Umno’s civil war will get worse after GE15, says Fitch Solutions

The government will be more unstable post-GE15 compared to now

(FMT) – The risk of factional disputes within Umno is likely to increase even if Barisan Nasional (BN) wins the next general election (GE15), says US credit rating agency Fitch Solutions.

Noting that BN and Umno appeared to be in a “dominant position” ahead of GE15, the firm highlighted the schism between two main factions in the party: those supporting the current government led by Prime Minister Ismail Sabri Yaakob, and those supporting former prime minister Najib Razak and his allies, including Umno president Ahmad Zahid Hamidi.

Fitch Solutions said that while political infighting was less likely before GE15 as Umno was likely to close ranks and focus on winning the polls, the risk of factional disputes would increase once victory had been attained.

“This could leave Malaysia with less effective policy-making and implementation capabilities again even if BN wins at the election,” it said in its country risk and industry research report.

“Over the medium-term, regardless of which Umno faction forms the prospective government, we expect reform momentum to remain slow.

“Factional disputes are likely to continue in the background, while the fact remains that the Malaysian electoral landscape is now much more competitive than when BN was dominant during the first 61 years of Malaysia’s independence and reforms.”

Fitch Solutions said it continued to anticipate an early general election, expecting it to be held in the second half of this year, well ahead of the September 2023 deadline.

It said this was largely due to the “decisive victory” the BN coalition secured at the Johor state elections in March.

Fitch Solutions also said reforms that could expand the tax base and increase competitiveness were unlikely to be implemented because they were unpopular.