A new opposition coalition

The three parties that form Malaysia's new opposition coalition have agreed on a code of conduct designed to settle disputes among coalition members. The new pact, signed on January 9, aims to avoid disagreements such as those that led to the split up of the former alliance, Pakatan Rakyat, half a year ago.

The deal comes after two of Malaysia's opposition parties which used to be part of the now-defunct alliance - jailed opposition leader Anwar Ibrahim's Parti Keadilan Rakyat (PKR) and the Chinese-based Democratic Action Party (DAP) - announced in September the formation of a new coalition called Pakatan Harapan (or Alliance of Hope in Malay) with the newly formed Parti Amanah Negara (PAN) - a splinter party of the Islamist Parti Islam Se-Malaysia (PAS).

The 1MDB scandal

The former alliance collapsed last June as the PAS - one of the coalition parties - severed ties with the DAP over differences which arose over the PAS' plans to implement Islamic penalties - known as hudud - in Kelantan State. The Islamic party's non-cleric elements then decided to break away to form the PAN.

The new alliance's code of conduct announcement comes as Prime Minister Najib continues to face calls to resign over alleged financial mismanagement at indebted state fund 1Malaysia Development Berhad (1MDB).

The PM, who also heads the powerful United Malays National Organization (UMNO), has come under growing pressure in recent months over claims that $700 million (633 million euros) were wired from the state-owned development company to his personal bank accounts.

The transfers were reportedly made shortly before a hotly contested election in 2013. During the 2013 elections, the ruling National Front or Barisan Nasional coalition had its poorest performance since independence after receiving only 48 percent of the popular vote, compared to 52 percent for the opposition led by now jailed Anwar Ibrahim. But the ruling bloc was able to remain in power only because it won the most seats.

Growing discontent

The PM, whose approval ratings have fallen sharply over the past year, has weathered his biggest political crisis since taking office in 2009 by denying any wrongdoing and refusing to heed the protesters' demands, calling them "shallow-minded."

But as political analyst Siegfried Herzog points out, people remain deeply unhappy with the government. "This is reflected in very low poll numbers for the ruling party, but it seems that voters are more upset about the sales tax and the slowing of the economy than about the 1MDB scandal, partly because most people don't feel that it involved their own money," Herzog, who heads the regional office of the German foundation Friedrich-Naumann-Stiftung, told DW.

Concerns over the political scandal are also said to have contributed to Malaysia's currency, the ringgit, losing nearly 20 percent of its value against the US dollar, making it the worst-performing Asian currency last year. The country's stock market was also one of Asia's poorest performing in 2015.

Najib 'back in control'

But the key question is whether the new alliance can capitalize on this. Experts are skeptical that the new opposition coalition can unseat the ruling Barisan Nasional in the next election. There are several reasons for this, as William Case, professor in the Department of Asian and International Studies at the City University of Hong Kong, told DW.

One key factor, Case argues, is that although Najib has been under great pressure in recent months, he has shown skill and unexpected ruthlessness in seeing these challengers off.

"He has shown convincingly that all members of UMNO benefited politically and personally from his distribution of 1MDB funds at the time of the last election. His position within the party is secure. And the party is secure in its Malay support. So while Najib was shaken by the crisis, he appears now to have regained full control," said Case.

Analyst Herzog has a similar view. He stresses that while there are still a few factors threatening Najib's position, there is also a chance that he will manage to sit out the crisis, as it is hard to construct an alternative scenario. Moreover, says Herzog, the international context favors him: "Malaysia is working very closely with the US in the anti-terror coalition against 'Islamic State,' so there is little outside pressure on him."

Malaysia is also one of the 12 Pacific Rim nations that joined the the Trans-Pacific Partnership or TPP, a far-reaching pact pushed by the US - but which excludes China - designed to dismantle tariff and non-tariff barriers to trade and investment between the participant countries.

Daunting challenges

But the new opposition alliance is basically led by a consensus of the DAP, PKR, and PAN parties, which have agreed that Anwar Ibrahim will remain the leader of the coalition and their prime ministerial candidate.

But given that the Islamic PAS is not part of the new coalition, the Pakatan Harapan's capacity to mobilize voter support remains to be seen, warns the analyst, adding that the block will inevitably suffer from the loss of the presence of Anwar Ibrahim who, however controversial, was highly charismatic.

This view is shared by analyst Herzog, who says that the key issue at the moment is leadership: "With Anwar Ibrahim in prison, coordinating the coalition and effectively communicating with the people remains the main internal challenge of the opposition coalition."

The Southeast Asia expert explains that since Malaysia is a multi-ethnic and multi-religious country - with Malay Muslims forming the majority - most parties tend to be based in one particular group. "The PAS is firmly Malay in character, whereas the PKR is multi-ethnic and the DAP is Chinese. As a result, the new coalition is being perceived by the Malays as being less credible in protecting their interests," he told DW.

The ruling Barisan is also multi-ethnic, but most Malays still support it.

"Given that Malay society is increasingly becoming more Islamic, Pakatan Harapan's refusal to support 'hudud' and other related Islamic matters have somewhat alienated them from the majority of the Malay voters. In this respect, Anwar Ibrahim's imprisonment is the biggest problem, as he enjoyed widespread trust among Malays," Herzog added. UMNO has also refused to support "hudud."

Animosities prevail

In the meantime, animosities between PAS and PAN continue. "During the last few months, the PAS has effectively been campaigning against PAN members who are depicted as traitors and the new party as anti-Islam. Yet, PAN has a huge following and it could well be that PAS has seriously suffered from the split," Andreas Ufen, Asia expert and senior research fellow at the Hamburg-based GIGA Institute, told DW.

As a result, the GIGA expert added, so-called three-cornered fights are probable in the next general elections, meaning that PAS and PAN candidates may be on opposite sides. "This new constellation of forces will enhance the chances of the ruling coalition to survive for the time being."

But the main obstacles facing the new opposition alliance are probably the deep antipathies between Muslim Malays and Chinese as well as between Islamists and Muslim reformers.

"Islamists within PAS obviously see the introduction of an Islamic penal code and so-called hudud laws as their major goal. Democracy and human rights seem to be rather unimportant to them. They do not see the corruption and nepotism as the major challenge, but the secularism of the Chinese minorities as represented by the DAP," said GIGA expert Ufen.

What next?

This is why in order to boost their chances of success the new opposition alliance needs to strengthen its leadership, make the coalition work smoothly, articulate its plans clearly, while showing their achievements in the states that they currently run, says experts. Without such measures, it will be a challenge for the new opposition to even become an alternative to the scandal-hit ruling coalition, said Herzog.

But analyst Case remains skeptical. He argues that even if the opposition wins an election, it loses, owing to the incumbent Barisan's "nearly complete control" of the election commission and electoral procedures, more generally. "This is important as it greatly diminishes the opposition's prospects regardless of how smoothly its leadership interacts, or how well it mobilizes voter support."