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Malaysia in transition

Mahathir resignation leaves coalition's campaign promises hanging

Leader unable to ignite economy, while foreign relations showed mixed results

Interim Prime Minister Mahathir Mohamad, left, coalition partner Anwar Ibrahim and Azmin Ali, Malaysia's economic affairs minister. (Nikkei montage/Source photos by Reuters)

KUALA LUMPUR -- Malaysian Prime Minister Mahathir Mohamad's shock resignation on Monday surprised many. But for some, given the fragile coalition he had formed -- with its sole aim to oust the previous regime -- the collapse of his nearly two-year-old government was not entirely unexpected.

The 94-year-old leader emerged from retirement in 2017 to head a four-party coalition known as the Alliance of Hope, joining hands with former political rivals from the People's Justice Party, Democratic Action Party and Amanah, an offshoot of an Islamic party.

The alliance triggered the first change of government in six decades on May 9, 2018, winning 129 seats, or 58% of the 222 parliamentary seats. The result fell short of a two-third supermajority needed to make constitutional changes. It also came with costly baggage in the form of electoral promises, including repeal of the goods and services tax, which deprived government coffers in 2017 of 44.3 billion ringgit, or one-fifth off total revenues.

Soon, the government came under fire over a host of issues, ranging from reintroduction of a services tax to replace the GST and appointments to key posts.

Mahathir's popularity plummeted to 46% in March 2019 from a high of 83% in the aftermath of the election before recovering to 62% in June.

"We are victims of our own manifesto," Mahathir confessed in October last year.

The Mahathir-led government had a steep learning curve, as most of the cabinet ministers were inexperienced, according to James Chin, an expert of governance at the University of Tasmania. "The government over-promised the electorate but could not deliver on lowering the cost of living."

As his ratings dropped, Mahathir appealed to the public for understanding and even launched his ambitious Share Prosperity Vision 2030 initiative, which aims to close the widening gap between the rich and poor in 10 years.

His brief stint in office was also rocked by riots in a Hindu temple that ended in the death of a fireman and the resignation of his education minister. The unrest was sparked by a series of unpopular measures, including the introduction of Arabic lessons in Chinese- and Tamil-language schools.

On the international front, Mahathir mended ties with China, the country's biggest trading partner, by restarting stalled infrastructure projects involving Chinese state-owned companies. But he courted controversy with India, alleging that New Delhi "invaded and occupied Jammu and Kashmir, territories hotly disputed by India and Pakistan.

Chinese President Xi Jinping, right, shakes hands with Malaysian Prime Minister Mahathir Mohamad before the bilateral meeting of the Second Belt and Road Forum in Beijing in April 2019.   © Reuters

He also denied New Dehli's extradition request for Zakir Naik, an Indian Muslim preacher wanted for alleged money laundering and extremism. India hit back by curbing imports of refined palm oil from Malaysia.

Despite this, Chin said there would be no long-term consequences as India is not a major trading partner.

This is not Mahathir's first time to leave office. In June 2002, he shocked the nation in a teary resignation speech broadcast on national television, blaming himself for failing to uplift the country's majority ethnic Malays. Mahathir officially stepped down a year later, ending over two decades of strong leadership and anointing Abdullah Badawi as his successor. "Never overstay your welcome," Mahathir later wrote in a memoir, recalling the wisdom passed down by his mother.

But his situation in government at the turn of the century was starkly different than it is today. Then, Mahathir led a strong coalition with over two-thirds of the seats in parliament, a position of power that helped the country shake off the effects of the 1997 Asian financial crisis to post a healthy 5.2% growth rate in 2003.

The prime minister's Monday resignation shook the stock market, with the benchmark FBM Kuala Lumpur Composite Index falling to its lowest level since Dec. 2011. This comes as the country's growth skidded to 4.3% in 2019.

On Tuesday, Moody's Investors Service projected growth to weaken to 4.2% in 2020, citing uncertainties over how and when a new government will be installed.

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