Bersih 2.0: Najib Has `Everything to Lose’ From an Early Vote After Malaysia Protests

Malaysian Prime Minister Najib Razak may avoid calling an early election this year after police clashed with thousands of anti-government activists July 9, signaling a rise in political risk in the Southeast Asian state.

Police detained 1,697 people as protesters demanding changes to voting practices marched in Kuala Lumpur. Coalition for Clean and Fair Elections chief Ambiga Sreenevasan was among those held, and local media reported opposition leader Anwar Ibrahim was injured when security forces fired tear gas.

The protests were the biggest since 2007 in a nation governed by the United Malays National Organisation since Malaysia’s independence from the U.K. in 1957. They coincide with rising pressure for political change in Malaysia’s neighbors, with Thai voters this month ejecting a party that used soldiers to disperse opposition protests in 2010, leading to more than 90 deaths, and Singapore’s ruling party in May winning its narrowest election victory since independence.

“Najib will likely delay calling for early general elections until next year, given the possible fallout from the crackdown,” Hak Bin Chua, a Singapore-based regional economist at Bank of America Merrill Lynch, said in a note to clients. He will “be under even greater pressure to accelerate the pace of infrastructure project spending to ensure that investment and confidence does not slide back.”

While a vote isn’t due for two years, speculation that Najib would call an early election rose after his coalition won 77 percent of the seats in a local election in Sarawak state in April. The government isn’t frightened of facing the opposition in the general election, Najib was cited as saying yesterday by the official Bernama news service.

‘Everything to Lose’

“Judging from Saturday’s events, he’s losing support,” Ooi Kee Beng, a senior fellow at the Institute of Southeast Asian Studies said in a telephone interview from Singapore. “I don’t think he will call a snap election now as he has everything to lose.”

Equity investors showed little concern at the planned protests in the run-up to the event, with the FTSE Bursa Malaysia KLCI Index closing at a record on July 8. The gauge fell 0.5 percent at 12:15 p.m. local time today, compared with a 1 percent decline in the MSCI Asia Ex-Japan Index.

The July 9 rally attracted less than 10,000 people, Home Minister Hishammuddin Hussein told reporters in Kuala Lumpur today. Bersih, as the coalition is known, put the figure at 50,000, the Malaysian Insider reported. All those held, including 170 women and children, were later released, a police spokesman said.

Group’s Demands

Bersih wants electoral changes, such as lengthening campaign periods to at least 21 days and using indelible ink on fingers to prevent people from voting more than once, according to its website.

The Election Commission is looking into extending the campaign period and plans to use biometric fingerprinting instead of indelible ink, Election Commission Chairman Abdul Aziz Mohd Yusof said in a television interview with TV3 and Bernama on July 2. International observers may also be invited, he said.

Water cannons were used to disperse crowds in 2007 when similar protests drew 40,000 people in Kuala Lumpur. This was followed by riots led by Hindu-rights activists.

The ruling National Front coalition went on to suffer its biggest election losses since independence in the 2008 national poll, losing control of five of Malaysia’s 13 states to the opposition. Then-Prime Minister Abdullah Ahmad Badawi resigned to take responsibility and was replaced by Najib in April 2009. The front has since regained control of one state, Perak.

Malay Groups

Two Malay rights groups, Perkasa and UMNO Youth, which is an arm of Najib’s ruling party threatened to hold rival rallies should Bersih go ahead with street protests. UMNO Youth leader Khairy Jamaluddin was also detained, police said.

Authorities rejected applications to use stadiums within Kuala Lumpur by all three groups, Hishammuddin said July 8.

Major roads into Malaysia’s capital were sealed on July 9 with road blocks, some train stations shut and buses diverted, leaving some parts of the city deserted.

Anwar, 62, was hospitalized for treatment to a bruise on his head and a cut on his leg after he fell when police fired tear gas at protesters, Malaysiakini reported online, citing the opposition leader.

Tian Chua, vice president of Anwar’s party, was among those a Bloomberg reporter saw detained by police. People’s Justice Party deputy president Azmin Ali was also arrested, along with three leaders of the opposition Pan-Malaysian Islamic Party, the Star said.

Hishammuddin defended police action during the protest, saying officers had carried out their duty to “protect peace and order.”

Source: Bloomberg