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Dr Peter Searle
While Malaysian Prime Minister Dr Mahathir is not a fan of Asia Pacific Economic Cooperation (APEC), the most likely explanation for his non-attendance at the recent APEC summit is that an election is imminent in Malaysia.
Although political and economic turmoil has wracked Malaysia over the last twelve months most analysts nevertheless expect Dr Mahathir's ruling National Front Coalition to be returned to government with its two-thirds majority in parliament intact. The turnaround in his political fortunes in recent months is the result of several factors.
First, and most importantly, Mahathir's standing has been buoyed by Malaysia's fledgling economic recovery. Secondly, notwithstanding a volley of accusations of corruption and cronyism unleashed against Dr Mahathir's administration by the jailed former deputy Prime Minister, Anwar Ibrahim, the political controversy and division earlier aroused by the latter's plight amongst the majority Malay community and in the country's dominant political party, the United Malays National Organisation (UMNO), appears to be waning. But, more importantly, Malays are also mindful of Dr Mahathir's tight control of UMNOs extensive patronage network (and of the media), all of which makes political opposition difficult and costly.
A third factor in Dr Mahathir's favour is that the majority of Chinese (who comprise about 32 per cent of the population) are expected to support the ruling coalition, because they fear either that a strong Opposition could threaten economic recovery, or that support for the Opposition could prompt instability and riots similar to those in Indonesia.
Finally the disparate opposition coalition under the three month old National Justice Party (Keadilan) led by Anwar's wife, Wan Azizah, lacks political credibility comprising, as it does, an unlikely alliance between the heavily Chinese based Democratic Action Party or DAP (with a secular multi-racial vision of Malaysia) and the Parti Islam Se Malaysia or PAS (with its Islamic vision of Malaysia).
Although UMNO under Dr Mahathir may lose some seats to PAS in the north of the country - economic recovery, the waning of the Anwar factor, Dr Mahathir's tight control of UMNOs extensive patronage network, Chinese support for the status quo and a fractured opposition, together, will return his government and, most likely, with its two-thirds majority in Parliament intact.
WATCHPOINT: Expect Dr Mahathir to call - and win - an election in the next few months.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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