Posts Tagged ‘Borneo’

Clash of political titans brings a gripping election to Malaysia

May 7, 2018

Malaysia’s general election this week will be an extraordinary contest, pitting a 92-year-old former authoritarian leader and a jailed reformist he fell out with 20 years ago against a prime minister who has been mired in a multi-billion-dollar scandal.

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FILE PHOTO – A combination photo of Malaysia’s Prime Minister Najib Razak and former Malaysian prime minister Mahathir Mohamad (R) in Kuala Lumpur, Malaysia, January 25, 2016 and March 30, 2017 (R). REUTERS/Olivia Harris REUTERS/Lai Seng Sin(R)/File Photos

Few doubt that Prime Minister Najib Razak’s Barisan Nasional (BN) coalition, which has ruled Malaysia for the six decades since independence, will triumph in Wednesday’s poll.

But a robust challenge from the opposition – spearheaded by nonagenarian Mahathir Mohamad, the country’s longest-serving prime minister, and his one-time protege Anwar Ibrahim – has produced the most hotly contested election yet.

“Momentum is with the opposition, but we believe it is unlikely that they will pull off a surprise victory,” said the Eurasia Group consultancy, which put the odds of a win for Mahathir’s Pakatan Harapan (Alliance of Hope) at 15 percent.


However, the political risk group’s Asia director, Peter Mumford, said there is a danger for the ruling coalition that it will fare worse than the 2013 election, when for the first time it lost the popular vote but still won with 133 of parliament’s 222 seats.

Under Malaysia’s simple majority system, the party that gets the most seats in parliament wins even if it does not secure the popular vote.

An unconvincing victory would leave Najib, 64, with reduced political clout and he could face pressure from within his party to stand aside ahead of the next election, Mumford said.

That would be a blow for Najib, who has survived an uproar surrounding 1Malaysia Development Berhad (1MDB), a state fund that racked up heavy debt after he took power in 2009. The prime minister has consistently denied any wrongdoing over the billions of dollars that were allegedly siphoned off from the state fund and he has been cleared of any offence by Malaysia’s attorney general.


Under Najib, a skyscraper called The Exchange 106 has come up in Kuala Lumpur that will replace Mahathir’s pet project, the Petronas twin towers, as the tallest on the capital’s skyline.

FILE PHOTO: Barisan Nasional flags hang at a public housing estate in Kuala Lumpur, Malaysia April 21, 2018. Picture taken April 21, 2018. REUTERS/Stringer/File Photo

The two buildings are testimony to Malaysia’s transformation from a rural backwater to an industrial nation, but they are also emblems of the bitter rivalry between the two leaders.

Mahathir, who ruled with an iron fist for 22 years, was once Najib’s mentor but turned against him over the 1MDB affair and quit the United Malays National Organisation (UMNO) party, which represents the country’s Malay majority.

Then, in an even more unlikely change of heart, Mahathir last year buried a feud with Anwar, 70, and the two agreed to join forces to oust Najib.

Mahathir sacked Anwar as his deputy prime minister in 1998. Anwar then started a movement known as “Reformasi’ – reform – to end UMNO’s race- and patronage-based governance, but he was stopped in his tracks by charges of sodomy and graft, which he denied, but for which he was jailed.

Anwar was imprisoned again in 2015, when Najib was prime minister, after another sodomy charge, which he described as a politically motivated attempt to end his career.

Mahathir has promised to seek a royal pardon for Anwar if they win the election and, once Anwar is free, to step aside and let his protege-turned-foe-turned-ally become prime minister.

Reformasi supporters have been dismayed by Anwar’s reconciliation with the very man who tried to block their movement, but Anwar’s daughter, lawmaker Nurul Izzah, says the opportunity to defeat Najib’s coalition is what matters most.

“It took us many years to get to this point, and if you’re not smart or wise enough to join all these forces together, we might lose the chance at wresting power from BN,” she told Reuters recently.


The opposition alliance, which counts on urban votes and support from the ethnic Chinese and Indian communities, is hoping Mahathir will draw in rural Malay voters who have long been loyal supporters of BN but are now disillusioned by increased costs of living.

A survey released by pollster Merdeka Center last week showed the opposition making gains, but not enough to land a majority of parliament’s seats.

It saw Mahathir’s alliance winning 43.7 percent of the popular vote in peninsular Malaysia and BN 40.3 percent. The poll did not cover the Borneo states of Sabah and Sarawak, which have historically been pro-BN although there have been recent signs of a swing away from the government in Sabah.

The opposition has complained that a revision of electoral boundaries in March tilted the election in BN’s favor by moving large numbers of opposition-leaning voters into fewer parliamentary constituencies.

The Election Commission insists its electoral map changes did not favor the ruling coalition, and the government says there was no political interference in the exercise.

Thomas Pepinsky, a Southeast Asia political expert at Cornell University, said that despite the unusual spectacle of a tight election in Malaysia, the outcome is in little doubt.

“The strength of the incumbent regime must not be underestimated,” he said. “It retains the legal, infrastructural, and material resources that it has always used to prevail in Malaysia’s controlled elections.”

Additional reporting by Joseph Sipalan; editing by Raju Gopalakrishnan


Malaysia’s Election: Is Chinese Money a Problem?

May 6, 2018

There’s nothing new about foreign investment in Malaysia, as opposition chief Mahathir Mohamad knows well. So why is Chinese money a campaign issue when voters are more concerned about the cost of living?

South China Morning Post

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The Malaysian opposition chief Mahathir Mohamad welcomed foreign direct investment from East Asian economies like Japan, Taiwan and South Korea during his 22-year tenure as prime minister, so why is he so nervous about the billions of dollars of Chinese money pouring into the country now?

That is the question being posed by Prime Minister Najib Razak and his supporters as they attempt to pin down the 92-year-old for what they claim is anti-China dog whistling to win crucial Malay votes in next week’s knife-edge general election.

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Mahathir Mohamad campaigning. Xinhua photo

The issue has not featured prominently in the campaign so far, as opposition candidates recognise that voters are far more preoccupied with hot-button topics such as the soaring cost of living and the unpopular goods and services tax (GST).

Those in Mahathir’s camp say the premier’s criticism is a red herring, and point out that their leader’s concerns are confined only to certain Chinese-backed projects.

Pointing to Sri Lanka’s current debt troubles, they question whether Malaysia can bear the burden of servicing Chinese loans if the projects go awry.

Mahathir has also voiced displeasure over China-backed luxury real estate projects which he says are aimed at luring foreign property investors rather than at boosting local housing needs.

A grocery receipt with the added six per cent goods and services tax (GST) at a department store in Kuala Lumpur. Photo: AFP

The opposition chief’s recent comments to international media that he would “review” Chinese-linked projects if he came to power had Najib volleying back hard this week.

“If you sour the relationship with the Chinese government and China, the implication is very, very serious,” Najib was quoted as saying while on the campaign trail in the Borneo state of Sabah.

Under the premier’s watch, Chinese investment in the country has soared.

Singapore was the top source of foreign direct investment (FDI) in 2017, followed by the Netherlands, Japan, the United States and Hong Kong, according to figures released by DBS Bank on Friday. China was in sixth place, bringing in US$2.36 billion, or 7.1 per cent of total FDI to Malaysia.

Everyone confident of victory in Malaysian election epic

The surge in FDI from China and elsewhere comes amid a push by Najib to restructure an economy that was once heavily reliant on oil revenue.

Oil revenue made up 41 per cent of total government income when he came to power; a “New Economic Model” implemented in 2010 has seen that figure come down to 14 per cent of a 225 billion ringgit (US$57 billion) economy.

A worker collects palm oil fruit in Sepang, outside Kuala Lumpur. Najib has warned cancelling Chinese-linked deals could prompt the country to stop buying Malaysian palm oil. Photo: Reuters

Najib said the cancellation of any of the Chinese-linked deals would have “far-reaching” implications on Southeast Asia’s third-largest economy.

“China could retaliate and stop buying our palm oil, bird’s nest and also stop sending tourists to Sabah,” he told ethnic Chinese supporters in the semi-autonomous state. He added: “We must maintain a good relationship with China, the United States, and other countries to benefit us. What happens if they become hostile to us? What is the benefit to us?”

Mahathir, who instituted a “Look East” policy in the 1980s and 1990s, was unavailable for comment, but his allies told This Week in Asia that his position was more nuanced than the Najib camp made it seem.

“Given China’s role in Southeast Asia it wouldn’t be smart to take on China … these are project specific concerns about sustainability, viability and cost,” said Charles Santiago, an opposition MP vying for his third term in the seat of Klang, one of the terminuses for a controversial China-backed rail link.

Syed Saddiq Abdul Rahman. Photo: Bhavan Jaipragas

And Syed Saddiq Syed Abdul Rahman, one of Mahathir’s closest aides and a parliamentary candidate, said there was “nothing xenophobic” about the former strongman leader’s reservations about the Chinese investments. “It’s about whether it benefits fellow Malaysians … even when we took loans from the Japanese during Mahathir’s era, the interest rates were ridiculously low, and there was technology transfer,” he told This Week in Asia.

Mahathir’s criticism about the Chinese investments centres on what he claims are lopsided agreements signed or endorsed by Najib which are tantamount to “selling the country”.

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The two projects he is most vehemently against are the US$100 billion Forest City mixed development in the state of Johor, and a US$13 billion East Coast Rail Link that will connect the country’s underdeveloped east coast to Kuala Lumpur.

A scale model of Forest City residences in Johor, Malaysia. Photo: EPA

Mahathir says the high-end property project – a joint venture between China’s Country Garden and Johor’s Sultan Ibrahim Ismail – does not benefit ordinary Malaysians. Apartment flats in the development built on freehold artificial islands near wealthy Singapore costs at least 1 million ringgit – well out of reach of most people in a country where half the work force earns less than 2,000 ringgit a month.

The Malaysian election issue no one can afford to ignore

The 688km rail line, meanwhile, is being assailed by the opposition chief on three fronts: its award without tender to China Communications Construction Company (CCCC), his argument that its price is inflated, and the Najib administration’s decision to exempt the project from paying sales tax.

Najib last month said CCCC was engaged because it offered the best possible deal, including a 7-year deferment on loan payments. Eighty-five per cent of the project is financed by a loan from the Export Import Bank of China at an interest rate of 3.25 per cent – much lower than the rates of most international lenders according to Najib – with the remainder financed through Islamic sukuk bonds issued by local banks.

CCCC told This Week in Asia it signed the deal with the Malaysian government “based on the market price” and after negotiations “following the guidance for these kinds of projects”.

A groundbreaking ceremony for the East Coast Rail Link project in Kuantan, Malaysia. Photo: Xinhua

On the tax issue, it said: “As Malaysian tax authorities have already stated, the goods and services tax (GST) waiver was for the purpose of lowering the project’s cost. It was a decision between the two governments, with a good intention of helping the general public in Malaysia.”

In China, experts say the fuss will dissipate post-election, no matter the outcome – whether it’s the current administration or the opposition who win.

“Malaysia needs foreign investments for its infrastructure projects. No matter which party is in power, they all have to advance the economy … so I’m confident either side will continue economic collaboration [with China],” said Lu Jinyong, a researcher on Chinese FDI at the University of International Business and Economics in Beijing.

Did Najib just pocket the Malaysian election?

And it’s not only Chinese money that will fund Malaysia’s burgeoning demand for new infrastructure.

In a commentary this week, Mah Siew Keong, one of Najib’s three ethnic Chinese cabinet ministers, said: “Chinese investment into Malaysia in cumulative terms is only a fraction compared with investment from other countries.” He said investment from the Japan International Cooperation Agency alone amounted to some 33 billion ringgit from the Mahathir era to date.

Referring to criticism about Chinese FDI, he said it was “unfair to single out a particular country in reference to FDI in order to gain political mileage”.

Mah Siew Keong. File photo

The reality is that the opposition is reliant on the support of Chinese voters, with the coalition member Democratic Action Party counting them as its core constituency even as its multiracial ranks have expanded dramatically in the past decade.

Any overly critical stance against Chinese investment might open up discord they cannot tamp down in time for the polls.

More critically, the country’s leading pollster Ibrahim Suffian said past polls showed “by and large Chinese investment in the national economy is viewed as positive and people welcome it”.

In a country where the unstated leitmotif to all political discussions is race, public support for this particular issue was surprisingly consistent across the ethnic divide, according to figures by Ibrahim’s Merdeka Centre think tank.

Ibrahim said any anxiety probably stemmed from a “small minority” concerned over whether accepting Chinese money would give Beijing “leeway” over Najib, or if it would harm the country’s sovereignty.

is [issue] tip the balance or be a major factor in the election outcome? I don’t think so.”

Malaysian Election: State of Sabah Says “We Are No Longer a Fixed Asset for Najib”

May 6, 2018

Malaysian Prime Minister Najib Razak can no longer count on the state of Sabah on the island of Borneo as a “fixed deposit” for his ruling coalition, a senior defector said, just days before the country goes to the polls.

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Shafie Apdal, who leads the opposition push in Sabah,

Najib has called Sabah, along with neighboring Sarawak, fixed deposits for consistently voting for his Barisan Nasional (BN) coalition, thereby allowing the party to retain power for decades despite losing votes in peninsular Malaysia.

But an opposition groundswell in Sabah, famed for its rain forests, beaches, wildlife and mountains, including the country’s highest peak, Mount Kinabalu, threatens to upend expectations of a repeat performance.

Najib is still expected to win Wednesday’s election, aided by recently redrawn electoral boundaries that the opposition and critics say favor his ruling pact and squabbling between the Pakatan Harapan coalition, led by his former mentor, Mahathir Mohamad, and a national Islamist party.

The Election Commission and the government have both said the new boundaries are free from political interference.

Shafie Apdal, who leads the opposition push in Sabah, said anger is palpable among Sabah people, who he says have long suffered from poor public infrastructure, porous border security and the lack of job opportunities, despite supporting the ruling coalition for more than 50 years.

“It’s shameful for Sabahans to be considered a fixed deposit, when interest is not given (back),” Shafie told Reuters in an interview at his home in the state capital of Kota Kinabalu. “People are no longer stupid.”

There are few independent polls that measure voter sentiment in Malaysia, but analysts have mixed views on whether Shafie’s new Parti Warisan Sabah can dent BN’s hold on the state and shift the power balance in parliament.

BN has said it is confident of retaining power in Sabah. Najib says the state now has better infrastructure and that the government has tackled issues like illegal immigration from the neighboring Philippines and Indonesia.


Najib’s coalition faces arguably its toughest election since Malaysia gained independence from Britain in 1957, as former prime minister Mahathir, 92, mounts an unprecedented challenge at the helm of a resurgent federal opposition pact.

The prime minister is also grappling with popular anger over rising living costs and allegations of graft, as he seeks to better BN’s performance in the 2013 polls when it lost the popular vote.

Shafie, who quit Najib’s United Malay National Organisation (UMNO) party over the prime minister’s handling of the graft scandal at 1Malaysia Development Berhad (1MDB), said he had to speak out against his “old friend for 30 years” on a point of principle. Najib denies any wrongdoing.

Malaysia’s Prime Minister Najib Razak speaks during an election campaign rally in Kuala Lumpur, Malaysia May 1, 2018. REUTERS/Lai Seng Sin

“I’m not a political prostitute that you can dump money in my mouth, in my ears… I was his buddy, now I’m fighting against him,” Shafie said.

Since campaigning officially kicked off on April 28, Najib has faced growing criticism from former friends and UMNO veterans. On Saturday, his party sacked two senior leaders and suspended another, all long-time loyalists of Mahathir, for speaking against Najib and attending opposition events.

At a campaign stop in Kimanis, a largely agricultural district southwest of the state capital, Shafie told a crowd of about 1,000 supporters that change will only come if people roundly reject BN in both the general election and the state polls, run concurrently.

“The power is in your hands. This is not for Shafie Apdal… It is not for any other leaders. We do this for the people and future of Sabah,” he said, surrounded by dozens of white flags bearing the party logo of a ship encircled by two clasped hands.

BN currently holds 21 of the 25 parliamentary seats.

Shafie is promising higher petroleum royalties and greater state autonomy, which are long-standing demands of Sabah people. Sabah, separated from the peninsula by the South China Sea, accounts for nearly a quarter of the country’s vast oil resources.

“The time has come to change Sabah,” Shafie said to cheers from the crowd. “Can we do that?”

Editing by Nick Macfie


Malaysia’s Ruling Party Sacks Defectors as Election Fight Heats Up

May 5, 2018

Prime Minister Najib Razak is fighting to stay in power, dogged by the continuing 1MDB scandal

Prime Minister Najib Razak at a campaign event Tuesday. His party said on Saturday it expelled two of its best-known members.
Prime Minister Najib Razak at a campaign event Tuesday. His party said on Saturday it expelled two of its best-known members. PHOTO:FAZRY ISMAIL/EPA-EFE/REX/SHUTTER/EPA/SHUTTERSTOCK


KUALA LUMPUR, Malaysia—Malaysia’s ruling party said on Saturday that it expelled two of its best-known members and began investigating a third for backing the opposition in Wednesday’s Wednesday’snational election, a fresh sign that Prime Minister Najib Razak might be facing a tougher-than-expected battle to stay in power.

The two politicians expelled from the United Malays National Organization or UMNO, Daim Zainuddin and Rafidah Aziz, as well as Rais Yatim, who is under investigation, are closely associated with Mahathir Mohamad. The former prime minister came out of retirement to lead an opposition coalition that aims to unseat Mr. Najib, his former protégé.

Now 92, Dr. Mahathir has blasted Mr. Najib for his management of the country, and particularly his handling of state investment fund 1Malaysia Development Bhd, or 1MDB. Dr. Mahathir and many others accuse Mr. Najib of skimming hundreds of millions of dollars from the debt-laden fund, which is the subject of several international investigations. Mr. Najib and 1MDB deny any wrongdoing.

Dr. Mahathir’s emergence at the head of the opposition has reinvigorated that movement and put UMNO on the defensive. Opinion polls suggest, however, that the party will be able to form a government, even if it loses the popular vote, as did in 2013.

Mr. Daim, Ms. Rafidah and Mr. Rais, all former ministers, have been openly critical of Mr. Najib in the election run-up and joined Dr. Mahathir at a huge rally Friday. Ms. Rafidah, who was Malaysia’s emblematic trade minister under Dr. Mahathir’s long premiership, urged the crowd to give him a “new contract.” She and Messrs. Daim and Rais didn’t respond to requests for comment Saturday.

UMNO officials said Saturday that they would take action against members breaking ranks, but the defections underscore divisions in the party feeding into uncertainty in formerly rock-solid strongholds. It comes at a time of increasing authoritarianism in Southeast Asia amid challenges on trade and security as the U.S. and China contest for influence in the strategically important region.

A prime example is on Sabah, an oil-and-gas-rich state on the northern tip of Borneo island on the South China Sea, lying near the troubled southern Philippines. Islamic militants from the Philippines have occasionally staged attacks in Sabah or tried to use it as a safe rear area.

The state delivers the third-most seats in Parliament and has long resembled a “fixed deposit,” as Mr. Najib put it, of support for the Front. In 2013, 22 of its 25 seats went to the governing coalition. Parliament has a total of 222 seats.

This time, the opposition in Sabah is being led by a former UMNO vice president, Shafie Apdal, who quit the party in 2016 after Mr. Najib suspended him for being critical of the 1MDB scandals. Mr. Shafie later formed an opposition party in Sabah with opposition lawmaker Darell Leiking.

The opposition rallies in Sabah are heavily attended, including with younger voters who have increasingly been deserting UMNO. Supporters say they are looking for more autonomy for the state.

“I thank God I left UMNO. It was divine intervention,” Mr. Shafie said in an interview. “I have been observing the body language of people. It is very positive for us as the numbers coming out are very good.”

UMNO has been at the center of every Malaysian government since 1957, but it lost the popular vote in the 2013 elections to a resurgent opposition and allied parties in the long-ruling National Front coalition were reduced to insignificance. As the 1MDB scandal gained steam in recent years, Mr. Najib purged challengers and opponents.

James Chin, a Malaysian academic who heads the Asia Institute at the University of Tasmania, said that the most recent defection of former UMNO ministers who served under Dr. Mahathir showed that “more and more senior UMNO people are willing to challenge Najib at the polls.”

“On the other hand, the fact that all these people were in Mahathir’s cabinet gives the impression that May 9 is a fight between the old UMNO elite and the new UMNO elite,” Mr. Chin said.

Write to Yantoultra Ngui at

In darkest Borneo, answers to why Malaysia’s Najib will be elected again: cash payments

May 3, 2018

One answer to why Malaysian Prime Minister Najib Razak is heading for another victory in next week’s general election can be found in the remote village of Sawai, tucked between vast palm oil plantations and a river in northern Borneo.

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Women wash clothes along a river at Nanga Singat village in Sarawak, Malaysia April 24, 2018. REUTERS/A. Ananthalakshmi

Few of Sawai’s residents have heard of 1MDB, let alone the multi-billion-dollar scandal surrounding the state fund that has dogged the country’s prime minister since 2015 and fueled opposition to his bid for re-election on May 9.

But everyone here knows about the cash handouts, fishing and farming subsidies, crates of mineral water and life jackets for children who take river boats to school – and they know all that comes from Najib’s long-ruling coalition, Barisan Nasional (BN).

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“We are 100 percent Barisan,” said villager Usup Sirai. “The government has done a lot for us. If we support other people, it would not have the same outcome as supporting the government.”

BN is facing its toughest election yet thanks to a challenge led by Malaysia’s former strongman, Mahathir Mohamad, a one-time mentor of Najib and now his fiercest critic.

But the chances of Najib losing are seen as slim, in large part because of villages like Sawai that faithfully vote for BN.

Sawai is part of the Igan parliamentary constituency, which BN won uncontested in 2008 and took again in 2013 with 87 percent of the votes.

A Malaysian flag is draped outside a house at Nanga Singat village in Sarawak, Malaysia April 24, 2018. REUTERS/A. Ananthalakshmi


It helps that votes in sparsely populated rural areas carry more clout than votes in cities, where popular disgust over corruption and the cost of living favor the opposition.

Igan, with just 19,592 voters, is the country’s smallest constituency in terms of electorate size. By contrast, Bangi, an urban constituency in Selangor state held by the opposition, is the biggest with 178,790 voters. Both elect one lawmaker.

Two-thirds of the constituencies in the Borneo states of Sabah and Sarawak are rural or semi-rural, which means they are important for BN to secure a parliamentary majority even if it loses the popular vote, as it did in the 2013 election. The two states together account for a quarter of all parliament seats.

Critics accuse Najib – as they did Mahathir before him – of gerrymandering to tilt elections in his favor, and point to a recent redrawing of electoral boundaries as further evidence.

The Election Commission insists it is independent and says its electoral map changes in March did not favor BN. The government says there was no political interference.

Eric See-To, deputy director of BN’s strategic communications, said opposition claims of “dirty election” tactics of patronage and gerrymandering in Borneo are part of an “ongoing script of theirs to win sympathy votes”.

He said the Malaysia Agreement of 1963, under which Sabah and Sarawak joined Malaya and Singapore to form Malaysia, stipulated that the two states get representation in parliament that reflects their size. Sabah and Sarawak account for about 60 percent of Malaysia’s land mass.

As a result, nine of Malaysia’s smallest 10 parliamentary constituencies in terms of electorate size are in Sarawak.


Baru Bian, an opposition leader in Sarawak, says he struggles to win voters over in rural areas, where sometimes he has to explain even the concept of elections.

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“To some of these old folks, they see the party as the government and the government as the party … (they) think if no BN then there will be no development in their areas.”

The development support is indeed impressive, running from prayer halls and river jetties to schools and solar panels.

Take Nanga Singat, an Igan village without electricity that is 90 minutes by boat from the nearest town. Its 500 residents, who mostly live in the same wooden longhouse, use purification tanks installed by BN to make river or rain water drinkable.

“If we vote for the opposition, maybe they will let the longhouse suffer. So we just follow and vote BN,” said Francis Kiah Pengarah, village headman for the past 40 years.

Villagers around him nodded and said they would take the headman’s advice on who to vote for. They were unaware that Mahathir was now leading the opposition, but dismissed the 92-year-old as too old.

Najib, on the other hand, is popular for introducing ‘BR1M’, a cash handout for the poor, and for launching a coastline highway that, when completed, will connect Sabah and Sarawak.

Residents in nearby Nanga Semah village said a local BN official recently gave each longhouse 1,500 ringgit ($380) for a harvest festival. In 2013, BN chartered a boat for villagers working in towns to return home to vote, and those who showed ink-marked fingers proving they had cast a ballot got 20 ringgit ($5), they said.

Asked which party she supported, a 66-year-old who gave her name only as Gata pointed to a framed photograph of Najib. “It’s because of that man, we got BR1M. We like him,” she said.

Reporting by A. Ananthalakshmi, additional reporting by Praveen Menon; Editing by John Chalmers and Raju Gopalakrishnan

Why China is coming to Brunei’s aid as its oil slowly runs out

March 5, 2018

Beijing sees the state on the coast of Borneo as a potentially key ally as it stakes its claim to waters in the South China Sea, according to analysts

South China Mornoing Posy

PUBLISHED : Monday, 05 March, 2018, 3:25pm
UPDATED : Monday, 05 March, 2018, 4:58pm

The Sultan of Brunei, Hassanal Bolkiah, inspects an honour guard during National Day celebrations last month. Photo: Reuters


On a tiny island off Brunei’s northern tip on the South China Sea, thousands of Chinese workers are building a refinery and petrochemical complex, along with a bridge connecting it to the capital, Bandar Seri Begawan.

When completed, the first phase of the US$3.4 billion complex on Muara Besar island, run by China’s Hengyi Group, will be Brunei’s largest-ever foreign investment project and comes at a time when the oil-dependent country needs it the most.

Brunei’s oil and gas reserves are expected to run out within two decades. As production falls, oil firms will not be investing much in existing facilities, further hampering output, oil analysts say. As a result, the country’s oil revenues, which provide virtually all of Brunei’s government spending, are in steady decline.

With youth unemployment rising, Brunei’s ruler, Sultan Hassanal Bolkiah, is trying to quickly reform the economy and diversify its sources of income, while fighting graft and cracking down on dissent.

Brunei’s changing fortunes have been reflected in its financial industry. HSBC pulled out of Brunei last year, while Citibank exited in 2014 after 41 years. Bank of China, meanwhile, opened its first branch in the sultanate in December 2016.

The Muara Besar project is promising more than 10,000 jobs, at least half of which would go to fresh graduates, media reports in Brunei said. But claims that thousands of Chinese workers have been shipped in to build the complex has angered some residents.

“There are no jobs for us, so why create some for the Chinese?” asked one shopkeeper in the capital city.

Hengyi Industries, the local company building the refinery, did not respond to requests for comment. The company, founded in 2011 and based in Bandar Seri Begawan, expects to complete the first phase of the refinery and petrochemical complex on Muara Besar by the end of the year, according to its website.

 Students attend the National Day celebrations last month. Photo: Reuters

A US$12 billion second phase would expand the refinery capacity to 281,150 barrels per day and build units to produce 1.5 million tonnes per year of ethylene and 2 million tonnes per year of paraxylene, the company said last month.

Total Chinese investment in Brunei is estimated at US$4.1 billion, according to the American Enterprise Institute’s China Global investment tracker.

That will almost certainly rise as China ramps up its “Belt and Road Initiative”. Sometimes called the “21st Century Maritime Silk Road, it envisages linking China with Southeast Asia, Africa and Eurasia through a complex network of ports, roads, railways and industrial estates.

“Brunei is an important country along the 21st century Maritime Silk Road,” Chinese ambassador to Brunei Yang Jian said at the opening ceremony in February 2017 for a joint venture, running Brunei’s largest container terminal.

Accumulated US foreign investment in Brunei, by contrast, was just US$116 million in 2012, the latest figures available, according to the US State Department.

China has invested about US$205 billion in East Asia between 2010 and 2017, according to the China Global investment tracker.

It has been increasing those investments while tussling with four other Southeast Asian nations, including Brunei, over competing claims to islets and atolls in the South China Sea.

“Building good relations and offering big investments are part of China’s strategy to split Southeast Asian nations to ensure there is no consensus on South China Sea matters,” said Jatswan Singh, associate professor at the University of Malaya in Kuala Lumpur, who has written four books on Brunei.

“The sultanate is hard-pressed for investments to diversify its economy and in this sense the Chinese investments are important to [Brunei],” he said. Brunei has not commented publicly about its territorial claims in the South China Sea.

There was a time not so long ago, with oil prices over US$100 a barrel, when Brunei citizens could care less about jobs at a refinery.

 Squeezed between two Malaysian states on the island of Borneo, Brunei provided cradle-to-grave benefits for its 420,000 citizens. Photo: Reuters

Squeezed between two Malaysian states on the island of Borneo, Brunei provided cradle-to-grave benefits for its 420,000 citizens, including zero taxes, subsidised housing and free education and health care.

But the sultan has had to whittle back some of those benefits – Brunei has been in recession for three straight years – and tighten up the ship of state.

The 71-year-old Bolkiah, the world’s second-longest reigning monarch, reshuffled his cabinet again last month, replacing six top ministers – just over a couple of years after they were appointed. No explanation was given.

Sources close to the government and foreign diplomats say Bolkiah wanted to weed out corruption and address grumbling among the Malay-Muslim majority who are unhappy with the pullback in welfare programmes, budget cuts and unemployment.

In the last available official report in 2014, the unemployment rate was put at 6.9 per cent. Unofficial figures suggest youth unemployment could be as high as 15 per cent.

“A majority in Brunei expect a job in the government, state-linked firms or in the oil and gas sector, but all three have been hit pretty hard,” one Western diplomat said.

Bolkiah, who is also the prime minister, controls the key portfolios of defence, finance and foreign affairs.

The sultan’s office did not respond to a request for comment and newly appointed ministers refused to comment during National Day celebrations last week.

 Brunei’s Sultan Hassanal Bolkiah salutes during National Day celebrations in Bandar Seri Begawan. Photo: Reuters

But the sultan is still popular. He marked 50 years in power in October, with a glittering procession through the capital on a gilded chariot, cheered by well-wishers.

But in the long run, an economy based on dwindling single source of income could erode the relationship between the ruler and his subjects, said Muang Zarni, democracy advocate and a former research fellow at the London School of Economics.

“That doesn’t mean that will translate into street protests, but Bruneians know things are not as rosy as they appear in the sultan’s newspapers and TV channels,” said Zarni, who quit the University Brunei Darussalam in 2013 over what he said was a lack of academic freedom.

Malaysia Arrests 7 Filipinos Suspected of Abu Sayyaf Links

September 21, 2017

KUALA LUMPUR, Malaysia — Malaysian police said Thursday they have arrested seven Filipinos believed to be members of the Abu Sayyaf militant group, as part of a crackdown on suspected terrorists in the country.

National police chief Mohamad Fuzi Harun said the seven men, aged between 22 and 38, worked as security guards with private companies in Kuala Lumpur and surrounding areas. He said a 22-year-old suspect had formerly engaged in battles against Filipino troops and was involved in kidnappings in southern Philippines.

Abu Sayyaf, which is notorious for bombings, ransom kidnappings and beheadings, is supportive of the Islamic State terror group and blacklisted as a terrorist organization by the United States and the Philippines.

Mohamad Fuzi said in a statement that the men sneaked into Malaysia from eastern Sabah state on Borneo island, which is a short boat ride from the southern Philippines, in September 2015 and used false travel documents to fly to Kuala Lumpur.

He said their arrests came from information obtained following the Aug. 30 detention of eight suspected Abu Sayyaf members — two Filipinos and six Malaysian. Police have said one of the Filipinos was planning to attack the Aug. 30 closing ceremony of the Southeast Asian Games as well as an Independence Day parade the next day.

Fuzi said Thursday that police had detained 41 foreign terror suspects this year alone. Since 2013, police in Malaysia have detained more than 300 people believed to be linked to the Islamic State group.

Malaysia Sets Boat Ablaze as It Turns Up Heat on Illegal Fishing

August 30, 2017

KUALA LUMPUR — Malaysia on Wednesday for the first time set fire to a foreign boat for fishing illegally in its waters as it turns up the heat on trespassing trawlers.

Porous maritime borders are a constant problem for Malaysia and its Southeast Asian neighbors, which struggle to keep foreign fishing vessels from operating illegally in their waters.

In early 2016, more than 100 Chinese fishing vessels were detected off the Borneo state of Sarawak, while in April Indonesia sank 81 mostly foreign boats caught illegally fishing in its waters.

The boat was set fire at sea off the coast of the northern state of Kelantan, the first time Malaysian authorities have resorted to such action, according to the Malaysian Maritime Enforcement Agency (MMEA).

The MMEA did not specify the boat’s country of origin.

“This method shows how seriously the MMEA views incursions by foreign fishing boats in Malaysian waters,” the MMEA’s Deputy Director-General of Operations, Mohd Taha Ibrahim, said in a statement.

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Indonesia burns a foreign fishing boat. (Photo : Getty Images)

Mohd Taha said Malaysian authorities had so far sunk 285 foreign fishing vessels nationwide to create artificial reefs, but said the method has not made a “deep impact” on foreign fishermen operating illegally in Malaysian waters.

“The MMEA will continue to ramp up our surveillance and patrols to clamp down on crimes committed out at sea,” Mohd Taha said.

(Reporting by Joseph Sipalan; Editing by Nick Macfie)

Indonesian military officer orders that forest burners be shot — authorities struggle to contain fires that cause choking smoke in the region

August 5, 2017

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An Indonesian ranger inspecting the peat forest fire at Meulaboh, Aceh province. PHOTO: AFP 

JAKARTA (REUTERS) – A military official in the Indonesian province of Jambi said on Saturday (Aug 5) that he has ordered that anyone who deliberately sets fire to forest areas be shot, as the authorities struggle to contain fires that cause choking smoke in the region.

Five Indonesian provinces have declared emergencies because of forest fires, according to Indonesia’s National Disaster Management Agency (BNPB), with the number of hotspots steadily increasing in many areas over the past week.

The BNPB is working with many government branches, including the military, to contain the fires.

Indonesian media have reported that the authorities in the neighbouring province of South Sumatra, also on the island of Sumatra, had issued the same order.

“This is to stress a point to the people, who have been warned many, many times,” said Colonel Refrizal, commander of the forest fire task force in Jambi. “(This is) to show our firmness and seriousness.”

The order would be carried out “responsibly”, said Refrizal, who goes by one name.

BNPB spokesman Sutopo Purwo Nugroho said on Twitter the Jambi task force was working to extinguish a fire covering an area of 10 hectares (25 acres).

Nugroho also said the authorities had found one area in Jambi that had been “intentionally” burned by its owner.

The number of hotspots had increased to 239 by July 30, from 173 hotspots three days earlier, according to the BNPB.

The hotspots were seen mostly on Kalimantan, the Indonesian portion of Borneo island, with some also on Sumatra and Java island.

The agency had previously warned that the threat of forest fires would escalate, with the dry season expected to peak in September.

Indonesia is regularly hit by forest fires, which can result in choking smoke blowing across to neighbouring countries like Singapore and Malaysia.

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An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo

The sprawling South-east Asian archipelago suffered some of its worst forest fires in 2015, hitting Sumatra and Kalimantan.

The World Bank, citing government data, said 2.6 million hectares (6.4 million acres) of land in Indonesia burned between June and October 2015, causing US$16 billion (S$21.7 billion) of estimated economic damage.

Draining and conversion of peatland, often driven by palm oil plantations, contributed to the intensity of haze from the fires, the World Bank said.


 (Contains links to several related articles)

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Carbon monoxide concentrations world-wide during the Indonesian burning season, 2015


Indonesian Villagers Cut Down Forest in Orangutan Sanctuary

July 27, 2017

JAKARTA, Indonesia — A conservation group says nearly a fifth of the forest belonging to an orangutan sanctuary on the Indonesian part of Borneo has been occupied and damaged by people living near the area, threatening efforts to rehabilitate the critically endangered great apes for release into the wild.

Borneo Orangutan Survival Foundation spokesman Nico Hermanu says nearly 340 hectares (840 acres) of Samboja Lestari forest in East Kalimantan has been encroached upon. People suspected to be migrants from other parts of Indonesia have occupied the land, cut down trees and planted crops.

Their activities are near a “forest school” home to more than 20 orangutans that is a crucial part of their rehabilitation.

The foundation bought the land for the 1,850-hectare (4,571-acre) sanctuary from locals over several years and restored its forest.

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Image result for Samboja Lestari forest, map