Asia Politics

Malaysia's political crisis could worsen coronavirus and economic challenges

Key Points
  • Malaysia's parliament sat for the first time this year on Monday and was supposed to debate motions that include a no-confidence vote against Prime Minister Muhyiddin Yassin.
  • "At the moment we know that the coalition that governs the federal government is operating at a very, very thin, fragile ... majority," said Tricia Yeoh, a fellow at Malaysian think tank Institute for Democracy and Economic Affairs.
  • The fragility of the government, the coronavirus outbreak and the economic slowdown formed a "triple-whammy crisis" for Malaysia, said Yeoh.
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Malaysia is facing a 'triple-whammy crisis,' says analyst

As countries globally grapple with the coronavirus outbreak and the resulting economic fallout, Malaysia faces an additional threat — the fragility of its current government.

That's a "triple-whammy crisis" for the Southeast Asian country at a time when businesses and households have been hit by months of lockdown to combat the pandemic, said Tricia Yeoh, a fellow at Malaysian think tank Institute for Democracy and Economic Affairs.

"At the moment we know that the coalition that governs the federal government is operating at a very, very thin, fragile ... majority," Yeoh told CNBC's "Street Signs Asia" on Monday. 

"As long as the current government doesn't table any motion (in parliament), it is secured — but the question of political stability will continue to haunt the current government and has, of course, tremendous economic impact."

Malaysia flag seen on the top of Palace of Justice building's dome.
Faris Hadziq | SOPA Images | LightRocket via Getty Images

The country's parliament sat for the first time this year on Monday. The session was supposed to debate motions that include additional government spending in economic stimulus packages to cushion the impact of the coronavirus, as well as a no-confidence vote against Prime Minister Muhyiddin Yassin.

Muhyiddin was sworn in as prime minister in March after his predecessor Mahathir Mohamad's sudden resignation sparked a week-long tussle for the top job between the two main political factions in Malaysia. The no-confidence motion against Muhyiddin was sought by Mahathir.

But Muhyiddin, citing the coronavirus pandemic, decided to convene parliament on Monday only for an address by the king.

Time is running out

Lockdown measures in the Southeast Asian country came into effect in mid-March. Restrictions put in place include border closures, shutting of schools and non-essential workplaces, and limits on inter-state travel. Malaysia has reported 6,894 cases of the coronavirus disease and 113 deaths, according to its health ministry.

But Mahathir said that decision was a sign that Muhyiddin doesn't have the parliamentary majority needed to form a government.

Analysts said the Muhyiddin-led government cannot delay parliamentary sessions for much longer.

Muhammad Harris Zainul, an analyst at research firm Institute of Strategic and International Studies Malaysia, said last week there's a limit to the policies that the government can enact without parliamentary approval.

He cited the example of federal debt, which is capped at 55% of gross domestic product and can only be increased with a nod from parliament. The current federal debt level in Malaysia is hovering around 52% of GDP, he said in a webinar held by the institute.

The next parliament sitting is currently scheduled for July. Even if the session is postponed again, the government cannot escape from tabling its budget for 2021 later in the year, said Yeoh.

"The question of political instability is still very much there and will continue to be there all the way till July and perhaps even September in the following parliamentary sitting, where the budget for 2021 will be tabled," she said.

"The current government cannot remove itself from tabling any motion and bill in parliament for that much longer."