Najib to Abolish Detention, Media Laws as Popularity Drops

AppId is over the quota
AppId is over the quota
September 16, 2011, 4:45 AM EDT By Gan Yen Kuan and Daniel Ten Kate

(Adds markets in 10th paragraph.)

Sept. 16 (Bloomberg) -- Malaysian Prime Minister Najib Razak said he will abolish laws allowing the government to detain citizens without trial and ease media rules as he moves to repair his public image ahead of national elections.

The government will end the Internal Security Act and the Emergency Ordinance to ensure people can’t be arrested for political affiliations, Najib said yesterday in a speech broadcast on national television. The government will also ease restrictions on media licenses and public assembly, he said.

“The abolition of the ISA, and the other historic changes, underline my commitment to making Malaysia a modern, progressive democracy,” Najib said. The changes “will ensure a brighter, more prosperous future.”

Najib, 58, is taking the measures two months after street protests that led to the arrest of more than 1,600 people and a 13 percentage point drop in his public approval from last year. Concern over rising living costs have also undercut his popularity, ahead of an election that Bank of America Merrill Lynch economist Chua Hak Bin says will likely be held in the first half of next year.

“It’s a big step forward and will probably boost his standing,” said the Singapore-based Chua. “Generally there is a clamor for greater openness in terms of the media, in terms of the checks on the government.”

Wide Powers

The Internal Security Act was introduced in 1960 in the wake of an armed insurgency by Communist rebels, giving the police wide-ranging powers to detain suspects indefinitely. It will be replaced by a law that incorporates more judicial oversight and limits police powers to detain people for preventive reasons, Najib said.

Opposition leaders including Anwar Ibrahim, Lim Guan Eng and Karpal Singh have been held under the ISA and 37 people are now detained under the the law. The same regulation remains in neighboring Singapore, another former British colony. The Emergency Ordinance, introduced in Malaysia following race riots in 1969, permits the detention of suspects for up to two years with a minister’s consent. The government used it against six opposition politicians in July.

Media laws will be repealed so licenses, which must now be renewed annually, can remain valid indefinitely unless revoked, the government said in an e-mailed statement.

“We view this as a step in the right direction by the government to win back support from the public, signaling that perhaps general elections may be sooner rather than later,” JPMorgan Chase & Co. analysts Hoy Kit Mak, Sriyan Pietersz and Adrian Mowat said in a research note after Najib’s speech.

Malaysia’s ringgit climbed 0.3 percent against the dollar as of 4:19 p.m. local time today and the benchmark FTSE Bursa Malaysia KLCI Index fell 0.5 percent to 1,430.93.

Falling Support

Public support for Najib slipped to 59 percent in August from 65 percent in May, according to a survey by the Merdeka Center. The poll of 1,027 people was taken Aug. 11-27 and didn’t give a margin of error.

Concern over higher inflation has also reduced the prime minister’s support, the survey said. Consumer prices rose 3.4 percent in July from a year earlier after climbing 3.5 percent in June.

Groups such as Amnesty International condemned the use of force to detain peaceful activists who had marched on the capital in defiance of a government ban. The rally involved a group of more than 60 non-governmental organizations known as Bersih 2.0, which has the support of opposition parties.

Bersih wants electoral changes such as campaign periods of at least 21 days and the use of indelible ink on fingers to prevent people from voting more than once. During the July protests, Malaysia’s Home Ministry blacked out parts of an article in the Economist sold on local newsstands that called the government “overzealous” in its handling of the Bersih rally.

‘Positive Development’

Najib’s pledges are a “positive development that opens up space for freedom of speech, rule of law and transparency,” said Ibrahim Suffian, a political analyst at Merdeka Center. “The proof lies in the implementation of these statements and the nature of the laws meant to replace the ISA.”

While Najib’s sweeping changes to security laws are among the biggest since independence in 1957, he didn’t revisit earlier promises to roll back policies favoring the ethnic-Malay majority. The World Bank said in a report earlier this year the preferences have stifled economic growth and limited foreign investment, with more than one million Malaysians living abroad, led by ethnic Chinese and Indian minorities.

Economic Measures

The Malaysian measures, implemented in 1971 following race riots, have provided ethnic Malays with cheaper housing as well as priority for university places, government contracts and shares of publicly traded companies.

Najib has eased some rules to encourage investment, including doing away with a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 percent of their Malaysian equity for indigenous investors. Last year, he unveiled an economic transformation program under which the government identified $444 billion of projects from mass rail to nuclear power that it would promote in the current decade.

Malaysia is also building a database of skilled Malaysians abroad and has proposed tax incentives to lure them back.

--Editors: Patrick Harrington, Peter Hirschberg

To contact the reporters on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net; Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

View the original article here