April 3 (Bloomberg) -- Malaysian Prime Minister Najib Razak dissolved parliament in preparation for elections that will determine whether his ruling coalition extends its unbroken hold on power since independence in 1957.
Under Malaysian law the contest must be held within 60 days of the dissolution of the legislature. The Election Commission will meet in a few days to announce a date for the poll, spokesman Sabri Said said in a text message.
“The ultimate power of choosing the government lies in the peoples’ hands,” Najib said in a televised address. “Over the past five decades we’ve achieved stability and prosperity in this country. I hope we’ll continue this tradition.”
Najib will lead Barisan Nasional to the polls for the first time since he took power four years ago following the 13-party coalition’s narrowest election win ever in 2008. The prospect of an even closer contest against Anwar Ibrahim’s resurgent opposition alliance has helped make the FTSE Bursa Malaysia KLCI Index one of the worst performing Asian benchmarks this year.
“This election is probably going to be the closest ever in Malaysian history,” Mohamed Nawab Mohamed Osman, research fellow at the S. Rajaratnam School of International Studies in Singapore, said by phone. “It’s a do-or-die sort of election. On the day when the results are going to be announced, there will be a lot of power jockeying. It’s going to be a good two or three months before things are going to settle down.”
The KLCI index index added less than 0.1 percent to 1,685.40 at the close in Kuala Lumpur, after dropping as much as 3.1 percent. The ringgit, Asia’s fifth-worst performing currency this year, gained 0.1 percent to 3.08 as of 6:23 p.m. local time. Since Najib took office, the KLCI index has gained 82 percent as of yesterday’s close, about three times less than benchmarks in Thailand, Indonesia and the Philippines.
Najib, 59, said all government-controlled state assemblies are also dissolved. In the 2008 election, when Abdullah Ahmad Badawi led Barisan Nasional, the ruling coalition lost control of five of the country’s 13 states to Anwar’s People’s Alliance. It later regained control of Perak state following defections.
Barisan Nasional currently controls 137 seats in Malaysia’s 222-member parliament, with Najib’s United Malays Nasional Organisation its biggest component. Anwar’s alliance holds 75 parliamentary seats.
Najib is more popular than his government, according to the Merdeka Center for Opinion Research. His approval rating slipped to 61 percent in February from 63 percent in December, a survey of 1,021 voters conducted Jan. 23 to Feb. 6 on the country’s peninsula showed. By contrast, 48 percent of respondents said they were “happy” with the government.
Barisan Nasional has struggled to reverse perceptions of entrenched corruption and sufficiently address concerns over higher living costs, according to Ibrahim Suffian, a political analyst at the Merdeka Center. More voters under 40 years of age are now accessing news reports online, he said, and “the government narrative isn’t always dominant anymore.”
“Economic growth was pretty strong at the end of last year and we can see some improvement in the numbers, but not nearly enough to significantly boost the government’s chances,” Ibrahim said by phone.
Malaysia’s economy has expanded by more than 5 percent for each of the past six quarters through the end of 2012, buoyed by domestic demand and investment. Najib has given cash handouts and raised civil servant salaries to woo voters while planning $444 billion worth of projects over the next decade from mass rail to oil storage that have attracted companies such as Carrefour SA and General Electric Co.
He has rolled back some preferences for ethnic Malays and indigenous peoples known as bumiputeras to encourage investment, including doing away with a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 percent of their equity for this group. The policy of favoring ethnic Malays was put in place by his father, Abdul Razak Hussein, who was the country’s second prime minister.
Anwar, 65, leads an ideologically disparate opposition that includes one party with mostly ethnic Chinese and another whose members support the implementation of Islamic law. He spent six years in prison until 2004 on corruption and sodomy charges that he says were politically motivated. The charge of having sex with a man was eventually overturned.
“We remain committed to champion the cause of the common folk of all racial groups and religious denominations,” Anwar told reporters today in Petaling Jaya, outside of Kuala Lumpur. “We have worked very hard and I’m rather cautiously optimistic of the outcome.”
Anwar has pledged to revamp racial preferences for bumiputeras, and trim the budget deficit through cost savings if he wins power. His coalition also wants to raise the minimum wage, lower oil and electricity prices, and increase cash handouts to the elderly and students.
The opposition will win the election with a majority of more than 10 seats, Anwar said in a March 8 interview. Today he said he would leave his seat in the opposition stronghold of Penang to contest in Perak state, where Najib’s coalition won 13 of 24 seats in 2008.
“I don’t want to sound over-confident, but I believe looking into the trend now it will be a comfortable majority,” he said.
Anwar backed mass demonstrations last year and in 2011 that were organized by the Coalition for Clean and Fair Elections, or Bersih, to demand changes to the country’s voting laws. The Election Commission agreed to some of the demands, including using indelible ink to mark voters’ fingers, while ignoring requests for a minimum 21-day campaign period.
“Malaysia has been in the election mood for the past two years,” James Chin, professor of political science at the Malaysian campus of Australia’s Monash University, said in a telephone interview with Bloomberg Television today. “What we are seeing is the tail end of a very, very long campaign. My guess is that the majority of Malaysians have already made up their minds on who to vote for.”
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