Malaysia's Mahathir and Anwar in new showdown amid turmoil

Andrew Cummings
February 27, 2020

The ringgit opened higher today against the United States dollar on better demand due to investors' improved risk appetite ahead of an announcement of the government's economic stimulus package later today.

Malaysia's king summoned Mahathir Mohamad to the palace Thursday, fueling talks he may have majority support to return as the next prime minister after his abrupt resignation and the collapse of his ruling coalition this week.

Under the stimulus package, the government will implement a three-pronged approach - 1) to ease the cash flow of affected businesses, 2) to assist affected individuals and 3) to stimulate demand for travel and tourism.

In a statement, Dr Mahathir said Malaysia's outbreak of the viral disease now known as Covid-19 has been well contained, with most of those infected having fully recovered. A failed bid by Mr. Mahathir's supporters to form a new government without his named successor Anwar Ibrahim plunged the country into a political limbo.

To try to end the crisis, Sultan Abdullah Sultan Ahmad Shah has been meeting all 222 elected Members of Parliament (MPs) over two days.

Anwar was Mahathir's deputy during his earlier stint as prime minister, but they fell out over the handling of the Asian financial crisis and he was sacked in 1998.

Anwar was Mahathir's deputy and a rising political star when Mahathir was prime minister the first time but they fell out.

Mahathir said Wednesday that he had quit to show he wasn't power insane and because he didn't want to work with the former corrupt regime that he had ousted in 2018 polls.

Mahathir said he quit because his party wanted to pull out of the Pakatan coalition and form a government with the parties they defeated in the last general election.

While some politicians have openly voiced support for Dr Mahathir to stay in office, it was not clear whether enough of them would give him their backing.

"I just want to do what is best for the country", Mahathir said in a televised message.

"We wait for the decision of the king", he told a news conference.

Anwar's camp still controls 41% of parliamentary seats but could be the largest bloc after two key Malay opposition parties withdrew their support for Mahathir.

Mr Anwar then made his own move.

The struggle between Mahathir, 94, and Anwar, 72, who formed a surprise pact to win a 2018 election, has shaped Malaysian politics for more than two decades and is at the root of the latest crisis. But their relationship remained uneasy as Mahathir refused to set a time frame to hand over power to Mr. Anwar.

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