June 8, 2008 / 10:48 AM / 10 years ago

Malaysia's Anwar says fuel hike to hasten govt fall

KUALA LUMPUR, June 8 (Reuters) - Malaysian opposition leader Anwar Ibrahim said on Sunday the government’s unpopular decision to raise fuel prices will hasten its fall, as more members from the ruling coalition break ranks.

The hike in line with a global surge in oil prices has stoked public anger against Prime Minister Abdullah Ahmad Badawi, who is already battling for his political life after the worst electoral performance in his coalition’s 50-year rule in March.

Small and scattered protests have taken place against the 41 percent increase in petrol prices and 63 percent for diesel, which Anwar said was the result of the government’s failure to manage its finances well despite being a new oil exporter.

The government says fuel subsidies have become financially crippling. Pump prices in Malaysia are still one of the cheapest in Asia.

“Politically, the message was clear on 8th of March, economically it’s now a disaster. That is why we are calling on them to resign,” Anwar told a news conference ahead of a rally called in the capital to build support against the ruling coalition.

Anwar, a former deputy prime minister, has previously said that he had enough lawmakers to topple Abdullah’s government following the election on March 8 and was waiting for the right moment.

On Sunday, Anwar, sensing blood, said the plan for a change in government was on track as more members from Abdullah’s ruling Barisan Nasional coalition were drawn to his group, angry over what he said was the “highest single increase” in fuel prices around the world.

“Our timetable (for party crossovers) is still on. It’s on schedule and now it’s more attractive after the price hikes.”

Anwar said in the past three months alone, his party had received 50,000 applications for membership and these included members of constituent parties of the ruling coalition.

“We have seen clearly more interest and support for Pakatan Rakyat (opposition alliance). This applies even to members of parliament. Even some of them have been encouraged to approach me directly even though they are being closely monitored,” he said.

But he didn’t give any details and analysts say that Anwar, who was cast into the political wilderness after being dumped in 1998 by his former mentor, ex-prime minister Mahathir Mohamad, has repeatedly made claims without showing any evidence.

The government said it would save 13.7 billion ringgit ($4.23 billion) as part of a broad overhaul of its heavily subsidised energy price system.

The money used for subsidies, which eat up a third of the budget, would be better spent on development projects, the government said.

Abdullah, fighting to fend off a challenge to his leadership from within and stave off opposition attempts to organise defections, will spell out measures this week to ease the burden on consumers, state media has said.

The proposals include ways for state bodies to save costs, widen the social safety net for the poor, increase the number of price-controlled items and improve public transport. (Additional reporting by Niluksi Koswanage; Editing by David Fogarty)

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