Malaysia Latest: Muhyiddin Turns Down King on Unity Government

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(Bloomberg) -- Former premier Muhyiddin Yassin said he turned down a proposal by the Malaysian monarch to form a unity government with reformist opposition leader Anwar Ibrahim, according to local media reports, as the political uncertainty continues after an inconclusive general election.

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As a next step, King Sultan Abdullah Sultan Ahmad Shah will interview 30 MPs from Barisan Nasional on Wednesday to help him decide who should become the next prime minister. BN, as it’s known, was in power but lost heavily in Saturday’s vote, although it’s still in a position to be a kingmaker in deciding the next government.

The king had summoned Anwar’s Pakatan Harapan alliance and Muhyiddin’s Perikatan Nasional for an audience with him at the palace. Anwar said the monarch wants to see a strong, formidable and inclusive government and hasn’t made a decision yet on who will lead the country.

Anwar Is One Compromise Away From Finally Leading Malaysia

Malaysian politics was thrown into disarray after the weekend’s snap polls. Lawmakers from Barisan Nasional have informed the monarch that they plan to be in the opposition.

Key Developments

  • Malaysia Kingmaker Won’t Join Rivals Racing to Form Government

  • Islamic Surge Puts Malaysia’s Recovery at Risk: Clara F. Marques

  • Ringgit’s Best Days May Be Behind It as Hung Parliament Weighs

  • Malaysia Extends Deadline to Form Government as Turmoil Drags On

  • Mahathir’s Shock Election Loss Marks End of Decades-Long Career

  • Six Key Takeaways From Malaysia’s First-Ever Hung Parliament

(All times local)

Muhyiddin Turns Down King on Unity Government (7:45 p.m.)

Malaysia’s king asked Muhyiddin’s Perikatan Nasional and opposition leader Anwar’s Pakatan Harapan alliance to come together to form the next government but PN declined the monarch’s proposal, local media reported, citing the former prime minister.

Muhyiddin, who had an audience with the monarch earlier Tuesday, said his coalition was resolute in its stance of not working with PH. He said he had the support of 115 lawmakers to become the prime minister, more than the 112 needed to have a simple majority, but that wasn’t deemed enough by the king, the reports said.

Monarch to Interview All 30 Barisan Nasional Lawmakers (6:40 p.m.)

Malaysia’s King Sultan Abdullah Sultan Ahmad Shah will grant an audience to all 30 Barisan Nasional lawmakers at 10:30 am tomorrow, the national palace said in a statement Tuesday evening.

This will help the monarch determine who to appoint as the next prime minister. The statement was issued hours after the monarch summoned Anwar Ibrahim and Muhyiddin Yassin for an audience with him.

Anwar Says Malaysian King Hasn’t Made Decision on New PM (5:52 p.m.)

Anwar Ibrahim has asked that the public give the monarch time to decide on the new prime minister. The king in their meeting spoke of the need for a strong, formidable and inclusive government -- advice which Anwar said he would take into account while waiting for him to make his final choice.

“No decision has been made as of yet,” Anwar told journalists outside the national palace. The matter of forming a minority government did not come up, and, given time, Anwar said he was confident he could secure the simple majority needed to form the new administration.

Monarch Summons Competing Coalitions to Palace (3:50 p.m.)

Malaysia’s King Sultan Abdullah Sultan Ahmad Shah has summoned leaders of Anwar Ibrahim’s reformist Pakatan Harapan alliance and Muhyiddin Yassin’s pro-Malay Perikatan Nasional for an audience at the palace 4.30 p.m.

This is after he found that no lawmaker enjoyed a simple majority to be appointed as prime minister, according to a statement from the national palace.

Key Bloc Told King It Won’t Support Muhyiddin as PM (3:42 p.m.)

Barisan Nasional said it had informed the king that none of its lawmakers backed Muhyiddin Yassin as prime minister, adding the coalition is open to talks with “related quarters” to ensure a new government can be formed.

Malaysia’s King Says Will Make Decision Soon (2:57 p.m.)

Malaysia’s King Sultan Abdullah Sultan Ahmad Shah said he would come to a decision soon and urged everyone to accept the choice made by the people and lawmakers.

“Please be rational and we have to move on,” he told journalists outside the palace. “We have to move forward for our beloved country.”

The monarch smiled and laughed when one reporter asked if he planned to summon the lawmakers for an audience with him one-by-one. He did not answer the question.

Malaysia Bloc Won’t Join Rivals Racing to Form Government (2:03 p.m.)

The search for Malaysia’s next leader hit a snag when former ruling coalition Barisan Nasional said it will stay out of any new government and become part of the opposition instead, prolonging the uncertainty after the weekend’s inconclusive vote.

The move deprives both Anwar Ibrahim’s reformist group and ex-premier Muhyiddin Yassin’s pro-Malay alliance the support they require to form a new administration. No single coalition won a simple majority on Saturday’s election, and BN could have broken that stalemate by backing one over the other.

US Businesses Keen on Malaysia Despite Islamist Resurgence (12:05 p.m.)

US businesses present in the Southeast Asian country are less worried over the popularity of hardline Parti Islam Se-Malaysia, known as PAS, given Malaysia’s record of luring robust FDI flows in recent years despite the protracted political strife.

“The PN coalition, which includes PAS, has in the past provided some level of stable business environment,” Siobhan Das, chief executive officer of the American Malaysian Chamber of Commerce, said in a BTV interview.

Malaysian lawmakers have always been pragmatic in the past and the hope is that will happen again this time, she said, adding that investors “still see Malaysia as a fertile place to put their money.”

Regional Parties Distance Themselves from Muhyiddin (11:13 a.m.)

Muhyiddin Yassin’s majority support is in question after a bloc of parties from the Borneo state of Sarawak said it would leave it to the king’s wisdom to appoint a prime minister to lead the new government.

The coalition, known as Gabungan Parti Sarawak or GPS, had earlier proposed forming a government under Muhyiddin with Barisan Nasional as a partner -- but BN later said no such discussions had transpired.

“Considering the political turmoil in Peninsular Malaysia, GPS is of the stance that the people’s mandate must be respected,” the Office of the Sarawak Premier said in a statement.

Ringgit Consolidates Ahead of Palace Deadline (10:05 a.m.)

Malaysia’s ringgit consolidates as the deadline approaches for rival political parties to submit a plan to the king to form a new government. The currency was steady at 4.5800 against the dollar after rising 1% in the previous three sessions.

Kingmaker Coalition Meeting Ahead of Palace Deadline (9:58 a.m.)

Barisan Nasional lawmakers along with the coalition’s supreme council are set to gather at their headquarters in Kuala Lumpur 11 a.m. That’s three hours ahead of the palace’s deadline for parties to present their plans for a new government and prime minister.

The former ruling coalition will have to decide whether it will back Anwar Ibrahim’s reformist Pakatan Harapan or Muhyiddin Yassin’s pro-Malay Perikatan Nasional alliance. There has been a push among lawmakers for BN to stay out of any government and form the opposition. The BN supreme council had already met Monday night but no decision was made at the time, according to leader Wee Ka Siong.

Police Warn TikTok Users Not to Incite Unrest (12:46 a.m.)

Malaysia’s police chief warned users of social media, including TikTok, not to misuse their platforms to spread racist content that could lead to unrest.

Since the election results, several TikTok videos have been uploaded warning of a repeat of the deadly 1969 riots between the ethnic Chinese and Malay communities. The posts were repeating a narrative pushed by pro-Malay coalitions that any government with the Democratic Action Party, the choice of most non-Malay voters, would destabilize the country.

Some in BN Want to Stay Out of Any New Government (9:48 p.m.)

Barisan Nasional election director Mohamad Hasan has joined in the calls for the former ruling coalition to stay out of any new government. Perikatan Nasional and Pakatan Harapan should combine to form the administration instead, as they received the most votes in Saturday’s polls, he said.

“We BN accept the people’s decision to reject BN. Hence we have no power to form the government,” said Mohamad on Twitter late Monday. “BN is prepared to become a responsible opposition to provide check and balance to the new government.” Mohamad is the deputy president of BN linchpin UMNO, and was among the most vocal leaders pushing for snap elections.

Islamists Try to Appease Fears on Policies on Non-Muslims (7:50 p.m.)

Parti Islam Se-Malaysia, a major partner in ex-premier Muhyiddin Yassin’s coalition, said it won’t use its position in any federal government to implement policies that pressure non-Muslims.

“Pas always respects the diversity and plurality of Malaysia, which comprises various races, customs and religions and recognizes their rights and freedoms to practice their own way of life as under the Federal Constitution,” the party said in a statement.

Gaming, Alcohol Stocks Fall on Islamic Party Malaysia Poll Gains

Anwar’s Pakatan Harapan Forges Alliance to Govern Two States (7 p.m.)

Anwar Ibrahim’s Pakatan Harapan made an alliance with Barisan Nasional to govern the central states of Pahang and Perak in a sign the rivals would replicate the cooperation on a national level.

Pakatan Harapan controls 82 seats nationwide and tying up with Barisan Nasional would allow Anwar to claim a 112 seat majority, adequate enough to form government.

Anwar used to be a part of Barisan Nasional until he was sacked in 1998 in the wake of the Asian financial crisis. He has since waged a battle against BN, particularly its linchpin United Malays National Organisation, and helped to oust it from power in 2018 elections amid the 1MDB scandal.

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Stocks Pared Declines After Hung Parliament Result (5:46 p.m.)

Malaysia’s stocks pared declines after Saturday’s election produced the country’s first-ever hung parliament and amid a broader slump in Asia.

The benchmark KLCI Index closed little changed after briefly falling as much as 1.5%. Gaming and alcohol-related stocks took a hit after the Islamic party PAS, known for pushing the sharia law, garnered the most seats at the polls. The ringgit was 0.5% lower against the dollar while the 10-year yield remained steady.

Anwar Says Awaiting Decision from Former Ruling Coalition (2:41 p.m.)

Anwar Ibrahim said he was optimistic of heading a coalition government with Barisan Nasional, and was now awaiting a formal decision from the former ruling bloc. A tie up between the two would provide Anwar the simple majority needed form a new government.

“I am extremely pleased with the pace of exchanges we had including the formal negotiations. There was virtually no conditions attached except the condition of unity, to focus on the economy,” Anwar told a press conference in Kuala Lumpur after a meeting with BN leaders. All discussions was predicated on Anwar becoming the PM candidate, the long-time opposition leader added.

Muhyiddin’s Coalition Says Has Lawmakers to Support PM Bid (2:05 p.m.)

Shortly after the palace issued the statement, Perikatan Nasional alliance said it had submitted to the king sworn declarations of more than 112 lawmakers to support him as prime minister. PN had won 73 seats of the 220 parliament seats contested on Saturday, fewer than Pakatan Harapan’s 82.

Perikatan Nasional includes the Islamist PAS, whose electoral gains caused stocks related to gaming and alcohol to slump on Monday. PAS’ rise could dent investor confidence as the party has previously called for the implementation of hardline Shariah law in the country.

King Extends Deadline by 24 Hours (1:30 p.m.)

Malaysia’s king granted party leaders another 24 hours to decide on their choice of alliance and prime minister, days after the national vote produced a hung parliament.

Party leaders have until 2 p.m. Tuesday to present to the monarch their plans on forming the new government, according to a palace statement about thirty minutes before the original deadline.

Neither Anwar’s reformist, multi-ethnic Pakatan Harapan coalition nor Muhyiddin’s pro-Malay, Islamist alliance won enough parliamentary seats to gain a majority.

Zahid Seeks Flexibility on Deadline (12:05 p.m.)

BN chief Ahmad Zahid Hamidi said that he would request for more flexibility over the 2 p.m. deadline to provide the king with its choice of prime minister. Any decision will only be made after the negotiating committee has concluded and the supreme council has provided its endorsement, said Zahid.

Zahid was addressing the media after his BN coalition met with Anwar’s PH alliance. A tie-up between the two would provide them with the simple majority needed to form a government. All but four of BN’s MPs were present at the meeting, BN’s Ahmad Maslan said separately on Twitter.

--With assistance from Anuradha Raghu and Ravil Shirodkar.

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