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To: TobagoJack who wrote (42991)	12/11/2003 8:46:28 PM
From: elmatador	Respond to of 74559

Malaysia's new prime minister shift in economic priorities. <<...Mr Abdullah is expected to redirect government spending towards agriculture and small enterprises to win back rural voters...>> Malaysia delays rail plan as PM pushes reform By John Burton in Singapore Published: December 11 2003 10:21 \| Last Updated: December 11 2003 10:21 Abdullah Badawi, Malaysia's new prime minister, has signalled an important shift in economic priorities with his decision to shelve a controversial M$14.5bn (US$3.8bn) railway project, the country's biggest infrastructure programme. Mr Abdullah has expressed doubt about big projects, including the construction of a new administrative capital and an airport initiated by his predecessor, Mahathir Mohamad, who retired six weeks ago. The decision on Wednesday to postpone "indefinitely" the plan to build a double-track railway from the Thai border to Singapore could enhance Malaysia's image among foreign investors, who were concerned over the lack of transparency in the government's selection of businesses for big contracts. The transport ministry on Thursday said there was a "strong feeling in the cabinet that the project will be postponed for the time being," and that the government would convene a final meeting to discuss the decision next week. The project had been criticised after the construction contract was suddenly awarded to Syed Mohktar al-Bukhary, a favoured businessman, in the final days of Dr Mahathir's administration, even though letters of intent had been signed with Chinese and Indian rail companies. Dr Mahathir had also chosen Mr Syed Mokhtar to develop the southern state of Johor into a regional transport hub, with new port and airport facilities, to rival neighbouring Singapore. The railway project, designed to help funnel goods into and out of Johor, revived criticism that Dr Mahathir was favouring an elite group of businessmen by awarding lucrative contracts without open bidding. "The railway cancellation makes clear that the process will become more transparent and that could finally win the attention of foreign investors who have harshly ignored recent signs of progress in Malaysia, such as banking reform," said Van Anantha-Nageswaran, a Singapore-based global economist for Credit Suisse. Mr Abdullah has also said he is "not sure" whether the government will proceed with the sale of a large hydroelectric project in Borneo to Mr Syed Mohktar under a privatisation scheme. Analysts believe that Mr Abdullah's abrupt decision is also meant to score political points at the general elections expected early next year. "Abdullah wants to show voters that he is serious about promoting clean government," said Rajiv Malik, regional economist with JP Morgan Chase in Singapore. The government is worried about possible gains by the conservative Islamic party, Pas, which has won support with its criticism of alleged crony capitalism corrupting the United Malays National Organisation, Malaysia's dominant political party. In an apparent effort to distance himself from Dr Mahathir, Mr Abdullah is expected to redirect government spending towards agriculture and small enterprises to win back rural voters who form the main support base for Pas. Officials said Mr Abdullah was also concerned about the economic consequences of the railway project when the government was trying to reduce its large budget deficit, which had been above 5 per cent of gross domestic product in the last few years. "Fiscal consolidation is important, although there was also a need to improve Malaysia's infrastructure over the last decade," said Mr Malik.