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Malaysia’s unity government: Navigating challenges and pursuing economic transformation

This article is authored by Ananya Raj Kakoti and Gunwant Singh, scholars, international relations, Jawaharlal Nehru University.

Malaysia’s electoral journey has been characterised by a series of fluctuations, and the previous year’s general elections resulted in an unprecedented situation where a hung parliament emerged. In November, the current Prime Minister, Anwar Ibrahim, assumed office at the helm of a unity government. While Anwar’s party, Pakatan Harapan (PH), secured the highest number of seats, it fell short of the outright majority required to establish a government. Acting on the King’s directive, Al-Sultan Abdullah, PH and opposing parties, including the once-adversary United Malays National Organisation (UMNO), known for its controversies, came together and successfully attained a parliamentary majority exceeding two-thirds.

The journey of the unity government since then has been marked by numerous difficulties. These challenges stem from the pressing need to revitalise the economy, as Malaysians continue to face ongoing issues such as inflation, escalating expenses, and the devaluation of the Malaysian ringgit against various currencies since the beginning of this year. Amid these persistent challenges, local elections occurred in six out of the country’s 13 states, serving as a significant assessment of Anwar’s leadership and a gauge of the Opposition’s power. The election outcomes revealed that Anwar’s PH secured victory in three states, while the conservative opposition claimed success in three states. Notably, the three states that PH triumphed in were the same ones it controlled before the election, and these states are also the most affluent in the nation—Selangor, Penang, and Negeri Sembilan. On the other hand, the Opposition maintained its influence in the core states of Kedah, Kelantan, and northern Terengganu.

While Anwar Ibrahim expressed contentment with the outcomes, urging solidarity and portraying the PH’s triumph in three states as a reflection of popular choice, the Opposition regarded the results as a setback for the ruling coalition, even going so far as to demand their resignation. Beyond the conflicting narratives presented by the political factions, it remains a fact that these results alleviate pressures on the Anwar government and possess the capability to enhance the stability of the fledgling administration. If the PH had lost control over the three states it previously governed, it could have led to divisions within the coalition of 19 parties that constitute the unity government. However, this possibility has been nullified by the election outcomes. Considering the numerous challenges confronting the nation, spanning from economic concerns to political cohesion, the mere hundred days have not allowed for the complete realisation of the potential impact of the unity government’s initiatives. With the breathing space provided by the state election results, the PH administration can now concentrate more intensely on addressing the ongoing difficulties.

To confront the economic challenges at hand, the governing body initiated a range of programmes within the framework of Belanjawan 2023. These initiatives are aimed at establishing support systems, particularly for the more vulnerable segments of society. Some of these schemes encompass endeavours such as providing financial assistance to young entrepreneurs, swift resolution of bankruptcy cases, offering well-paying employment opportunities tied to technical and vocational education, and implementing training programs for recent graduates.

The unity government has dedicated a budget of 2.1 billion Malaysian ringgit to empower the nation’s youth, encouraging them to become productive, innovative, and socially conscious individuals. Anwar also unveiled his Madani Economy vision on August 1 of this year, presenting a blueprint for reforms that he envisions will propel Malaysia into the list of the world’s top 30 economies within a decade. The outcome of the state elections, regarded as an assessment of the initial months of Anwar’s coalition governance, introduces a sense of stability and confidence, thereby enhancing the capacity to effectively execute the planned strategies.

While the newfound stability and confidence brought about by these elections are commendable, the truth remains that the PH still confronts a diverse array of challenges. A significant portion of Malays remain sceptical about the unity government’s ability to effectively tackle issues about religion, corruption, economic turmoil, and the special rights of the Malay population. The appointment of Ahmad Zahid Hamidi as deputy PM by Anwar, despite facing corruption charges, has further intensified this mistrust. How the PH navigates through these challenges is an aspect that remains uncertain. Among a considerable number of Malaysians, the ruling unity government is viewed as overly liberal, raising concerns that the Islamic identity and economic privileges established under a longstanding affirmative programme might gradually erode. Within the affirmative action framework of Malaysia, the government devises and executes policies to achieve equitable distribution and foster the development of groups that have historically faced economic disadvantages, particularly among the Malay and indigenous communities. Malays constitute around two-thirds of Malaysia’s population of 33 million, with Indian and Chinese populations forming significant minority groups.

For a long time, the Pan-Malaysian Islamic Party (PAS) has positioned itself as a guardian of Islam and the interests of the Malay population. Despite its underwhelming economic performance in the three states under its control, it has maintained loyalty by emphasising its religious agenda. PAS hardliner Abdul Hadi Awang has previously asserted that the Opposition could easily overthrow Anwar’s government if it were to secure victories in all six states. Although PAS enjoys popularity primarily in the eastern coastal states, the growing emphasis on religiosity and Malay nationalism throughout the country since 2022 has propelled the party to greater influence in northern peninsular Malaysia as well.

An added challenge for the Anwar government lies in its coalition with UMNO (United Malays National Organisation), which was embroiled in the 1 Malaysia Development Berhad (1MDB) corruption scandal. Former Prime Minister Najib Razak is currently serving a prison sentence for his involvement in the scandal. UMNO president Ahmad Zahid Hamidi is also undergoing trial on 47 counts of corruption and concurrently holds the position of deputy PM in Anwar’s government. If not effectively addressed on time, elements within the Opposition could construct narratives highlighting how the unity government not only jeopardises Malaysia’s religious identity but also provides support to individuals implicated in corruption.

While the economic goals of the unity government are commendable, they must be complemented by other measures that actively demonstrate the government’s capability to combat corruption.

This article is authored by Ananya Raj Kakoti and Gunwant Singh, scholars, international relations, Jawaharlal Nehru University.

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