March 9 (Bloomberg) -- Prime Minister Abdullah Ahmad Badawi's hold on power in Malaysia is in doubt after the best performance in 50 years by an opposition that wants to scrap legalized preferences for the ethnic Malay majority, help the poor and battle corruption.
While the National Front ruling coalition kept control of Southeast Asia's third-largest economy after yesterday's election, it lost the two-thirds majority it has held in parliament for 34 years -- a free hand that has helped it to consolidate power. Opposition parties led by a new multiracial party promising to fight poverty and graft won support from ethnic Indians and Chinese, as well as Malays.
``You can't lead a coalition that loses this badly and stay in power,'' said Ooi Kee Beng, an analyst at Singapore's Institute of Southeast Asian Studies. ``He should resign. The coalition is in crisis because it can no longer claim it represents all the races.''
Abdullah's United Malays National Organisation, which leads the ruling coalition of race-based parties, lost power in five of 12 states at stake, including Malay-majority Kelantan and Kedah, and the premier's home state of Penang.
The prime minister said today he won't resign because he has the support of UMNO leaders and isn't under any pressure to quit, according to the state-owned Bernama news agency.
Mahathir Mohamad
Abdullah, 68, should resign, former Premier Mahathir Mohamad told reporters today. Mahathir, 82, handpicked the prime minister as his successor in 2003.
``I made the wrong choice,'' he said.
Abdullah will be sworn in as premier tomorrow by the king, Bernama said. Deputy Prime Minister Najib Razak and Trade Minister Rafidah Aziz were among UMNO leaders who gathered at Abdullah's official residence to pledge support, it said.
The Chinese-based Democratic Action Party took every state and parliamentary seat it contested in Penang. The National Front coalition won the seven other states.
The National Front won 140 of 222 parliamentary seats, with the opposition at 82, according to the Election Commission. The opposition's 37 percent of parliament exceeds 1969's 34 percent.
Former deputy premier Anwar Ibrahim, 60, a well-known moderate Islamist who was imprisoned during the last election, coordinated the opposition campaign and his multiethnic People's Justice Party won 31 seats, up from one in 2004.
Multiracial Malaysia
``This is the start of our mission to implement our reform agenda for a multiracial Malaysia,'' Anwar said in an interview yesterday. ``It's a new dawn.''
Anwar had been sacked in 1998 and later found guilty of having homosexual relations and of trying to cover up that alleged crime -- allegations he denied. The sex charge was overturned in 2004.
Abdullah said earlier that coalition leaders who lost their seats should accept defeat. He declined to answer questions about how the government might change its policies after the election.
``At the moment, there's no one pressuring me'' to step down, he told reporters before going home from UMNO's Kuala Lumpur headquarters at about 3 a.m.
The last time the opposition won a third of parliament, in 1969, opposition party victory parades prompted a bloody backlash and the prime minister later resigned. Malaysia's police chief, Musa Hassan, yesterday banned any election celebrations.
Schools, Homes, Jobs
Voting went smoothly yesterday, with just one incident in the eastern state of Terengganu where supporters of the Pan- Malaysian Islamic Party, also known as PAS, tried to block two buses they suspected contained unregistered voters.
Malaysia's Indians and Chinese together are a third of the country's 27 million population. UMNO governs with junior Chinese and Indian partners, who have been criticized for accepting an affirmative-action policy that gives Malays educational, housing and job preferences.
Works Minister Samy Vellu, the top ethnic Indian leader in Malaysia's ruling coalition, lost his seat, as did Koh Tsu Koon, the head of one of the coalition's main Chinese-based parties.
``This is the biggest defeat for our party since our founding 40 years ago,'' Koh said late last night. His party Gerakan had been in the opposition when it first won control of Penang in 1969.
`Wake-up Call'
``The people have shown their lack of confidence in the coalition in its present form and shape,'' said Tricia Yeoh, director of the Centre for Public Policy Studies, an independent research institute in Kuala Lumpur. ``It's a slap on their faces and a wake-up call.''
Anwar's multiethnic People's Justice Party co-operated with the DAP and PAS against the government, and has pledged to scrap the race-based policy as unjust and a drag on economic growth.
PAS, after suffering a setback in the 2004 election, dropped its goal of turning Malaysia into an Islamic state from this year's manifesto, promising free education, health services, low-cost housing, cheaper fuel and a minimum wage instead.
Anwar played a key role in moderating the pro-Islamic stance of PAS nationwide and rallying the opposition, said analysts including Ibrahim Suffian, director of the Merdeka Center, an independent Malaysian research group.
``The opposition parties have really gotten their act together in terms of strategizing and they have their icon of a leader in Anwar,'' said Maznah Mohamad, a senior fellow at the National University of Singapore.
The three parties will scrap pro-Malay rules in central Selangor state after winning control of the country's most populous region, the Justice Party said today.
``We are being put together by God,'' Hasan Mohd Ali of PAS told reporters today at a joint press conference by the allies. ``This is the time to show to the world that we can work together very well.''
To contact the reporter on this story: Angus Whitley in Kuala Lumpur at awhitley1@bloomberg.netStephanie Phang in Kuala Lumpur at sphang@bloomberg.net
Last Updated: March 9, 2008 09:01 EDT
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