ENGLISH DEYEA NEWS

By EILEEN NG / AP WRITER | KUALA LUMPUR — Malaysia's ruling party elected a new leader along with a fresh team of deputies packed with his allies, hoping they would rebuild the party's tattered reputation and fix an economy galloping toward recession.

Newly-elected deputy president of the ruling party United Malays National Organisation (UMNO) Muhyiuddin Yassin (2nd L) celebrates his victory with other office bearers in Kuala Lumpur. (Photo: AFP)

Deputy Prime Minister Najib Razak—elected unopposed as president of the United Malays National Organization on Thursday—will also have to juggle competing interests in the party, curb infighting and mend his own image of a hard-liner tainted by corruption, analysts said Friday.

"Investors don't believe there is going to be much in the way of reform from Najib and his team," said Philip McNicholas, an economist with research firm IDEAglobal in Singapore. "He talks about reforms but he has to put his money where his mouth is."

In line with tradition, Najib as party president will also become the prime minister, a job he will inherit next week from the moderate Abdullah Ahmad Badawi, who spent a largely ineffective 5 1/2 years in office.

Najib's first political test will be three parliamentary by-elections on April 7.

The elections "will be seen as a poll of his popularity. Right now, the market is just discounting any sort of strong government" to push through reforms, said McNicholas, adding there was a "fair degree of political risks" for investors.

The Malaysian economy is heading for recession despite a US$16 billion stimulus package that Najib announced earlier this month. Malaysia's central bank said Wednesday it expects exports—the main pillar of the economy—will fall by a quarter this year.

Najib, 55, is expected to appoint his right-hand man, International Trade and Industry Minister Muhyiddin Yassin, who was elected as the party's deputy president in Thursday's elections, as the deputy prime minister.

Cabinet posts will also be given to three other allies, Ahmad Zahid Hamidi, Hishammuddin Hussein and Shafie Apdal who were elected as party vice presidents. Hishammuddin is Najib's cousin, and both are sons of two former prime ministers.

The party election virtually purged the top leadership of politicians aligned to Abdullah, except for his son-in-law Khairy Jamaulddin, who was elected head of the party's youth wing. The position normally carries with it a Cabinet ministerial post.

Najib is also saddled with criticism that he will crack down on the opposition and dissent. In recent days, the government shut down two opposition newspapers, and police used tear gas to break up a rally by opposition leader Anwar Ibrahim.

But analysts say such concerns may be premature.

"It's unfair to prejudge him," said Ramon Navaratnam, chairman of the Center of Public Policy Center think tank in Kuala Lumpur. "Now that Najib is firmly in the saddle, he is in a position now to remove these uncertainties."

He said Najib will also have to show that he is not only the leader of the majority Malays but also of the Chinese and Indian minorities.

UMNO, a party of Malays, is the largest component in the National Front coalition that has ruled Malaysia since 1957. But for the first time in 40 years, the Front failed to get a two-thirds majority in Parliament and ceded control of five of Malaysia's 13 states to the opposition in March 2008 elections.

Many Malaysians see UMNO as a party of corrupt and power-hungry politicians. The party is also accused of subverting the judiciary, the police force, the bureaucracy and discriminating against the Chinese and Indian minorities.

The suave and articulate Najib has also been accused of corruption, including an alleged shady deal to purchase French submarines when he was defense minister. Najib denies the allegations.