This article first appeared in The Edge Financial Daily on March 2, 2020

KUALA LUMPUR: Tan Sri Muhyiddin Yassin became Malaysia’s eighth prime minister yesterday after a tumultuous week which saw the nation plunge into a political crisis that needed the palace to intervene.

Muhyiddin took his oath of office before Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah at Istana Negara yesterday. The president of Parti Pribumi Bersatu Malaysia (Bersatu) will now set out to choose his cabinet of ministers to run the government after playing second fiddle for much of his political career.

The country will soon see another new cabinet line-up in less than two years after Pakatan Harapan took over Putrajaya.

Against the backdrop of a gloomier global outlook plus the Covid-19 outbreak adding uncertainties to economic growth, amid the prolonged slowdown in the domestic property market, the business community will cast eyes on the candidates for finance, economic affairs, and housing development ministers, among others.

Given the country’s tight fiscal position on one hand and the pertinent need for the government to stimulate economic growth on the other, the upcoming finance minister is expected to have an uphill task going forward, said economists, noting that crude oil prices are on a decline amid soft demand.

Some caution that with the global recession risks heightening, the current economic headwinds might not be any less than the Asian financial crisis in 1998/1999.

Investment analysts expect some knee-jerk reaction in the stock market today, particularly the sin stocks, such as breweries and gaming companies, considering PAS is expected to be part of the ruling government.

“Any major selldown in the local market may attract the government-linked funds to hunt for bargains,” said a fund manager.

An extraordinary week kicked off last Sunday with then PKR deputy president Datuk Seri Mohamed Azmin Ali disobeying party orders to join forces with Bersatu and opposition parties Umno and PAS to overthrow the Pakatan government.

Muhyiddin’s name was not in consideration for the premiership earlier in the week as all the talk was about the power struggle between Tun Dr Mahathir Mohamad, Mohamed Azmin and PKR president Datuk Seri Anwar Ibrahim for the top spot.

This culminated in a dinner purportedly organised by Umno and PAS at the Sheraton Petaling Jaya Hotel which Mohamed Azmin and his PKR faction had attended.

Last Monday, Dr Mahathir shocked the nation when he stepped down as prime minister as well as Bersatu chairman claiming that his party had disobeyed its protocol to work with the opposition. This caused a ripple effect in which the government was effectively dissolved and the nation’s stock market closed at its lowest since 2011.

It was then left to the King to decide which party should get to nominate their candidate for prime minister amid a three-way tug of war between PKR, Bersatu and Umno.

While the Agong had taken the decision to interview each of the 222 members of Parliament, he appointed Dr Mahathir as interim prime minister, a move which had never been done in the nation’s history. As the saying goes, the rest will be in Malaysian history books now.

In the final act, the King had named Muhyiddin as the eighth prime minister of Malaysia, as the Bersatu president was the one who was “likely to command the confidence of the majority of the members of the [Lower] House”, as spelt out under Article 40 of the Constitution. However, the dust might not settle that soon on the local political scene.

Dr Mahathir, who in a shocking U-turn emerged as Pakatan’s prime ministerial candidate as Anwar had removed himself from the race last Friday, claimed he had garnered a simple majority of 113 parliament seats to form the government. And he has called for a parliamentary sitting next Monday to show whether Muhyiddin has enough support to be the premier.

Muhyiddin served as the former deputy prime minister under Datuk Seri Najib Razak’s government and was sacked from the post in 2015 for questioning RM2.6 billion deposited into Najib’s private accounts as part of the 1Malaysia Development Bhd scandal.

The 72-year-old political stalwart from Muar, Johor formed Bersatu after he and Dr Mahathir were kicked out of Umno by Najib.