‘Martyr Politics’ Option Closes for Anwar as Malaysia Election Fight Looms

Anwar Ibrahim’s acquittal on sodomy charges pushes the Malaysian opposition leader to shed his image as political victim as he tries to widen support for his coalition and blunt the impact of government election sweeteners.

“For Anwar the test now is to move out of what I call martyr politics to offer a more positive alternative to voters,” said Bridget Welsh, an associate professor in political science at Singapore Management University. “The number one issue is the economy. The public is looking for leaders who are able to manage Malaysia through economic turmoil.”

Anwar pledged yesterday to “clamor for reform” as he leads a disparate opposition alliance seeking to unseat Prime Minister Najib Razak’s ruling coalition after 55 years in power in elections that must be held by June 2013. Najib said in a statement the decision proves the judiciary’s independence and clears the government “once and for all of the many baseless accusations of political interference” against Anwar.

Both leaders are aiming to convince Malaysia’s 28 million people they are the right choice to restructure a $238 billion economy beset with race-based preferences that the World Bank warned is holding back growth. Najib may call an election as early as March to capitalize on budget handouts passed at the end of last year, said fund manager Nik Hazim Nik Mohamed.

“This feel-good factor will actually be a good platform for the ruling party to call for elections,” Nik Hazim, who helps manage 2.6 billion ringgit ($824 million) of funds at Kenanga Investors Bhd. in Kuala Lumpur, said in a telephone interview. “I don’t think they will want to wait longer than that because that effect will diminish.”

Cash Payments

Gross domestic product may expand 5 percent to 6 percent this year after projected growth of as much as 5.5 percent in 2011, Najib said in an annual budget speech on Oct. 7, during which he unveiled wage increases for civil servants and one-time cash payments to low-income families. The moves sparked speculation of an early election, which increased last month when Najib announced that preparations had begun for a vote.

The FTSE Bursa Malaysia KLCI Index (FBMKLCI) fell 0.1 percent as of 3:14 p.m. local time after advancing 0.5 percent yesterday. The ringgit, which has outperformed major Southeast Asian currencies in the past month, rose 0.4 percent.

‘Clear Fight’

The election “will be a very clear fight now,” Scott Lim, who manages 350 million ringgit as chief executive officer at Kuala Lumpur-based MIDF Amanah Asset Management Bhd., said in a telephone interview. “After the election is over, nobody can accuse the other party of being unfair or having a political advantage.”

The acquittal may be seen as increasing political risk, Credit Suisse Group AG analyst Tan Ting Min wrote in a report today. The stock market could be “range bound” before general elections likely to be held in the first half of this year as investor avoid significant exposure until knowing the outcome.

Najib securing a two-thirds majority in the election would be positive for markets, according to the report.

For Anwar, the acquittal is his second in the past decade on charges of sodomy, which is illegal in Muslim-majority Malaysia and carries a sentence of up to 20 years. The former deputy to Prime Minister Mahathir Mohamad spent six years in jail for sodomy and a separate corruption charge before Malaysia’s highest court overturned the sex conviction in 2004.

U.S. Welcome

“The Malaysian media was fully utilized to demonize me virtually every night on prime time news, either as a sexual pervert, sodomite, Jewish agent, CIA agent, or a lot of racist slurs, that I am pro-Christian,” Anwar told Bloomberg Television yesterday. “To use the sodomy and sexual perversion in order to appeal to the conscience and sentiments of the rural masses, particularly the conservative Muslims, is clearly pathetic.”

The U.S. welcomed the acquittal. “The ruling reflects favorably on the independence of Malaysia’s judiciary and presents an opportunity for all Malaysians to focus on the future,” State Department spokesman Victoria Nuland said in a statement.

Anwar, 64, leads the three-party People’s Alliance, which aims to unwind economic preferences for ethnic Malays and promote greater political freedom. The coalition was formed before the 2008 election, when it captured 37 percent of seats in the 222-member Parliament, the narrowest victory for Najib’s ruling 13-party National Front coalition in five decades.

Uniting Force

Anwar has acted as a uniting force, holding together coalition members with divergent ideological views. The People’s Alliance coalition includes Anwar’s People’s Justice Party, the Pan-Malaysian Islamic Party and the Democratic Action Party. Some Pan-Malaysian members espouse the implementation of Islamic law, while the Democratic Action Party’s secretary-general is Penang Chief Minister Lim Guan Eng, Malaysia’s only ethnic- Chinese state leader.

Theft, illicit sex, alcohol consumption and renouncing Islam are crimes under hudud, or Islamic law, and punishment can involve whipping, stoning to death or amputation of limbs. The Pan-Malaysian Islamic Party’s support for implementing hudud has faced objections from the Democratic Action Party. Malaysian Information, Communications and Culture Minister Rais Yatim said yesterday the verdict was proof of an independent judiciary and that the government planned to “extend this transparency to all areas of Malaysian life.”

Preferential Treatment

Najib, 58, took over as prime minister in April 2009, after Abdullah Ahmad Badawi resigned mid-term to take responsibility for losing control of five of 13 states in the elections. Since then, Najib has sought to blunt the opposition’s momentum by introducing rules to roll back some preferential treatment for ethnic Malays and promising to repeal an internal security law that allows for detention without trial.

Abdul Razak, Najib’s father, initiated the ethnic preferences in 1971 as the country’s second prime minister as he sought to raise the share of national wealth to at least 30 percent for the Bumiputeras, or “sons of the soil,” about 60 percent of the population. The plan gave Malays and some indigenous groups cheaper housing as well as priority for college places, government contracts and shares of publicly traded companies.

‘Reform Card’

“The opposition will play up the reform card, which appeals to younger voters,” said Joseph Chinyong Liow, associate dean of the S. Rajaratnam School of International Studies in Singapore. “Najib is trying to pull the rug from under their feet by saying, ‘Look, I have been initiating all these reforms.’”

Najib’s ruling coalition has won five by-elections in the past 15 months after implementing stimulus measures that enabled the economy to grow 7.2 percent in 2010, the strongest expansion in a decade. The opposition has kept up pressure for reform, with police in July firing tear gas and arresting more than 1,600 people protesting in Kuala Lumpur for cleaner and fairer elections.

“Both sides have held their ground quite well, so the campaign will be important,” Ooi Kee Beng, deputy director of the Institute of Southeast Asian Studies in Singapore, said by phone. “Anwar’s a fantastic speaker, which the opposition will need in the election whenever it’s called.”

To contact the reporters on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net; Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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