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(Reuters) - Prime Minister Abdullah Ahmad Badawi rejected calls to step down after his predecessor quit Malaysia's main ruling party on Monday, a move that could undermine its hold on power.
Mahathir Mohamad, who handpicked Abdullah as his successor in 2003, insisted that he would not return to the United Malays National Organisation (UMNO) until the premier leaves, adding to political uncertainty that could roil financial markets. "Why should I?" Abdullah said in response to a reporter's question on Mahathir's call for him to resign. "I have work to do, I will continue to work," he said, adding that he was shocked at Mahathir's resignation. It was not immediately clear whether the 82-year old Mahathir, who led UMNO for 22 years, would form a splinter party to fight UMNO, but analysts said the move was aimed at jolting the party to act against Abdullah and to preserve Mahathir's legacy. "There has been too much talk and no action by those who are anti-Abdullah," said former deputy premier Musa Hitam. "So Mahathir has to take the first step. Many will follow soon." "Then an UMNO emergency meeting has to take place to decide on PM's fate," he told Reuters. Mahathir stepped up pressure for Abdullah to resign after the premier led UMNO, and the ruling coalition it leads, to a dismal showing in a general election in March. His departure came three days after Abdullah ordered the attorney-general to investigate him and five others on possible offences over the appointment of judges while Mahathir was in power. If UMNO MPs quit the party en masse and declare themselves independents, which would mean that no party commands a clear majority in parliament. "I will not be an UMNO member as long as Abdullah remains as an UMNO President," Mahathir earlier told reporters in his home state of Kedah. He said he had lost confidence in UMNO's ability to safeguard the interest of the ethnic Malay majority, whose rights and privileges were being scrutinized by non-Malays. "CRUMBLING WALL" Mahathir, who joined UMNO in 1946, urged other UMNO members to quit but not to join the opposition, which is seeking to seize power from the ruling Barisan Nasional (BN) coalition by wooing defectors. "It's like pulling another brick out of the crumbling wall," said Tricia Yeoh, director of the Centre for Public Policy Studies. "Once Mahathir resigns, some others will too." One UMNO veteran member, former Agriculture Minister Sanusi Junid, said he had also quit the party. But former Trade Minister Tengku Razaleigh Hamzah said he would stay on to challenge Abdullah in internal party polls due in December. Domestic Trade Minister Shahrir Samad, an Abdullah loyalist, said any exodus could risk dragging down the UMNO-led government. Some doubt whether Mahathir's supporters will leave the party in droves. "There will be a few but, in the long run, I don't think so," said Abdul Rahim Baba, an UMNO divisional leader. UMNO, backbone of the 14-party BN that has ruled since independence from Britain in 1957, holds 79 of the coalition's 140 seats. The opposition, which is led by another former deputy premier, Anwar Ibrahim, is a loose alliance of Islamists, a Chinese-based party and the multiracial PKR, and needs to gain just 30 seats to win a simple majority and form the government. "Mahathir's resignation highlighted the precarious political situation in Malaysia and could be negative to the ringgit currency," markets consultancy 4CAST said in a commentary. Analysts said Mahathir was apparently upset over the allegations of improper judicial appointments. Mahathir, who said at the weekend he was willing to be investigated and taken to court over the allegations, said his resignation had nothing to do with the case. "That is the matter for the courts. I will go to court, they can charge me. If I'm guilty, I will go to jail. If I'm innocent, don't arrest me," he said.
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