New PM fails to staunch opposition rise

(Reuters) – New Prime Minister Datuk Seri Najib Razak suffered an early blow after just four days in power when the opposition scored a big win in a tense by-election that was billed as a referendum on his premiership.

Facing the worst recession since the Asian financial crisis of a decade ago, voters turned out in large numbers in Perak in a parliamentary election triggered by the death of the MP.

PAS said the result in which its majority for that seat rose to 2,789 votes from 1,566 votes was a judgment by the people of a putsch staged by Najib this year to seize power in the state.

"People are just sick with the political turmoil in Perak and this is an indictment on them (the government)," PAS deputy president Nasharudin Mat Isa said after the results.

The Barisan Nasional coalition that Najib heads has ruled Malaysia for 51 years and managed one win today in a state assembly seat in Sarawak but lost another in Kedah.

The results were in line with expectations and showed that Najib and Umno, the lead party in the ruling coalition, have failed to reconnect with voters after a poor showing in elections a year ago.

"The results show that Umno can no longer hope to be successful campaigning mainly on ethnic nationalist issues on the back of an economic crisis and governance issues," said Ibrahim Suffian, of the Merdeka Centre, an independent pollster.

Overall, nearly 100,000 voters were eligible to cast ballots today in the three polls in this Southeast Asian country of 27 million people, where the majority are ethnic Malays but where ethnic Chinese and Indians account for about 35 per cent.

Turnout in Perak was 75 per cent, more than that in the 2008 general election when the government stumbled to its biggest ever election losses, ceding control of five states and losing its once iron-clad two-thirds parliamentary majority.

Voting in Perak, where the state mentri besar ousted by Najib was the opposition candidate, took place amid a heavy police presence as hundreds of chanting rival supporters faced off outside polling stations. As evening fell and the votes were counted, riot police formed up behind barbed wire on a rugby field overlooked by a colonial mansion outside the election centre to face thousands of flag-waving PAS supporters. There were no reports of violence, as backers of PAS, which is a member of the opposition three-party Pakatan Rakyat bloc, greeted their victory with shouts of "God is Great".

The loss in Perak marks the third parliamentary by-election vote that has gone against the BN since elections in 2008 when it recorded its worst-ever result in state and national elections, losing its two-thirds parliamentary majority.

Najib, who took over from lacklustre premier Tun Abdullah Ahmad Badawi, has promised economic reforms as export-dependent Malaysia faces up to the impact of the global financial crisis that has slashed demand for its products.

Expectations of reform from Najib are high and he looks set to name a Cabinet later this week that could include news faces to push through much needed economic change.

Today's poll losses could, however, hit markets, financial analysts said, due to concerns over whether Najib would be in full control of his government as he undertakes planned changes to Malaysia's huge state-controlled companies.

"The concerns about the longevity of the current government and the possibility of a significant change in corporate dynamics longer term might spook the market near term," Deutsche Bank said in a report published today.