Malaysia’s new PM takes office amid economic challenges

Wednesday, 4 March 2020 00:51 - - {{hitsCtrl.values.hits}}

Malaysia's incoming Prime Minister Muhyiddin Yassin waves outside his residence in Kuala Lumpur before his swearing-in ceremony as the country's new leader

KUALA LUMPUR (Reuters): Muhyiddin Yassin took office as Malaysia’s new prime minister yesterday, capping a week of political chaos caused by the shock resignation of Mahathir Mohamad, and as the country’s economy weakens mainly due to the spread of the coronavirus.

In a marked difference from the administration of his outspoken 94-year-old predecessor, the publicity-shy Muhyiddin, 72, made no public remarks to state media called for his first day in office.

His office issued a two-paragraph statement saying he met government officials but had no plans to see any political leaders. He also visited the graves of his parents in his hometown in Johor, neighbouring Singapore, to pay his respects.

Muhyiddin, who unexpectedly fought off a challenge from his former boss Mahathir to get the top job, will have to soon hammer out deals with his new Malay nationalist alliance partners to pick his cabinet colleagues.

One of his biggest challenges would be to revive Southeast Asia’s third biggest economy that grew at its slowest pace in a decade in the fourth quarter.

It was not immediately clear if he would stick to a $ 4.7 billion stimulus package announced by Mahathir last week as interim prime minister to counter the impact of the coronavirus outbreak. Malaysia has reported 29 confirmed cases of infection, with 22 already cured and discharged.

“The change of government and assemblance of a new cabinet — appointments expected soon — could delay the roll out of the stimulus measures announced by Mahathir,” said Peter Mumford of consultancy Eurasia Group.

“In addition, the deterioration in relations between Muhyiddin and Mahathir means there is a risk the former replaces the latter’s appointments at government-linked companies, creating a period of uncertainty that delays investment plans.”

Foreign investors dumped 1.26 billion ringgit ($ 300 million) worth of equities last week - the highest in 88 weeks - as domestic political uncertainty added to worries over the disease outbreak.