Society

Malaysia's Islamists to back Anwar

To some in PAS, UMNO, the main party in the ruling Barisan Nasional coalition, is preferable due to its Malay-Muslim core.

Analysts cautioned an alliance with UMNO, which has partnered with PAS before, may not get the Islamist party any closer to its plans of running the country according to its principles.

"The (opposition) offers more possibilities because it is very new. If they win, there could be opportunities for PAS, like getting ministerial posts for Islamic affairs," said Lee Hock Guan, senior fellow at the Singapore Institute of Southeast Asia Studies.

POLITICAL RISK PROBLEMS

The prospect of prolonged instability has scared investors away from Malaysia's stock, bond and foreign exchange markets.

The country's ringgit currency has fallen to 12-month lows of 3.32 to the dollar and the stock market has lost 22.58 percent in value this year.

"Political risk has become a major problem in Malaysia and has the potential to destabilise the nation," said economist Nikhilesh Bhattacharyya in a report published in Moody's Economy.com on Wednesday.

Paradoxically, investors are likely to have little to fear from PAS whose economic programme endorses social justice, but makes clear it is committed to a vibrant, growing middle class.

It has also built a reputation for good governance and for stamping out corruption in states it rules, winning plaudits from businesses, in sharp contrast to the ruling coalition.

"It is not like we are out to do an Islamic economy when everything is sharia compliant," a senior PAS official said speaking on condition of anonymity, noting that Malaysia already had dual Islamic and conventional finance.


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