Malaysia lives under state of emergency - EU envoy

KUALA LUMPUR (Reuters) - Malaysia is living under an effective state of emergency, an EU envoy said on Tuesday, after police used tear gas and water cannon at the weekend to break up the biggest anti-government protest in a decade.

"Today, this country still lives under emergency," the European Commission's envoy to Malaysia, Thierry Rommel, told Reuters by telephone on the last day of his mission to Malaysia.

Rommel's remarks, extraordinarily blunt for a diplomat, chime with a chorus of criticism from opposition parties and some non-government groups about the way the government handled the protest, which it called an illegal assembly of troublemakers.

Police had set up road blocks around the capital to prevent protesters converging on Kuala Lumpur for Saturday's rally, but despite these measures and heavy rain, around 10,000 people thronged the city centre to call for electoral reform.

Police later moved in with tear gas and water cannons, which fired jets of water laced with a chemical irritant, to break up the crowd. There were no reports of any serious violence.

Rommel, who has spent four and a half years in Malaysia, said many Malaysians felt that their voices were not being heard and agreed that the electoral system should be reformed.

"It's not a secret that elections are not fair," he said, noting complaints from electoral reform group Bersih, organiser of Saturday's protest, that election campaigns were too short and that the media was biased toward government campaigning.

"There's a significant part of the population that feels their voice is not really heard because of the way elections are managed," he added. "They feel locked out."

The Belgian noted that several emergency-style laws were still in use, such as the Emergency Ordinance, born in 1969 to deal with race riots, and the colonial-era Internal Security Act (ISA). Both allow detention for years without trial.

None of these powers were used to quell Saturday's protest, and the ISA has not been used against opposition politicians and activists for several years. But the chief minister of central Pahang state, a member of the main ruling party, has said the ISA should be used if necessary to deal with future protests.

"They (emergency laws) all very clearly establish the legal framework for the executive to take measures in cases of unrest -- as the executive defines them," Rommel said.

PAINTING AN UGLY PORTRAIT

Rommel, a career diplomat, is not new to controversy in Malaysia. He created a storm in June when he gave a speech likening Malaysia's affirmative-action policy to a trade barrier.

That remark brought a swift backlash and formal protest from the government. The trade minister even complained publicly that Rommel had an attitude problem, and his name started to disappear from the government's invitation lists.

But Rommel, who spoke to Reuters on condition that his comments be published after his departure later on Tuesday, said he was unrepentant about his criticisms and denied he was trying to superimpose Western values onto Malaysia.

He said Malaysia's "Bumiputra" policy of affirmative action, which favours majority ethnic Malays, distorted trade because it allowed the government to award state contracts to Malay businesses without clear, competitive tender procedures.

It also fostered corruption, he added.

"The extension of Bumiputra-based discrimination and preference in public procurement -- which is massive in the Malaysian economy -- has worked to the disadvantage of foreign players in particular and has become a vehicle for officially acknowledged corruption...," Rommel said.

"It is public knowledge that local Malay vested interests, with powerful political or administration connections, want to see this mechanism maintained."