KUALA LUMPUR (Reuters) - Malaysia will hold general elections on May 5, the government said on Wednesday, in what could be the toughest test of the ruling coalition's 56-year grip on power in Southeast Asia's third-largest economy.
Opinion polls suggest a narrow victory for the National Front led by Prime Minister Najib Razak, who is under pressure to restore the two-thirds majority the coalition lost for the first time in 2008.
Najib ended months of speculation when he called for the poll last week, less than a month before the end of the parliamentary term.
He says he needed time to show the impact of his economic transformation programme, but critics say the delay was a sign of indecision that kept financial markets on edge.
He told reporters after meeting coalition leaders in Kuala Lumpur that he wanted to form a "strong and viable" government at the national and state level.
Najib faces a confident opposition led by former deputy prime minister Anwar Ibrahim, whose Peoples' Alliance won five of Malaysia's 13 states in 2008 and has the best chance of toppling the coalition in Malaysia's post-colonial history.
"Najib has to perform better than 2008; if the result is worse, there could be internal challenges against his rule," said Oh Ei Sun, senior fellow at the S. Rajaratnam School of International Studies in neighbouring Singapore.
"For Anwar, its another old battle. If he doesn't make it this time, his age will catch up with him and he won't be a viable opposition for the next general election," he said.
The May 5 poll could be 65-year-old Anwar's last chance to lead a fractious alliance that includes Muslim conservatives and ethnic Chinese minorities. His alliance wants to tap into a growing desire for faster political and economic reform.
The ringgit currency rose to its highest level since January 21 after the New Straits Times leaked the polling dates earlier on Wednesday. It appreciated 0.4 percent to 3.0245 to the dollar, also due to continuous bond inflows. Financial markets were otherwise mostly unchanged, with the Kuala Lumpur Stock index up 0.2 percent at the midday break.
Elections Commission Chairman Abdul Aziz Yusof said candidates will be nominated on April 20, meaning roughly a two-week campaigning period. That falls short of the 21-day campaigning period sought by the electoral reform group, Bersih.
"I disagree that it will be a dirty election," Abdul Aziz told reporters in Malaysia's administrative capital, Putrajaya.
Bersih wants electoral rolls cleaned up and equal media access to all parties. Recent Bersih protests often ended in clashes with riot police, prompting the government to meet some demands for change such as allowing overseas voting.
"The Election Commission has made a lot of positive steps towards meeting the demands placed by civil society and also pro-democracy voices here in Malaysia," said Ibrahim Suffian, head of respected pollster the Merdeka Centre.
"But there remains fundamental concerns about the reliability of our voters' list," he said.
Defying electoral rules, parties from both sides have already been campaigning, courting voters across Malaysia with party banners and rallies and setting out populist manifestos.
The National Front and the opposition are both targeting the 2.4 million first-time voters, nearly a fifth of Malaysia's eligible voters, with promises of reform and handouts.
(Additional reporting by Siva Sithraputhran in PUTRAJAYA; Editing by Niluksi Koswanage and Paul Tait)
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