Oil prices threaten to end Malaysian party's 50-year rule

Oil prices threaten to end Malaysian party's 50-year rule
14 June, 2008

Lorry drivers and motorists across Europe and Asia are in uproar, with the price of oil at unprecedented highs of about $138 a barrel.

BY THOMAS BELL, TELEGRAPH.CO.UK

In the past few days there have been protests in France, Spain, Holland, India, South Korea and Nepal. Lorry drivers are threatening to blockade the Thai capital, Bangkok, on Tuesday.

In Malaysia, where the government allowed the price of petrol to rise by 40 per cent last week, worshippers poured out of Friday prayers yesterday to stage a rare demonstration in the capital. They called for an end to the government that has ruled for 51 years since independence from Britain.

Gatherings of more than four people are illegal without a police permit, and plain clothes officers filmed the mosque as the faithful arrived. But a last-minute change of route wrong-footed the riot squad.

Mohamad Sabu, a vice-president of the Islamic opposition party, told a cheering crowd: "Rice is 25 pence a plate! With fish and vegetables it costs £1.10! And they choose now to raise the price of petrol? The ministers go shopping in London! It is corruption and breach of trust."

Johari Awang, 21, a quantity surveyor, said: "The prices of goods are going up beyond control. We have to do something. This is the first step towards the fall of the government."

Many observers believe he could be right. Angered by rising inflation and corruption, voters in March delivered what was – by Malaysian standards – a stunning defeat to the ruling National Front government, reducing its parliamentary majority below two thirds for the first time in decades.

The resurgent opposition coalition is led by Anwar Ibrahim, once the rising star of the government who fell out with the then prime minister in 1999 and was jailed for corruption – charges that were widely seen as politically motivated. Now Mr Anwar claims he has the support of the 30 government MPs he needs to topple the ruling party. He says he is looking for more support before calling a vote of no confidence.

Steven Wong, a government economics adviser, said that at current world prices the old fuel subsidy would have cost the government three per cent of GDP. But even he was surprised when the price rose by 40 per cent – as an oil exporter Malaysia should have some room for manoeuvre.

In an attempt to assuage public anger the government announced this week that ministers' overseas trips would be curtailed and their entertainment allowances cut by 10 per cent.

Abdullah Badawi, the prime minister, responded yesterday to calls to step aside, announcing a private agreement to hand power to his deputy – although no indication was given of when it would be.