Malaysia opposition takes aim at affirmative action

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PENANG, Mar 11 (Reuters): The newly elected opposition took power in Malaysia's industrial heartland Tuesday and immediately said it would kill one of the nation's sacred cows -- affirmative action for majority ethnic Malays.
"We will run the government administration free from the New Economic Policy (NEP) that breeds cronyism, corruption and systemic inefficiency," said Lim Guan Eng, whose Democratic Action Party (DAP) took control of Penang state after Saturday's watershed elections and was sworn into office Tuesday.
The four-decade NEP was meant to fight poverty by steering resources to indigenous people, including Malays, whose politicians dominate the ruling national coalition. They get preference in state contracts, jobs, university seats and financial aid.
But many Malays say the plan has strayed from its original aim of fostering economic competition and is enriching a small elite, while rural Malays live hand-to-mouth in wooden huts.
In Kuala Lumpur, de facto opposition leader Anwar Ibrahim also took aim at the "Bumiputra" (sons of the soil) policy.
"We consider the NEP is obsolete," Anwar told reporters.
"I always say the NEP benefits the few family members of the ruling establishment and their cronies. So we stop this practice of awarding tenders, projects and privatisation to family-related companies and cronies only at states where we are in charge."
Many in the country's large Chinese and Indian minorities have criticised the policy as unfair. It has also been widely criticised abroad and was a key stumbling block in five fruitless rounds of talks with the United States on a free trade deal.
Anwar said the opposition's version of the programme, which he called the Malaysia Economic Agenda, will protect the interests of "the Malays, the poor and the marginalised" but will be a "competitive, merit-based system."
Acting Law Minister Nazri Aziz confirmed that opposition-ruled states did have the power to scrap the NEP.
"Anything to do with federal government projects, which come under our jurisdiction, then the NEP applies. But if it's a state government jurisdiction, then it's up to them," he told Reuters.
The Edge Financial Daily said in an editorial Tuesday that cronyism was a major issue in Saturday's election.
"Indeed, one can say that one reason why the people voted so strongly for the opposition in the elections is to send a message that they have had enough of political cronyism and awards of contracts and deals to politically connected companies," it said.
Anwar's People's Justice party won 31 seats in the 222-member National Parliament, the most of any opposition party, and will share power in four of five states now under opposition control.
The National Front won the most seats, but lost the two-thirds majority it has enjoyed almost without interruption since independence in 1957.
The strongly Islamist Parti Islam se-Malaysia (PAS) will lead or share power in four states, including three -- Kedah, Perak and Kelantan -- that share borders with Thailand, which has been battling an Islamic insurgency with historical links to Malaysia.
PAS Vice President Husam Musa told reporters Tuesday the opposition intended "to create an investor-friendly atmosphere ... and that foreign investment and interests are guaranteed in the states where we are in power."