Bogeymen Beware

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Yap Yok Foo

Jun 25, 1999, 3:00:00 AM6/25/99
From Far Eastern Economics Review
Issue 1st July 1999

Bogeymen Beware
Malaysia's Mahathir turns up the anti-foreigner rhetoric ahead of
elections, despite efforts to attract tourists and foreign-investment
By Simon Elegant in Kuala Lumpur
If a ground zero for foreign influence exists in Malaysia, it could be
the area around Federal Highway in the Kuala Lumpur suburb of Petaling
Jaya. Situated between the capital and the city's original airport,
the area's industrial zone was one of the first sites for major
foreign investment. Huge neon signs still loom over the streets
trumpeting factories set up by Nokia, Motorola, Honda and Toyota.

Closer to street level another billboard of white letters on a stark
black background blares out a very different message: "Foreign
interference is a threat to national stability." The message is
illustrated by a photograph of demonstrators attacking a car during
street protests against the arrest of former Deputy Prime Minister
Anwar Ibrahim.

Waving his cigarette in the air, Abdul Rashid, a local resident,
dismisses the government's anti-foreign campaign, which includes
similar billboards at intersections around Kuala Lumpur, television
advertisements set to patriotic jingles and strident speeches from
Prime Minister Mahathir Mohamad and other government ministers. It's
all just "politics" says Abdul.

Malaysia's prime minister has long displayed a seemingly contradictory
attitude towards foreigners--vitriolic criticism of the United States
and other Western nations coupled with warm encouragement of
investment by multinationals from those same countries. But in recent
weeks, Mahathir has raised the pitch, most recently warning delegates
at the general assembly of his ruling United Malays National
Organization of "re-colonization" by "ethnic Europeans," who "still
have the desire to rule the world, to colonize, if not directly, then
indirectly, by dominating the weak countries."

Taken with an accompanying campaign warning Malaysians to beware of
outside influence, political analysts say the level of anti-foreign
rhetoric has been sharply stepped up. With the majority Malay
community still divided over Anwar's sacking and subsequent jailing on
corruption charges, his critics--and not a few independent
analysts--say Mahathir is blatantly playing the anti-foreign card in
the lead-up to the general election, which must be held by June 2000.

Attacking the foreign bogeyman, as Mahathir's critics derisively
characterize it, is a well-worn campaign tactic around the world. But
while it may play well at home, analysts say the strategy could prove
a liability overseas, scaring off investors and tourists whose foreign
exchange is critical in helping Malaysia to recover from the
regionwide slump of the past two years.

Zulkifli Alwi, secretary of Umno's youth wing, believes the prime
minister has little choice. The role of foreigners in the country's
current difficulties "has to be explained to our people," he says. The
prime minister's comments weren't meant to include all foreigners, he
adds, and referred only to "elements in political and financial
circles overseas who he feels are not friendly to Malaysia."

Zulkifli does acknowledge, however, that "sentiments are running
high," and in that atmosphere there's no doubt that whatever the
motivation, raising the spectre of foreign interference and appealing
to Malaysians' patriotism make a visceral rallying cry. Such appeals
probably don't resonate as deeply with more urbanized, educated
Malaysians, says Bruce Gale of the Political & Economic Risk
Consultancy. But aided by the "government stranglehold on the media,"
they still have considerable currency in the countryside, the critical
battleground in any Malaysian election, notes Sabri Zain, an
environmental activist and political commentator.

Besides the mostly Malay rural voters the campaign may also resonate
with non-Malay voters, perennially preoccupied with the possibility of
Indonesian-style ethnic riots. "That kind of scaremongering about the
Indonesian riots and instability could well bring non-Malays" to vote
for the ruling National Front coalition, Sabri says.

While it may appeal at home, however, the anti-foreign rhetoric does
little to improve Malaysia's image elsewhere. The government's
seemingly contradictory attitude was underlined only days after
Mahathir's speech attacking Europeans, when his tourism minister
announced tax cuts and other measures aimed at attracting foreign
tourists, including a publicity campaign overseas touting the country
as a "shopper's paradise."

That could be wasted money if those potential tourists are reading
newspaper stories reporting the demonization of foreigners in
Malaysia, says one Western diplomat. "It's not exactly going to tempt
them to come to Malaysia if the prime minister is trying to galvanize
a siege mentality."

Equally important would be a change in attitude among potential
overseas investors. "It's confusing, says one Chamber of Commerce
official in Kuala Lumpur. "One minute the prime minister is calling on
us all to invest, the next he says we're all neocolonialists."

Gale, of Political and Economic Risk Consultancy, agrees, noting that
the real danger to future investments doesn't come so much from local
expatriate managers but rather from their bosses outside the country.
"At the headquarters they're going to read Mahathir's speech and say,
'Good God, why should we invest more resources in Malaysia?'"

**************From Uncle Yap**************
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