Malaysia's anti-government protests: What's next?

Protesters hold up a placard during a Bersih rally as protestors call for the resignation of Prime Minister Najib Razak on August 30, 2015 in Kuala Lumpur, Malaysia.
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Malaysia's mammoth civil disobedience campaign has heightened pressure on scandal-ridden Prime Minister Najib Razak but is an imminent departure on the cards? Unlikely, analysts say.

The 61-year-old leader, who is no stranger to controversy, has most recently been accused of pocketing almost $700 million from troubled government fund 1Malaysia Development Berhad (1MDB). Najib says the allegations are part of a malicious campaign to force him from office, while his cabinet ministers claim the funds were campaign donations from unnamed sources in the Middle East.

"[The] protests will pile on public pressure on Najib to resign. But unfortunately he's in quite a strong position," said James Chin, director of the Asia Institute at the University of Tasmania.

"When you look at the number of Malay participants that were a lot less this time and it's the Malay community that will decide the outcome of Najib's prime ministership."

Malaysia, a nation of 30 million, is predominantly Malay Muslim. However, the majority of participants in the weekend's rally - estimated by police to number roughly 25,000 - came from the country's minority ethnic Chinese and Indian communities.

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More than the protests, Chin said Najib's handling of the economy was what might see him pushed out the door.

"The ringgit is the key to the prime ministership," said Chin. "If the economy does well and the ringgit recovers, then Najib will be in a much stronger position. If the ringgit keeps falling to 4.6, 4.7– the Prime Minister doesn't have a choice but to resign," he said.

The ringgit has lost one third of its value against the U.S. dollar over the past 12 months and is Asia's worst performing currency this year, driven by global headwinds - such as lower energy prices and a broader selloff in emerging market assets – as well as domestic political turmoil.

A weaker ringgit hurts consumers' pockets as it pushes up the price of imported goods. The currency traded at 4.19 against the greenback on Monday.

Will Malaysia's 'Bersih' movement spark change?
Will Malaysia's 'Bersih' movement spark change?

According to Terence Gomez, a professor in the department of administrative studies and politics at the University of Malaya, Najib's resignation would not, in any case, solve Malaysia's broader corruption woes.

Najib has previously been linked to corruption around a French submarine contract, as well as the murder of a Mongolian model connected to the sub deal, but has always strenuously denied any wrongdoing.

"The [corruption] situation is getting worse and worse even though we're into our 4th Bersih campaign," he said. Berish, which means "clean" in Malay, is the name of the pro-democracy organization behind the weekend's rallies.

"Is getting rid of Najib the solution? No. We need major institutional reforms in the country."

Krystal Tan, Asia economist at Capital Economics shared a similar view.

"If Mr Najib were to be ousted, another leader would likely be chosen from the UMNO [United Malays National Organisation] ranks, and any changes in policy or governance would probably be minor," she said. Najib's UMNO party is the biggest in the ruling Barisan Nasional coalition.

"If Malaysia is to achieve its potential, its institutions need a shaking up and cleaning out."

While political reform remains distant, Bersih rally protesters said they were happy to be part of the process.

"We Malaysians want to try to change something. Maybe there will be nothing happening after this (but) this is progress [and] I want to be part of the process," 29-year-old Pauline Chow told CNBC.

Khor Chun Wai, 34, meanwhile, highlighted the need for racial unity in the movement.

"Malaysia needs to change, but we can't do this with just one race, we need the support of all races, we need them all to stand forward, and change the present situation," he said. "The fall of the ringgit, and our foreign reserves, and the withdrawal of foreign investors, we can't stand aside any longer."