KUALA LUMPUR (Reuters) – Malaysian media photos showing “in camera” proceedings in the sodomy trial of opposition leader Anwar Ibrahim prompted complaints of bias in the politically charged trial on Friday.

The graphic picture in Friday’s edition of government-controlled Malay language Utusan Malaysia showed a 24-year-old man, who says Anwar had sex with him, gesturing toward a bed.

The same paper on Thursday used language that was struck out of court proceedings after objections by Anwar’s lawyers in a headline that read “Not willing to be sodomised again,” implying that Anwar had sex with the man more than once.

The judge said Utusan had not broken reporting restrictions on a Thursday visit closed to the public and media to the condominium where Anwar’s accuser said he was sodomised in 2008, in a ruling that stunned Anwar and his supporters.

KUALA LUMPUR, Feb 2 (Reuters) – Malaysian opposition leader Anwar Ibrahim said on Tuesday he would subpoena the country’s premier in a bid to escape what he says are trumped up charges of sodomy that could see him jailed for 20 years.

Speaking outside a packed courtroom and cheered on by 250 supporters shouting “justice for Malaysia, justice for Anwar” the 62-year-old former deputy premier said the presence of so many foreign embassy staff in court on the first day of his trial showed the “interest, concern and disgust” it was attracting.

Anwar said that Malaysian Prime Minister Najib Razak and his wife, Rosmah Mansor, had both met his accuser and had interfered with the legal process, something a spokesman for Najib denied.

Earlier, Anwar, accompanied by two of his daughters and his wife, told reporters the prosecution was down to “the machinations of a dirty, corrupt few”.

KUALA LUMPUR, Feb 1 (Reuters) – The ruling coalition of Malaysian Prime Minister Najib Razak may delay some planned economic reforms as tensions rise over the trial of opposition leader Anwar Ibrahim and ethno-religious rivalries. Sovereign 5-year credit default swaps for Malaysia <MYGV5YUSAC=R> are trading at a spread of around 101.67 basis points, compared to a weighted average of 134.40 for the Thomson Reuters Emerging Asia Index. The implied risk of a Malaysian default is seen as lower than Thailand, with a spread of 111.00 basis points, and South Korea at 103.75, but higher than China, Hong Kong and Singapore. Following is a summary of key Malaysia risks to watch: * POLITICAL CONFLICT The National Front which has ruled Malaysia for 52 years recorded its worst performance in last year’s general election, losing control in five states and its once iron-clad two-thirds control of parliament. Voters, especially the country’s Chinese and Indian ethnic minorities, abandoned the National Front in favour of Anwar’s three-party opposition. Anwar’s upcoming trial on renewed sodomy charges will provide a flashpoint. Malaysia’s political stability has deteriorated significantly over recent years, and investment will be further damaged if that trend continues. What to watch: — Anwar’s trial. Opposition supporters widely regard the trial as politically motivated, and it is likely to further dent Malaysia’s attractiveness for foreign investors. If a contentious or divisive verdict seems likely, more foreign money will be pulled from Malaysia’s markets, pulling down stocks <.KLSE>, bonds and the ringgit <MYRX=>. But with limited foreign portfolio investment still in the country, the impact will be muted. — A leadership tussle in the Malaysian Chinese Association, the second biggest party in the ruling National Front coalition, might drive more Chinese voters to the opposition. * ECONOMIC REFORM The government has promised further economic reform to attract more foreign investment. Najib has rolled back elements of a four-decades old Malay affirmative policy, relaxing the rule that companies must offer stakes to indigenous ethnic Malays. But Najib is wary of upsetting the Malays, a critical vote bank, and treads carefully on economic reform. This may cause him to dilute or abandon his plans as he attempts to remain in power. What to watch: — Government policy implementation and announcements. A further bout of liberalisation has been trailed by the government, although while investors have greeted positively measures so far, little money has flowed into Malaysia’s markets as they are wary over implementation. — The government’s moves to reduce crippling fuel and food subsidies. Past fuel price hikes have drawn an intense public backlash, so the reaction to the government’s expected announcement of a two-tier fuel price in May will be key. — The appointment of a new head of state oil-firm Petronas, with President and Chief Executive Officer Hassan Marican’s contract reported to expire in February. A failure either to extend the contract of Hassan — who is renowned for his no-nonsense approach in running the oil firm — or to replace him with a rank outsider may be read as an attempt to put in place an executive more pliable to government whims, which could sour market confidence. * RACE AND RELIGION Race and religion have always been explosive issues in Malaysian politics. Najib took power pledging a more inclusive approach to ethnic Chinese and Indian minorities, but his United Malay National Organisation (UMNO) party that is the lynchpin of the ruling coalition cast this approach aside to try to prevent further loss of support amongst its Malay powerbase. Najib, who took office in April last year, received a boost in approval ratings following measures to liberalise the economy and a pledge to promote inclusiveness. His gains, especially among minority ethnic groups, are in doubt after religious tensions flared over whether Christians could use the word "Allah" to describe God. The row sparked anger among ethnic Malays and deep unhappiness among non-Muslims. What to watch: — If religious tensions worsen, the government may decide to put on hold further measures to withdraw special privileges for ethnic Malays in case this worsens Malay discontent and undermines support for the government. A severe worsening of tensions could raise the spectre of sectarian unrest. — If the government tries to woo Muslim voters with more conservative policies based on Islam, investors may be spooked. * CORRUPTION Malaysia used to be regarded as one of the region’s more reliable countries but worsening corruption and a perceived lack of judicial independence have damaged investment. What to watch: — Government efforts to deal with a scandal over a port trade zone close to the capital of Kuala Lumpur that exposed links between politics and business. False government guarantees given when the bonds were sold have triggered concerns among holders of $1 billion of bonds that they might not be repaid. — How Najib handles the dilemma of bolstering his core support bloc while also cracking down on corruption. Investors are watching to see whether promised reform materialises. — Indicators gauging corruption in Malaysia. Transparency International’s 2009 Corruption Perceptions Index saw a significant deterioration in Malaysia’s ranking to 56th out of 180 countries from 47th the previous year. * SECURITY The insurgency in southern Thailand has implications for Malaysia, particularly if it starts to draw more attention and sympathy from Malaysians for the ethnic Malay fighters across the border. A less likely danger is that al Qaeda-linked groups manage to establish a foothold in the area. Much of the leadership of regional al Qaeda offshoot Jemaah Islamiah came from Malaysia or spent considerable time there. The main JI organisation is thought to have abandoned violent attacks on foreign targets but splinter groups remain at large. In January, police said 10 people, nine of them foreigners, had been arrested on suspicion of links to international militant groups. Local media reports that the suspects were linked to the Nigerian passenger who tried to detonate a bomb on a flight into the United States on Dec. 25 could not be verified. What to watch: — Signs the insurgency in Thailand is becoming more of a political issue in Malaysia could worsen regional tensions and unsettle markets. Any evidence al Qaeda is gaining traction in the region would also be a negative factor for markets. (Editing by Andrew Marshall)

KUALA LUMPUR (Reuters) – Police stepped up security after the United States Embassy in Malaysia warned on Friday that criminal and terrorist groups were planning attacks against foreigners in the Borneo island state of Sabah.

A “warden notice” posted on the embassy’s website (malaysia.usembassy.gov/), dated Friday, said resorts located in isolated areas of eastern Sabah, a state bordering the southern Philippines, were of “present concern.”

It identified areas of eastern Sabah including Semporna and the islands of Mabul and Sipadan, as well as travel to and from the area.

The warning said there were indications criminal and terrorist groups “are planning or intend acts violence against foreigners,” notwithstanding the Malaysian government’s ability to detect and prevent such attacks.

KUALA LUMPUR (Reuters) – A Christian is challenging the confiscation of CDs referring to “Allah,” church officials said on Tuesday, a case that could deepen a row over Christians’ use of the word to refer to God in mostly Muslim Malaysia.

Rising religious tensions could threaten Prime Minister Najib Razak’s efforts to rebuild a ruling coalition hit by big losses in 2008 elections as well as Najib’s efforts to put Malaysia back on the global investment map, analysts said.

The latest case follows a recent court ruling that allowed a Catholic newspaper to use “Allah” in its Malay-language edition which prompted Muslims to protest at mosques and sparked arson attacks on nine churches and a Catholic school.

Jill Ireland Lawrence Bill, a member of Sidang Injil Borneo (SIB), the Borneo Evangelical Church, is seeking a court declaration that it is her right to possess the material.

KUALA LUMPUR (Reuters) – Malaysian Muslims rallied on Friday to protest against Christians using the word “Allah” for God after a spate of attacks on churches that threatened to stoke racial and religious tensions.

At least three churches were struck early on Friday in an unprecedented spate of attacks in this mainly Muslim country as a row over a court ruling that allowed a Catholic newspaper to use the word “Allah” in its Malay language editions presented a major challenge to the government.

The issue could pose a longer-term risk of political instability for Malaysia, which has been trailing Indonesia and Thailand for foreign investment and where investors have been frightened off by the prospect of an end to the predictable rule of the coalition that has governed for 52 years.

At Friday prayers, banners outside the country’s biggest mosque in the capital city of Kuala Lumpur read “Don’t pawn Malay pride for personal political gain” as hundreds of people gathered chanting “Allahu Akbar” (God is greatest) in peaceful protests.

KUALA LUMPUR (Reuters) – Arsonists attacked at least three churches in Malaysia early on Friday, prompting tighter police checks at churches nationwide ahead of mass demonstrations in a row over the use of the word “Allah” for the Christian God.

Protests were due to take place later in the day to denounce a court ruling last week in predominantly Muslim Malaysia allowing the Catholic Herald newspaper to use “Allah” in its Malay-language publication.

The impact on Malaysia’s financial market has been muted, but analysts said the issue could pose a longer term risk of political instability for Malaysia, which has been trailing Indonesia and Thailand for foreign investment.

A fire at the Metro Tabernacle church in suburban Kuala Lumpur, part of a Pentecostal group called “The Assemblies of God”, gutted a ground-floor administrative office.

Facebook group protesting Allah ruling, 5 Jan 2010/Bazuki Muhammad

Malaysia’s government has filed for a stay of execution pending its appeal of a court ruling allowing a Malay-language Catholic paper to describe the Christian God as “Allah”, amid growing Islamic anger in the country. We reported on the dispute here yesterday, including how it has spilled over into Facebook.

What lies ahead in this row threatening to increase religious tensions in the mainly Muslim but multi-racial Southeast Asian country?

Our Q+A asks why this is arousing so much anger, what happens next, whether there will be political fallout from the dispute and whether religious tensions present an important threat to religious, political and economic interests in Malaysia.

KUALA LUMPUR (Reuters) – More than 43,000 Malaysians protested online over a court ruling allowing a Catholic paper to use the word “Allah” to describe the Christian God, signaling growing Islamic anger in this mostly Muslim Southeast Asian country.

A group page on social networking site Facebook was drawing 1,500 new supporters an hour on Monday as last week’s court ruling split political parties and even families.

Among those who signed up for the protest were Deputy Trade Minister Mukhriz Mahathir, the son of Malaysia’s longest serving prime minister, Mahathir Mohamed, while Mahathir’s daughter Marina called critics of the court decision “idiots” in her weblog (rantingsbymm.blogspot.com/)

The government said on Monday it had filed an appeal against the court ruling amid concerns the issue could cause religious and racial conflict in this country of 28 million which has large Christian, Buddhist and Hindu minorities.

KUALA LUMPUR (Reuters) – Malaysia’s government will offer “credible” cuts in its emissions of carbon dioxide at the Copenhagen climate change summit in a bid to halt global warming, Prime Minister Najib Razak told Reuters on Sunday.

Najib will be among more than 110 world leaders who will meet in Copenhagen next week to attend a summit to try to clinch a deal on deeper emissions cuts by rich nations, steps by developing nations to cut their carbon pollution and finance to help the poor adapt to climate change.

“We are willing to offer our commitment, I am not just going to call on the developed world I am going to commit Malaysia and I am going to commit Malaysia to very credible cuts which means we have to spend, which we will do,” Najib said in the interview.

Najib said the cuts were still being worked on.