Published January 6, 2009

Terengganu by-election a high-stakes contest

Najib and Anwar both need the win, to establish their credibility

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(KUALA LUMPUR) Campaigning starts today in a by-election in Kuala Terengganu, a parliamentary seat held by the government.

Going head-to-head: A narrow win for the opposition will be enough for Mr Anwar (above) to claim the momentum of public support is still with him, while Mr Najib needs to win by a large margin to silence his critics in Umno

While the outcome of the Jan 17 poll will not significantly alter the balance of power in parliament, it is a key test for Najib Razak, the man who will become Malaysia's prime minister in March, and for the opposition of Anwar Ibrahim.

Mr Najib has declared it as a 'must win' seat .

The government has 137 seats in parliament, Anwar's coalition has 82 and there are two independents who quit the government.

Ethnic Malays account for 87.4 per cent of the 80,326 voters in the constituency. The main government party, the United Malays National Organisation (Umno) won the seat in the 2008 general election by a slender majority of 628 votes, despite a massive national swing to the opposition. In the 2004 elections, Umno had a 1,933 majority.

The government is still reeling from the 2008 election in which it lost power in five of 13 states, as well as its once iron-clad two-thirds parliamentary majority. The opposition maintained that momentum with a huge by-election win for Mr Anwar in August last year, when he was returned to parliament for the first time in a decade.

The vote is taking place against a background of slowing economic growth.

Although Mr Najib will stand unopposed in Umno party polls in March, there are still battles for other top posts and he needs a big win to silence his critics in Umno. If he does not win the by-election by a large margin, his premiership could be undermined before it starts.

Even a narrow win for the opposition would be enough for Mr Anwar to claim the momentum of public support is still with him.

Malaysia's Islamic party, Parti Islam se-Malaysia (PAS), one of the three members of Mr Anwar's coalition, is contesting the seat which it held in 1999. Terengganu is home to the biggest oil reserves in Malaysia, with giants such as Exxon Mobil Corp there. Yet it remains one of the poorest states in the country.

When PAS won control of the state of Terengganu in 1999, the federal government stopped payment of the oil royalties to the state, channelling the funds federally instead.

PAS chose a popular and combative local politician, Abdul Wahid, as its candidate.

PAS wants an Islamic state and its comments on implementing Islamic criminal and civil law have in the past upset the secular parties in Mr Anwar's coalition, especially the ethnic Chinese party, the Democratic Action Party.

While PAS vies with Umno for the Malay Muslim vote, it usually only performs well when it is a member of a national coalition. Eleven per cent of the electorate in the seat is ethnic Chinese and PAS needs those votes to win.

PAS will target the links of Umno candidate Wan Farid to the Monsoon Cup, an annual yachting event costing RM300 million (S$125.7 million). That money, it says, would be better spent helping the poor.

Rural Malays in 1999 turned against then-prime minister Mahathir Mohamad. While the economic growth of the Mahathir years benefited Malaysia, its big infrastructure projects did not help the rural poor. Umno is likely to attack PAS on Islamic laws. Even among rural Malays, PAS's push for an Islamic state is not that popular. It is their clean government and the neglect of the rural poor by Umno that boosts the Islamic party's appeal. Umno will try to exploit the ethnic Chinese community's fears about Islam.

Money will play a big part in the campaign and Mr Najib personally handed over a cheque for RM408.6 million for the state's oil royalties when he visited the state.

Vote-fraud allegations are a common complaint by the opposition and could feature here. The opposition claimed massive vote fraud when the government wrested control of the Terengganu state from PAS in the 2004 polls.

The claims were not proven and were strongly denied by the government. Police fired shots during a protest demanding fair elections in Kuala Terengganu in 2007 and two demonstrators were injured.

Mr Anwar lost political traction when he failed to win over government MPs to take power on Sept 16 last year.

A resounding win would re-establish his momentum and keep his fractious alliance of PAS, urban reformers and the DAP together. Mr Anwar, a former Muslim activist, is popular among Muslim voters, despite his imprisonment for sodomy and corruption in the late 1990s, and new charges of homosexuality that are in the courts.

The by-election will provide an important reading on his popularity with rural Malays, a key voter segment whose support will be required if the opposition is to win Malaysia's next general election, scheduled for 2013.

While economists have praised Mr Anwar's policies, particularly his anti-corruption stance and plans to remove a system of economic and social preferences for ethnic Malays, he also has a populist message. He opposed moves to end fuel subsidies that cost the Budget RM18.1 billion last year. -- Reuters