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March 26, 2009

Malaysia's ruling party faces reform challenge
Malaysia's main ruling party defied expectations and picked the prime minister's son-in-law for an important party post on Wednesday.

Khairy Jamaluddin, 33, was chosen at a party meeting to head the youth wing of the United Malays National Organisation, the lynchpin of the National Front coalition that has ruled Malaysia for the past 51 years.

The post usually carries a cabinet position and has been occupied by three men who have gone on to be prime minister, including the current Deputy Prime Minister Najib Razak, who will move to the top job next month.

Many political analysts had written off Oxford-educated Khairy's chances of winning the post when he was censured over vote-buying in the contest for the post.

Najib is to replace incumbent Abdullah Ahmad Badawi who led the National Front coalition to its worst ever results in national and state elections a year ago.

Najib is charged with reforming UMNO, which is seen as corrupt and arrogant as well as battling a strident opposition led by former deputy prime minister Anwar Ibrahim and fighting a looming economic recession.

The youth post was one of the first jobs to be decided at the UMNO polls and Najib, who is standing unopposed, needs to ensure that he gets his backers into top posts.

A test will come on Thursday when Najib's pick for deputy president of UMNO, International Trade Minister Muhyiddin Yassin, is standing in a contested poll.

Najib will have to shepherd Malaysia's trade-dependent economy through what looks likely to be its deepest recession since the Asian financial crisis a decade ago.

Malaysia's central bank said on Wednesday it expected exports to tumble by a quarter this year.

The economy could shrink as much as one percent this year, a figure most private sector economists say is too conservative. Malaysia has grown by an average 5.4 percent a year since the Asian financial crisis.

Najib, who is also finance minister, this month unveiled a 60 billion ringgit ($16.53 billion) spending package to boost the domestic economy and staunch rising job losses.

He has announced plans to reduce Malaysia's dependence on electronics, oil and commodities exports and to boost the services sector but has not said how he will do it.

At the same time Najib will face a political test just days after taking the leadership with a parliamentary by-election and two state seat by-elections on April 7.

Anwar, who was booted out of office and imprisoned on what he says were trumped up sodomy and corruption charges in the late 1990s, has united Malaysia's fractured opposition and now heads a three-party alliance.

Despite facing new charges of sodomy, he stands a real chance of unseating the government in elections that must be held by 2013 at the latest.

Political analysts say that UMNO is in disarray despite the change of leadership.

"The party is not ready to face the opposition. The top leadership talks about change, but on the ground, the rank and file are still demoralised," said Sobri Sudin, a research fellow at the Information Source Foundation, an UMNO think-tank.

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