Playing a risky waiting game
The prime minister is holding back on the election date to shore up flagging support and give his reforms more time to work.
Reuters
Prime Minister Najib Tun Razak could call national elections anytime between now and April 2013, but he may wait to announce a generous budget on Sept 28 as he plays a risky waiting game.
The ruling Barisan Nasional coalition is widely expected to win the election but further gains by the opposition after its strong performance in 2008 could undermine Najib’s standing.
Holding back until after September would give Najib more time to shore up flagging support among ethnic Chinese voters, and to convince Malaysians that his reform efforts are working as he tries to reverse the ruling coalition’s worst election showing in 2008.
It would also make him vulnerable to any worsening of the global economy or the emergence of fresh corruption scandals that could push swing voters over to the three-party opposition.
The political atmosphere is becoming more tense as the election looms. Key opposition figures have complained of hate speech and acts of intimidation directed at them.
Its economy grew at a surprisingly strong annual pace of 5.4% in the second quarter, Bank Negara said, as a jump in private and government investment helped offset weakness in exports. The central bank expects growth this year to be at the top end of its 4%-5% forecast.
Following is a summary of key Malaysia risks to watch:
Election approaching
The polls will be a test of Najib’s efforts to reform the state-heavy economy and roll back repressive security laws without upsetting the status quo that has seen his dominant Umno party rule since independence in 1957.
The election promises to be the most fiercely fought in Malaysia’s history, and already tensions are high after Opposition Leader Anwar Ibrahim was charged over his role in a major street protest for electoral reform in April.
In addition, senior opposition politician Rafizi Ramli, who made a series of revelations about alleged government wrongdoing, was arrested in early August for disclosing bank details related to a high-profile corruption case involving the family of a former minister.
Meanwhile, the government is planning a fresh round of cash handouts to poorer families, Deputy Prime Minister Muhiyuddin Yassin said in June, a move aimed at shoring up support among undecided voters.
In July, Najib – facing growing public demand for greater political and social freedoms – said he would scrap the colonial-era Sedition Act, which has been used over the years to silence dissent.
Firm domestic demand helped cushion Malaysia’s economy from the worst of the slowdown in global activity in the first half of 2012 and the trend is expected to continue as government and government-linked companies spend on big projects.
At the same time, heavy government spending and an overly generous budget would sharpen concerns over Malaysia’s chronic budget deficit. Ratings agencies have raised concerns about Malaysia’s public finances and its reliance on oil revenue.
Najib’s personal approval rating remains high but support for his ruling coalition is sliding. According to a June survey, Najib’s rating eased one point to 64% while the coalition’s popularity fell 6 points to 42%.
Two July defections from coalition in what has traditionally been a safe bank of seats in the east Malaysian state of Sabah have added to Najib’s worries.
What to watch:
- Clues about the timing of the election. Signs that the global economy is deteriorating more rapidly could prompt Najib to rush to the polls before Malaysians feel the pain from a slowdown.
- Large anti-government protests, and the government’s response to them, as well as racial and religious relations. Najib is trying to reach out to non-Muslim minorities who make up about 40% of the population. Last year, he set up diplomatic ties with the Vatican in a bid to win Christian support.
