By Barry Porter and Manirajan Ramasamy. Published by Bloomberg News on 10 February 2014.
Abdul Taib Mahmud plans to retire as chief minister of Sarawak, after running Malaysia’s commodities-rich eastern state for more than three decades.
Taib, 77, intends to inform Sarawak’s head of state to of his intention to resign, Malaysia’s official Bernama news agency reported, citing the chief minister. The decision comes seven months after the Malaysian Anti-Corruption Commission formed a multi-agency task force to expedite investigations into claims of graft. Taib has denied corruption allegations, and press reports say he may seek to become the state’s governor.
During his 33-year rule of Malaysia’s biggest state, Taib’s government handed out concessions for logging and supported the federal government’s mega projects, including construction of the country’s largest hydroelectric dam. Oil palm plantations spread as loggers rolled back the frontiers of Borneo’s rain forest, home to nomadic people and rare wildlife such as orangutans and proboscis monkeys.
Some stocks linked to his relatives fell after the Berita Harian newspaper first reported on Feb. 5 that Taib planned to retire as chief minister and become the state’s governor. Cahya Mata Sarawak Bhd. (CMS), a construction and building materials maker, rose 3.8 percent today after declining 8.6 percent last week after the report.
‘More Powerful’
“It’s a misconception to think he’s really retiring,” said James Chin, professor of political science at the Malaysian campus of Australia’s Monash University. “When he moves up to governor, he becomes even more powerful. Certain things need his signature. He appoints the chief minister. All mining leases must be signed off by him.”
Taib and his allies control 25 Sarawak seats in Malaysia’s national parliament. That’s enough to ensure the ruling Barisan Nasional coalition falls from power should they ever choose to switch support to the opposition, said Chin. Prime Minister Najib Razak’s alliance was returned to power in May 2013 by its narrowest margin since independence in 1957.
Taib told Bernama he would step down from his current position by the end of this month. He is Malaysia’s longest-serving chief minister, in power longer than Mahathir Mohamad, who retired after 22 years as prime minister in 2003.
Important Role
“Taib is not really gone from Sarawak politics,” Ibrahim Suffian, a political analyst at the Merdeka Center for Opinion Research, said by phone. “From behind the scenes or even as the new governor, he will play an important role including handling economic issues. Most important now is who will be Taib’s successor.” Opposition parties have made some inroads in Sarawak in recent years, he said.
Taib had doubled up as the state’s finance minister, and minister for planning and resource management, according to his official website. He’s also president of Parti Pesaka Bumiputera Bersatu, or PBB, and state chairman of Barisan Nasional, Malaysia’s ruling political coalition headed by Prime Minister Najib Razak.
PBB met at the weekend and gave Taib a mandate to nominate his successor, the Star reported, citing party Chairman Amar Asfia Awang Nassar.
Local media, including the Star, have named three candidates short-listed by Taib to replace him. They are the party’s deputy president Amar Abang Johari Openg, senior vice president Amar Awang Tengah Ali Hasan and information chief Adenan Satem.
To contact the reporters on this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net; Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net
To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net
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Published by Today Online on 10 February 2014.
But Mr Taib’s influence over the sprawling Borneo island state is likely to remain strong as he is expected to take on the job of state governor, a more ceremonial role than his current post.
His departure will raise doubts over whether a successor will be able to maintain Mr Taib’s political balance between defending the interests of native Sarawak residents, and supporting the national Barisan Nasional (BN) coalition. The state is majority Christian in Muslim-majority Malaysia.
Sarawak, the country’s largest state, has been increasingly crucial to the long-ruling BN coalition as its support wanes in peninsula Malaysia. Without the 25 seats that Mr Taib’s party and his allies won in last May’s election, the national coalition would have lost its majority in the 222-seat parliament, likely ending its 57-year rule.
Mr Taib’s party emerged from the election as the coalition’s second-largest party after the ruling United Malays National Organisation (UMNO), boosting his sway over national politics.
Mr Taib has short-listed three possible successors, including his housing minister who is seen as having close ties with the federal government and Prime Minister Najib Razak.
“I think the big question is what happens over the longer term, whether his successors will develop minds of their own,” said Mr Ibrahim Suffian, head of the Merdeka Center polling firm.
Mr Taib, who travels by Rolls Royce and private jet, has been under pressure to step down amid a growing focus on alleged timber corruption in the state.
Environmental groups say that under his rule, Sarawak — which accounts for a quarter of the world’s tropical log exports - has lost 95 per cent of its virgin forest. Sarawak officials say 84 per cent of the state is forested although this includes massive oil palm estates planted in place of forests.
UNDER INVESTIGATION
Mr Taib has been under investigation by Malaysia’s anti-graft agency since 2011 and is regularly accused by activist groups of enriching his family through his control over awarding huge infrastructure contracts.
Ms Clare Rewcastle-Brown, who has long been a critic of Mr Taib and who runs the Sarawak Report website, said Mr Taib was merely “moving upstairs” into the new role and would maintain his overall influence on state affairs.
“He will never willingly give up power as it would be too dangerous for him and threaten the business empire he has built up across Sarawak,” she said.
Mr Taib is presiding over a US$100 billion (S$127 billion) plan to harness the state’s rivers into 12 dams by 2020 and transform it into an energy hub that can power smelters built by Japanese and Australian firms and also light up the rest of Borneo island.
Shares in Cahya Mata Sarawak, owned about 40 per cent by Mr Taib’s immediate family, snapped three days of losses to rise 2.5 percent today on expectations Mr Taib will still have a say in how the state awards infrastructure jobs.
Timber companies such as Ta Ann Holdings and Jaya Tiasa that benefit from logging licenses awarded by Mr Taib rose 2.3 per cent and 1.3 per cent respectively.
All the counters outperformed the broader market which inched up 0.4 per cent. REUTERS
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Published by Free Malaysia Today on 12 February 2014.
Research by Swiss NGO, the Bruno Manser Fund (BMF), has shown that Taib’s family raised US$16.94 million (RM55.9 million) from the sale of one of his San Francisco properties. The historical 11-storey building at 260 California Street in San Francisco’s financial district was sold by Sakti in mid-2012. Sakti, a US company, is allegedly controlled by Taib via his closest family members.
Documents released by the late whistleblower Ross Boyert back in 2010 showed that 50% of Sakti’s shares were held “in trust” Taib by his two brothers – Onn and Arip – and his three children. The Swiss NGO said in a statement that Taib’s majority control of Sakti was kept a secret because the Sarawak constitution prohibits the Chief Minister from actively running commercial interests.
The constitution states that the head of government and the Governor “shall not hold any office of profit and shall not actively engage in commercial enterprise...The Sakti sale is a textbook example of money-laundering. A foreign politician who acts in an illegal and unconstitutional way should not be allowed to operate freely in the United States. The US and the Malaysian authorities have to act decisively and confiscate all Taib assets whose origin cannot be explained,” the statement said.
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