Malaysia Risks Investment Trouble As Political Drama Drags On

A week after opposition leader Anwar Ibrahim laid claim to the premiership citing enough parliamentary support to form a new government, the political situation is fluid and the power to decide what happens next rests with a king who is currently hospitalised.

Fitch Solutions said the upheaval since March was risky for Malaysia’s long-term growth at a time when its neighbours compete for investments from firms diversifying manufacturing away from China.

“Malaysia could find it difficult to pitch its attractiveness to investors given the existence of lower-cost centres such as Vietnam and Indonesia on the one hand, and more stable politics in countries such as Singapore,” its Senior Asia Country Risk Analyst Darren Tay told Reuters.

The power struggles that have ensued since the end of decades of unbroken rule by one party in 2018 could sap confidence among multinationals beset by coronavirus-related problems, analysts and business groups said.