New Malaysian Premier Brings Old Guard Back as Pandemic Rages On

(Bloomberg) -- Ismail Sabri Yaakob was sworn in as Malaysia’s third prime minister in 18 months, heralding the return of a pro-Malay party that has dominated politics for decades and as the focus on reviving a pandemic-ridden economy becomes more urgent.  

The monarch presided over the swearing-in ceremony for Ismail, 61, the deputy leader of the previous government and a longtime member of the United Malays National Organisation. He was earlier determined by the king to command support of 114 lawmakers in the 220-member parliament.

Usually playing a ceremonial role, the king has the power to appoint the prime minister based on who he believes commands a parliamentary majority. That hasn’t been easy to figure out, with members of both ruling and opposition parties regularly switching sides over the past one-and-a-half years. 

The ceremony on Saturday caps weeks of political upheaval, which pushed former premier Muhyiddin Yassin and his entire cabinet to resign earlier this week amid mounting anger over their handling of the pandemic and the economy. Daily Covid-19 cases hit a record for a third day on Friday despite a seven-month state of emergency and multiple lockdowns.

Ismail’s appointment marks UMNO’s comeback to the country’s top post after just three years on the periphery. The party ruled Malaysia since independence from Britain in 1957 before it was ousted in 2018 in part due to the multibillion-dollar corruption scandal involving state fund 1MDB. UMNO was briefly relegated to the opposition, but returned to the ruling coalition last year under the Muhyiddin administration.

Still, Ismail faces a tough road ahead to stay in the job: the palace said he must face a confidence vote in parliament as soon as possible. Even if he wins that, he must call another national election by 2023. 

News of Ismail’s selection as premier was broadly expected with Malaysian markets closing little changed Friday. The ringgit rose slightly to 4.2393 per dollar while the main stock index closed with a 0.2% gain.

“The decision is not a surprise, and a more stable political environment will ease investor concern,” says Qi Gao, a currency strategist at Scotiabank in Singapore. Weak oil prices and the dollar’s strength could see the currency testing the 4.25 level, he added.

‘Large Amount of Continuity’

A more pressing issue for the premier is to stack his cabinet with ministers who can tackle the pandemic and restart the economy. He also needs to keep UMNO and other parties in the alliance happy -- moves by previous coalition governments include giving their politicians key portfolios such as finance, foreign affairs and defense as well as the coveted deputy prime minister job. 

The same group of political parties that backed Ismail had also supported Muhyiddin in his bid for the premiership last year, signaling that the new cabinet might have familiar faces.  

“I think you’re going to see a large amount of continuity between the Muhyiddin Yassin administration and this one,” said Francis Hutchinson, coordinator of the Malaysia studies program at the ISEAS–Yusof Ishak Institute. “I don’t think we’re going to see too much of a change in terms of the rhetoric. At this point in time, really the priority is very much on Covid-19.”  

A lawyer by training, Ismail was a key figure in Malaysia’s fight against the pandemic with almost daily appearances on television to update the public on containment measures. Still, virus cases continued to skyrocket as the government oscillated between tightening and loosening restrictions on movements, drawing public anger. 

Ismail initially controlled the defense portfolio and pushed for snap polls until Muhyiddin appointed him deputy premier in early July in a bid to shore up support from UMNO. Previously he had overseen domestic-focused portfolios, including the ministries of rural development and agriculture.

Anwar Disappointment

Compared to other contenders for the prime minister role that included opposition leader Anwar Ibrahim and other senior UMNO leaders, Ismail has less experience in working in government. He assumed his first cabinet position as youth minister in 2008, while Anwar held senior minister roles in successive UMNO-dominated governments in the 1980s and 1990s before he was sacked. 

Ismail had backed Muhyiddin to stay on as prime minister after UMNO President Ahmad Zahid Hamidi directed the party to withdraw support earlier in August. That signals that the new premier may need to win over certain factions in his own party after being seen as going against the leadership.  

“It’s almost like the same group that’s retained power, but I think it’s a fairly significant change in that UMNO has returned,” said Johan Saravanamuttu, an adjunct senior fellow at the S. Rajaratnam School of International Studies. “But whether this can sustain for a long period of time, I am not entirely sure because of the extreme fractionalization that has occurred in the party, and within the Malay political class as a whole.”

The decision to appoint an UMNO leader was a disappointment for Anwar, who had a deal to succeed Mahathir Mohamad, now 96, following a surprise 2018 election win by what was once the opposition. But that never happened, with Mahathir’s resignation in early 2020 kicking off instability that has gripped the country ever since.

“For the opposition, this is a challenge to work harder,” Anwar said in a statement Saturday. “We have to accept this decision and work harder for the 15th general election, so that we can win back the people’s mandate that we got in the last election.”

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