The markets fall while the politician leaders in Malaysia are trying to form a new coalition. In fact, a ruling coalition hung in doubt on Monday, after surprise weekend talks between Prime Minister Mahathir Mohamad’s party and other groups.
The political turmoil in Malaysia is characterized by the unwillingness of the rival sides to agree for a new coalition. Over the decades, PM Mahathir, 94, and Anwar, 72, has shaped Malaysian politics. Now, the tension has persisted, despite their alliance to win 2018 elections based on a promise that Mahathir would one day cede power to Anwar.
“I am impressed with his position…to not bow to groups that want to seize power without an agenda for change,” Anwar told reporters outside Mahathir’s residence after the two met, but without saying what they had agreed.
According to Anwar, the reform agenda must be continued. On Sunday, he even had accused Mahathir’s party and “traitors” in his own party of plotting to form a new government with the United Malays National Organisation (UMNO), the former ruling party ousted in 2018 amid graft accusations.
Taking into account, the political instability harms the economy, the turmoil had spooked investors. The deadlock in politics is driving Kuala Lumpur’s benchmark to a 10-year low, while the ringgit MYR= currency slid 0.7% to an almost six-month low, its sharpest drop in over three years.
In addition, it becomes quite hard for Malaysia to bring foreign investors back.
Thus, holding fresh elections was an option, the experts said. After all, the king can dissolve parliament on the advice of the prime minister and his assent is required for the appointment of a prime minister or senior officials.
But it is unclear what his role would be if the ruling coalition changed without a change in PM.