Newly elected Prime Minister Najib Razak said he would press ahead with a multibillion-dollar modernization program for Malaysia’s economy, adding that he hoped it would help reunite the Southeast Asian nation after the most fiercely contested election in its history.
Mr. Najib’s National Front coalition secured around 60% of the seats in Sunday’s ballot, but the vote was heavily split between Malaysia’s thriving cities, which largely voted for opposition parties, and rural, mostly ethnic-Malay areas that threw their support behind Mr. Najib, the 59-year-old
The plans include investing in new industries such as health care and strengthening its logistics and energy capabilities. Mr. Najib is also hoping for a further lift after earlier easing some race-based quotas and repealing a repressive colonial-era security law that allowed for detention without trial.
The British-educated aristocrat’s approach is a more modest version of overhauls than those pushed on the campaign trail by Mr. Anwar, who is 65 years old and contesting what he said would be his last election. The prime minister’s chief rival argued for a “big bang”-style transformation that would remove affirmative action and replace it with a more-inclusive welfare system, along with immediately freeing up the country’s heavily state-influenced media.
Mr. Najib’s election win buoyed financial markets, and the Prime Minister viewed their response as a stamp of approval for the direction he is trying to take the country. The benchmark stock index rose 1.4% to a record 1776.73 on Tuesday, after surging 3.4% on Monday, while Malaysia’s ringgit currency gained 1.9% against the dollar in the first two trading days of the week.
“I was happy to see the market strengthen so much. The word is out that Malaysia is now on the ‘buy’ list,” he said.
Still, many political analysts described Sunday’s vote as polarizing, deepening many of the divisions that run through Malaysia, as the well as the gulf between those who have benefited from years of rapid growth, and those who have been left behind.
Mahathir you are one of the major cause of Najib’s poor performance. You and Perkasa have caused BN to loose thousands of votes. I do expect Najib to do the right thing now because unmoved by shenanigan Mahathir trading starts in Umno. Newly installed PM Najib Razak and his deputy Muhyiddin Yassin are out in the market wooing warlords and the ‘emperor’ (ex-PM Dr Mahathir Mohamad) to gain favours to take over the crown of Umno president in the coming Umno general election expected at the end of the year.Mahathir is also in the market to put his son, now Kedah MB, Mukhriz, in a good position, possibly as a running-mate as deputy president, either to Najib or Muhyiddin. That way Mahathir junior can be on the fast track to power before his father kicks the bucket as he is now 88 years old.
n his first remarks to the international media following the election, Mr. Najib told The Wall Street Journal in an interview on Tuesday that expanding the size and scope of the country’s economy would help draw support back to the National Front, which has run the country uninterrupted since independence from Britain in 1957.
“My next task is to harmonize the racial makeup of Malaysia,” he said.Mr. Najib had launched a series of economic and social overhauls before the election, rolling back parts of a decades-old affirmative-action program designed to raise incomes among the generally poorer ethnic-Malay majority. Now, he says, he aims to accelerate a $444 billion plan in public and private outlays to help increase local consumer spending and make Malaysia more competitive against wealthier rivals such as South Korea and Singapore.
“There are those who will expect a bit more because they voted for you, but you still have to keep things in balance,” Mr. Najib said.
Malaysia’s racially divisive election result has sparked a battle within the country’s ruling party that is likely to slow Prime Minister Najib Razak’s drive to reform the economy and roll back policies favoring majority ethnic Malays.
Najib’s Barisan Nasional (BN) coalition retained power in Sunday’s election . But the coalition lost the popular vote and turned in its worst-ever electoral performance as it was heavily abandoned by the minority Chinese and rejected by many voters of all races in urban areas.
Najib was quick to blame the outcome on the swing by Chinese voters to the opposition alliance, putting a racial interpretation on the result that has struck a chord with traditionalists in his United Malays National Organisation (Umno).
Umno, which dominates Barisan, now faces a leadership election in October or November that is likely to be fought between traditional and reformist wings.
“The ideological lines have been drawn within Umno,” said Khairy Jamuluddin, a reformist who heads the party’s youth wing, in a posting on Twitter. “Game on.”
Any major reforms are likely to be postponed until the leadership is decided, although Najib has said he will push for national “reconciliation” and press ahead with a $444 billion economic masterplan aimed at attracting investment and doubling incomes by 2020.
Conservatives have blamed ethnic polarization and Chinese “disloyalty” while reformists have urged Najib to expand steps to make Umno more inclusive beyond its base of poor, rural Malays.
Utusan Malaysia, a newspaper controlled by Umno, sought to portray Sunday’s election result in racial terms, with one headline saying: “What more do the Chinese want?”
Malaysia’s former and longest-serving prime minister, Mahathir Mohamad, a powerful figure in Umno, was quoted by local media as saying “ungrateful Chinese” and “greedy Malays” were to blame for the result.
“It may be the starting shot of what’s to come for Najib,” Ooi Kee Beng, deputy director of Singapore’s Institute of Southeast Asian Studies, said of conservative reactions to the result. “At the same time, I think he is their (Umno’s) best asset despite everything.”
Fraud
Najib also has to deal with a strong opposition that is claiming that Barisan won the election through fraud. On Wednesday, tens of thousands of opposition activists thronged a stadium on the outskirts of the capital Kuala Lumpur in response to a call from opposition leader Anwar Ibrahim.
“This is merely the beginning of the battle between the people and an illegitimate, corrupt and arrogant government,” Anwar, a former deputy prime minister, told the crowd, many of whom wore black to symbolize mourning.
Najib, the 59-year-old son of a former prime minister, had far higher approval ratings than his party in the run-up to the election and has few obviously strong rivals to replace him.
Taking power in 2009, he staked his fortunes on reforms aimed at spurring growth, increasing transparency and dismantling affirmative action policies.
But Najib’s ambitions have been curbed by conservative interests within Umno. He has failed to come up with major steps to roll back the ethnic privileges that are seen as having benefited an elite of well-connected Malays more than the poor majority.
The government does not provide an ethnic breakdown of the population, but Malays make up about 60 percent of the 28 million people, while Chinese comprise more than 25 percent. The country also has a significant minority of ethnic Indians.
Barisan won 133 seats in the 222-member parliament, but only 47 percent of the popular vote, compared to the opposition’s 50 percent.
“The polarization in this voting trend worries the government,” Najib said. “We are afraid that if this is allowed to continue, it will create tensions.”
But Barisan has also come in for criticism from younger voters for corruption and patronage politics that critics say have been the hallmark of its 56 years in power.
Liew Chin Tong, an opposition member of parliament from the southern state of Johor, said Najib appeared to be taking the wrong message from the election result.
“It was not just the Chinese who swung against Barisan Nasional. There were many young first-time and second-time voters who voted against the BN,” he told Reuters.
Najib now looks more vulnerable to traditionalists in his party who are opposed to his tentative steps to phase out the policies that favor ethnic Malays, introduced two years after traumatic race riots in 1969.
Those policies have been a pillar of Umno’s support but have been a prime cause of ethnic Chinese and Indian alienation and investors say they stunt growth and investment in Southeast Asia’s third-largest economy.
Najib’s efforts to roll back these policies and other politically sensitive reforms – such as the introduction of a consumption tax to reduce Malaysia’s dependence on oil revenues and lowering fuel and food subsidies to tackle a chronic budget deficit – could be put on the backburner for now.
“The outlook for direct investment will remain uncertain until it becomes clearer whether or not Najib’s reform-minded policies will continue,” HSBC economists said in a note after the result.
The opposition’s Liew said Najib’s choices of cabinet members in the coming days would be a crucial indication of whether his new government would try to appeal across ethnic groups or only to its Malay base.
“His comments on the Chinese is rhetoric,” Liew said. “What we need to see is who he will include in his cabinet. Will it be made up of Umno extremists or younger members from the middle ground? We also have to see if he will include the Chinese.”
His spending program, known locally as the Economic Transformation Plan, is a bid to drag Malaysia out of the so-called middle-income trap, which forces many emerging economies to compete with each other in producing cheap exports instead of developing more-sophisticated, value-added products.
In previous interviews, Mr. Najib has talked widely on this theme, describing his goal to push Malaysia onto a higher-growth path as the main focus of his administration.
