March 16 (Bloomberg) -- Parti Islam SeMalaysia, Malaysia's biggest opposition party, said it will protect the interests of non-Muslims if it gains more power in Sunday's election, moving to ease concerns about the influence of Islam on its policies.
"We cannot interrupt the activities of non-Muslims,'' party President Abdul Hadi Awang said in an interview at his home in Terengganu, one of two states controlled by PAS, as the party is known. There is "common moral ground'' among Malaysia's different races, irrespective of their religions, he said.
PAS is trying to reassure Chinese and Indian minorities -- comprising about two-fifths of the population -- who are worried that plans to create an Islamic state in Malaysia will curtail freedoms and scare investors. Though Barisan Nasional is expected to win the general election, the popularity of PAS has already led the ruling coalition to field more Muslim scholars as candidates and spend more time courting Malaysia's Muslim vote.
"The political discussion has moved from being a debate about Malay nationalism to the role of Islam in Malay society,'' said Bruce Gale, a political risk analyst at Hill & Associates in Singapore. "In 1999, the election was overshadowed by the treatment of Anwar Ibrahim. Now we're going to see whether we really do have a resurgence in Islamic fundamentalism.''
The United Malays National Organization, which leads the ruling coalition, has held power since 1957 by enacting affirmative action plans in support of indigenous Malays, while protecting the interests of non-Muslims. Its majority was eroded in 1999 amid anger over the dismissal of Anwar as deputy prime minister and his trial for corruption and sodomy -- charges he said were politically motivated.
Hadi, 56, says an Islamic state would lead to a more democratic Malaysia, where UMNO rules with the support of the Malaysian Chinese Association and the Malaysian Indian Congress.
"Islam can accept anything that is good,'' he said through a translator. "It took from the Persians, the Romans, Indians and Chinese. Good faith and honesty counts in the West, they have integrity in the courts. This is something that is good and can be used.''
The party also points to its track record in Terengganu, which it won in 1999, to rebut concerns that its policies will deter investors and damp the economy, which is forecast to expand 6 percent this year.
Terengganu's economy expanded an average 3.6 percent a year between 2001 and 2003, more than the annual average nationally of 3 percent, according to the mid-term review of the country's Eighth Malaysia Plan. Only the states of Sarawak and Selangor expanded more quickly.
Terengganu, which borders the South China Sea and has some of Malaysia's largest reserves of oil and gas, grew even though Petroliam Nasional Bhd., the national oil company, stopped paying the state a royalty on sales shortly after PAS took control, an issue that's now in court.
Without the royalty, the northeastern state's income fell 80 percent, Hadi said. PAS countered by improving efficiency at plantations, stepping up collection of religious taxes, or zakat, and turning around unprofitable state-run companies. That allowed the government to abolish road tolls and household taxes while doubling aid to the poor, he said.
"We've managed the budget professionally,'' Hadi said. "We put stress on helping the needy and justice for everybody.''
Terengganu attracted investment worth 5.22 billion ringgit ($1.4 billion) from 2001 to 2003, including a German investment in a tire recycling plant.
"We can attract investors to our state,'' Hadi said. "We cut red tape and make sure there's no corruption. That provides a positive atmosphere for them to come here.''
Still, the two states remain among Malaysia's poorest, while the party's Islamic agenda prompted the Democratic Action Party to quit its alliance with PAS.
"Look at Terengganu, look at Kelantan and what they've done,'' said Chong Sui San, who helps manage $263 million at Kuala Lumpur-based Allianz General Insurance Malaysia. "It's hard to be convinced.''
The state's two-year-old Islamic laws, or hudud, provide for punishments such as the stoning of adulterers, although the code hasn't got the federal backing required for it to be enforced. In everyday life, women working in government offices have to wear headscarves, gambling is banned and the sale of alcohol is restricted.
"The Barisan Nasional promises us material development but that's not what we want,'' said Ali Daud, 66, a fruit seller in Kuala Terengganu, at the end of a three-hour rally of about 10,000 PAS supporters at the town's football stadium last week. "What we want is spiritual development and PAS has brought us that.''
That's not much comfort to non-Muslim voters, who fear that an Islamic state would curtail their rights and leave them marginalized.
"Many businessmen have moved out to Kuantan or further,'' said pet shop owner Lim Chew Siang, who's 32 and has a young daughter. "If we had enough capital we'd go too,'' he said.
Parent site: "Focus on Malaysia"