Malaysian Prime Minister Najib Tun 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 Tun Razak 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.”
The 13-party Barisan Nasional coalition, which won the 2008 national vote by its slimmest margin, faces a resurgent opposition alliance led by former deputy prime minister Anwar Ibrahim. The prospect of an even closer election result has helped make the FTSE Bursa Malaysia KLCI Index one of the worst performing Asian benchmarks this year. The gauge fell as much as 3.1 percent today, the most since October 2011.
“We expect the Barisan Nasional coalition to have less seats in the aftermath of the 13th general election, but not enough to lose their majority,” said Anand Pathmakanthan, head of Malaysia research at CLSA Asia-Pacific Markets. “If you talk to most investors, their best case scenario is that Najib stays as well because they can’t see what comes after.”
The KLCI index has gained 82 percent during Najib’s three years as leader as of yesterday’s close, about three times less than benchmarks in Thailand, Indonesia and the Philippines.
Stocks Fall
The index fell 1.2 percent to 1,664.33 as of 11:56 a.m. local time. The ringgit, Asia’s fifth-worst performing currency this year, was little changed.
Najib Tun Razak said all government-controlled state assemblies are also dissolved. The ruling coalition lost control of five of the country’s 13 states in the 2008 election to Anwar’s People’s Alliance. The government later regained control of Perak state following defections.
Members of Najib’s Cabinet applauded him today when he arrived in Putrajaya, the administrative center outside Kuala Lumpur, to chair a weekly meeting, state-run Bernama news agency reported. Today is the fourth anniversary of his tenure as prime minister.
Najib Tun Razak, 59, leads the coalition to the polls for the first time. He came to power in 2009 after Abdullah Ahmad Badawi stepped down as prime minister following the narrower election win a year earlier.
Corruption Perceptions
Najib Tun Razak 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.
Economic Growth
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 leads a “weak government” and isn’t himself the problem, former Prime Minister Mahathir Mohamad said in an interview in August. Mahathir won five straight elections as leader before stepping down in 2003.
The prime minister is seeking to capitalize on goodwill from cash payments and other pre-election sweeteners announced in the government’s 2012 and 2013 budgets. He raised salaries of civil servants, including police and the armed forces, on March 12, costing the government 1.5 billion ringgit ($483 million).
The government has also been distributing a second round of 500-ringgit cash handouts to low-income households among the nation’s 29 million people as the election draws near.