Malaysia’s declaration of emergency means PM can avoid election until pandemic ends

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The King of Malaysia has declared a nationwide state of emergency for the first time in more than half a century, suspending Parliament in a measure that allows ailing Prime Minister Muhyiddin Yassin to avoid doing facing elections until the pandemic is over.

The emergency decree gives Muhyiddin’s administration more power to deal with an increase in COVID-19 cases, including over the operations of private hospitals, and may allow the police and military to help take public health action. The ringgit and the country’s main stock index fell after the announcement, which came a day after Muhyiddin imposed a targeted two-week lockdown across most of the country from Wednesday.

During a briefing on Tuesday, the prime minister said he could introduce measures such as price controls to prevent economic sabotage. An independent committee would be set up to inform the king of the duration of the emergency, which was due to expire on August 1, unless the outbreak subsides earlier. Elections would be held as soon as an independent committee declares the pandemic has subsided and it is safe to hold a vote, Muhyiddin said.

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“The emergency proclaimed by the Yang di-Pertuan Agong is not a military coup and the curfew will not be applied,” he said in a national speech, referring to the monarch. “I stress that Malaysia is open for business. In the face of these difficult times, this time of emergency will bring us much-needed calm and stability, while allowing us to focus on economic recovery and regeneration. “

Opposition politicians criticized the move, accusing Muhyiddin of failing to contain an outbreak of COVID-19 cases in recent months, then using the pandemic as an excuse to stay in power. New infections hit an all-time high last week and the tally stood at just over 2,000 on Monday. The government has forecasted daily cases to reach 8,000 by the end of March or the end of May, based on predictive modeling analysis.

“Political flip-flops, double standards and sheer incompetence” have led to an outbreak of cases, according to Lim Guan Eng, general secretary of the opposition Democratic Action Party, the largest in parliament. He said Muhyiddin’s government failed to implement effective measures due to an “endless politics of survival.”

The ringgit fell 0.6% to 4.0760 per dollar, the weakest since Dec. 7, as government bonds extended their losses. Malaysia’s main stock index fell 1.6%, led by banks including CIMB Group Holdings Bhd.

Malaysia last experienced a national emergency in 1969, when race riots between Malays and China resulted in the suspension of parliament for two years. The announcement of the emergency on Tuesday brought back memories of that “very traumatic time,” said Bridget Welsh, honorary research associate at the Asian Research Institute at the University of Nottingham in Malaysia.

“I see this as completely unnecessary from a COVID-19 perspective,” Welsh said. “It is a political decision to retain political power.”

The emergency declared on Tuesday ends any election risk for Muhyiddin, who has held a slim majority in parliament since taking office last year following the collapse of a previous coalition government. In October, the king pushed back Muhiyddin’s attempt to put the entire country on a state of emergency before a major budget vote – a test of confidence he ended up passing.

Still, calls had increased in recent weeks for a new election. Some key members of his ruling coalition’s largest party, the Malaysian National Organization, had called forfor an instant pollby March.

An emergency “can act as a ‘breaker’ on domestic political rumors, but on the other hand, it could increase the perceived risk for foreign investors in Malaysia,” said Winson Phoon, head of fixed income research. at Maybank Kim Eng Securities.

Following the imposition of a new lockdown, Fitch Solutions reduced Malaysia’s real gross domestic product forecast for 2021 to 10% from 11.5% earlier. The restrictions announced on Monday are likely to last longer than the initial two-week period, he said in a report, adding that the previous lockdown that ended in June lasted nearly a quarter and was put into effect. works after an epidemic much milder than the current wave.

Fitch Ratings lowered Malaysia’s sovereign rating in early December.

The palace press release called the emergency a “proactive measure to contain the Covid-19 pandemic”. Muhyiddin said flooding in a number of states also contributed to the need for increased powers in addition to the virus.

“The virus cases continue to rise and show no signs of abating in the short term,” Muhyiddin said. “Therefore, the government needs certain powers to ensure that the virus can be effectively contained and to ensure that health services are not crippled.”

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