Battle lines drawn over Anwar’s return

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If all goes according to plan Anwar Ibrahim, the Malaysian opposition leader, will on Tuesday easily win a by-election in his old constituency and return to parliament after a 10-year absence.

The former deputy prime minister then wants to mount within three weeks a parliamentary coup against the National Front coalition government that has ruled Malaysia since independence from Britain half a century ago. He hopes to persuade at least 40 government legislators to cross the aisle to support a vote of no confidence.

But the strategy has been dogged by allegations of sodomy that, if proved, could strip Mr Anwar of the seat, and emerging signs of dissension within the ranks of the three-party opposition alliance he led to near-victory in general elections in March.

According to opinion polls the allegations are seen by many Malaysians as a desperate, last-ditch government attempt to derail Mr Anwar’s return to power. He says the charge is a fabrication, although his accuser, a 23-year-old aide, recently took the dramatic step of taking a sworn oath on the Koran that the allegation was true.

Mr Anwar was convicted of a similar offence and jailed after he lost a power struggle with Mahathir Mohamad, then prime minister, in 1998. The supreme court overturned the conviction in 2004, although Mr Anwar was legally barred from holding political office until a few months ago.

“This is Anwar’s last chance. He’s 60 years old and if he’s thrown in jail again he’ll never become prime minister,” says Ng Hua Hwang, a local driver.

That feeling is reflected in Mr Anwar’s would-be constituency of Permatang Pauh, a mainly rural backwater near the bustling port of Penang in the north west of Malaysia.

Mr Anwar is heavily favoured to win in the district, which he represented from when he entered politics as a government MP in 1982 until he was sacked as Dr Mahathir’s heir apparent in 1998. Mr Anwar’s wife then served as an opposition MP for the district until she resigned last month to make way for her husband.

There are, however, signs the government’s aggressive pursuit of the sodomy case has created a backlash against the administration of Abdullah Badawi, whose popularity has fallen to record lows. It has also led to uncertainty about Malaysia’s political future and undermined the confidence of foreign investors, as reflected in a 25 per cent fall in the Kuala Lumpur stock exchange index this year.

The credibility of Mr Anwar’s expected victory will largely rest on the size of his winning margin among the constituency’s 58,500 voters, who are predominantly Muslim.

The by-election also represents a test for Najib Razak, the deputy prime minister, who is leading the government campaign. Mr Najib was last month named to succeed Mr Abdullah as prime minister in 2010 should the current government still be in office.

Mr Anwar alleges the government has tried to sabotage a strong turnout for him by selecting a weekday for the by-election instead of the weekend, as is normal in Malaysia.

A secure victory for Mr Anwar might help persuade government MPs to defect at a time when its popularity is suffering from rising inflation, which in July reached a 26-year high of 8.5 per cent.

The Borneo states of Sabah and Sarawak, which have a large non-Muslim population, are expected to provide most of the defectors. That has raised worries among the majority Muslim Malays that any government formed by Mr Anwar would be dominated by minority groups, including ethnic Chinese, Indians and Borneo Christians.

The Islamic Party of Malaysia (Pas), one of the three opposition alliance members, recently held talks with the United Malays National Organisation, the dominant party in the National Front, about co-operation in maintaining Malay political supremacy. Although Pas has promised to stick with the opposition alliance, some of its officials complain that the party has lost out to other opposition groups in power-sharing in five state governments, including Penang, that the alliance won in the March elections.

Analysts expect the government will play the Malay race card to persuade Pas to join its ranks if Mr Anwar succeeds in attracting non-Muslim MPs from Borneo. Otherwise, the government might decide to call a snap general election in the hope of preventing him from gaining power.

Malaysia's central bank left its key rate on hold at 3.5 per cent on Tuesday, the same level it has been since April 2006, and stressed that it had not bowed to political pressure to do so.

Bank Negara Malaysia is the only significant central bank in emerging Asia not to have responded to rising inflationary pressures. The decision came after data on Friday showed that annual inflation in July had surged to 8.5 per cent due in large part to rising petrol and food prices.

Bank governor Zeti Akhtar Aziz said she had not bowed to pressure in setting rates ahead of Tuesday’s by-election, in which opposition figure Anwar Ibrahim is expected to score a big victory.

“We only take into account the economic, monetary and financial conditions in determining our interest rate policy,” she said.

The bank said its decision was based on the fact that inflation had not fed through into a dangerous spiral of wages chasing prices.

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