I'm Pushing Myself

Behind Malaysian Poll Protest, a Peace Deal That Collapsed

JK again :)

JAKARTA, Indonesia—A former Indonesian vice president with a history of brokering peace agreements has accused Malaysian opposition leader Anwar Ibrahim of reneging on a secret deal to respect the outcome of Malaysia’s elections on May 5.

Jusuf Kalla revealed the pre-election accord in an interview with The Wall Street Journal, amid a public protest campaign by Mr. Anwar over what the opposition leader said was widespread vote fraud by the ruling National Front coalition. The election returned Prime Minister Najib Razak and the long-ruling National Front to power in the tightest national election in Malaysian history.

Mr. Kalla said the two candidates—whom he said he considered friends of his going back decades—had made a written agreement in April to refrain from personal attacks during the campaign and to accept the outcome, in a deal first proposed by Mr. Anwar.

Mr. Anwar acknowledged he had made the pact with Mr. Najib, with Mr. Kalla as mediator, but said the National Front had rendered it void by the way it ran its campaign.

He singled out Malaysia’s media, much of which is controlled or owned by the government or members of the ruling coalition. “How can you talk reconciliation when you demonize your opponent in this manner?” Mr. Anwar said to The Wall Street Journal. He also said it was Mr. Kalla, not him, who first proposed the pact.

Mr. Najib stressed reconciliation in his first public remarks after the election, though both sides said that the other had rejected a clause in the pact that the winner was to offer the loser a role in a “reconciliation government.”

Mr. Najib’s camp confirmed that the agreement was made and dismissed Mr. Anwar’s view that it had been undermined by the campaign—during which both sides accused the other of low blows and distortions. Mr. Anwar had strong support among Malaysian Web-based media during the campaign.

Mr. Kalla said he felt that both sides met their commitment to refrain from personal attacks during the campaign, and he hasn’t criticized Mr. Najib over the conduct of the election.

Mr. Anwar said he plans to step up a legal campaign to overturn the results in 29 electoral districts, raising political tensions in Malaysia, which has grown increasingly divided in the aftermath of the election.

Mr. Anwar, a former deputy prime minister who has been the country’s most prominent opposition leader for the past 15 years, has led a national campaign of mass rallies since the election. The scene has grown increasingly confrontational. Three prominent opposition activists were detained and later released in the past week.

In the weeks before the election, Mr. Anwar alleged that the National Front and Malaysia’s Election Commission were manipulating electoral rolls and mobilizing illegal voters. On May 5, Mr. Anwar said his alliance had won and accused the National Front of stealing the election.

The National Front and the Election Commission rejected the allegations of electoral fraud. The Commission said there were extremely few irregularities, and that a record 85% of voters cast ballots.

Mr. Anwar said he is pessimistic that courts would overturn results in key districts.

The final vote count showed that Mr. Anwar’s Pakatan Rakyat alliance won a majority of the popular vote, but Mr. Najib’s coalition won heavily in many rural constituencies, where he has strong popular support, to emerge with a 21-seat parliamentary majority.

Mr. Kalla said that the outcome of the balloting, held on a Sunday, was clear. “We had a commitment,” he said. “On Monday, I asked Anwar to accept it and look at reality. But they said, ‘No, no, no, no.’ ”

Mr. Kalla said Mr. Anwar approached him about an agreement two months ago, and they met at his Jakarta home. Mr. Anwar asked him to reach out to his opponent and secure his commitment for a peaceful election outcome, Mr. Kalla said.

At the time, Mr. Anwar was leading in voter surveys in Peninsular Malaysia, where most of the country’s 29 million people live. A victory by his alliance—a collection of Islamists, a mostly ethnic Chinese party and the largely urban secular party he leads—would have been an earthquake to an establishment controlled since 1957 by the coalition that Mr. Najib now leads.

Mr. Kalla had brokered peace agreements in various conflicts across the troubled Indonesian archipelago during his time as vice president from 2004 to 2009, and had roles in peace negotiations in Thailand and Sri Lanka.

He said that he shuttled back and forth between Jakarta and Kuala Lumpur, meeting the opposition leader and Mr. Najib.

“Mr. Anwar sought Jusuf Kalla’s assistance to secure a mutual agreement between BN [Barisan Nasional, the National Front] and [Pakatan Rakyat] stating that both sides agreed to accept the results of the general election, even in the event of a slim majority by either side,” an adviser to Mr. Najib said. “The prime minister reiterated privately to Jusuf Kalla and in public before the election that BN would respect the will of the people and accept the election results, even if the opposition wins.”

Mr. Anwar said Mr. Kalla reached out to him to offer his assistance in ensuring an orderly outcome to the elections. “There were many friends around the region who were concerned about the transition of power and whether it would be peaceful,” he said.

Both candidates had pasts rich with fodder for personal attacks during the campaign. Mr. Anwar spent nearly six years in prison on sodomy and corruption convictions after failing to unseat his one-time mentor, Mahathir Mohamad, in 1998. The sodomy charge was overturned, and he was later acquitted on a second sodomy trial. Mr. Anwar consistently denied the charges.

Mr. Najib, meanwhile, has been subject to rumors widely disseminated in the media—which he has denied—that he had an affair with a Mongolian model and translator who was later murdered. Two police officers were convicted in the murder. Mr. Najib hasn’t been charged with any wrongdoing.

Mr. Kalla said he fears that the longer the dispute between the two political leaders goes on, the divisions in Malaysia—among factions in the majority Malay Muslim group and between Malays and the ethnic Chinese minority—will harden and perhaps lead to violence. Malaysia was racked by race riots in 1969 and Mr. Kalla’s neighboring country, Indonesia, has suffered repeated outbreaks of sectarian violence.

—Celine Fernandez in Kuala Lumpur contributed to this article. (Wall Street Journal)

Minimum Wage for Selected Country

Singapore ‘to Become New Switzerland’

By Sarah Krouse and Mike Foster (WallStreetJournal)

Wealth managers are stepping up their search for staff to expand in Asia as Singapore starts to overtake Switzerland as the world’s top private banking hub.

Singapore will overtake Switzerland as the biggest offshore wealth center in terms of assets under management by 2020, according to research firm WealthInsight.

A separate survey of advisers by PwC said Singapore would leapfrog Switzerland this year in terms of reputation. A broader survey by adviser Z/Yen in March named Hong Kong and Singapore as two of the world’s top four financial centers behind London and New York. Singapore was tipped for the top more frequently than any other city.

The business case for wealth management in Asia is clear: Singapore had the highest percentage of millionaire households in the world at the end of 2011, according to research from the Boston Consulting Group, and Hong Kong had the highest number of billionaires relative to the size of its population. While private wealth in the Asia-Pacific region ex-Japan increased by 10.7% to $23.7 trillion in 2011, private wealth declined in North America and Western Europe.

Advisers say Singapore’s low tax rate, stable currency, efficient corporate registration and clearly defined regulation have become more attractive than Switzerland.

Sebastian Dovey, managing partner of advisory firm Scorpio Partnership, said: “Whichever year you want to choose, Singapore is on a trajectory to get to the top.”

Chris Wheeler, senior analyst at Mediobanca Securities, said: “If you want to be anywhere in the international wealth advisory business, you need to be in Singapore.”

For advisers based in Switzerland, the move’s not a cheap one.

Mr. Dovey said the war for talent in Asia and real estate costs made Singapore one of the world’s most expensive places to set up a wealth advisory business. The ratio between costs and income in Europe averaged 73%: “But the ratio is 10 percentage points higher in Singapore,” he said.

An executive at a large wealth advisory firm said he knew of advisers “working at a loss in the hope of getting market share”.

Even so, BNP Paribas Wealth Management plans to add 200 private bankers in Asia over the next three to five years, the firm told Financial News, MoneyBeat’s sister journal. Rory Tapner, chief executive of private bank Coutts, part of the Royal Bank of Scotland RBS.LN -0.07%, said he wanted to double his client-facing staff in Asia in the next two or three years.

Swiss bank Julius Baer calls Asia its “second home market” after buying Merrill Lynch’s international wealth business. Chief executive Boris Collardi has said the deal doubles Julius Baer’s market share in north and south-east Asia and told a Chinese newspaper that the firm would more than double its staff in Asia by 2015.

First-quarter results from banks with large wealth businesses have illustrated how capital investment in Asia can pay off. Asia-Pacific flows were up 11% year-on-year at Swiss bankUBS UBSN.VX +1.43%, representing a third of the bank’s Sfr15bn ($16.05bn) in net new wealth assets. Inflows from clients in Europe were lower at just Sfr 1.1bn.

At Credit Suisse CSGN.VX +2.37%, assets under management for wealth clients in Asia were up 21% year-on-year, the strongest growth of any region.

And  banks on both sides of the Atlantic are pruning their wealth-management businesses: Morgan Stanley MS -0.04% last month sold its European arm to Credit Suisse, while Lloyds Banking Group LLOY.LN +2.11% is said to be considering selling some international wealth operations.

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Indonesia?