Pak Lah and Najib buying more time


Abdullah Risks Party’s Grip on Malaysia by Staying On (Update1)

By Douglas Wong and Angus Whitley

April 29 (Bloomberg) — If Malaysian Prime Minister Abdullah Ahmad Badawi is politically doomed, he isn’t acting like it.

Abdullah has come under pressure to step down since he last month led the United Malays National Organisation and its coalition partners to the smallest electoral victory since independence in 1957. Opposition leader Anwar Ibrahim is seeking to court enough lawmakers to topple the government; Mahathir Mohamad, who hand-picked Abdullah as his successor after serving 22 years as prime minister, is leading calls for his ouster to protect UMNO’s half-century grip on power.

Abdullah says he plans to stay put at least until party elections in December, fighting his detractors with policies to bolster popular support including larger gasoline subsidies for the poor and a new anti-corruption commission.

“What Abdullah is trying to do is buy a little bit more time,” said Mohamed Mustafa Ishak, professor of politics at Universiti Utara Malaysia. “At best, he can delay his downfall.”

The coalition lost its two-thirds majority in the March 8 election for the first time since 1969, after which the government passed laws giving the ethnic Malay majority preferential treatment for college places, jobs and housing. Anwar, 60, focused his campaign on scrapping that system, which he says encourages corruption.

The race-based rules were introduced to help Malays catch up with ethnic Chinese business owners. Abdullah, 68, said last month the government will continue policies to close the gap.

Anwar’s Candidacy

“I can’t see how UMNO can save itself,” said Abdul Aziz Bari, a professor at the International Islamic University Malaysia. Abdullah “can’t afford to delay” his resignation, he said. “The writing’s on the wall.”

Anwar, a former deputy prime minister who was jailed on corruption charges he denied, led a three-party alliance to victory in five of Malaysia’s 13 states. He plans to run for a seat in parliament, which convened today, now that a ban resulting from his jail sentence has expired.

“There’s no turning back,” Anwar told reporters after attending parliament, as a visitor, for the first time in a decade. “Now that I’m here, I’ll stay.” He said it’s too early to say which seat he’ll contest.

Anwar’s People’s Alliance already scrapped racial quotas for tenders in states it controls. Under the current system, public universities give Malays easier entry than Chinese and Indians. Companies must also sell 30 percent of their shares to Malays and disclose how many they employ if they list on the stock market.

Najib Razak

Najib Razak, Abdullah’s deputy, has stood by his boss and worked with him on the policy response. Najib, 54, said this month he has seen no signs that Anwar can tempt lawmakers to switch camps.

Abdullah’s policy pledges “should have been carried out four years ago when he received the people’s mandate to fight corruption,” Anwar’s People’s Justice Party said in an April 22 statement. Abdullah won a landslide election victory in 2004.

His multiparty National Front coalition already faces declining support from Chinese and Indian minorities upset by the preference system.

Investment projects and business confidence in Malaysia have stalled since the election. The key stock index slumped the most in a decade on the first trading day after the result, and is down 15 percent from a January record.

In Penang, a west Malaysian state that fell to the opposition, the construction of a second bridge to the island has been delayed by nine months, state-run contractor UEM Builders Bhd. said this month.

Train Delay

The government also dropped a proposed 8 billion-ringgit ($2.5 billion) high-speed rail link to Singapore, state news service Bernama said April 23. Abdullah said last week that many projects are under review.

“Investors are cautious because it appears power is draining away from Abdullah by the day,” said Song Seng-Wun, an economist at CIMB-GK Research in Singapore.

Mahathir started trying to remove Abdullah in 2006, accusing him of achieving nothing since taking office three years earlier. Trade and Industry Minister Muhyiddin Yassin said Abdullah should step down as UMNO head for the good of the party, Bernama reported April 13.

Party rules that Mahathir introduced require 30 percent of UMNO’s 191 regional party offices to back a leadership change. That’s a hurdle Abdullah’s only public challenger to date, Tengku Razaleigh Hamzah, may struggle to clear, Aziz said.

Hard to Oust

In an April 4 speech, Razaleigh, a former finance minister, urged UMNO members to hold a special meeting to address what he called an “emergency” in the party. “What we lack is leadership,” Razaleigh said.

Abdullah’s most immediate challenge is the prospect of a no- confidence vote in the new parliament.

“We opposition parties on our own won’t have a big enough voice,” said Lim Kit Siang, a lawmaker for the Democratic Action Party, part of Anwar’s alliance. “We can move a motion, anyone can do so, but to get that vote on our own will be a problem.”

A more likely scenario is for disgruntled coalition lawmakers to abstain from voting on a minor bill, allowing the government to be defeated, said Andrew Aeria, a political analyst for Enterprise LSE, the commercial arm of the London School of Economics.

“If this happens, Abdullah’s position would be untenable,” Aeria said. The opposition could then bide its time before offering to “save the country,” he said.

To contact the reporters on this story: Douglas Wong at; Angus Whitley in Kuala Lumpur at



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