http://www.atimes.com/se-asia/CF26Ae03.html

DIRE STRAITS

A victory fraught with danger

By Anil Netto

PENANG - As riot police kept angry protesters in check outside, delegates to an extraordinary general assembly of the second largest party in Malaysia's ruling coalition on Sunday voted by a slim majority to take over two relatively independent Chinese-language dailies.

The verdict: 1,176-1,019, a 157-vote majority in favor of the Malaysian Chinese Association's (MCA) takeover of Nanyang Press Holdings, with nine abstentions.

The result is a hollow win for MCA president Ling Liong Sik, who has personally staked his credibility in backing the takeover of the two papers, Nanyang Siang Pau and China Press. With 46 percent of his party opposing the deal and uproar in the Chinese Malaysian community at the takeover, the cost of victory could prove high in the long term.

For sure, the wafer-thin majority has provided some respite for Ling. If delegates had voted against the takeover, Ling's leadership of the MCA could have been immediately thrown into jeopardy and the party would have been in turmoil.

But the euphoria for Ling was short-lived. As he walked out of the hall, a crowd of some 300 anti-takeover protesters yelled "rotten fish-head" - while shouts of "Bravo" greeted his deputy, Lim Ah Lek, who had opposed the takeover. The protesters were part of a groundswell of opposition to the takeover by hundreds of Chinese groups and associations, including key figures among the Chinese Malaysian business community, the MCA's traditional backers.

The community's anger at the takeover has split the party right down the middle and could jeopardize the cohesion within the ranks of the ruling Barisan Nasional (National Front) coalition of Prime Minister Mahathir Mohamad.

"If the technical victory marks the beginning of the official split in the second-largest component party in Barisan Nasional, the victory is merely Pyrrhic," warned the pro-government New Straits Times in a commentary.

The MCA was ridden with factionalism even before the takeover. But the acrimony surrounding the takeover will likely deepen fault lines and trigger even more infighting and possibly even a bitter leadership challenge. That could spell trouble for Mahathir, in power for the past 20 years and with problems of his own, in the next general election due by 2004.

With MCA support, the multi-party coalition headed by Mahathir's United Malays National Organization (Umno) has ruled Malaysia since independence. But in the 1999 general election, Umno suffered an erosion of ethnic Malay support following the sacking of deputy premier Anwar Ibrahim. The coalition, however, coasted home on the back of non-Malay support with 56 percent of the popular vote.

But in a key by-election in last November, the Barisan Nasional suffered a shock loss in Lunas, a traditional safe seat in northern Kedah, Mahathir's home state. Analysts blamed the defeat on the swing in ethnic Chinese votes to the opposition following grievances over Chinese education and the premier's outburst against a grouping of Chinese associations appealing for greater civil and political rights.

The Chinese press has traditionally provided space for a wide range of views on politics, education, and culture. Its relative independence compared with the Malay and English-language press has occasionally resulted in warning letters from the home ministry.

These warning letters cannot be taken lightly. The home minister has the power to revoke publishing licenses at any time and his decision cannot be challenged in court. Under Malaysia's suffocating Printing Presses and Publications Act, publishers also have to apply to the home ministry every year for a fresh publishing permit for each periodical they produce. It is a system that encourages self-censorship and caution among editors of most dailies and makes it difficult for independent publishers to thrive.

But despite the warning letters, the comparatively independent Chinese press somehow managed to get away with bolder reporting that covered views from the ruling coalition, the opposition and community in general.

No longer. Despite Mahathir's denial that he is behind the takeover and Ling's assurance that the editorial independence of the two papers, which have a combined circulation of 400,000, will be preserved, they are sure to be toned down. Indeed, with the takeover of the two papers, nearly all the mainstream media in Malaysia will be controlled by parties friendly to the ruling coalition.

Historically, the Chinese media has been seen as a cultural icon of the community and many Chinese Malaysians will not take kindly to the takeover.

Enough Malaysians will see the deal as one that is aimed at boosting support for the MCA and, by extension, the ruling coalition. Top-selling English daily, The Star, owned by the MCA's investment arm, Huaren Holdings, is widely seen as a pro-MCA and pro-establishment tabloid, and its ownership is reflected in its editorial stance.

The ruling coalition will now have to contend with a possible backlash from the Chinese Malaysian community. This may take the form of a swing in support towards the multi-ethnic but Chinese-based Democratic Action Party or Anwar's multi-ethnic, Malay-based Keadilan (National Justice Party), both members of the opposition Barisan Alternatif (Alternative Front).

"While the party [MCA] can promise that there will be no editorial interference, how convincing is the argument being put across will, to a certain extent, be reflected in the next general election, scheduled in 2004," said the New Straits Times. The ruling coalition, it said, "can ill-afford a vote swing from the Chinese and its defeat in the Lunas by-election should serve as a warning".

A more immediate danger is the threat of a public boycott of the two newspapers by anti-takeover groups. In the past, two Chinese papers were forced to fold after they were taken over by firms linked to the ruling coalition. If the boycott is effective, the two acquired newspapers could chalk up losses that could devalue the MCA's investment in the two papers and dry up liquidity needed to repay the huge 230 million ringgit (US$60 million) loan raised to finance the takeover.

While Ling and his colleagues are hoping the takeover will result in the largest Chinese media stable in Malaysia and perhaps enhance their political prospects, many activists are hoping that those who backed the takeover will live to regret the day they thought of this scheme.