Contentious Malaysia opposition poll threatens power bid

Malaysia's opposition leader Anwar Ibrahim listens during a meeting at his office in Kuala Lumpur March 11, 2010.

KUALA LUMPUR (Reuters) - Malaysia's main opposition party looks increasingly unlikely to mount a serious threat to the status quo when the country next goes to the polls.

Its leader Anwar Ibrahim is on trial on sodomy charges. And an internal election to choose his party's deputy leader -- and his successor if he is convicted -- has divided the party just at a time when Prime Minister Najib Razak may decide to call a snap election.

A few months ago it looked as if the opposition could mount a serious threat to the National Front that has ruled this Southeast Asian country for over half a century as the government wrestled with accusations it was pandering to extremists and struggled to implement economic reforms.

In elections in 2008 the three-party opposition scored its best ever results in national and state elections, depriving the National Front of its iron-clad two-thirds parliamentary majority, and prompting investors to dump Malaysian stocks.

Now, Najib looks to have the momentum to call early polls and although Anwar confidante Azmin Ali is set for a comfortable win in the race for the deputy presidency of the People's Justice Party (PKR), the party has been split by allegations of irregularities in the election.

Azmin, 46, holds an unassailable lead in voting that ends on Sunday with results to be announced on Nov 27. He will take the PKR post at a crucial time as Anwar is again on trial for sodomy, a charge that he says is a repeat of trumped up charges that saw him dismissed from government in 1998 and jailed.

"Azmin will need to reunite the party very quickly given that the prime minister will call a snap election," said James Chin, a professor of political science at Monash University in Malaysia.

Malaysia's opposition has been defeated in four of five recent by-elections, its momentum slowing ahead of general elections expected as early as April next year.

A strong win by the ruling National Front coalition in an early general election that can be held any time until 2013 could enable Najib to consolidate his economic reform agenda and bolster investor confidence.

For a graphic of foreign direct investment trends:

here

Najib has pledged economic reforms but has shied away from major moves like a goods and services tax and radical subsidy cuts as he is wary of upsetting voters.

NOT OUT OF THE WOODS YET

Najib who will tour the country's 13 states from next month to beef up preparations in his own party for early polls, will need to regain his National Front coalition's two-thirds majority in parliament and win back control in at least two of the five states it lost in 2008.

While the Front has recovered some of its form with convincing wins in recent by-elections, most of the coalition's smaller component parties are still weak after being abandoned in 2008 by the country's minority ethnic groups.

The possibility the country's four opposition-run states would run their own state polls separately from national elections could also prolong political tensions.

"Najib could win the national level elections but his mandate will remain uncertain with state polls looming," said Ibrahim Suffian, director at independent opinion outfit Merdeka Center.

The country's stock market dropped 9.5 percent when markets re-opened after polling in the 2008 elections, a situation that could be repeated if neither side scores a strong win in national and state polls.

PKR has been hit with a series of resignations by its MPs in an opposition alliance that also embraces a more established Islamist party and a mainly ethnic Chinese secularist party. "The People's Alliance has to be honest and admit that they've lost some of the goodwill from the people," said prominent lawyer and rights activist Haris Ibrahim.

(Reporting by Razak Ahmad; Editing by Andrew Marshall)