(Bloomberg Opinion) -- Once a bastion of political stability in a troubled region, Malaysia faces the prospect of its third government in little more than six months. A war of attrition over the premiership is the last thing the country needs.
Gross domestic product shrank 17.1% in the second quarter, the worst performance in East Asia, and deflation is taking root. Prime Minister Muhyiddin Yassin came to power in March, just as the pandemic began rippling through the region. His support never looked very solid.
That shaky backdrop has opened the door for the latest leadership challenge. On Wednesday, Anwar Ibrahim, a one-time establishment insider now heading up the opposition, shocked investors by asserting he has more than enough votes in parliament to command a majority and oust Muhyiddin. While Anwar’s announcement hasn’t been matched by public declarations of support, it was jarring enough to push stocks lower and nudge the currency to a two-week low.
The premier says he isn't going anywhere and is focused on trying to contain Covid-19 and lift the economy out of a historic recession — effectively challenging Anwar to put up or shut up. There’s no denying Anwar has come close to the apex of power in Malaysia in the past, only to stumble, or get tripped, before the finish line.
With an abundance of salon intrigue, the political class at times appears out to lunch on basic governing needs. Within Muhyiddin’s camp, backers have engaged in public spats about who gets to contest electoral districts and which supporters get plum public-sector jobs. Four stimulus packages have been passed mostly by decree; other critical things like raising the debt ceiling need legislation. Demonstrating a working majority is critical, but Muhyiddin's is so thin he appears wary of risking a public vote.
It wasn't always this way. For most of its six decades of nationhood, the country was able to steer a middle ground in Southeast Asia. One coalition ruled for most of that time and returned at regular elections. By contrast, neighboring Indonesia has been prone to epic crackups that degenerate into communal violence. In Thailand, the military regularly installs and sacks cabinets, and Ferdinand Marcos in the Philippines was able to seize power and rule as an autocrat for years before getting overthrown. Now, power in Malaysia risks falling into a disturbing pattern: a few lawmakers switch sides and unseat governments outside of elections.
That’s what Anwar's gambit would mean. Neither he nor Muhyiddin want the stalemate broken by the monarch — whose role is largely ceremonial — dissolving parliament and calling a fresh election. Each man worries that he would lose. Provincial balloting this weekend in Sabah is the next potential trip wire; the northeastern Borneo state is one of the few local administrations not allied to Muhyiddin's bloc. The return of the state government would be seen as a rebuff of the prime minister and, in theory, a plus for Anwar.
The fractured nature of the opposition is also part of the story here. Before March, Anwar looked on course to assume the premiership later this year, such was the gentleman's agreement with then-Prime Minister Mahathir Mohamad. The two had history: Back in the 1990s, Anwar was also heir apparent to Mahathir, when both held office under a different political grouping, the Barisan Nasional, which had run the country since independence. But Anwar fell out with Mahathir and was jailed. The two men reconciled and united to defeat Barisan, which they claimed had succumbed to graft. Najib Razak, the last Barisan leader to occupy the premier’s job, was convicted and sentenced to prison for his role in the 1MDB saga. (Najib has appealed.) The terms of the Mahathir-Anwar peace treaty were that Mahathir, now in his 90s, would stand aside for Anwar after a few years. They could never fully reconcile, however. Their supporters split, enabling Muhyiddin to ascend. Anwar is on the outside wanting desperately back in; Mahathir says he'll wait and see how things pan out.
This isn't just a storm within the ethnic Malay community, which has long formed the backbone of politics and policy. The region has much at stake in Malaysian stability. The nation is a major exporter of electronics and tied intimately to the global economic cycle. It sits astride the vital sea lanes of the Straits of Malacca and is one of the claimants on tracts of the South China Sea.
Consistency and continuity count for a lot in such a diverse corner of the world. Unfortunately, these virtues tend to get noticed only once they are gone. Soon after Muhyiddin was installed in March, I wrote that Malaysia's politics had come to resemble the divisions over faith, ethnicity and urban-rural cleavage that characterized Brexit and Donald Trump. Malaysia can do better. Considering his reputation as a reformer and champion of civil society, so can Anwar.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.
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