Najib Tells Malaysia’s Ruling Party to Prepare for Elections

By Soraya Permatasari and Manirajan Ramasamy

Nov. 5 (Bloomberg) — Malaysia’s Deputy Prime Minister Najib Razak told the country’s ruling party to prepare for elections as he opened preliminary meetings to its annual assembly today.

“The political radar is getting clearer and the temperature is heating up,'’ he said, while noting that the exact timing of an election, which is not due until early 2009, would be decided by Prime Minister Abdullah Ahmad Badawi. “Our confidence in repeating our victory in the coming elections is well-founded.'’

Abdullah, who won a landslide victory three years ago, has announced development projects this year amounting to 671 billion ringgit ($201 billion) over 20 years. He also announced 30 billion ringgit of spending on education, including tax exemptions for Chinese, Tamil and religious schools, in what analysts described as efforts to win back waning support. This week’s United Malays National Organisation meeting may see more.

“The complaint on the ground is that things are not being delivered,'’ said Shamsul Amri Baharuddin, a political analyst at the National University of Malaysia. “They are not happy at the local level. And an election is about these people.'’

Abdullah’s approval rating fell to 73 percent in June from 91 percent when he was elected in November 2004, according to the latest survey by the Merdeka Center, a Malaysian political, marketing and economic research company. While Abdullah may try to sell his economic plans to the party, analysts including Terence Chong say he needs to grapple with rising crime and failures such as overspending at his ministries.

`Absentee Landlord’

“He’s largely seen as an absentee landlord by many because of issues like corruption,'’ said Chong, a Singapore-based analyst at the Institute of Southeast Asian Studies. “Many Malaysians are waiting for the prime minister to come out and state very clearly what he intends to do about them. This general assembly would be a great platform for that.'’

Abdullah’s UMNO has more than 3 million members out of Malaysia’s population of about 27 million. The party is the biggest political group in the ruling Barisan Nasional coalition.

Abdullah last month introduced a 112 billion-ringgit plan to boost growth in Malaysia’s less-developed eastern states. Two earlier projects aimed to generate 382 billion ringgit of funds to redevelop the southern state of Johor, and 177 billion ringgit to turn the northern states into a logistics, food and tourism center.

Some UMNO members want to know how the government will tackle rising living costs, said Abdul Karim Ali, head of its youth wing for Merbok, Kedah, who will be at the assembly.

Inflation Worries

Malaysia’s central bank expects inflation to rise to as high as 3 percent next year from between 2 percent and 2.5 percent in 2007. Crude oil reached a record $95.93 on Nov. 2 and a government pledge not to raise gas pieces at the pumps expires on Jan. 1, 2008.

“Several economic and implementation policies for the Malays are still not very clear,'’ Abdul Karim said. “We need to get this clarified.'’

Abdullah is hoping the investment in the three so-called economic corridors will trickle down to underdeveloped areas away from the capital of Kuala Lumpur, said Shamsul at the National University of Malaysia. The projects must “improve the quality of life'’ for them to be successful, he said.

According to the August Merdeka Center survey, Malaysians’ satisfaction with Abdullah’s handling of the economy dropped to 56 percent in June from 65 percent in April. Dissatisfaction with the cost of goods and services climbed to 76 percent from 69 percent.

Government Waste

A September report by the Auditor General showed government ministries overspent by millions of dollars on equipment ranging from patrol boats to pens. The same month, former Deputy Prime Minister Anwar Ibrahim released a video recording purportedly showing a lawyer attempting to fix judiciary appointments.

Abdullah must call an election by early 2009 at the latest as the government must dissolve Parliament by May 17, 2009.

“If he really wants to boost his approval rating before the election he has to come up strongly and send a message that things are going well, that he’s still in charge,'’ said Chong at the Institute of Southeast Asian Studies.

Abdullah expects economic growth in Southeast Asia’s third- biggest economy to accelerate to as much as 6.5 percent in 2008 from 6 percent this year. The $149 billion economy expanded 5.9 percent in 2006.