Najib Faces Early Polls Dilemma After Malaysia Protests

Malaysian Prime Minister Najib Razak will decide whether to proceed with early elections after police clashed with demonstrators seeking faster and more radical changes to the country’s voting rules.

Police fired tear gas and fought with protesters in Kuala Lumpur as they marched at the weekend calling for “reform” and cleaner elections. All 512 people, arrested for defying a new government ban on street rallies, were later released, Assistant Commissioner of Police Ramli Mohamed Yoosuf said by phone, estimating the crowd size at between 40,000 and 50,000 people.

“There will be a lot of pressure on Najib” from within and outside Malaysia to go ahead with elections this year, Bridget Welsh, a political science professor at the Singapore Management University, said by phone yesterday. “If he goes without reform, he opts for a very high-risk strategy where the opposition will gain more support and the electorate will become even more polarized.”

Preparations for an election have begun, Najib said in December. His ruling National Front coalition, which has governed Southeast Asia’s third-biggest economy for five decades, may call a vote as early as May or June, according to four officials who spoke last month. The poll required by early next year comes in the face of decelerating growth and a resurgent opposition led by Anwar Ibrahim.

Water Cannons

“This was not a peaceful rally and the motive was clearly to riot,” Inspector-General of Police Ismail Omar told reporters today. “Police will investigate and take action against all those who have been involved in the rally, directly and indirectly.”

Najib told the official Bernama news services yesterday that he didn’t know whether the protest might delay Malaysia’s 13th general election and expressed regret that violence occurred.

Gross domestic product growth may ease to 4 percent this year from 5.1 percent in 2011 on a weak global outlook, slower than regional rivals Indonesia, Thailand and Vietnam, according to the Asian Development Bank. While the FTSE Bursa Malaysia KLCI Index hit a record on April 3, its 2.6 percent gain this year lags benchmarks in neighboring countries.

Police used water cannons as some marchers threw shoes, bottles and chairs while trying to break through barricades to enter a square where the Coalition for Clean and Fair Elections, or Bersih, wanted to hold a sit-in. Najib’s government enacted legislation this month banning such protests after police detained more than 1,600 people during a similar rally in July.

Market Impact

More than 250,000 people attended the protest, Bersih co- chairwoman Ambiga Sreenevasan was quoted as saying by the Malaysiakini news portal yesterday, dismissing the police figure as too low.

The ringgit halted four days of gains to drop 0.2 percent to 3.0262 per dollar in Kuala Lumpur today, according to data compiled by Bloomberg. Malaysia’s benchmark stock index closed 0.2 percent higher.

The protest “may have some impact in terms of risk premium for the ringgit,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “It introduces a bit more uncertainty in terms of the election timetable and what that means for further reforms being introduced by the government.”

Arrests during last year’s rally led to a temporary drop in the prime minister’s approval rating. A delayed vote would prevent him from taking advantage of a swell in support that followed increases to civil servant salaries and cash payments to poor households.

Indelible Ink

The government can’t understand why the demonstration was necessary as seven out of the movement’s eight demands have already been addressed, Home Minister Hishammuddin Hussein said in an e-mailed statement after the rally.

“The independent Election Commission has gone to extraordinary lengths to ensure that the next elections are free and fair and meet the highest international standards,” he said. “Alongside electoral reforms, the government has implemented the most significant package of political reforms since Malaysia’s independence, including the repeal of outdated security laws, new measures to enhance media freedoms and changes to allow greater student participation in politics.”

Indelible ink has been introduced to stop people voting twice, the electoral roll has been “thoroughly scrutinized” and the election campaign period extended to a minimum 10 days, the minister said.

Approval Rating

Bersih, whose name means “clean” in the Malay language, is demanding that Election Commission officials resign after so far implementing just one of its demands, the use of indelible ink, in time for the next vote, Ambiga said April 24. The group also wants it to introduce absentee ballots, a minimum 21-day campaign period and more comprehensive review of the electoral roll to remove dead people and duplicate voters.

Najib’s approval rating in peninsular Malaysia fell to a two-year low of 59 percent a month after last year’s protests, according to the Merdeka Center for Opinion Research. It increased to 69 percent in February after the government announced it would give cash handouts of 500 ringgit ($164) to households with monthly incomes of 3,000 ringgit or less, and overhaul security laws. The margin of error was 3.07 percent.

In 2008, when eight days of campaigning preceded elections, Najib’s National Front coalition won by the narrowest margin since independence in 1957. A Bersih rally held three months before that vote increased momentum for the opposition, according to Joseph Chinyong Liow, associate dean of the S. Rajaratnam School of International Studies in Singapore.

‘Heavy-Handed’

While barring street protests, Malaysia’s Peaceful Assembly Act enacted this month still allows gatherings elsewhere if organizers give police 10 days’ notice. The authorities said they offered Bersih organizers the use of several stadiums around Kuala Lumpur for their weekend protest, though Ambiga claimed this came too late.

Police began cordoning off Kuala Lumpur’s Independence Square on April 27 after getting a court order preventing people from entering the area where Bersih planned a sit-in. Crowds marched in groups toward the square from different parts of the city, including the 88-floor Petronas Twin Towers, Southeast Asia’s tallest building.

“Our monitoring teams reported witnessing the use of an array of heavy-handed tactics by the police, including the indiscriminate discharging of multiple rounds of tear gas without any obvious provocation, and arbitrary use of water cannons,” Christopher Leong, Malaysian Bar Council vice president, said in a statement. “The monitoring teams also witnessed numerous acts of police brutality, such as assault of arrested persons.”

By contrast, Home Minister Hishammuddin said police acted with “professionalism” and “restraint under difficult circumstances.”

Some 13 police officers were hospitalized, Ismail said. At least 117 rally-goers were treated, according to cases reported to Bersih, steering committee member Maria Chin Abdullah, said in a text message to Bloomberg today.

To contact the reporters on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net; Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net

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