The decision by the opposition Islamic party PAS to impose pre-conditions for the so-called "Malay Unity" talks is seen as a blow for Prime Minister Mahathir Mohamad, who had been banking on the discussions to reverse the dwindling fortunes of his United Malays National Organization (Umno). The PAS pre-conditions and Umno's apparent reluctance to accept them have effectively scuttled the talks and placed them in cold storage. 

PAS has demanded that the federal government reinstate oil royalties for the PAS-ruled state of Terengganu, lift a ruling that restricted the frequency of its party newspaper Harakah, and drop a proposal to ban the use of the word Islam in party names. 

Mahathir responded that the first two did not come under Umno's jurisdiction. PAS, he said, should instead forward its request to the government. He added that if all PAS pre-conditions were accepted beforehand, there would be no more need for the two parties to meet. 

But PAS president Fadzil Noor responded by arguing that since it was Umno who "pressured" the government to take away the oil royalties and to curb Harakah, it could also reverse the situation. "If Umno wants to go on with the Malay unity talks, then it should begin to work towards this," he said. 

PAS seemed to have second thoughts about the meeting with Umno after the authorities clamped down heavily on a series of opposition gatherings - each of which drew crowds ranging from 3,000 to 10,000 - over the last two weeks. 

Umno had mooted the "Malay unity" talks after the ruling coalition was jolted by a shock by-election defeat in Lunas in northern Kedah state last November. Umno later agreed to expand the scope of the talks to include national issues (as PAS had wanted) after earlier insisting that they should be confined to discussing Malay unity. 

The earlier insistence resulted in the opposition National Justice Party (Keadilan) turning down an invitation to the talks. Keadilan pointed out that though it was a Malay-based party, it was multi-ethnic and therefore the party wanted to discuss national unity and not Malay unity. 

Top of the PAS agenda for the talks was its concern over the state of the judiciary - especially the plight of jailed deputy premier Anwar Ibrahim. Found guilty of abuse of power and sodomy, Anwar who maintains his innocence, is now serving jail terms totaling 15 years. Bringing up the subject of Anwar, who looms large in the political landscape, in the talks would have put Umno in a delicate position - he remains a thorn that refuses to go away. 

But Umno secretary-general Khalil Yaakob said Mahathir, the party president, had given an assurance that the party was prepared to discuss any topic with PAS. He said that PAS' demands should also be included in the agenda. 

Umno badly needs these talks to shore up waning support for the party from its traditional support base, the ethnic Malays, who make up more than half the population. "Everyone can feel the mood that Umno desperately needs this meeting," said one political analyst. 

No matter what the agenda, the meeting if it had taken place, would invariably have focused attention on Malay unity and deflected attention away from the reformasi movement's opposition to corruption, cronyism and abuse of power. 

Malaysian political parties have traditionally relied on ethnic and religious sentiment to win votes. But since the reformasi movement was unleashed in September 1998, it has inspired many Malaysians to bridge ethnic and ideological gaps in demanding an end to Mahathir's 20-year rule and in calling for wide-ranging reforms. It is a trend that scares many politicians who are used to using racial rhetoric to whip up support. 

In putting a wet blanket on the talks, PAS appears to be belatedly recognizing lingering uneasiness within the reformasi movement over Umno's motive for initiating the talks. Some fear that Umno will try to extract the most political mileage from the talks, to break the unity of the opposition front, and to confuse reformasi street demonstrators. Others point to PAS' unhappy stint with the ruling coalition for a brief spell in the 1970s and say the party has nothing to gain by engaging with Umno. 

Had PAS gone ahead with the talks with Umno, it could have also jeopardized PAS' relationship with non-Muslim opposition front supporters, who might feel betrayed. In recent months, PAS has appeared noticeably more circumspect in issuing statements that could alarm non-Muslims, earning it some goodwill. 

PAS may have realized that it has little to gain politically from the talks with Umno - not when more than half the Malays are so enraged with Umno and the ruling coalition over perceived injustices, abuse of power, and high-level corruption. 

The PAS pre-conditions carry with them huge financial implications. The PAS-controlled Terengganu state government lost some 800 million ringgit (US$210 million) in annual revenue when petroleum royalty payments due to the state were blocked. The federal government said these were not royalties but "goodwill payments" that it now wanted to channel directly for development projects in the state, thus bypassing the state government. 

The party lost another cash cow when the Home Ministry slashed the frequency of Harakah from twice a week to twice a month. The bilingual (Malay-English) tabloid, with a circulation of more than 250,000, is one of the largest newspapers in Malaysia. 

In a sense, the breakdown of the "Malay unity" talks reflects what some analysts say is a gradual trend away from ethnic politics. It's a trend that could hurt the fortunes of the ruling coalition and its race-based parties. The biggest beneficiary from this trend is Keadilan, which has generated much non-Malay interest since its Lunas by-election win and has organized high-profile protests in recent weeks. 

"I think Keadilan has stronger support than PAS because it not only has Malay support but support from other races," says ethnic Malay factory worker Jamal Z, a Keadilan supporter who campaigned in Lunas. 

While that may be debateable, one thing is fairly certain: as Malaysians become more educated and politically mature, the old politics of race will gradually die but it will be some time before it can be buried. Many politicians still carry the baggage of years of racial politicking and alas find it an all too convenient rhetorical tool to create fear and shore up dwindling support for outdated race-based politics. But the good news is that fewer and fewer Malaysians are lapping it up.