Incumbents win elections in Taiwan and Malaysia in contrasting styles
Save for a possible vote recount in Taiwan, the elections are over in Taiwan and Malaysia. Incumbents won in both elections, but the manner of victory and the impact on financial markets have been quite different for the two countries.
In Taiwan, Chen Shui-bian of the Democratic Progressive Party (DPP) won re-election to the presidency on 20 March by beating his opponent, Lien Chan of the Kuomintang (KMT), by a margin of less than 30,000 votes, or 0.22 percent of the votes cast. The narrow margin has resulted in members of the KMT demanding a recount of the votes. Protesters supporting Lien Chan have camped outside the presidential palace since Saturday night, with some alleging vote-rigging and election fraud on the part of the DPP.
The Taiwanese police has already ruled out the possibility that the shooting that injured President Chen and Vice-President Annette Lu on Friday could have been staged. President Chen had been hit in the abdomen while Vice-President Lu was hit in the knee. The shooting, occurring on the eve of the election while Chen and Lu had been campaigning, very likely helped him garner some sympathy votes and might have tipped the balance in his favour.
However, the narrowness of the victory, the uncertainty created by the possibility of a recount, President Chen's well-known pro-independence inclination, his antagonism towards China and his reluctance to promote communication and business dealings with China all make the election outcome somewhat unfavourable to business. As a result, the Taiwan Weighted Index has fallen from 6,815.09 at the end of last week to 6,213.5601 yesterday, a drop of 8.8 percent over three days.
In Malaysia, the election ended on 21 March in contrasting style. The ruling Barisan Nasional (BN) coalition decisively defeated its main rival, Parti Islam SeMalaysia (PAS). It captured 198 out of 219 seats in parliament and regained one state, Terengganu, from PAS, leaving the latter in control of only Kelantan, where it won by a narrow margin of 24 seats against BN's 21.
The result shows that Islamic fundamentalism is not as popular it had previously been thought to be. In contrast to the diminished fortunes of PAS, the secular opposition party, the Democratic Action Party (DAP) performed better than in the previous election. The good showing by PAS in the previous election can probably now be attributed to the electorate's distrust of then-prime minister Mahathir Mohamad. Mahathir had sacked his own deputy prime minister Anwar Ibrahim -- who ended up in prison -- and was associated with many prominent businessmen handling big projects for the government.
In contrast, the present prime minister, Abdullah Ahmad Badawi, is widely seen as promoting good governance, fighting corruption and cancelling mega-projects in favour of rural projects. Such actions cannot help but make him out to be, in the words of Suhaini Aznam in The Star, "the kindly father figure: sincere, caring for the ordinary people and moderate in his interpretation and implementation of Islam".
The decisive election result in favour of a secular party undoubtedly goes down well with the business community. The Kuala Lumpur Composite Index has held relatively steady this week, closing at 895.31 yesterday, down from 904.45 at the end of last week, a one percent fall that is more or less in line with most other Asian markets.
With more elections around the world still to come this year -- Indonesians go to the polls on 5 April and, of course, Americans on 2 November -- politics will continue to be among the top watch items among businesses and investors for quite a while.
In Taiwan, Chen Shui-bian of the Democratic Progressive Party (DPP) won re-election to the presidency on 20 March by beating his opponent, Lien Chan of the Kuomintang (KMT), by a margin of less than 30,000 votes, or 0.22 percent of the votes cast. The narrow margin has resulted in members of the KMT demanding a recount of the votes. Protesters supporting Lien Chan have camped outside the presidential palace since Saturday night, with some alleging vote-rigging and election fraud on the part of the DPP.
The Taiwanese police has already ruled out the possibility that the shooting that injured President Chen and Vice-President Annette Lu on Friday could have been staged. President Chen had been hit in the abdomen while Vice-President Lu was hit in the knee. The shooting, occurring on the eve of the election while Chen and Lu had been campaigning, very likely helped him garner some sympathy votes and might have tipped the balance in his favour.
However, the narrowness of the victory, the uncertainty created by the possibility of a recount, President Chen's well-known pro-independence inclination, his antagonism towards China and his reluctance to promote communication and business dealings with China all make the election outcome somewhat unfavourable to business. As a result, the Taiwan Weighted Index has fallen from 6,815.09 at the end of last week to 6,213.5601 yesterday, a drop of 8.8 percent over three days.
In Malaysia, the election ended on 21 March in contrasting style. The ruling Barisan Nasional (BN) coalition decisively defeated its main rival, Parti Islam SeMalaysia (PAS). It captured 198 out of 219 seats in parliament and regained one state, Terengganu, from PAS, leaving the latter in control of only Kelantan, where it won by a narrow margin of 24 seats against BN's 21.
The result shows that Islamic fundamentalism is not as popular it had previously been thought to be. In contrast to the diminished fortunes of PAS, the secular opposition party, the Democratic Action Party (DAP) performed better than in the previous election. The good showing by PAS in the previous election can probably now be attributed to the electorate's distrust of then-prime minister Mahathir Mohamad. Mahathir had sacked his own deputy prime minister Anwar Ibrahim -- who ended up in prison -- and was associated with many prominent businessmen handling big projects for the government.
In contrast, the present prime minister, Abdullah Ahmad Badawi, is widely seen as promoting good governance, fighting corruption and cancelling mega-projects in favour of rural projects. Such actions cannot help but make him out to be, in the words of Suhaini Aznam in The Star, "the kindly father figure: sincere, caring for the ordinary people and moderate in his interpretation and implementation of Islam".
The decisive election result in favour of a secular party undoubtedly goes down well with the business community. The Kuala Lumpur Composite Index has held relatively steady this week, closing at 895.31 yesterday, down from 904.45 at the end of last week, a one percent fall that is more or less in line with most other Asian markets.
With more elections around the world still to come this year -- Indonesians go to the polls on 5 April and, of course, Americans on 2 November -- politics will continue to be among the top watch items among businesses and investors for quite a while.
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