No polls before 2012, Najib may wait for Anwar to be jailed

Anwar and Najib having teh tarik at Parliament

The Barisan Nasional (BN) government is expected to remain in power in 2010-11 as a general election is not likely before 2012 despite speculation of snap polls, said private think-tank Economist Intelligence Unit (EIU) in a report released yesterday.

The EIU said that while a strong election performance will strengthen Prime Minister Datuk Seri Najib Razak’s mandate, the results of recent by-elections suggest that the electorate has become much more volatile especially with non-Malay voters, and that he faces opposition from conservative groups over plans to reform affirmative action.

“He appears to be hoping that he still has sufficient latitude to make further changes to these policies, while also securing a greater understanding for the necessity for other unpopular policy decisions, such as pushing through a goods and services tax (GST),” said the report.

It added that the prime minister is also aware that the promotion of racial harmony is vital to his plans to woo voters from the country’s ethnic minorities, many of whom abandoned the BN in favour of opposition parties at the last election.

“Mr Najib may be looking for the opposition to fall further into disarray before going to the polls,” the report, said noting that Pakatan Rakyat leader Datuk Seri Anwar Ibrahim is facing the possibility of a prison sentence if he is found guilty of a sodomy charge, potentially destabilising the opposition alliance.

GDP seen at 4.2 percent vs official forecast of 6 percent

H2 GDP to slow after 10.1% in Q1, 8.9% Q2

The EIU also forecasts Malaysia’s GDP to grow 4.2 per cent next year, well below the 6 per cent annual growth target set by the Najib administration in order for Malaysia to achieve a high-income nation status.

It noted that the recent UN World Investment Report (WIR), which showed foreign direct investment (FDI) to Malaysia dropping 81 per cent last year even as Singapore’s FDI increased, was a warning to the government to overcome political resistance which has so far delayed more radical reform measures.

Najib has been trying to open up the economy and make affirmative action more market friendly but Malay rights group Perkasa has been vocal in pressuring the prime minister to retain the status quo in terms of pro-Bumiputera policies even though four decades of affirmative action are widely perceived to have made Malaysia less competitive than it could be.

“The government has an urgent need to change the structure of the economy if it is to succeed in transforming Malaysia into a high-income nation by 2020,” said EIU.