MARCH 14, 2008

Change in Malaysia

The Malaysian government has been a big supporter of Formula 1 in recent years, funding the Grand Prix as a means of showing the world that Malaysia is a technically-advanced economy. The problem is that the people of Malaysia are beginning to get fed up with the current administration and an election last weekend reduced the ruling party's powerbase significantly, with the National Front' suffering its biggest election setback since taking power in 1957. The government lost 49 seats in the election, but retain 140 of the 222 seats. At the same time it lost control of five major states and control of the government of Kuala Lumpur. This resulted in fears that the government's massive infrastructure projects will hit troubles and that caused a wave of panic selling on the stock exchange. This in turn resulted in former prime minister Mahathir Mohamad calling for the resignation of prime minister Abdullah Badawi before the slide goes too far and results in an opposition victory.

Malaysia has a contract to run Grands Prix for years to come but fundamental changes in government are always a worry because when politicians decide that such activities stop, they tend to stop, even if there have to be commercial settlements. The arrival of a Singapore Grand Prix means that such a development would not greatly hurt F1 in the Asian market, but these matters are sure to be much discussed when the Grand Prix circus arrives in Kuala Lumpur next week