grades. The three companies rate Indonesia one level below investment grade.

Global sales of sukuk, which pay asset returns to comply with Islam's ban on interest, has doubled to $16.8 billion this year, according to data compiled by Bloomberg. Offerings from the six-member Gulf Cooperation Council, including Saudi Arabia, Qatar, Oman, Bahrain, Kuwait and the United Arab Emirates, rose 51 percent to $3.7 billion.

Yields on Malaysia's benchmark five-year local-currency Islamic bonds have dropped 17 basis points, or 0.17 percentage point, this quarter to 3.466 percent Thursday, matching the lowest level this year, a Bank Negara Malaysia index and Bloomberg data show.

The Bloomberg-AIBIM-Bursa Malaysia Sovereign Sharia Index, which tracks the most-traded government debt in Malaysia, climbed to 104.158, the highest level since it was created in September, and has advanced 3 percent this year.

Malaysia's government announced a spending program in 2010 to build roads, electricity plants and a rail-transit system aimed at easing traffic congestion in Kuala Lumpur, over the next decade. Prime Minister Najib Razak said in March that Islamic bonds would be sold to fund the 48 billion-ringgit rail project, without saying when the debt would be sold or how big it would be. The Treasury has sold 26 billion ringgit of sukuk in 2011, up from 18.5 billion a year earlier, according to Bank Negara data.

The economy will expand as much as 6 percent this year, Razak said on Aug. 18, after growing 7.2 percent in 2010, the fastest pace in 10 years.

For sukuk sales to beat the 2007 record, the "assumption is that we will continue on the path of economic stability," Bank Muamalat's Ahmad Najib said. "The impact is greater when the economy is doing well."

Persian Gulf issuers have tapped the Southeast Asian nation's market this year, with Gulf Investment Corp., the investment company owned by the six GCC states, selling 1.35 billion ringgit of Islamic debt in Malaysia in two tranches in February and August. State-owned Abu Dhabi National Energy Co. is considering the ringgit market in Malaysia for a potential bond sale, chief financial officer Stephen Kersley said on Aug. 10, without specifying whether it will be a sukuk issue.

Among planned offers, Tenaga Nasional Bhd., Malaysia's biggest power producer, said in July it will raise up to 5 billion ringgit this year. Emery Oleochemicals Group, the world's largest producer of plastic additives, will sell 480 million ringgit of sukuk in the fourth quarter, the Shah Alam, Malaysia-based company said Friday, citing group chief executive officer Kongkrapan Intarajang.

Malaysia Debt Ventures Bhd., a venture capital company owned by the Finance Ministry, will offer as much as 500 million ringgit of Sharia-compliant debt in September or October, it said last year.

"Sales can surpass 40 billion ringgit this year given the ample liquidity in the market," Michael Lau, head of debt markets at Kuala Lumpur-based Maybank Investment Bank, said in an Aug. 17 interview. "There's easily 7 to 8 billion ringgit worth of sukuk in the pipeline that will be in the market before the end of the year."

Sharia-compliant bonds gained 7 percent this year, according to the HSBC/NASDAQ Dubai U.S. Dollar Sukuk Index, while debt in developing markets returned 7.2 percent, JPMorgan Chase & Co.'s EMBI Global Index shows.

The difference between the average yield for sukuk and the London interbank offered rate widened three basis points to 243 Thursday, according to the HSBC/NASDAQ Dubai U.S. Dollar Sukuk Index.

The spread between Malaysia's 3.928 percent dollar-denominated sukuk due June 2015 and the Dubai Department of Finance's 6.396 percent note due November 2014 was unchanged Friday at 235 basis points, Bloomberg data show.

Islamic banking assets in Malaysia rose 16 percent in 2010 to 350.8 billion ringgit and accounted for 21 percent of the total banking system, according to Bank Negara's annual report released on March 23. The country had $94 billion of sukuk outstanding last year, accounting for 66 percent of the global total, the report said.

"If I was a borrower, I'd love to come to the market at this time," said Zulkiflee Nidzam, the head of foreign-exchange and bond trading at Kuala Lumpur-based Asian Finance Bank.


Though Not a 'Malaysian Spring,' Bersih Shakes Up Local Politics

Posted: 19 Aug 2011 11:31 AM PDT

 

By Fabio Scarpello, World Politics Review

To dismiss Berish, however, would be a mistake. In fact, despite its contradictions, the movement may have a considerable impact on local politics. 

Weeks after the Malaysian government cracked down on pro-reform protesters gathered under the banner of the Coalition for Free and Fair Elections, or Bersih, uncertainty is still thick in Kuala Lumpur.

Bersih, which literally means "clean" in Malay, estimates that 50,000 people showed up at the July 9 rally to protest in favor of electoral reforms, clean politics and anti-corruption measures as stated in an 8-point manifesto. The police, who fired tear gas and water cannons at the demonstrators, claim that only a few thousand were present. In the end, some 1,700 people were arrested, while several were injured, and one died.

The rally was the second organized by Bersih. The first, held in November 2007, was also met with a heavy-handed response, although to a lesser degree. Bersih has now demanded that Malaysia's election commission complies with its demands or face a new rally.

In the meantime, it is worth examining what Bersih signifies in a country where politics has always been an elite-only game monopolized, until recently, by the United Malays National Organization (UMNO) party.

Some observers agree with the NGOs, civil society groups and citizens that took part in the rally, who see Bersih as the beginning of a Malay Spring, a moderate version of the mostly people-driven uprisings reverberating in the Middle East. According to this view, Bersih is a pro-democracy, grassroots movement uniting the country's notoriously divided ethnic groups.

Conversely, the Malaysian government and its supporters contend that Bersih is a movement manipulated by the political opposition to overthrow the government. As such, they argue, Bersih is a threat to public order that needs to be dealt with severely.

Bersih's future impact is likely to be determined by a number of uncertain variables, making any political forecast fraught with a sizeable margin of error. Nonetheless, it is fair to say that neither of the above-noted positions is fully substantiated.

Bersih was established in July 2005 as a Joint Action Committee for Electoral Reform. It took on a more permanent shape in November 2006, with several NGOs and civil society groups playing a key role in determining its programs, tactics and dynamics.

However, it is undeniable that members of the Pakatan Rakyat opposition coalition have also been involved and played an important role. While it is unfair to label Bersih a tool of the opposition, it is reasonable to acknowledge that its close ties with opposition leader Anwar Ibrahim and his supporters have weakened Bersih's claim to be a genuine grassroots movement.

Understandably, Bersih and Pakatan Rakyat share the objective of reforming Malaysian politics to allow for a more level playing field. With its flawed electoral laws and biased national media helping to perpetuate the UMNO's hegemony, Malaysia traditionally scores low in democratic assessments, with Freedom House scoring it as "partly free" in 2010. Yet, Bersih would enjoy more credibility had it maintained a clearer distance from Pakatan Rakyat.

Also, Bersih claims to represent all the different ethnic groups that constitute the Malaysian nation. However, although the movement is indeed supported by ethnic Malays, Indians and Chinese, they predominantly share a similar socio-economic profile -- namely urban, educated and young.

Outside this socio-economic circle, the ethnic divisions associated with the UMNO-perpetuated pro-Malay system are still very prominent. Ethnic Malays at the top and bottom of the social ladder -- the latter found especially in rural areas -- enjoy the patronage benefits this system grants them and have no intention of foregoing them any time soon. Likewise, some ethnic Indians and Chinese, associated with ethnic parties included in the UMNO-dominated Barisan Nasional coalition, also benefit from the status quo and therefore view it favorably.

Lastly, Malaysia's socio-political landscape seems unlikely to offer the groundswell of discontent needed to fuel movements like those on display in the Arab world. It has been argued that the Arab Spring was driven by the confluence of a number of factors, including economic stagnation, high unemployment, widespread poverty, corruption and human rights abuses. Malaysia has its share of problems, but it is by no means in the same league as Egypt or Syria. Given the not-insignificant support for the current system, Bersih will struggle to ignite a nationwide, pro-democracy movement.

To dismiss Berish, however, would be a mistake. In fact, despite its contradictions, the movement may have a considerable impact on local politics.

The 2007 Bersih protest was widely credited with spurring on Malaysia's opposition movement, which won its best-ever electoral results in 2008. In the short term, the ripple effects of the latest protest could again galvanize the Anwar-led coalition, which has partly lost steam since the 2008 vote. This may be insufficient to dethrone the UMNO, but could be enough to keep it on its toes.

However, if Bersih establishes itself as a durable structure, its main impact could be in the mid-to-long term. The segment of society supporting Berish is influential. Their age means that they are likely to be politically active for decades, and their educated, middle class background raises the possibility that they may one day occupy powerful roles in the country's financial, cultural and educational sectors, to name a few. The injection of reform-minded executives into a stagnant system could result in progressive ideas slowly becoming more acceptable to the mainstream.

Bersih may also force Malaysia's international partners to take a closer look at what is happening in and around Kuala Lumpur. The July 9 crackdown was condemned internationally and focused a critical spotlight back on Prime Minister Najib Razak, who had lately enjoyed positive press treatment.

Moreover, small-scale Bersih protests staged in 38 cities worldwide -- including Washington, New York, Chicago, Los Angeles, Portland and San Francisco in the U.S. - serve as a reminder that in a globalized world, the dividing line between national and international politics is often porous. Bersih supporters have since kept the pressure up via Facebook and blogs.

Hence, although spring as a season does not exist in near-equatorial Malaysia, democracy could still blossom if monsoonal downpours manage to nurture the terrain.

Fabio Scarpello is a journalist, analyst and consultant covering Southeast Asia. He has a master's degree in Globalization and Governance and will pursue a doctoral degree on Security Sector Reform and Conflict Management at Murdoch University in Australia.

Malaysia Looks West for Investments

Posted: 19 Aug 2011 11:22 AM PDT

By Mattew Saltmarsh, New York Times

With Europe's economy mired in a debt crisis, governments in the region have been looking east for a helping hand, tapping the likes of China and Japan to buy their bonds and step up investments.

But at least one Asian country — Malaysia — still sees value in turning the opposite way, to enhance opportunities for its more assertive multinationals as well as bolstering investments from the West.

The Malaysian prime minister, Najib Razak, led a large official delegation last month to Britain via Turkmenistan, to capitalize on his country's strong economy and investment inflows and assuage concerns about political agitation in the multicultural Southeast Asian country.

In past years, "it was just 'please come to Malaysia,' " the trade minister, Mustapa Mohamed, said during an interview on the trip. "Now we are going to foreign countries to help provide access to Malaysian companies."

Part of the sales pitch is selling the economic recovery story. The economy grew by 7.2 percent last year after shrinking 1.7 percent in 2009, and the government anticipates expansion of about 5 percent this year and next. The Malaysian inflation rate has been creeping up, though it remains moderate by global standards, at an annual rate of 3.5 percent in June.

But officials were also eager to ease potential concerns about the Malaysian political challenges.

"I think many investors have been to Malaysia, they understand the complications in Malaysia — multiracial, multireligious," Mr. Mohamed said. "We need to have laws in place to ensure that things don't get out of hand."

The Coalition for Clean and Fair Elections, or Bersih, an amalgam of nongovernmental and activist groups, has pushed for changes in electoral law from the coalition government led by the United Malays National Organization, which has dominated politics since independence from Britain in 1957.

Bersih was declared illegal July 1, after which hundreds of activists were rounded up. Most of them were quickly released, but some were held longer. On July 9, thousands of protesters defied a government ban and held a large street protest, during which the police fired tear gas and water cannons and arrested about 1,700.

"We have to engage," Mr. Mohamed said, "we have to continue changing, reform."

Underneath the political tension is an economy that has proved increasingly attractive to overseas capital.

Nonequity foreign direct investment inflows in 2010 were $9.1 billion, according to the United Nations Conference on Trade and Development, up from $1.4 billion a year earlier. The government is confident that it can retain that momentum.

"It's not having an impact on investor confidence," Mr. Mohamed said of the recent disturbances.

Ian Bryson, an analyst in Singapore at Control Risks, a consulting firm, said that there was less political risk in Malaysia than most of its regional peers and that the country benefited from relatively low corruption and a fairly dependable judiciary.

"I don't think the current political agitation is pivotal or that the country is at a tipping point," he said. "Malaysians are not interested in a full-scale upheaval."

"The opposition is factious but vociferous," he said, adding that splinter, conservative groups from the United Malays group still had the potential to destabilize the governing coalition in the next election, which is expected to be called in 2013.

On the economic front, Mr. Bryson cited concerns about limits on equity ownership in certain sectors — favoring ethnic Malays known as Bumiputera — and the employment of foreigners. He also noted broader skills shortages and restrictive local hiring and firing rules. "It's generally very open to business, but with some cultural and sociopolitical limitations," he said.

A report from the World Bank's private sector arm, the International Finance Corporation, ranked Malaysia 21st out of 183 economies globally for the ease of doing business. The country scored lower for starting businesses and enforcing contracts.

Among Malaysian companies seeking global opportunities is the energy group Petronas, which announced last month that it had drawn its first natural gas from a field in Turkmenistan, where it has invested $5 billion. Others include the automaker Proton, which controls Lotus, a maker of sports cars; and the utilities conglomerate YTL, which owns Wessex Water in Britain.

At home, the government has used its $25 billion sovereign wealth fund, Khazanah Nasional, to take strategic stakes in businesses, including the energy group Tenaga Nasional, Malaysia Airlines System and Bank Lippo. More recently, the fund has been making tentative forays into Singapore and Indonesia. It opened its first overseas office in Beijing in 2008.

Speaking in London, Mr. Najib, the prime minister, sought to address potential concerns like those highlighted by Mr. Bryson. The government, he said, is "committed toward divesting government holdings," citing the sale of post office assets, two Petronas subsidies and a sugar business. "There will be quite a few more holdings that we will divest," he added.

He said there had been a "policy of gradual liberalization" of Bumiputera quotas, and "in the forthcoming budget we are expected to make further announcements."

European companies that have invested in the country include BP and Royal Dutch Shell in energy, HSBC and Standard Chartered in banking, the vacuum cleaner maker Dyson and the retailer Tesco.

Tesco has invested more than $1.5 billion in Malaysia and employs about 14,000 people in the country. In a report in April, marking 10 years in the country, the chief executive of Tesco Malaysia, Tjeerd Jegen, said that he was "as bullish as ever on the prospects of the Malaysian retail sector."

He cited "continued economic growth and prosperity, buoyed by sound economic reforms, robust consumer confidence and political stability."

Perhaps mindful of recent unrest in the Middle East and rising inflation in Asian economies like India and China, Malaysia has been quick to express its desire to stay on a steady course.

Mr. Najib said there was a "huge commitment by the government to keep prices as low as possible," and there would be only a "gradual" easing of subsidies on food and fuel.

Appointed in 2009, Mr. Najib has initiated several economic plans to draw investment and address the lack of skilled workers in Malaysia, focusing on bolstering productivity and research, easing red tape for investors and improving inclusiveness.

The government is also seeking to fill its labor shortage by biometrically registering all workers and offering permits of a maximum 10 years for illegal workers.

"We'll legalize them as workers, not as citizens; that would be a disaster," Mr. Najib said. "If all those things are executed, God willing, we will be a fully developed nation. It will give us 6 percent growth that we need for the next 10 years."

According to the government, one million Malaysians live abroad, a sizable proportion of the country's population of 28.7 million. Some estimates peg the number of Malaysian nationals based overseas much higher. Singapore has been the biggest beneficiary of the outflow, attracting more than half of those who have emigrated.

Mr. Najib also said rising wages in China could present an opportunity for Malaysia.

"More and more people are beginning to realize they need a 'China plus one' policy," he said, "They don't want to put all their eggs in one basket."

As a result, he said, "we're seeing companies seriously looking at Malaysia."

 

Malaysia's 'Silent' Awakening

Posted: 19 Aug 2011 11:09 AM PDT

 

By Natasja Sheriff, The Nation

"In spite of all the attacks, the intimidation, the fear, that the government has put in, from race to violence to chaos and all that, the people have actually decided that they want to come forward to join this rally," Chin Abdullah continues. "No more being the silent majority. We are hoping that from here it will be a stepping stone towards a formation in the future of a more democratic movement in Malaysia."

In early July, while eyes were on the unrest in the Middle East, another democratic movement was gathering momentum in Southeast Asia. Borne out of growing discontent with the ruling government, the people of Malaysia were experiencing their own awakening. Their movement for electoral reform, known as "Bersih" (meaning "clean" in the Malay language), reached critical mass on July 9, when an estimated 47,000 people took to the streets of Kuala Lumpur, demanding action against voter fraud, press freedom and an end to "dirty politics"—slander and incessant claims and counterclaims of supposed sexual misconduct. The rally provoked an unprecedented government crackdown, widely condemned by international human rights agencies, leading to the arrests of more than 1,600 people. Police action has continued, with people frequently detained for as little as wearing a yellow T-shirt—a symbol of support for the outlawed Bersih movement.

The reform movement has been growing since 2005, when a group of politicians and non-governmental organizations, dismayed at the level of fraud and corruption in the Malaysian political system, came together to form the Joint Action Committee for Electoral Reform. When the movement was revived in 2010 as the Coalition for Clean and Fair Elections, or Bersih 2.0—the now familiar moniker of the reform movement—the organizers made a strategic decision to exclude all political parties, including members of the opposition coalition, Pakatan Rakyat. Bersih 2.0 emerged as nonpartisan, civil society movement to monitor progress towards electoral reform.

Without the involvement of political parties, organizers had to find other means to reach out to mobilize their supporters. "We planned all these roadshows at the nationwide level," says Maria Chin Abdullah, whose organization EMPOWER serves as the secretariat for the Bersih 2.0 Coalition, which would "entail us going to various states to explain the fifteen demands we had and why we prioritized eight of them." But the police took a harsh position against protestors. "Before we could even start our roadshow, they already arrested about thirty people," Chin Abdullah explains.

With direct attempts to reach out to the public thwarted by the police, the movement took to social media. Facebook became the main source of information about the July 9 rally in Kuala Lumpur, and the Twitterverse lit up. A new generation, well-versed in the advantages of online activism and emboldened by the relative anonymity of social media, took courage from protestors across the Middle East and came forward to support the movement. On July 9, the number of Twitter users talking about the Bersih rally reached 19,188, according to the website Politweet. Both online and offline, many thousands of supporters wanted to make their voices heard despite the threat of the government's harsh preventative laws like the notorious Internal Security Act (ISA), frequently and arbitrarily applied to suppress dissent.

Many Malaysians feel they are powerless to change their government, yet the ruling coalition, Barisan Nasional, which has held power since the formation of the Federation of Malaya in 1957, is clearly uneasy. The Minister of Home Affairs, Hishammuddin Hussein, outlawed Bersih for spreading seditious propaganda and for "affecting the harmony of a multicultural society." The police refused to grant a permit for the "Bersih 2.0" rally, and government ministers denounced the rally and its organizers.

The government has also attempted to discredit the rally and its organizers by suggesting that the movement's real goal is to cause disharmony and racial strife. Fear of igniting racial tensions among the country's three dominant ethnic groups—Malay, Chinese and Indian—frequently colors the political rhetoric of Malaysia. References to the race riots that swept across Malaysia in 1969, leaving an estimated 169 people dead, are often cited as a warning to Malaysians who threaten the status quo, and are used to create an atmosphere of fear and intimidation. Anil Netto, a Malaysian journalist who frequently writes on behalf of the reform group Aliran, explains that the government's tactics are erratic, and increasingly ineffective. "Initially they were speaking of foreign powers, the next day about communism, another day that Christian groups were getting involved. Many can by now see through these tactics and they are not carrying as much weight as they might have in the past." And attempts by the government to frame the rally as a threat to racial harmony appear to be unfounded—the movement cuts across racial and religious groups.

"What was good about Bersih 2.0 rally, as everyone now knows, is that it brought out a more multi-racial component," says Chin Abdullah. "It's actually a Malaysian rally." It's also a movement in which women have played a leading role: Ambiga Sreenevasan, a lawyer and former chairwoman of the Malaysian Bar Council, is the leader of the Bersih movement, and a recipient of the US State Department International Women of Courage award in 2009; and Maria Chin Abdullah, a central figure in the Malaysian women's rights movement, is head of the Bersih Secretariat. Support also came from an unexpected quarter when Marina Mahathir, daughter of former Prime Minister Mahathir Mohamad, attended the rally.

The government likely fears that the movement will result in electoral gains by the opposition in the 2012 election. After Bersih's first rally, in 2007, the opposition coalition gained control of five of Malaysia's thirteen states in the 2008 general election, a victory commonly dubbed a "political tsunami." "The government probably knows that these kind of reforms will strike at the heart of the current electoral process which has returned them to power since independence," says Netto.

Ironically, the government has only served to fuel public anger and provided the Bersih movement with all the publicity they could need. "To be honest, we didn't even need the roadshows to raise the publicity of Bersih 2.0, the government did the publicity for us," says Chin Abdullah. "In spite of all the attacks, the intimidation, the fear, that the government has put in, from race to violence to chaos and all that, the people have actually decided that they want to come forward to join this rally," Chin Abdullah continues. "No more being the silent majority. We are hoping that from here it will be a stepping stone towards a formation in the future of a more democratic movement in Malaysia."

The “Third Force” In Malaysia: Finding Relevance In An Emerging Duopoly

Posted: 19 Aug 2011 11:00 AM PDT

By Afif Pasuni, Eurasia Review

The "third force" in Malaysian politics continues to progress with Tengku Razaleigh's new NGO Amanah. With the general election looming, the "third force" will face an uphill task to make gains if it does not ally with one or more established political entities in Malaysia.

EARLY THIS year, the former UMNO and PKR politician Zaid Ibrahim founded a new party, the Parti Kesejahteraan Insan Tanah Air (KITA). It was formed supposedly to act as a "third force" between the ruling Barisan Nasional (BN) and opposition Pakatan Rakyat (PR) coalitions, to provide checks and balances between the two dominant political entities in the country.

Recently, the veteran UMNO politician, Tengku Razaleigh Hamzah founded Angkatan Amanah Merdeka (Amanah), which is also touted as a "third force". Formed as an NGO, the goal of Amanah is "to represent the middle and moderate voice" of Malaysia. However the group has not ruled out being political, opening the way for a more political role in the run up to the looming 13th general election. These two entities raise the question of the relevance of the third force in the emerging duopoly of Malaysian politics.

Formation Of The "Third Force"

The idea of a "third force" is not new, having being proposed by lawyer-activist Haris Ibrahim and influential blogger Raja Petra Kamarudin. In fact, some have argued that such a "force" has always been a feature of Malaysian politics, be it in the form of NGOs, civil and religious movements, and even individuals who seek political reforms.

The "third force" term was coined against the backdrop of the political opposition's success against the incumbents in the 2008 elections, giving rise to hope for a two-party system in Malaysia. The division between the two groupings was sharpened by the subsequent politicking between them. To understand the "third force" rationale, one has to look at events after the 2008 elections, where no party has been spared from criticisms amidst the country's tumultuous political scene. For example, both the ruling and opposition parties were criticised for their role in the recent Bersih rally; while one was blamed for unleashing police brutality, the other was accused of playing agent provocateur.

The country has also witnessed the controversial long-drawn court case involving the opposition leader Anwar Ibrahim, and the constant PAS-DAP disagreements over religious issues. In addition, there were also criticisms against aspects of the government's Economic Transformation Programme, and the seemingly free rein given to Utusan Malaysia, UMNO's Malay language newspaper, and the NGO PERKASA in raising racial issues.

Therefore some have seen the need for a "third force" to balance the political polemics as well as filling the void in the so-called middle ground.

Relevance To Be Seen

To assess the potential relevance of the "third force" in Malaysian politics, the following features of the recent political developments in the country need to be addressed:

Firstly, for the "third force" to play a part in deciding on Malaysia's direction, a main challenge is getting enough members to support them. In order to initiate political change, the party needs to have very strong grassroots support, which they are trying to garner by attracting prominent names into their fold. However the effectiveness of such a move is in question, as very few Malaysian politicians are able to sway the masses solely with their personality, and who can dissociate themselves from party associations.

Secondly, the inter-dependence of civil society groups and NGOs with the political coalitions in Malaysia should be scrutinised more closely. The recent Bersih rally, though touted as apolitical and representative of the civil society, was nonetheless very closely associated with the opposition PR coalition. On the other side the Malay rights NGO PERKASA is led by the UMNO-friendly Ibrahim Ali and enjoys the patronage of former Prime Minister Mahathir Mohamed. While the political coalitions are continuing to become the major galvanising forces in politics, the civil society groups and NGOs are seen to be affiliated, closely or tenuously, to either one of these two political groupings.

Furthermore, given that the alternative media are also regarded as strongly partisan in some of their coverage and commentaries, it is doubtful that any new entity which strives to be relevant in the political discourse is able to remain neutral always.

Thirdly, the Malaysian electoral landscape is too big for any one political group. While this may benefit new parties, to achieve political dominance they pragmatically require alliances. For example, Malaysia's oldest opposition party PAS recently held its 57th AGM. But it was only recently that they managed to be a part of a more effective force in parliament as a component of the PR coalition after the 2008 elections.

Sarawak's state elections in April this year also serve to illustrate the dominance of BN and to a lesser extent the PR. The PR arguably made significant inroads, while BN's number of seats dipped slightly. However the biggest losers of the election were the independents and new parties such as Parti Cinta Malaysia, which lost its only seat in the state assembly.

Between Principle And Political Survival

All these lead to one point which is, if the "third force" is to become relevant in Malaysian politics in the near future – specifically the 13th general election – it is imperative that its component groups ally themselves with more established political entities. Although to succumb to that is antithetical to their founding motive, it will be difficult to be purposeful in Malaysia's political development without losing political independence.

Whether the "third force" remains truly independent or otherwise, it will have to choose between principle and political survival. While its inception is based on the former, it is likely the latter will dictate their strategy in the virulent political landscape of Malaysia.

Afif Pasuni is an Associate Research Fellow with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

 

Malaysia’s government wants to tear down heritage attraction, Petaling Street

Posted: 19 Aug 2011 10:55 AM PDT

 

By Luc Citrinot, E-Turbo News

The plan happens to come at a very unfavorable time. In recent years, Malaysia's social fabric has turned more and more fragile due to growing tensions among its various ethnic groups. More and more citizens put into question today the fundamentals of the government's Bumiputra policy – a 40-year-old program, which provides preferential treatment to the Malay community, asking for a review, as many look at it as ethnic discrimination. The partial destruction of Petaling Street would then deprive the Chinese community from one of its most sentimental heritage areas. The government's decision might then be considered as more than politically incorrect.

KUALA LUMPUR, Malaysia (eTN) - No one would generally disagree with a government looking at improving public transport for the sake of commuters. Malaysia government's latest MTR expansion is the Sg Buloh-Kalang 51 km line – to date, Malaysia's most extensive public infrastructure with 27 elevated and 7 underground stations. It is, however, facing strong protests from residents of the areas concerned by the project. The line will connect Kuala Lumpur's city center, passing under some of the capital city's oldest areas, among them, Petaling Street and part of Sultan Street, two popular streets frequented by both locals and tourists. Petaling Street remains a favorite among visitors to the Malaysian capital, as it welcomes every night Kuala Lumpur's only night market. It is also a popular place for Malaysian Chinese, especially prior to the Chinese New Year, when the community gathers to eat together and do some shopping. Petaling Street was consequently thoroughly renovated a decade ago.

The area also has a deeply historical value for the Malaysian capital. Petaling Street was, in fact, one of the first settlements for Chinese arriving into Malaya at the end of the XVIII century. The area has a high number of beautiful heritage buildings as old as 100 years. The MRT project foresees the destruction of 20 to 30 buildings, including some structures considered landmarks for Chinatown. Among them are Yook Woo Hin restaurant mentioned in many travel guides and famed for its mooncakes, as well as the Lok Ann Hotel and the Yan Keng Benevolent Dramatic Association Building. The latest is considered as the birth place to Cantonese Opera in former Malaya.

Over the last three decades, successive Malaysian government has systematically erased from Kuala Lumpur's urban landscape any references to the city's colonial heritage, except for a few symbolic buildings. But according to local newspapers, most shop owners were surprised to abruptly learn about the need to destroy the area to give way to the MRT. In Kuala Lumpur's 2020 masterplan, Petaling Street has been indeed named a heritage area. But so far it has not been officially registered as such, exposing the historical district to any wild redevelopment. The surprise has even been bigger as MRT tunnels will be located 30 meters under the street and would consequently not threaten the stability of the buildings. Shop owners want now to take legal action and will ask the government to review the project to protect the area. Construction for the MRT is due to start by year-end for a projected completion in 2015.

The plan happens to come at a very unfavorable time. In recent years, Malaysia's social fabric has turned more and more fragile due to growing tensions among its various ethnic groups. More and more citizens put into question today the fundamentals of the government's Bumiputra policy – a 40-year-old program, which provides preferential treatment to the Malay community, asking for a review, as many look at it as ethnic discrimination. The partial destruction of Petaling Street would then deprive the Chinese community from one of its most sentimental heritage areas. The government's decision might then be considered as more than politically incorrect.

Special investigation: TV company takes millions from Malaysian government to make ...

Posted: 17 Aug 2011 06:41 PM PDT

Corporation suspends relations with leading film-maker accused of conflict of interests over 'palm oil' programmes

An investigation by The Independent has established that entries in the Malaysian government's Supplementary Budget 2010 show that FBC Media (UK) was allocated 28.35m Malaysian Ringgit (MYR) – nearly £6m – for work on a "Global Strategic Communications Campaign" ordered by the Malaysian government in 2009. A similar sum (MYR29.34m) was designated to the company the previous year. Concerns over the arrangements have been raised in the Malaysian parliament.

By Ian Burrell and Martin Hickman, The Independent

The BBC has launched an investigation into how it broadcast to millions of people around the world programmes made by a company that had received millions of pounds in payments from the government of Malaysia.

It has suspended all programming from the London-based production company, FBC, which since 2009 has made at least four BBC documentaries dealing with Malaysia and controversial issues such as the country's contentious palm oil industry and its treatment of rainforests and indigenous people.

In a statement, the BBC said: "FBC has now admitted to the BBC that it has worked for the Malaysian government. That information was not disclosed to the BBC as we believe it should have been when the BBC contracted programming from FBC. Given this, the BBC has decided to transmit no more programming from FBC while it reviews its relationship with the company."

An investigation by The Independent has established that entries in the Malaysian government's Supplementary Budget 2010 show that FBC Media (UK) was allocated 28.35m Malaysian Ringgit (MYR) – nearly £6m – for work on a "Global Strategic Communications Campaign" ordered by the Malaysian government in 2009. A similar sum (MYR29.34m) was designated to the company the previous year. Concerns over the arrangements have been raised in the Malaysian parliament.

Documents filed with the United States government's House of Representatives in 2008 show that FBC Media (UK) contracted the Washington-based American lobbying company APCO Worldwide, which it paid more than US$80,000 (£50,000) in 2008 for the purpose of "raising awareness of the importance of policies in Malaysia that are pro-business and pro-investment as well as [showing] the significance of reform and anti-terrorism efforts in that country".

The BBC's guidelines on conflict of interest state: "Independent producers should not have inappropriate outside interests which could undermine the integrity and impartiality of the programmes and content they produce for the BBC."

Having obtained this information on the Malaysian payments, the BBC is conducting an investigation into whether any of the FBC material it broadcast was in breach of BBC guidelines on impartiality. At the same time, CNBC, a business channel owned by the giant American NBC network, has withdrawn "indefinitely" its weekly show World Business, which was made by FBC and featured Malaysia on many occasions. In a statement issued to The Independent, the broadcaster said: "In light of serious questions raised two weeks ago, CNBC withdrew the programme World Business indefinitely and immediately initiated an examination of FBC and its business practices. CNBC has made a formal inquiry to FBC for its explanation in relation to the allegations that have been made."

FBC denies any impropriety in its programmes for any broadcaster and said via its lawyers that "at no time have the television programmes made for the BBC ever been influenced or affected by our client's commercial activities". Its lawyers said that FBC ran both production and commercial divisions, which "are and always have been quite separate and distinct". They added: "Our client, having reviewed its procedures, is now taking steps to ensure that even the merest appearance of bias or overlap is fully avoided."

Last night, media regulator Ofcom said: "Ofcom is currently assessing this matter in accordance with our published procedures. We will shortly decide whether to launch a full investigation of the content in question under the broadcasting code."

The BBC and palm oil

With its lush vegetation and smiling workforce dressed in polo shirts, the footage from the Tuan Mee palm oil estate, to the north of Kuala Lumpur, gave no obvious reason for BBC viewers to think they were being shown anything more than an exotic travelogue and an intriguing business story.

But the coverage of the workings of one of Malaysia's most important industries, shown on BBC World News's Third Eye series this summer under the title "The Power of Asia", formed part of a much bigger picture.

The programme was made for the BBC by a London-based company called FBC Media, which has been hired by Malaysia to conduct a Global Strategic Communications Campaign, and has paid American lobbyists to raise "awareness of the importance of policies in Malaysia that are pro-business and pro-investment".

In the Third Eye programme, one of several productions made on Malaysia for the BBC in the last three years, viewers were told of the key role of the Malaysian palm oil industry in meeting the growing demand for food in countries such as China and India. "Once an efficient production centre for rubber, Malaysia over the years has increasingly turned to oil palm," said the voiceover. "The country is now one of the world's biggest exporters, producing 40 per cent of global supply, and is reaping the economic benefits of higher demand from Asia."

Azman Abdul Majid, of the Tuan Mee estate, was happy to tell his positive story. "The market now is so high that plantation in palm oil is a very good business in terms of profit, in terms of our benefit," he said. The BBC show also featured Kuala Lumpur Kepong, another Malaysian palm oil business, and other Malaysian business figures.

The programme dealt with the growing food crisis in Asia and the economic instability and social unrest that may result. It highlighted failures in harvesting rice in China and contrasted that with the successful Malaysian palm oil industry. "There are now more than 200,000 smallholders depending on the sale of palm oil," the programme stated.

It noted that "stocks in Asia's food companies from Mumbai to Kuala Lumpur are now hotly traded", but stressed the need to expand to meet the vast food demand. Indian companies were anxious to invest in Malaysian palm oil plantations "but land prices are now too high".

Only a brief reference was made to the reasons why the palm oil industry is the subject of fierce debate. Environmental groups complain that its spread has caused devastating levels of deforestation which harm biodiversity, threaten the livelihoods of indigenous people and put at risk the survival of the orang-utan.

The programme took the view that production needed to be stepped up fast: "Asia is now experiencing rising demand and rising prices for grains and oils but production is lagging, as is investment and increases in yield." It concluded with a sense of urgency: "Asia is going to have to grow its way out of trouble – and the clock is ticking."

It was not the first time that BBC viewers had shown programming on Malaysia produced by FBC. In February 2011, BBC World News broadcast on its One Square Mile programme a piece from Sarawak in which presenter Rian Maelzer, who describes himself as the "South East Asia Correspondent" for FBC's CNBC programme World Business, explored the lifestyle of the tribal Iban people and took a boat ride to visit a traditional longhouse.

"Tourism not only brings in money, it also encourages youngsters to keep alive skills that might otherwise have died out," he reported. "For the past 40 years, the Malaysian government has practised an affirmative-action policy aimed at raising the living standards of indigenous groups." The attractive portrayal of Sarawak, and the fight to preserve traditional culture, is at odds with the area's reputation among environmentalists, who have highlighted the battle of indigenous people in Sarawak to preserve the rainforest against logging and the development of palm oil plantations.

Similar subjects were examined in FBC's Develop or Die documentary for the BBC in March 2009. The programme opened with a cartoon that drew comparisons between colonialists who asked "Are the natives friendly?", and modern-day environmentalists who ask "Are the natives eco-friendly?" It examined the benefits of the Malaysian palm oil industry and its value to the economy, quoting smallholders whose lives have been transformed for the better by palm oil production. While it quoted environmentalists, it reported that "the major players in the industry resent the sweeping nature of environmental campaigns". The programme concluded by pointing out the pressure on nations such as Malaysia to develop. "Now that their economies are more likely to fuel global growth in the next few years, they are more than ever questioning why they should be punished by Western-imposed standards." As part of its Develop or Die series, BBC World News also screened an FBC co-production, "World Debate: Islam and Democracy in 2009", featuring Malaysian Prime Minister Najib Razak sitting alongside the host on the panel.

FBC's 'blue-chip service'

FBC is a media company with offices in London, Mumbai and Rome. It told The Independent that the programmes it has made "have always been fair, balanced and impartial". It also said that it was no longer working for Malaysia.

When The Independent first questioned the company about its business at the end of last month, it denied that it had ever done work for Malaysia. Confronted with evidence of contractual arrangements listed in Malaysian public records, the company's lawyers said they had made an "error", having "failed to spot an amendment made by our client to a draft letter that we had prepared".

It stated: "It is no secret that FBC received funds and performed consultancy work and media-buying for the Malaysian government in the past." Of its hiring of American lobbyists to promote Malaysia, it said: "The object of that work involved showing the economy of Malaysia to be attractive to investors and committed to battling terrorism."

After FBC was contacted by The Independent, most of its website was replaced with a single page, giving only the most basic of information. In its online promotional material for potential clients – now removed from the internet – FBC boasted: "We control blue-chip television editorial time-slots" and can "guarantee controlled messaging from A to Z on the world's leading news channels". Telling would-be customers that "FBC is not a traditional PR firm", it stated that it "can guarantee that your message is endorsed by prestige third-party ambassadors".

FBC also talked of its "broadcast news feeds" and informed clients that "by facilitating independent editorial coverage, broadcast news feeds can raise awareness amongst a highly targeted audience". In another statement on its former website, it said: "FBC specialises in the planning and execution of strategic communications and branding campaigns, helping raise awareness across the international media landscape". It then promised "an elite audience via" and listed a series of prestigious media brands including BBC World (now BBC World News), CNN, CNBC Europe and a number of print publications including The Economist, the Financial Times, Business Week, the Wall Street Journal and the International Herald Tribune.

FBC says that its company is split into two distinct divisions, one for television production and the other for branding. It says its references to "time-slots" were "to paid advertising commercial spots and paid advertorial programming that is clearly labelled as such".

The founder and chairman of the FBC Group, which is the 100 per cent owner of both FBC Branded Content and FBC Media (UK), is Alan Friedman, an award-winning journalist and former banking correspondent at the Financial Times. Friedman was credited as the "executive producer" of three of the FBC programmes featuring Malaysia made for the BBC.

Before the BBC broadcasts, it is understood that FBC, which has made 20 programmes for the BBC, signed the BBC's standard producer guidelines which guarantee to "not accept money or other services or benefits from any individual, company or organisation with a view to endorsing or promoting such services and/or products in the series or series publicity or which could lead to doubts about the subjectivity or impartiality of the series".

In a statement to The Independent, the BBC said: "All independent TV companies who produce programmes for BBC World News have to sign strict agreements to ensure programmes meet the BBC's editorial guidelines, including avoiding any conflict of interest."

BBC World News attracts 78 million viewers a week, is available in more than 200 countries and reaches around 300 million households and more than 1.8 million hotel rooms. The channel's content, which includes advertising, is also available on 57 cruise ships, 42 airlines, 35 mobile phone networks and a number of major online platforms including bbc.com/news.

The American-owned business channel CNBC has also begun an examination of "FBC and its business practices" and "withdrawn indefinitely" the programme the company produces, World Business. In the past two years, FBC has made at least 10 programmes for CNBC's World Business featuring Mr Razak. In other editions, the previous prime minister, Abdullah Badawi, appeared as well as senior figures from Iskandar Malaysia, Malaysia Airlines and palm oil company Sime Darby. In March this year, the channel showed Deforestation in Sarawak, which was syndicated to other broadcasters, including US state broadcaster PBS. The programme featured Sarawak leader Taib Mahmud talking positively about the condition of the state's rainforests and highlighted the area's attraction to tourists.

Eckart Sager, the president of FBC, is a former producer with CNN who, since joining FBC, has personally conducted interviews with Mr Razak, and separately his wife Rosmah Mansor, for CNBC's World Business. Friedman, who is an American and lives in Rome, has also personally interviewed Razak. FBC is also linked to another award-winning journalist, John Defterios, the host of CNN show Marketplace Middle East, since 2007.

Defterios, the former group president of FBC Media, last month conducted an exclusive interview for CNN with Mr Razak during his official visit to London. During the interview, Defterios questioned the Prime Minister on recent mass street protests by democracy campaigners in Malaysia. "Some would say you had 1,600 arrests of some 20,000 protesters. Are you satisfied with the security response to that particular round of protests, yourself?" he asked. Razak responded: "It was quite mild, you know, because although they were taken in, they were released after eight hours and they were treated very well. There was no undue use of force."

CNN issued a statement to say it had "never had an editorial relationship with FBC" and that FBC Media had not been involved in setting up interviews. "FBC has released a public statement that John Defterios resigned from the company," it said.

"While we appreciate that John Defterios's relationship with FBC during his tenure with CNN could present the appearance of an editorial conflict, we have been reviewing the situation and have found no indication that CNN's editorial standards were – or are in any way – compromised by that prior relationship."

The movers and shakers at the TV company

Alan Friedman, chairman and founder of FBC Group

The award-winning journalist, who studied at Johns Hopkins University, New York University and the London School of Economics, describes himself as a "media entrepreneur". He has worked for the Financial Times, the International Herald Tribune and the Wall Street Journal. In FBC material he is described as "one of Europe's most respected economic and political commentators". He is the author of books on the Italian industrialist Gianni Agnelli, and on America's arming of Iraq. Friedman was the executive producer of many of FBC's programmes for the BBC and has conducted some of FBC's interviews, including with Malaysia's Prime Minister Najib Razak.

Eckart Sager, president and head of production for FBC

German-born and educated in the US, Sager is a former senior producer for CNN, based in London. He previously worked for CNN in New York, travelling the world profiling leading business figures. He is the executive producer of many of FBC's documentaries and also "provides key strategic communications advice and support on behalf of FBC clients". Sager has also personally interviewed Mr Razak for FBC.

John Defterios, former group president of FBC Media from 2000-2011

Since 2007, he has been the presenter of CNN International's Marketplace Middle East programme and is a journalist with 25 years' experience. He is a CNN news anchor and former Reuters bureau chief. In July this year he conducted an exclusive interview with Mr Razak for CNN during the Malaysian Prime Minister's visit to London, CNN said the interview did not involve FBC. Defterios resigned from FBC in March, the company has told CNN.

The money trail

* Malaysian budget records show that MYR28.35m (nearly £6m) was allocated to FBC Media (UK) for a "Global Strategic Communications Campaign" in 2009. A similar allocation was made in 2008. FBC Media (UK) is a subsidiary of FBC Group Ltd

* Documents filed with the United States House of Representatives show that FBC Media (UK) hired the Washington lobbyists APCO Worldwide in 2008 for the purpose of "raising awareness of the importance of policies in Malaysia that are pro-business and pro-investment as well as the significance of reform and anti-terrorism efforts in that country"

The palm oil industry's history of misleading claims

The Malaysian palm oil industry has a history of offending the authorities by making false claims on BBC World.

Three years ago, the Advertising Standards Authority (ASA) criticised a campaign from the Malaysian Palm Oil Council (MPOC) for carrying "misleading" claims about its impact on the environment. The advertising from the MPOC, which was not made by FBC, appeared on BBC World in 2007 and showed a palm oil plantation interspersed with shots of a rainforest and wildlife. In a voiceover, it asserted that "its trees give life and help our planet to breathe, and give home to hundreds of species of flora and fauna. Malaysia palm oil: a gift from nature, a gift for life." The MPOC also claimed that palm oil had been "sustainably produced" since 1917.

A second advert showed a man running through a forest, cut with shots of a palm oil plantation and wildlife. The voiceover said of the palm oil industry: "Its trees give life and help our planet breathe. Its fruit provides vitamins for our bodies and energy for our daily lives." But the ASA upheld a complaint from Friends of the Earth International and Friends of the Earth Europe that the advert was misleading on the grounds that much palm oil was produced in a way that was not socially or environmentally sustainable. The advert was made before the Roundtable for Sustainable Palm Oil completed a verification system for sustainable palm oil.

The ASA ruled that the advert "was likely to mislead viewers as to the environmental benefits of palm oil plantations compared with native rainforest". It also said viewers were misled "because there was not a consensus that there was a net benefit to the environment from Malaysia's palm oil plantations".

In July this year, another campaign from the MPOC was banned by the advertising watchdog in Belgium for once again claiming that the production of palm oil is "sustainable". The Jury d'Ethique Publicitaire ruled that production had impacts on the environment and the campaign was in breach of its environmental advertising code.

 

WikiLeaks cable: Filipinos 'troublesome' in Sabah

Posted: 17 Aug 2011 03:26 AM PDT

Under the scheme implented in the 1990s, UMNO gave Malaysian citizenship and voting rights to over 600,000 foreigners, predominantly Muslims from Mindanao and Indonesia, in return for their votes in Sabah's state assembly elections. 

by Jojo Malig, abs-cbnNEWS.com

Migrant Filipinos are synonymous with the word trouble in Malaysia's Sabah state, according to a confidential cable from the US embassy in Kuala Lumpur that was released by WikiLeaks on Wednesday.

Masidi Manjun, Sabah's Minister of Youth and Sports, told US diplomats in Malaysia that his state was "flooded with foreigners" and "singled out Filipino Muslims from Mindanao as 'especially troublesome.'"

Manjun claimed that the Filipinos were "using our [Malaysia's] social services and not integrating into society," and that "vagrancy and violence" were rampant within Sabah's Filipino community, according to the diplomatic cable dated October 10, 2006 that was deemed classified by US embassy political section chief Mark D. Clark.

The Sabah official, who headed government-funded think tank Institute of Development Studies, said the state's maritime and land borders are "very porous" and expressed concern that Sabah's foreign residents were starting to become politically active.

"He acknowledged, however, the economic importance of Sabah's foreign population," the US embassy cable said. "With regard to Sabah's large number of illegal foreign workers, estimated to total over 750,000,  Manjun said, 'We need them here, or our economy would collapse."

 Sabah's then Acting Police Commissioner, Mohd Bakri Zinin, also told American officials that "illegal migrants and other foreigners" account for about three-fourths of violent crimes committed in the state. 
 
The embassy cable also quoted a state assemblyman, Samson Chin Chee Tsu, who said Filipinos and Indonesians outnumber Malaysians 3 to 1 along Sabah's east coast.

"He (Samson) and his wife recently refused to attend an event that gathered public and private sector leaders on the resort island of Mabul, off the east coast of Sabah, as he feared an attack on the gathering by Mindanao-based Muslim extremists," it added.

Simon Sipaun,then vice-chairman and state head of the Malaysian human rights commission Sukaham, also told US officials that the large number of Filipinos on the state's east coast represented a potential security threat "if they decide to become more politically active, or if parts of Mindanao become more autonomous."

Project Mahathir

Samson and another PBS state assemblyman, Ching Eng Leong, told US officials that the large number of native Filipinos in Sabah can be attributed to a program hatched by dominant political party UMNO.

Under the scheme implented in the 1990s, UMNO gave Malaysian citizenship and voting rights to over 600,000 foreigners, predominantly Muslims from Mindanao and Indonesia, in return for their votes in Sabah's state assembly elections. 

"UMNO's control was further solidified during the 1999 state election, as UMNO granted more foreigners citizenship and voting rights under what came to be known as 'Project Mahathir,'" the US embassy cable revealed, in apparent reference to then-Prime Minister Mahathir Mohamad.

According to a probe made by Suhakam on Project Mahathir, Sabah's legal resident population increased 362% to 2.6 million from 1970 to 2000.

"This substantial increase in Sabah's legal residents excludes an influx of over 750,000 foreigners holding invalid identity cards and visas - or no documents at all - according to Suhakam," the cable added.

"Filipinos and Indonesians move easily -- and often illegally -- between Sabah and their respective home countries," it said.

In its analysis of Sabah's problems with Filipinos, the US embassy said a significant reduction in Sabah's foreign-born population could only be reversed through an UMNO-led effort to round up and deport the foreigners, whom Sabah's economy ironically relies upon. 

"While Malaysia periodically launches campaigns to expel illegal workers, even PBS' leaders concede this is highly unlikely to be carried out to the point of seriously harming the state's economy," it said. "The US  Border Control Assessment Initiative (BCAI) focused on the Sulu and Sulawesi sea areas of Malaysia, Indonesia and the Philippines will enhance our understanding of the security challenges facing Sabah and ways we can assist."

The Philippines has a dormant claim on Sabah that was not resolved by the Manila Accord, or the United Nations Treaty No. 8029  between the Philippines the Federation of Malaya, and Indonesia, that was signed in July 31, 1963 and the succeeding exchange of notes between Manila and Kuala Lumpur in February 7, 1966.

Former Presidents Diosdado Macapagal and Ferdinand Marcos pursued the Philippines' claim on the territory but those who succeeded them did not do so.

The dispute resulted in the 1968 Jabidah Massacre that was exposed by the late Sen. Ninoy Aquino, father of President Benigno Aquino III, according to Malacañang.

ARMM on undocumented Filipinos in Sabah

Officials of the Autonomous Region in Muslim Mindanao (ARMM) said they are trying to address the "cycle of arrest and detention" of undocumented Filipinos through talks with Malaysian authorities.

ARMM Executive Secretary Atty. Naguib Sinarimbo led an 8-member team in a visit to Kuala Lumpur and Kota Kinabalu last July to discuss the problem with Malaysian Parliament House Speaker Seri Utama Pandikar Amin Bin Haji Mulia.

Sinarimbo "proposed a 'non-political' solution to the Sabah proprietary dispute vis-a-vis its effects on the unabated detention and arrests of undocumented Filipinos in Malaysia," according to the ARMM website.

The ARMM has admitted that hundreds of Filipinos continue to go Sabah and later end up getting arrested and deported.

Most of those who go to Sabah are allegedly recruited to work as domestic helpers or bar girls.

"Those coming from ARMM areas, especially from Basilan, Sulu and Tawi-Tawi were found to be stubbornly returning to Sabah after deportation on the belief that the Sulu Sultanate owns the state," according to the ARMM.

Sinarimbo and Mulia have allegedly approved of a plan to set up a center in Tawi-Tawi province that will provide passports and other official documents for Filipinos heading to to Sabah or other parts of Malaysia.

"Other ARMM officials had earlier thought of putting up even a 'desk' in Sabah to facilitate the documentation of Filipinos working or staying in Malaysia without documents or permits. But legal luminaries opposed the concept, saying that such facility would mean an official structure of the Philippines and, thus, signify a waiver of Filipinos' claim over Sabah," the ARMM website said.

 

FBC under probe over conflicts in Putrajaya contract

Posted: 16 Aug 2011 04:48 PM PDT

(The Malaysian Insider) - The British Broadcasting Corporation (BBC) is investigating FBC Media's "inappropriate outside interests" after an embarrassing exposé showed the British publicity firm had been paid by Putrajaya and Sarawak to portray Malaysia positively in programmes it produced for the public broadcaster.

The BBC said in a statement to Britain's The Independent newspaper that was published today that it had not been told by FBC Media of its contract with Malaysia when it aired the company's programmes, which may be in breach of its impartiality rules.

Putrajaya has now ended its contract with FBC Media after an exposé revealed Malaysian leaders routinely appeared in paid-for interviews on global television programmes on CNBC.

The Malaysian Insider understands that the Prime Minister's Office (PMO) terminated FBC Media's contract in the past week, just months after another public relations firm, APCO Worldwide from the United States, met an ignominious end for alleged links to Israel.

The BBC has suspended all programming from London-based production company FBC, which, since 2009, has made at least four BBC documentaries dealing with Malaysia and controversial issues such as the country's contentious palm oil industry and its treatment of rainforests and indigenous people, The Independent reported today.

In its statement, the BBC said: "FBC has now admitted to the BBC that it has worked for the Malaysian government. That information was not disclosed to the BBC as we believe it should have been when the BBC contracted programming from FBC. Given this, the BBC has decided to transmit no more programming from FBC while it reviews its relationship with the company."

FBC Media's dealings with the Malaysian government came to light after supplementary supply Bills showed vast payments made for a "Global Strategic Communications Campaign".

The records showed that between 2008 and 2009, RM57.7 million was paid by the Prime Minister's Office to FBC Media for the campaign.

The Independent said in its special report today that documents filed with the United States government's House of Representatives in 2008 show that FBC Media (UK) contracted the Washington-based American lobbying company APCO Worldwide, which it paid more than US$80,000 (RM240,000) in 2008 for the purpose of "raising awareness of the importance of policies in Malaysia that are pro-business and pro-investment as well as [showing] the significance of reform and anti-terrorism efforts in that country".

The BBC's guidelines on conflict of interest state that "Independent producers should not have inappropriate outside interests which could undermine the integrity and impartiality of the programmes and content they produce for the BBC".

The BBC is now investigating whether any of the FBC material it broadcast was in breach of BBC guidelines on impartiality.

Global broadcasters have been scrambling to contain potential damage after the allegations of impropriety surfaced following the expose by whistleblower Sarawak Report, which claimed the interviews and other programmes produced by FBC Media had cost the ruling Barisan Nasional (BN) coalition millions of ringgit as part of its bid to shine its international image.

US-based broadcaster CNN denied last week it was paid to interview Datuk Seri Najib Razak during his visit to London last month, but questions remain about the role played by its anchor John Defterios after the latter's FBC Media programme "World Business" was axed early this month by rival network CNBC.

The spotlight is on the relationship between FBC Media — the British publicity firm led by media giant Alan Friedman, which still lists Defterios as its group president — and broadcasters like CNBC, CNN and the BBC.

Both interviews were conducted by Defterios, which raised eyebrows over his appearance on the rival channels as well as questions over a conflict of interest on his unclear ties with FBC Media.

Defterios was listed as director in the British firm on the FBC Media website before it was stripped down to a one-page fact sheet yesterday, with all information about its board members removed.

The Independent said in its report today that the coverage of the workings of one of Malaysia's most important industries, shown on BBC World News's Third Eye series this summer under the title "The Power of Asia", formed part of a much bigger picture.

The programme was made for the BBC by FBC Media when it was still hired by Malaysia.

READ MORE HERE

 

Ezam sowing seeds of racial tension

Posted: 16 Aug 2011 04:28 PM PDT

It seems like Umno senator Ezam Mohd Nor will stop at nothing to gain political mileage. Now, he is using religion to threaten the non-Muslims, all under the guise of protecting the faith.

There is no doubt that Ezam has Umno's backing in terrorising the non-Malays, using Islam as his modal or capital. Otherwise, how does Umno leader Najib Tun Razak who is also the prime minister explain the gathering? Did Ezam apply for a permit? If he did not, why was no action taken against him for holding an illegal gathering?

Free Malaysia Today

The "leave Islam alone" threat has cropped up again. This time it is Umno senator Ezam Mohd Nor who has declared war against all those who try and convert Muslims. He said he will also burn down news portals which act as agents for infidels.

Where is Ezam coming from, openly making such threats to online news portals and to non-Muslims? Will action be taken against him for disrupting peace through his incendiary remarks?

Ezam is one angry man who has even threatened Muslims who abet non-Muslims in conversions out of Islam.

"We have no choice but to wage war to protect the Muslim faith," he said recently in front of 500 fellow Muslims at the compound of the Selangor state mosque in Shah Alam.

There is no doubt that Ezam has Umno's backing in terrorising the non-Malays, using Islam as his modal or capital. Otherwise, how does Umno leader Najib Tun Razak who is also the prime minister explain the gathering? Did Ezam apply for a permit? If he did not, why was no action taken against him for holding an illegal gathering?

When the poor gather on May 1 to commemorate Labour Day and plead with the Barisan Nasional (BN) government to help improve their quality of life, these less privileged citizens are chased away or detained. The rakyat urge the BN government to reform the electoral system and what does Najib do – he uses brute force to scare them. Why the double standard, Najib?

Ezam's threats were directed at online news sites Malaysiakini and The Malaysian Insider which he claimed adopted a strong stance against the Selangor Islamic Affairs Department (JAIS) raid at the Damansara Utama Methodist Church on Aug 3.

Political mileage

A man devoid of substance, Ezam had the cheek to say that Muslims have no issues with non-Muslims. Is that so? Has he been in deep slumber all the while when Muslims went about stomping on the severed head of a cow, all because they hated the idea of a Hindu temple being built in their Muslim neighbourhood?

Was Ezam in a stupor when the Muslims were up in arms against the non-Muslims when the latter found the Muslim call for prayer by mosques a tad too loud?

Has Ezam been sleeping on the job each time Malay right-wing group Perkasa issues threats to the non-Muslims, all under the guise of defending Malay rights?

Where was Ezam when former prime minister Dr Mahathir Mohamad cautioned the non-Malays that this country belongs to the Malays and that the Indians and Chinese should be thankful for having been given Malaysian citizenship?

The fact is it is people like Ezam who tarnish the image of Islam, manipulating the religion to gain political mileage. Confrontations arising from sensitive issues like religion can never be solved through bloodshed, in case Ezam has now, during Ramadan – the month of repentance – decided to adopt violence as his modus operandi in cowering those who speak and report the truth. Is that the mark of a good Muslim?

Ezam's threats will go no where near protecting the Muslim faith. To slaughter fellow humans under the pretext of jihad or struggle will only put Islam under a very damaging spotlight.

Is Ezam not aware that Islam, like all religions, is about compassion? Sad that as a Muslim, Ezam lacks this very fundamentals his religion espouses.

Fear culture

Since Ezam claims "violence is the best way to protect Islam", he better deal with the truth that to slander and vow to cause harm is not going to earn him any "brownie points".

The fear culture to get the non-Muslims to kowtow to the dominant race has to stop. The rakyat have had enough of threats made under the name of religion. They are just as tired of characters like Ezam and Perkasa chief Ibrahim Ali who never cease to foam at the mouth in trying to act as defenders of Islam.

Ezam has to grow up and tackle the issue at hand in a mature manner. Is anger not condemned by all religions, its damage always irreversible?

There are decent ways and means to safeguard one's religion and violence is definitely out of the scene. Does this self-serving senator truly believe that putting other people's lives in danger is THE answer to a "safer" Islam?

This latest row involving Islam has certainly riled up the non-Malays but as always they are on their own each time such threats are made. Where do the non-Malays turn to when the government itself comprises racists and bigots in the likes of Deputy Prime Minister Muhyiddin Yassin and Home Minister Hishammuddin Hussein? The latter did not bat an eyelid in picking up a keris and swaying it in the face of non-Malays, threatening them to lay off "all things Malay" and demanding that they respect Islam at all cost.

Ezam has threatened to burn down online news portals. Is arson not a crime or is he now, by virtue of being an Umno crony, above the law?

What has happened to the non-Malay representatives, both the MIC and the MCA? Have they no guts to chastise Ezam and demand an apology for insulting the non-Malays over a matter that could have been dealt with wisely instead of resorting to gangsterism?

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