Magazine article Business Asia

Islamic Leaders Show Way

Magazine article Business Asia

Islamic Leaders Show Way

Article excerpt

Bitter political battles are brewing between Malaysia's Mahathir Government and popular Islamic governments. GANESH SAHATHEVAN suggests that investors have little to fear from Islamic economic policies

Some investors have been wary of the Islamic governments now in control of the states of Terrengganu and Kelantan in Malaysia.

However, those same market players might be surprised to discover that these governments share similar likes -- a preference for small government and relatively free enterprise.

The Islamic PAS party swept into power in the oil- and gas-rich state of Terrengganu in general elections last November. At the same time, it retained control of Kelantan.

In Terrengganu over the past two months, PAS -- led by the religious teacher Ustaz Hadi Awang -- has taken steps that would gladden any advocate of small government.

Based on the Islamic principle of simplicity in living, he has ordered that state government officers relinquish their BMWs for the Malaysian-made Proton. That's an annual saving of about 100,000 to 150,000 ringgit (US$26,385 to US$39,577) per vehicle when maintenance costs are included.

He then ordered the retrenchment of 420 civil servants employed in a largely irrelevant state body that was supposed to promote inter-communal harmony.

The PAS's policies, however, have raised some concerns among foreign and domestic investors. Among these is a proposal for a tax on non-Muslim businesses -- a plan that has been put on hold as a result of protests. …

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