Ruling combine in Malaysia has got another setback when a prominent opposition leader Anwar Ibrahim got elected to parliament recently. Resurgent after the lifting of a ban on holding office expired in April, Anwar Ibrahim, Malaysia’s opposition leader and former deputy Prime Minister won a resounding victory, despite facing fresh accusations of sodomy, in a by-election on 26 August in a seat vacated by his wife and his success to date has rattled the ruling coalition and undermined Badawi’s leadership.
As he rejoined parliament on August 28 after a decade’s absence, Anwar is seen busy scheming his immediate strategy to bring down the Abdullah Ahmad Badawi government and implement ambitious reforms. He has been trying to make his political comeback since a ban on seeking public office, related to a previous corruption conviction, expired in April. Anwar’s re-entry now into Parliament is expected to complete his political rehabilitation. He was fired by Mahathir as deputy prime minister in 1998 and jailed for six years after he was convicted of corruption and sodomizing his family driver. The sodomy conviction, which Anwar charged was a politically motivated frame-up, was overturned by Malaysia‘s top court in 2004.
The governing Badawi coalition currently holds 140 seats in the 222-seat parliament. Anwar’s coalition, Pakatan Rakyat, made up of three parties, holds 82 seats. Anwar has pledged to oust Prime Minister Abdullah Badawi said that his deadline to secure enough defectors from the government to overthrown Badawi by 16 September was still on. The governing coalition currently holds 140 seats in the 222-seat parliament. Anwar’s coalition, Pakatan Rakyat, made up of three parties, holds 82 seats. He needs to persuade 30 government MPs to defect. He says the entire ruling party clique and their cronies who have amassed billions. He said that his deadline to secure enough defectors from the government to overthrown Badawi by 16 September was still on.
Former premier Mahathir Mohammed, who has slammed the policies of his successor Badawi for quite time now, said he believed many government supporters voted for Anwar “so that Abdullah will realize that his leadership is no longer wanted.” Mahathir asked Abdullah to take responsibility and resign now. Mukhriz Mahathir, Mahathir’s lawmaker son, said that that with Anwar Ibrahim in Parliament, the parliamentarians cannot afford to have a weak leadership because it could lead to our downfall.
Once the protégé of former Prime Minister Mahathir Mohamad, Anwar was forced from office in 1998 on corruption and sodomy charges that he denounced as part of a conspiracy to ruin his political ambitions. Ten years on, he is being backed by the biggest number of opposition MPs in Malaysia‘s history in his quest to oust the Barisan Nasional coalition that has ruled the country for the past 50 years. But to fulfil his dream he must win the backing of 30 legislators from the ruling coalition to get a majority in the 222-member parliament. Besides, Anwar must also fight another charge of sodomy in a court case due to start on September 10. Previous charges of sodomy charges were overturned by a court in 2004 resulting in Anwar’s release from jail after serving six years imprisonment.
Opposition Game Plan
Known for his corruption record, Anwar who many see as a possible future prime minister wants to put Malaysia back on a fast track to becoming a developed nation and says he will stamp out corruption and end an affirmative action program for ethnic Malays he says has failed to help them and made the country uncompetitive. The program gives ethnic Malays, who make up more than half the population, privileged access to education and civil service jobs as well as preferential loans and company ownership. Its opponents say it has produced graduates who are unfit for work and engendered a system of cronyism that has stymied economic growth.
Anwar, keen to overthrow the government of Prime Minister Abdullah Ahmad Badawi, has promised to reinvigorate Malaysia’s economy, which has lost some of its attractiveness as an investment destination to faster-growing regional rivals. A research report said they expect the government to pull all stops with an expansionary, populist budget, designed to yield maximum political mileage during this critical period for the government. The twin overriding objective would be to placate public unhappiness over soaring inflation, as well as keep the BN (ruling coalition) component parties happy and minimise the possibility of further defections to the opposition coalition.
Shaky Ruling Front?
Abdullah, however, played down the significance of Anwar’s triumph. Abdullah resisted calls to resign after the March elections. In the March elections, Prime Minister Badawi’s coalition won 140 of the 222 seats, while Anwar’s three-party alliance won an unprecedented 82 — 30 short of a majority — and wrested control of five states. Abdullah’s party has been the main party in a coalition that has governed Malaysia uninterrupted since independence from Britain in 1957, but which was seriously weakened for the first time in the March elections. Each major ethnic group Malays, Chinese and Indians, is represented by its own political party.
Cracks started to appear in the ruling coalition especially from the United Malays National Organization, the biggest government party as there were calls for Prime Minister Badawi to quit. The government has been reeling since losing its usual two-thirds majority in an election in March, but it retained a parliamentary majority and is stable. The last time opposition parties made similar gains in Malaysia was 1969, an election where victory parties degenerated into deadly ethnic riots that scarred the national consciousness.
The ringgit currency and the stock market have fallen sharply since the opposition deprived Barisan of its two-thirds parliamentary majority in March. The prospect of prolonged political upheaval has hit Malaysian assets hard, even though some economists have lauded Anwar’s plans and he is viewed by many investors as a safe pair of hands after holding the post of finance minister in the 1990s.
People welfare polices
Abdullah is facing renewed calls to step down from some in the United Malays National Organisation (UMNO), the main party in the coalition that has ruled Malaysia for five decades, after Anwar’s better-than-expected election result.
Emerging political scenario has made the ruling coalition a bit nervous. The Malaysian government is expected to announce several populist measures in its 2009 budget to ward off the challenge from Anwar Ibrahim as it tries to tighten its weakening grip on power in the face of economic and political challenges.
Prime Minister Abdullah has already said that the budget may include some relief for the poor to shield them from high prices, and analysts said the steps could include cash handouts, incentives for small and medium entrepreneurs, and tax cuts. Annual inflation in Malaysia surged to 8.5 percent in July, the highest since December 1981 and well above expectations, and the central bank has said it is likely to stay high this year and early next year.
The government has already given a taste of populist economic policy by announcing a surprising cut in fuel prices last week. “The fiscal deficit was brought down from 5.3 percent of GDP in 2002 to 3.2 percent of GDP in 2007, but it is projected to widen to 3.5-4.0 percent in 2008-09, reflecting largely higher operating and development expenditure,” CIMB said in its budget preview. Malaysia is going to tolerate for a couple more years deficit budget spending, which has been the case since 1998,” According to Citigroup, the average annual development expenditure is likely to be 53-57 billion ringgit in 2009-10, significantly above the average of 38.9-41.6 billion ringgit in 2006-08. The extent of the government’s generosity would only be capped by concerns over the size of the fiscal deficit, though windfall petroleum revenues would provide some important relief.
The government has also brought forward fuel price cuts after it slashed subsidies earlier this year in a move that was lauded by economists but shattered its popularity. “The budget would also aim to shore up support for the government following the huge fuel price hike in June and the electoral setback earlier this year,” the United Overseas Bank said in a recent report. The government is also expected to announce a significant increase in development spending, which analysts say could slightly widen the fiscal deficit.
The forthcoming budget session in Kuala Lumpur would be fascinating experience for both the ruling and opposition coalitions. The future course of the politics and government also would be determined then. And, that will decide the welfare schemes for the people at large – both the majority and minorities. However, basic character of the economic policies of Malasiya would remain unchanged.