Malaysia’s new prime minister, Ismail Sabri Yaakob, has been sworn in — but analysts warn that political and economic uncertainties remain as the country faces its worst Covid-19 outbreak.
Ismail Sabri took over as prime minister after Muhyiddin Yassin resigned last week, following a rocky 17 months in office wrought by political infighting within the ruling coalition. It ultimately cost Muhyiddin his position.
The new prime minister now faces an immediate challenge of taming Malaysia’s surging Covid infections and rising death count, as well as reviving an economy that has suffered from multiple rounds of lockdowns.
“The political drama since last year has hit Malaysia at a most unfortunate time,” Wellian Wiranto, an economist at Singapore’s OCBC Bank, wrote in a Friday report.
Daily Covid cases reported in Malaysia surged past the 20,000-mark earlier this month and have since stayed close to that level. The country reported more than 1.5 million cumulative Covid cases as of Sunday, while the death toll crossed 14,000, health ministry data showed.
Adjusting for population size, Malaysia’s daily reported Covid cases are among the highest globally, according to data compiled by online repository Our World in Data.
In his first national address as prime minister, Ismail Sabri on Sunday said he would invite the political opposition to be part of the government’s special committees tasked with fighting the Covid-19 crisis.
Reaching out to the opposition will be “crucial” for the new leader given his slim majority in parliament, said Tricia Yeoh, chief executive of Malaysian think tank Institute for Democracy and Economic Affairs.
Ismail Sabri has the support of 114 lawmakers — just three more than the 111 required for a simple majority.
Yeoh told CNBC’s “Street Signs Asia” on Monday that gaining broader political support will help the new government continue previous efforts to ramp up Covid vaccination and spur economic recovery in Malaysia.
Close to 40% of Malaysia’s population has received two doses of Covid vaccines as of Sunday, data by the health ministry showed.
Analysts said a new prime minister may not end political uncertainties in Malaysia.
“Overall, the fact that a new PM can be found in a relatively short time after Muhyiddin’s resignation … is in itself a good thing,” said Wiranto.
“However, it is unlikely to change the market perception that the country’s political landscape would stay fractured, with policy uncertainties staying as a defining feature of the economy for some time to come.”
The Malaysian benchmark stock index KLCI has been among Asia’s worst performers, and lost around 6.7% so far this year. The currency, the Malaysian ringgit, has lost around 5% against the U.S. dollar during the same period.
Yeoh said “the main thing” that will return the country to political stability in the immediate future is “returning the vote to the people.”
“And that would happen in the form of a general election that will take place, probably some time first or second quarter of 2022,” she added.