Thursday, June 24, 2004



China's middle class rebels
Doves coo in their cages overlooking the stone courtyard, and the shouts of a man collecting goods for recycling reverberate along the narrow alleyways.
On the surface, this maze of enclosed courtyards, one-storey houses and narrow stone passageways seems to be a picture of traditional Chinese life.
But against this peaceful backdrop a drama is being played out, pitting tradition against modernity, and individuals against the power of the state.

Beijing's old city is being swallowed by the urban sprawl of shopping malls and six-lane highways. Whole blocks are being razed as China moves to create a city of the future to host the 2008 Olympics.

In one area undergoing redevelopment, I met 47-year-old Liu Changshan by chance. He invited me to visit his house, which is facing demolition. It stands alone in a wasteland of broken bricks, the only remaining structure in the entire block.

He described his emotional ties to his property.
"My mother and father got married here," he said. "They bought this place before 1949. We're six children and we all grew up here.
"Now my mother and father have both passed away. I can't bear the thought that this house will be destroyed."
But Mr Liu is refusing to go for financial reasons. He said the compensation offered was not enough to buy a new place, even in the suburbs.
He will get $1,000 per square metre, less than half the market value of the site. And the personal cost is enormous - he has already sacrificed his 20-year-long marriage.

"My wife is someone who works hard, she couldn't live in these conditions. We really felt strongly for each other but every day we argued about our situation. I knew we couldn't go on, so we had to separate, then we divorced."

Mr Liu is among those paying the price for the city's facelift. One Swiss non-governmental organisation estimates 300,000 people have been evicted in Beijing to make way for Olympic projects.

But officials have argued that figure is too high, and they insist those relocated benefit by having an average of 40 sq m more space per family.
Officials turned down my requests for an interview.

Lawyer Lester Ross often represents developers. He believes that many residents are happy to take the compensation and move.
"In many instances, people are going to benefit because a great deal of the housing in Beijing, as well as other cities and rural areas, is very substandard," he said.

In the past, he has had to tackle problems caused by forced evictions by subcontractors working for the city government. But he believes the attitude is changing.
"One of the reasons why construction proceeded so fast is because they have been able to disregard what are considered to be basic rights of people who are residents or who maintain small businesses.
"If you just bulldoze them out of the way, then of course new construction can go on much faster. Beijing, in particular, is concerned now with the greater attention that's coming with the Olympics. Beijing doesn't want the great construction that's under way to be tarnished by public protests," he said.

'Damage done'

Recently the government announced it will demolish fewer buildings in a bid to tackle growing discontent.
But if Ye Guozhu is anything to go by, the damage may already have been done. His family's house was knocked down with their possessions still inside.
Unhappy with the compensation offered, his brother appealed to the authorities but got nowhere. Desperate, he tried to commit suicide in Tiananmen Square and was given a two-year jail term.

Mr Ye is deeply embittered by the experience.
"This unchecked demolition over the past few years has changed the way that people think about the party and the government. Now people think our government isn't governing for us. They're bandits and hooligans. It's a very deep problem. People have already lost confidence in the government," he said.

He now liaises with others who have lost their homes. His movements are monitored by the authorities and I was detained when I visited him, an indication of just how nervous the government is.

And he is not the only one who has turned against a government he once supported.
"These demolitions aren't being carried out properly. They're not taking account of people's rights. Everybody thinks that," said Liu Changshan, the man whose house faces demolition.
Then he pulls back some blue plastic sheeting to show me six huge containers of petrol lined along the walls.
"I'm prepared to take this fuel and pour it over my body. If they knock my house down forcibly, I'll set myself on fire," he said.

It is a sign this urban renewal is spawning a new generation of revolutionaries. It is ironic that in a communist country that has jettisoned so much of its ideological baggage, homeowners are now being thrust into the position of rebels, defying their government to defend their own property.
Source; BBC News, June 04
Write; by Louisa Lim, BBC correspondent in Beijing
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Inflated fertility rate used for pension bills
Ministry allegedly sat on lower figure
Health, Labor and Welfare Ministry officials said Tuesday they had estimated a record-low fertility rate in 2003 of 1.29 almost two weeks before the contentious pension reform bills were pushed through the Diet on June 5, based on a rosier figure.
The government's pension reform package was based on a more optimistic fertility rate of 1.32 for the year, forecasting it to eventually recover to around 1.39. A figure above 2.08 is needed to sustain the population.

Opposition lawmakers had demanded that the latest figure for 2003 be disclosed before the government-sponsored pension bills were passed.
Some have speculated that the ministry intentionally delayed the announcement of the figure because the government's pension reform plan was based on a more optimistic scenario.
The revelation that the government had already estimated the actual figure to be lower than that used in its pension reform package could fuel further public distrust of the system.
Responding to a written request from Takashi Yamamoto, a House of Councilors member of the Democratic Party of Japan, the welfare ministry said the head of the division in charge of demographic statistics reported an interim result of the latest data to the head of the ministry's statistics and information department on May 24.

But the ministry only released the data on the afternoon of June 10, after major newspapers reported the figure in front page stories that day.
The total fertility rate is a calculation of the average number of children that a woman will bear during her lifetime.
A senior official of the ministry's statistics division said Tuesday the interim figure was "around 1.29." He claimed the figure was tentative and not ready for official release.
Chief Cabinet Secretary Hiroyuki Hosoda meanwhile defended the ministry.
"You need to analyze various factors even after figures are obtained," he told a regular news conference. "Usually it takes several days before publication."
The government's fertility rate forecasts have been consistently overoptimistic for more than two decades, forcing it to repeatedly revise down pension premium revenue assumptions.
A higher birthrate prediction is politically favorable for the government, which has been trying to bathe its social security plan in a rosy glow.
Pension reform will be one of the key topics in the July 11 Upper House election. Welfare minister Chikara Sakaguchi declined to say whether the ministry intentionally delayed the release of the figure.
Source; The Japan Times, June 04
Writer; by Reiji Yoshida
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Taiwan urged to buy US weapons
Arms budget; According to the delegation visiting Washington, US officials said that if Taiwan does not treat its national defense seriously, then the US won't either
US Deputy Secretary of Defense Paul Wolfowitz has expressed serious concern about Taiwan's ability to protect itself against possible attacks by China, and urged Taiwan to strengthen its defenses with the proposed arms purchase, according to a Taiwanese legislator visiting Washington.
According to Democratic Progressive Party (DPP) Legislator Lee Wen-chung, Wolfowitz said that if Taiwan does not treat its national defense seriously, then the Americans won't either.
Wolfowitz said that if Taiwan did not take action as soon as possible to strengthen its defenses, China would be encouraged to invest more on military equipment, Lee told the Taipei Times after he and a multi-party legislative delegation headed by Legislative Speaker Wang Jin-pyng (王金平) spent a day in Washington discussing Taiwan's arms procurement budget with top defense and State Department officials.
The 15-member delegation was briefed by 25 US military and civilian officials during a breakfast meeting on the first day of a three-day visit on Monday morning, and then went off to separate meetings at the Pentagon and the State Department.
Although Wang is from the pan-blue camp, he still showed support for the purchase.
"The balance of military power on the two sides [of the Taiwan Strait] is necessary to the area's peace, stability and prosperity," Wang said.
The delegation was to attend a congressional meeting yesterday to discuss the prospects for a measure before the US Congress to enhance military relations between the US and Taiwan through greater joint activities and mutual visits by top officials who are currently barred from such visits by long-term US policy.
That measure, proposed by Senator Sam Brownback, is expected to come up for a vote this week. The House recently approved a parallel bill.
On Monday, American officials were "vague" about the US' commitment to help Taiwan fend off an attack from China, Chinese Nationalist Party (KMT) Legislator Sun Kuo-hua told the Taipei Times.
After the US officials insisted that it would be in Taiwan's best interests to buy the weapons stipulated in the special budget package - diesel submarines, P-3C anti-submarine aircraft and Patriot anti-missile systems - the legislators received somewhat unsatisfactory answers to their questions, Sun said.
When asked if the US would come to Taiwan's defense against China if it were to buy all the weapons, the US side was "vague," Sun said, "because they couldn't say they wouldn't come to our defense, because if they said that, Beijing would say, `Okay, let's attack.'"
"I think the United States is keeping that deliberately vague," he said.
Washington has long been pressuring Taiwan to buy the robust weapons package US President George W. Bush promised in April 2001.
Meanwhile, Pentagon officials were still unable to provide details on the design and cost of the eight diesel submarines included in the package, Sun said.
"We didn't even see a configuration for the submarines ... there's a lot of uncertainties in the cost estimates," he said. "The United States Navy doesn't know."
Sun indicated that Washington was still looking toward various European countries to provide the designs.

But the US officials "gave no indication where the subs will come from" and could not provide a price estimate, Sun said.
"They could only give a rough estimate. We want them to be more accurate," he said.
"How can we approve the cost in the budget if we don't know?" he said.
US shipbuilding companies, "cannot build diesel submarines," because they have not manufactured any for more than 40 years, Sun said.
Source; Taipei Times, June 04
Write; by Charles Snyder and Debby Wu
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China, Japan at odds over offshore gas project
Tokyo worries about sovereignty in the East China Sea.
China-Tokyo is expressing concern about a potentially lucrative natural gas field being developed by China near the border of Japan's exclusive economic zone (EEZ) in the East China Sea.
Japanese officials say the project may infringe on Japanese sovereignty, while China says it seeks joint development with Japan.
On Monday, Foreign Minister Yoriko Kawaguchi met her Chinese counterpart, Li Zhaoxing, here and expressed her concern.
Kawaguchi, who is visiting China for a regional ministerial conference, asked Li for information on the Chunxiao project because officials in Tokyo believe the area being drilled by China may cross over to Japan's EEZ, Japanese government officials said.
``There is a possibility the area marked off by China for drilling could be on Japan's side of the border dividing the two countries' EEZs,'' Kawaguchi said, according to officials.
She said it was possible the underwater gas field extends beneath the sea floor into what Japan considers its side of the boundary, and that Japanese natural resources could be tapped by China.
The Chinese foreign minister did not address Kawaguchi's requests for details. Instead, Li said the two sides should continue to stay in touch on the issue.
Li suggested that Japan and China ``shelve their differences'' and jointly develop the gas field.
In Tokyo, Shoichi Nakagawa, minister of economy, trade and industry, said Tuesday in a regular news conference that the government has no plans to jointly develop the natural gas field near Japan's claimed EEZ.
Nakagawa said he plans to inspect the site from a Japan Coast Guard aircraft.
Tokyo and Beijing dispute the boundary of the EEZ in the East China Sea. Tokyo contends that it is drawn at equal distances from the shores of the two countries. But China maintains the border is where the continental shelf ends.
The rig used in the Chunxiao project sits on the Chinese side of the line that Tokyo insists is part of its own EEZ.
Li's suggestion for a joint venture may be interpreted as an attempt to offset criticism from Tokyo, analysts said.
Officials noted that Japan could not join the project anyway, as it is almost finished. Western companies have been helping China.
``China has not given a direct answer to Japan (over its concerns). They just want to buy time,'' said a senior Foreign Ministry official.
Source: The Asahi Shimbun, June 04
Write; by Noriko Akiyama

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The boys from Bihar
Some members of the new government are an embarrassment
When Sonia Gandhi, leader of the Congress party, last month turned down the chance to become India's prime minister, she robbed the opposition of its first line of attack: a xenophobic campaign against her Italian origins. A second front, however, opened at once over an issue where Congress finds it harder to take the moral high ground. Several ministers in the coalition government are tainted by criminal charges filed against them.

The new Prime Minister, Manmohan Singh, is revered both as a successful former finance minister and as an incorruptible public servant. But he has never won a direct election. Many elected politicians have far dirtier hands. Under rules that came into force last year, candidates in Indian elections now have to reveal their criminal past. According to a tally by Outlook, a weekly magazine, no fewer than 100 of the 542 present members of the lower house face criminal charges.

They include ten of the 25 MPs from the Rashtriya Janata Dal (RJD) party, Congress's biggest coalition partner. The RJD's fief is Bihar, which, with more than 80m people, is India's third most populous state, and the one where crime and politics are most inextricably linked. A notorious gangster, Mohammad Shahabuddin, was re-elected to parliament last month for the RJD. The fact that he is notionally in prison - in practice, in a comfortable hospital - and was described in a police report last year as a “cold-blooded murderer and hard-core criminal” was, apparently, not an insurmountable obstacle.

The RJD's leader, Laloo Prasad Yadav, stood down as Bihar's chief minister in 1997, when he was arrested on corruption charges, but installed his wife as his proxy. He still faces charges related to one of the biggest frauds on the Indian state ever uncovered, involving the “purchase” by the Bihar government of billions of rupees-worth of non-existent fodder.
Mr Yadav, who, rather bizarrely, has become the new railway minister, claims the charges against him are all concocted by his political opponents. Similar claims are made on behalf of his party colleague, Mohammad Taslimuddin, the minister of heavy industries, accused of crimes including attempted murder, intimidation and extortion.

Privately, senior Congress figures say how much it pains the prime minister to welcome such people into his government. In public, Mr Singh points out that they have never been convicted of any crime, and Congress accuses the opposition Bharatiya Janata Party of hypocrisy. Its government, whose six-year tenure ended last month, included a number of politicians facing criminal prosecution for involvement in a riot in 1992 when a mosque was demolished at Ayodhya, triggering widespread communal violence.
Bihar is only the most egregious example of a national phenomenon. Criminals bribe and intimidate their way into office for the protection it affords and the opportunities it offers for recouping their investments. Jayaprakash Narayan of Lok Satta, an electoral-reform lobby group, quotes an estimate of 20m rupees ($440,000) as the cost of standing for election in Bihar.

There is some hope that if the new government carries out its promise to introduce the state funding of elections, politics may attract a nicer class of person. Mr Narayan also argues for a system of proportional representation to break the link between constituency and candidate. Perhaps more pressing is the need for an overhaul of the criminal-justice system, which at present seems to produce fewer convictions than ministers.
Source; The Economist, June 04
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TV can be friend or foe
While presidential candidate Amien is drawn to the medium, others shun it for being too revealing of shortcomings

Debates and dialogues featuring presidential candidates are saturating local television channels nearly every night, but not all the five contenders are getting equal exposure.
Dr Amien Rais has been a daily fixture, making appearances on talk shows expounding on themes ranging from politics and the economy to football.
But incumbent President Megawati Sukarnoputri has so far shunned TV debates, agreeing only to appear on taped interviews.
So far, Dr Amien's polished style - mixing humour with serious remarks - shows him to be the best communicator among the five candidates.
While some observers argue that he benefits from such exposure, others doubt the appearances will win him more votes.
Viewers who prefer the stern mien of a military man might be more inclined towards retired generals Susilo Bambang Yudhoyono and Wiranto.
Mr Bambang, another regular of presidential debates, has faced Dr Amien in at least three debates when other candidates have failed to show up at the last minute.
While Mr Wiranto gladly appears on talk shows or dialogues, he is reluctant to show up alongside other candidates in a debate.
However, while media exposure might boost their bids, some candidates have chosen to stage no-shows, citing reasons like illness or fatigue.
But commitments to take part in televised debates are no guarantees that they will turn up eventually, Mr Riza Permadi, news director of new TV network Trans TV, told The Straits Times.
Last week, the more established SCTV also cancelled a debate between Mr Wiranto and Dr Amien when the former pulled out at the last minute, citing fatigue from constant travelling.
Mr Hamzah Haz also called in sick an hour before a debate on Trans TV that was to set him and his running mate against the Wiranto- Salahuddin Wahid pair.
But Ms Megawati is by far the most media shy.
Trans TV has so far failed to get Ms Megawati to appear on its weekly presidential debates because it refused to concede to her demand to replace a team of panelists comprising analysts and human rights activists with journalists.
Ms Megawati is the only candidate who has not agreed to participate in Trans TV's fourth - and last - presidential debate next Monday.
Analysts attribute the president's coolness to live appearances to her lack of media savvy.
Said University of Indonesia political communication expert Deddy Hidayat: 'Ms Megawati's communication skill is among the worst of the five candidates.
'From the interviews we have seen so far, she appeared authoritarian and temperamental, especially when she is being asked critical questions.'
Regardless of candidates' desire for air time, however, analysts doubt whether the debates have any significant effect in winning voters over.
For one, the TV debates have been criticised for being too 'clinically clean' - candidates are not allowed to confront each other as they field questions from teams of panellists or members of the audience.
Often, the debates also get fairly pedestrian, with candidates saying similar things.
And their answers could also exhibit more style than substance.
Said media analyst Hinca Panjaitan: 'Both the panellists and the candidates like to use big words and show off their sophistication. This may backfire on them by alienating uneducated viewers.'
Source; Singapore Press Holdings, June 04
Write; by Devi Asmarani
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MPs under pressure as civil unions lose support
Frantic lobbying has begun at Parliament to keep plans for civil unions alive as the number of MPs expected to vote for it tomorrow begins to slide.

Days ago the Civil Union Bill had been expected to comfortably clear its first reading tomorrow and go to a select committee for public scrutiny.
But last night, numbers in favour of the bill had dropped, as some Labour and National MPs indicated they had major reservations.
The bill offers civil unions as an alternative to marriage, for gay and straight couples.
A second new law, the Relationships Bill, would end discrimination against same-sex and de facto couples but is not expected to be voted on until next week.
An indication that numbers are tighter than expected has come with Prime Minister Helen Clark's clear support for civil unions.
And yesterday Labour's first openly gay MP, Chris Carter, argued passionately for the two bills.
If they were voted down, he said, New Zealand risked its reputation as a society tolerant of diversity.
He also reminded fellow Labour MPs that introducing civil unions and ending discrimination against gays was party policy.
At least 60 of Parliament's 119 MPs will have to back the bill for it to be sent to a select committee.
Last week, the bill was thought to have support from 70 to 73 MPs. That may now be down to 63 or 64 votes.
Up to 10 Labour MPs oppose the bill. Their votes will be critical, as will any move by MPs to abstain.
Those in Labour thought to oppose civil unions include critics of the law decriminalising prostitution last year, such as Taito Phillip Field, Dover Samuels, Clayton Cosgrove, Damien O'Connor and possibly Harry Duynhoven and Janet Mackey.
Two who backed prostitution laws, but are against civil unions, are Cabinet ministers Paul Swain and John Tamihere.
Most of those MPs also form a conservative cabal within Labour, and were unhappy at Helen Clark's February Cabinet reshuffle, which saw David Benson-Pope inherit the Civil Union Bill from his sacked predecessor Lianne Dalziel.
Complicating the debate is the civil unions' companion legislation, the Relationships (Statutory References) Bill, which would end discrimination against couples who are not married, both straight and gay, and in de facto or civil union relationships.
NZ First yesterday said two of its 13 MPs had indicated their support of the Civil Union Bill to a select committee. Only a handful of National MPs are expected to do the same.
United Future's eight MPs oppose the bill. The nine Green MPs and two Progressive MPs support it.
Act's eight MPs are split, and independent Donna Awatere Huata remains undecided.
Source; New Zealand Herald, June 04
Write; by Helen Tunnah, deputy political editor

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Opening to yawns: a rookie's challenge
China's new stock market for smaller and riskier companies will be little more than a name and a number as trading begins Thursday. Investors may not provide the support it needs to become an independent entity.

The so-called second board at the Shenzhen stock exchange is opening with a roster of eight companies. Their six-digit tickers begin with 002, setting them apart from Shenzhen's 000 series and the 600 used in Shanghai, the bigger of mainland China's two exchanges. The stocks will trade on the same electronic system and be subject to the same regulations as stocks on Shenzhen's main board.

Ophelia Tong won't be a buyer. The investment director of Hong Kong-based HT Capital Management said she did not pay attention to smaller exchanges such as Hong Kong's Growth Enterprise Market or even Shenzhen's main board. "What's the point?" she said. "It's insignificant."

Without commitment from investors, the new forum may not draw enough money or listings to avoid the fate of similar initiatives. Nasdaq Stock Market pulled out of its Nasdaq Japan venture in 2002 after two years of losses, and turnover on Hong Kong's GEM, which opened in 1999, has slumped.

Some investors say creating the second board may detract from China's efforts to stamp out financial scandals at companies such as Guangxia (Yinchuan) Industry, fined last year for the nation's biggest securities fraud.

"The primary concern for fund managers is corporate governance and the quality of the assets," said Ho Kok Hua, a fund manager at APS Asset Management in Singapore.

Securities scandals helped make Shanghai and Shenzhen stocks the world's worst performers last year even as China had the fastest economic growth among major nations. Shanghai's composite index rose 10.3 percent while its Shenzhen counterpart fell 2.6 percent.

This year, the Shanghai index has fallen 4.3 percent and Shenzhen is down 2.8 percent. The benchmarks are among the 10 worst performers this quarter out of 60 global indexes tracked by Bloomberg.

Shenzhen's second board adds another pool of stocks to China's array of Class A and B shares, Hong Kong-traded H shares and listings in Singapore and New York.

The first batch of companies, which raised 2.3 billion yuan, or $278 million, in share sales, include Zhejiang NHU, a producer of food additives and health care products, and Zhejiang Jinggong Science Technology, a maker of construction and textile machinery.

Initially, their shares will trade through existing main-board platforms and will be included in the Shenzhen Composite index, according to the exchange's Web site.

The new market will evolve into an independent entity "when the time is ripe," the Web site says.

Companies will be subject to the same regulations, including rules on earnings reports, as main-board stocks. Like other Class A shares, they will be denominated in yuan and open only to domestic investors and a few overseas fund managers approved by China's government.

Li Mingzhong, a spokesman for the Shenzhen exchange, said a second-board index would be created when there were more listed companies.

The board is aimed at companies with a technology focus, the exchange said in a statement on its Web site.

None of the share sales by the first eight companies and 10 more that plan to join them in coming weeks has exceeded 30 million shares. Li, the exchange spokesman, said that was not an explicit limit.
Source; Bloomberg News, June 04
Write; by Sara Webb and Janet Ong
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No sign of abducted Nepal workers
The authorities in Nepal say they have no idea of the whereabouts of 140 cement workers abducted by Maoists.
The employees were taken from a state-run cement works in Udaipur district on Tuesday and a search by security forces has brought no clues.
There has been no word from the rebels, who are fighting to replace Nepal's monarchy with a communist republic.
In the past, rebels have made abductees attend political and cultural programmes before freeing them.
Thousands of people, including students and teachers across the kingdom, have been taken to remote rebel hideouts and later released after a few days.
About 9,000 people have died in the eight-year struggle between the Maoists and Nepal's security forces.
Source; BBC News, June 04

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Still Malaysia's reigning king of controversy
In the space of less than a fortnight, former Malaysian premier Mahathir Mohamad has managed to land himself in four political controversies. That's quite a feat for someone who is supposed to have retired.

Controversy number one arose after President Robert Mugabe of Zimbabwe said in an interview in May that the Malaysian and Chinese governments had provided partial funding for his US$5 million oriental-design, 25-bedroom mansion near the capital, Harare. He did not make it clear whether the supply of rare timber for paneling in the mansion, under construction for more than five years, represented the full extent of Malaysia's involvement.

Mugabe's comments sparked a public outcry in Malaysia, and it took Mahathir 15 days to shed some light on the issue, which appeared to have caught the Malaysian government and cabinet unaware.

"Yes, I think we did" supply timber for the mansion, Mahathir finally told reporters on June 10, but added that this was the "usual practice" in promoting Malaysian timber abroad. Mugabe has often said he regards Mahathir as a close friend, and the two men share many similarities, including a strong anti-Western rhetoric that has been undermined by autocratic rule at home.

After Mahathir's admission, Malaysia's opposition parties and public interest groups responded by calling for an immediate probe into the gift of timber.

"Mahathir is also accountable to the public for his action," said P Ramakrishnan, president of the social reform group, Aliran. "He must come clean by providing facts and figures to justify why a guy like Mugabe, who is regarded as a tyrant and a despotic dictator, deserves this 'gift' from Malaysians."

No sen in sight
Barely had the dust settled when Mahathir caught media attention again on June 17. This time, he was widely reported as saying he was "not getting even one sen" from serving as adviser to national petroleum corporation Petronas and national car maker Proton, as well as to the development authorities of two resort islands - Langkawi, off Mahathir's home state of Kedah, and Tioman, off the peninsula's east coast.

He said he was only receiving the pension for serving as prime minister for more than 22 years. This amounted to half of his last-drawn monthly salary of RM20,000 ($5,260), he was reported as saying in the pro-establishment Star, the country's top-selling English-language newspaper.

"I don't get a single sen at all," he said. "I am provided an office by Petronas." Mahathir said he needed to explain this matter because there had been talk that he was receiving huge allowances from these particular firms and agencies, the Star reported.

A day later, Mahathir was forced to "clarify". In a report by Utusan Malaysia, a paper linked to his former party, the ruling United Malays National Organization, Mahathir said he did receive taxable monthly allowances from Petronas after all. "However, the amount he received was totally far off from the hundreds of thousands of ringgit he was alleged to have received," said the report. It was not known who made those allegations and what prompted the about-turn.

Protection payment takes a hit
As if that was not enough, Mahathir stirred up a third hornet's nest when he called for a review of the honorarium of the annual RM10,000 ($2,600) paid by the northern state of Penang to neighboring Kedah for the historical acquisition of Penang Island and the accompanying strip of land on mainland Penang known as Seberang Perai, formerly province Wellesley.

In the late 18th century, Kedah, under the rule of Sultan Abdullah, offered to lease Penang to England's East India Company in return for protection against possible attacks from Siam (now Thailand) and Burma (Myanmar) and future uprisings by his own relatives. English country trader Captain Francis Light representing the East India Company formally took possession of Penang Island in 1786. Seberang Perai was leased to the English in 1800. However, Sultan Abdullah discovered too late that the compensation and the "protection" Kedah was to receive was much less than he had expected.

In calling for a review of the payment, also on June 17, Mahathir said the amount was no longer realistic. "Kedah should ask Penang for a review of the payment," he said. "We must make a demand because with RM10,000, now you can't even buy a house, or else we ask that Penang and Seberang Perai be returned to us," Mahathir said.

Those with longer memories were left puzzled as to why Mahathir was raising this issue now after stepping down last October after 22 years in power. They point out that when a request was made in 1994 for the payment to be increased to RM10 million, Mahathir himself had dismissed it. "The royalty payment is only a condition ... it is history, and we are only continuing with what is history. It has become meaningless," he said then. These critics also point out that subsequent historical events - Kedah becoming part of independent Malaya in 1957 and of the Federation of Malaysia in 1963 - had superseded the earlier agreement with the British.

Water under the bridge
In another salvo, Mahathir also said Kedah should think about charging Penang for the raw water it had received for free over the years. He pointed out that Singapore and Malacca state had to pay their neighbor Johor for water "but Kedah, a poor state at that, supplies raw water for free to a rich state like Penang."

In a way, Mahathir's admission of Kedah being poor is an admission of his administration's failure to raise socio-economic conditions in the state, which remains among the poorest in the country. Penang, by contrast, is one of the most developed states, and its Penang Water Authority (PBA) is widely regarded as one of the most efficient, supplying the public with water at a price that is among the cheapest in the country.

It would not have escaped Mahathir's attention that the PBA's exemplary track record has cast other water authorities in the country in an unfavorable light.

"Water has become a commodity and every state government wants to make money from the sale of water," says economist Charles Santiago, who noted that Kedah was also in the midst of privatizing its water resources. Penang, he said, has been profitable in water and "what Mahathir was saying is that since you are profitable you pay for your water."

But Santiago pointed out that the government had played a clear role in providing access to water as an important component of development, resulting in 95% of the Malaysian population having access to affordable, piped water.

Though both Kedah and Penang are governed by the ruling coalition, United Malays National Organization holds the reins in Kedah while its coalition partner, the multi-ethnic but Chinese-dominated Gerakan, leads the Penang government. Gerakan President Datuk Seri Dr Lim Keng Yaik holds the water portfolio in the federal cabinet, which was previously held by a staunch Mahathir loyalist, Samy Vellu, president of the Malaysian Indian Congress.

These unnecessary controversies are the last things current Prime Minister Abdullah Badawi needs as he seeks to distance himself from his predecessor. It only goes to show that, even in retirement, the former premier has a knack for ruffling feathers, whether international or domestic, and stirring emotions over the lack of transparency and accountability that characterized his administration. Perhaps after more than two decades in power, it was too much to expect Mahathir to lie low and confine himself to sailing, carpentry or horseback riding.
Source; Asia Times Online Ltd. June 04
Write; by Anil Netto
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