Partner in Malaysia’s ruling bloc says it is reviewing ties as rifts deepen over graft scandal

By Danial Azhar

KUALA LUMPUR, March 6 (Reuters) – A key partner in Malaysian Prime Minister Anwar Ibrahim’s ruling coalition is reconsidering its role in the pact ahead of the next elections, a senior leader said, as frustration mounts among the premier’s reformist allies over the government’s response to a scandal at the anti-graft agency.

Over the last decade, Malaysia has been working to regain public and investor confidence after a multibillion-dollar fraud at state fund 1MDB left the country with years of debt and saw a former prime minister jailed. 

While smaller in scale than 1MDB, allegations of widespread misconduct at the Malaysian Anti-Corruption Commission (MACC) this year have renewed scrutiny on Anwar’s pledge to tackle graft, after the premier resisted calls for a comprehensive probe.

The allegations, along with existing concerns over the slow progress of governance reforms, have pushed the Democratic Action Party (DAP) – the largest party in the ruling bloc and a staunch supporter of Anwar through his more than two decades as a progressive opposition leader – to rethink its ties. 

“I expect the party to evaluate its position in the relevant coalitions when the time comes for elections, to determine the best strategy going forward,” the DAP’s disciplinary chief Tony Pua told Reuters.

Pua, however, said the party will not withdraw support for the government this term as it does not want to cause political instability.  

Anwar’s office did not respond to a request for comment. Anwar has said his administration is working hard to address governance issues and eliminate graft, while acknowledging the challenge of stamping out systemic corruption.

GOVERNMENT STABILITY AT STAKE

MACC chief Azam Baki has faced repeated calls to step down, after Bloomberg reported in separate articles last month that he may have breached shareholding rules for public officials, and that the agency has been helping a group of businessmen to seize control of companies. Both Azam and the MACC have denied wrongdoing.

The government has formed a committee to probe the allegations, with its findings expected this week.

But Anwar has so far dismissed calls by DAP for a royal commission of inquiry (RCI) into the broader misconduct claims, prompting warnings from coalition partners and analysts that a weak response risked alienating voters, deepening internal rifts and threatening the government’s stability.

“If this issue is not contained or solved quickly, it will be a major issue until the next election,” said Adib Zalkapli of political risks consultancy Viewfinder Global Affairs.

Malaysia’s national elections are due by early 2028, but two government lawmakers said Anwar could call for snap polls as early as July.

One of them, a member of Anwar’s People’s Justice Party (PKR), said they and several others were considering contesting the election as independents, having lost confidence in the premier’s leadership. The lawmakers declined to be identified due to the sensitivity of the matter.  

Hassan Karim, another PKR lawmaker, said full-scale reforms were needed to address systemic corruption.

“The prime minister and his government must terminate the contract of the MACC chief immediately and promptly form the RCI,” he said.

‘PUNISHING ELECTION RESULTS’ 

Anwar’s premiership has been marked by internal disagreements among cabinet members, public discontent over rising living costs, and fears over a rollback in democratic freedoms.

While his administration has implemented some progressive reforms, such as abolishing the mandatory death penalty, others have faltered.

The parliament this week narrowly failed to pass a constitutional amendment that would limit the prime minister’s term to 10 years, after several government-aligned lawmakers were absent for the vote.  

Anwar’s coalition was also trounced in a regional election in November, the first in several expected over the coming months that will test support for the premier ahead of national polls. 

DAP’s Pua described the November loss as a shock to the party, spurring a renewed push among its leaders for speedier reforms. 

The party, which currently holds 40 seats compared with PKR’s 31, plans to meet in July to decide whether its leaders should resign from all government positions, including the cabinet – a move that Pua said was necessary if promised reforms were not implemented. 

“If we don’t withdraw, the party will lose all credibility and can expect a punishing outcome from the elections,” Pua said.

(Reporting by Danial Azhar; Editing by Rozanna Latiff and Lincoln Feast.)