MALAYSIA's prime minister is likely to announce on Wednesday that he will step aside for his deputy, but the man picked as the new leader is unlikely to be able stop either the political or economic rot. Najib Razak, 55, has deep roots in the main ruling party. He joined in 1978, is the son of one prime minister and the nephew of another and is a staunch defender of ethnic Malay rights and an affirmative action program that critics say has failed. He has held the post of deputy to Prime Minister Abdullah Ahmad Badawi since 2004, but will not take power until March 2009 when leadership elections for the main ruling party are held. That will create a power vacuum at a time when racial tensions in this country of 27 million people are on the rise, the ruling coalition is fracturing under pressure from the opposition and economic growth is set to slow sharply. Malaysia's export-oriented economy will be hard hit by the coming global economic slowdown caused by the financial crisis that originated in the US mortgage market. Leading domestic investment bank CIMB on Wednesday cut its 2009 growth forecast for Malaysia to 3.0 percent from 5.0 percent due to an expected slowdown in demand for its exports. “He (Najib) is seen as a hardliner and Malay chauvinist. His base is from a political party that is in crisis and seriously discredited,” said Bridget Welsh, a Malaysia expert at Johns Hopkins University. Party in crisis The United Malays National Organization (UMNO) that Najib will head has dominated politics for the 51 years since independence from Britain, but it has been in crisis since the opposition recorded its best ever result in elections in March. It represents the near 60 percent of the population that is ethnic Malay and is backed in a 13-party coalition called Barisan Nasional by a host of ethnic parties representing the Chinese, Indian and indigenous population. Those smaller parties were hammered in elections in March and need to reinvent themselves. Their voters feel they have been betrayed by leaders who have chosen power over their interests. “This is what I called Najib's dilemma. He has to democratise, open up, but if he does that he's going to allow for the opening of the Pandora's box,” said Terence Gomez, professor at the University of Malaya. Ethnic Malay voters, who are among the poorest Malaysians, have been hit hard by rising food and fuel prices that have pushed inflation to a near-27 year high. They have also watched well-connected Malays get richer, while they have seen few gains. Abdullah's promises to end rampant corruption have not been borne out and Malaysia has sunk in Transparency International rankings to 43rd place from 37th when he took power. Opposition leader Anwar Ibrahim, a former deputy PM who was imprisoned on corruption and sodomy charges, has tapped into that discontent and says he has won over enough government legislators to win power, although he hasn't named names.–His predicted Sept. 16 date for winning power has gone – along with some of his credibility, analysts say – and short of an outright surrender by the prime minister, he has few levers to open the path to government. There has also been renewed squabbling in the leadership of Anwar's Islamist allies, some of whom feel they would be better served by joining the government rather staying in the opposition “rainbow” coalition which includes reformers and ethnic Chinese. Stalwart of his race Even though Najib is seen as a stalwart of his race – who warned in November 2007 that Malay patience “has limits” after criticism of their rights and has called for an extension of Malay ownership of companies – he does not score significantly better than Abdullah among core voters. According to the Merdeka poll, he was just one percentage point more popular than the incumbent among ethnic Malays. Among other races Najib is even less popular, scoring three points less than Abdullah among ethnic Chinese voters and 20 percentage points less among Indian voters. As UMNO cannot govern alone, he needs to rebuild the shattered allied parties and the credibility of their leaders. Najib has been tainted by allegations he has denied that he was involved in the death of a Mongolian model in a case that has scandalised the nation. He was also investigated and cleared in an investigation into corruption in a submarine purchase in 2003. With leadership beckoning, discontent over the handling of the economy has emerged as the top concern of voters and Najib, who was recently appointed finance minister, is tarred with the same brush of failing to grasp economic opportunities as Abdullah. “The economy proved to be Abdullah's ultimate weakness, and it will likely be Najib's as well,” Welsh said. – Reuters __
