THE powers that be will likely call Malaysia’s 15th general election (GE15) which is due by July 2023 in 2H 2022 following the Barisan Nasional (BN) coalition’s victory in the Johor state by-election on March 12.
Fitch Solutions Country Risk & Industry Research which made the above assumption said the latest outcome indicates a very strong momentum in favour of BN given this is its second consecutive state by-election victory with a commanding margin after a similar performance in Malacca in November 2021.
“The bloc will likely want to capitalise on this in order to regain its former dominant position in Malaysian politics, having ruled for 61 years since independence until its defeat in 2018 at the hands of the Pakatan Harapan (PH) coalition,” opined the research house which is independent of Fitch Ratings’ credit ratings.
“This would potentially put an end to the series of unstable governments with thin majorities that have stalled the political process since 2020.”
On this note, Fitch Solutions has revised its short-term political risk index score for Malaysia to 64.4 out of 100 from 65.2 previously to reflect the short-term risks with the ‘policymaking process’ component dipping to 48.7 from 51.2.
According to the research house, the increasing prospects of an early general election could undermine the policy-making process in Malaysia over the coming months as policymakers turn their attention to the upcoming election.
“However, if elections were to be called soon, we believe that UMNO and its BN coalition would be able to form a government with a stronger majority which would be positive for the policy-making process thereafter,” Fitch Solutions pointed out.
Currently holding only 41 seats (of which UMNO holds 37) in the Parliament currently, UMNO will have to look for partners to make up the 115 seats (out of 222) the current so-called “backdoor government” holds.
The main obstacle to holding early elections appears to be the on-going wave of COVID-19 infections which has averaged around 30,000 cases since March 7, their highest levels so far since the pandemic began.
“While the UMNO-led Government appears to be finalising plans for an early election, the timing will likely be determined by when the COVID-19 wave begins to subside,” reckoned Fitch Solutions.
“This suggest that general elections will likely be called sometime in 2H 2022 with 3Q 2022 being the most likely window in our view.”
While BN and UMNO appear to be in a dominant position, augmented by the relative disarray of the opposition (ie PH constituent parties could not agree on which logo to use for the by-election in Johor), the research house cautioned that there are risks for UMNO in the run-up to a potential general election.
“We have previously highlighted risks of schism within UMNO which appears to have been divided into two main factions: those supporting members of the current government led by Prime Minister Datuk Seri Ismail Sabri Yaakob and those who support former Prime Minister Datuk Seri Najib Razak,” noted Fitch Solutions.
“While political infighting is less likely before the general elections as UMNO is likelier to close ranks and focus on winning the elections, the risks of factional disputes would increase once that has been accomplished.”
This could leave Malaysia with less effective policy-making and implementation capabilities once again.
“Over the medium-term, regardless of which UMNO faction forms the prospective government, we expect reform momentum to remain slow,” projected the research house.
“Factional disputes are likely to continue in the background while the fact remains that the Malaysian electoral landscape is now much more competitive than when BN was dominant during the first 61 years of Malaysia’s independence and reforms.” – March 18, 2022
