The opposition plans to topple his coalition in September through defections, while pressure is building within his ranks to quit and appoint his anointed heir to restore confidence in the Barisan Nasional coalition that has ruled for five decades.
Protests against the fuel hike have been small and scattered so far, but if the opposition carries through its plan to bring a 100,000 people into the city centre next month the pressure on Abdullah will increase dramatically, analysts said.
The protests would be the largest in a country with tight restrictions on public gatherings and might well be the tipping point as inflation stoked by the fuel price hike hits a 10-year high of 4.2 percent.
Petrol rose 41 percent and diesel 63 percent.
“The pressure on him will increase enormously,” said Rita Sim, deputy head of a think-tank linked to the Malaysian Chinese Association, a member of the ruling coalition.
“He’s made an unpopular decision which in the long-term is good for the country. But in the short-term, this may mean his political life is going to shorten,” she said.
Opposition figurehead Anwar Ibrahim says he has the numbers to topple the ruling coalition, which has ruled the country since independence from Britain in 1957, but is waiting for the right moment.
“We have seen clearly more interest and support for Pakatan Rakyat (opposition alliance). This applies even to members of parliament. Even some of them have been encouraged to approach me directly even though they are being closely monitored,” he told a news conference over the weekend.
Anwar plans a no-confidence vote against the government in September, hoping popular anger over the new fuel prices, which are expected to be followed with higher electricity rates in August, will boil over.
Abdul Ghapur Salleh, a ruling party lawmaker from the politically key state of Sabah, said it was difficult to explain to his constituents the reason behind the increases.
“They are not convinced by the government’s argument when we are an oil-producing country,” the Star newspaper quoted him as saying.
Sabah and neighboring Sarawak account for a third of seats in parliament and both held firm with Abdullah’s coalition even during national elections in March, when the tide turned against it across the country.
Since raising fuel prices, Abdullah has announced new development funds for these big oil-producing states to soften the blow.
“But the short-term risk remains, especially from the political aspect. Badawi’s leadership position has certainly been undermined with these recent changes in policy,” said Irvin Seah, economist at DBS Bank in Singapore.
Even before the fuel hikes, Abdullah’s popularity had been falling with voters unhappy over racial and religious tensions, rising street crime and failure to honor a pledge to fight corruption.
Prior to the price increases, Abdullah’s approval rating stood at a low of 48 percent, market research firm Merdeka Center said, adding it expected the figure to dip further in a new survey to be completed this week.
The mild-mannered premier had an approval rating of 91 percent when he took power in late 2003.
But his coalition recorded its worst-ever performance during its 50-year rule in the March election. The government lost its two-thirds parliamentary majority and surrendered control of five of the country’s 13 states to the opposition in the poll.
Abdullah might head off the opposition challenge to the Barisan Nasional by quietly arranging to hand power over to his likely successor, deputy prime minister Najib Razak.
So far he has not spelt out any timeframe for the transition and has in the past said he planned to defend his position as president of his United Malays National Organisation, the dominant party in the ruling coalition, in elections in December.
But as the party struggles with public discontent, the call for a quick transition could intensify.
“UMNO members are clamoring for a clear signal on the leadership issue, especially with the party elections looming at the end of the year,” political commentator Joceline Tan wrote in the Star newspaper.
She said the succession issue came up last week during the meeting of UMNO’s supreme council to decide on the party’s future and party bosses left it to Abdullah and Najib to decide.
Such uncertainty, which analysts say will run through the year, ties the government’s hands in a difficult economic environment.
“What you’re seeing is a general feeling that the inflation environment is forcing policymakers to make tough decisions. It’s raising political risks so it’s exposing weak governments regionwide,” said Eric Fishwick, CLSA’s head of economic research in Singapore.
“I think one of the problems that we have is that inflation is going to be increasingly stymieing supply side reforms in these economies,” he said.
An inflation rate of between 8 and 10 percent would be the highest since 5.3 registered in 1998.
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