Malaysian polls: anything possible, except new govt

KUALA LUMPUR (Reuters) - Malaysia's March 8 election islikely to shape the course of economic and social policy overthe next five years, even if it doesn't deliver a newgovernment.

The ruling coalition has governed in various forms sinceindependence in 1957, telling voters it is the only group thatrepresents all major races and can keep the peace between them.

The Barisan Nasional coalition portrays opposition partiesare racially divided and a threat to stability, but even theopposition admits it is too weak to challenge for power.

Instead, elections boil down to a battle over public policyand reputations, but there can still be a surprising number ofpolitical casualties.

Here are some possible scenarios.

THE PM'S WORST NIGHTMARE

Prime Minister Abdullah Ahmad Badawi wakes up on themorning after the vote to discover that he is still in officebut he has failed to secure a two-thirds majority in federalparliament, the first time the coalition has failed to do thissince 1969.

Worse, he has lost Terengganu, the biggest oil producingstate, to the opposition Islamist party, PAS, which also heldonto neighbouring Kelantan state despite a concerted coalitioncampaign to win it back.

This is as bad as it could conceivably get for thecoalition, and Abdullah's leadership would be under threat. Themain ruling party, the United Malays National Organisation(UMNO), might then turn to his deputy and leader-in-waiting,Najib Razak.

The coalition would have to lose more than 50 seats forthis to come true, but political analysts believe this is morean opposition fantasy than something Abdullah really fears.

Even in the 1999 elections, which followed a far moreturbulent chapter in Malaysian politics, the coalition stillmanaged to hold on to a two-thirds majority. It lost Terengganustate that year, but reclaimed it in the 2004 landslide.

Though Abdullah's approval rating has sunk to a personallow, it remains around 60 percent, according to a recent poll,and the economy is still a relatively strong selling point.

The electorate is unhappy over rising prices, racialtensions and street crime, but overall the economy is holdingup well despite a U.S. slowdown, creating jobs.

OPPOSITION, ISLAMISTS LOSE GROUND

Even if opposition parties steal seats from Abdullah'sBarisan Nasional (National Front) coalition, they could stillbe painted as losers if they don't make major inroadsfederally.

For the Islamist party, PAS, it could be a disaster if itfails to retain Kelantan, the only opposition-held state.

A recent opinion poll by the Merdeka Center, a local marketresearch firm, showed that Malays, the majority ethnic groupand followers of Islam, are least likely of all the majorracial groups to lodge a serious protest vote against thegovernment.

A contented Malay community would rob the opposition oftraction in the most important part of the electorate: Malaysmake up just over half the population and wield even greaterelectoral clout, partly because of the way boundaries aredrawn.

This could be painfully evident in the sleepy ruralvillages of Kelantan, which PAS has ruled for 18 years but nowholds by a razor-thin, one-seat majority after electoralsetbacks in 2004.

Abdullah, himself an Islamic scholar who advocates his ownbrand of moderate Islam, recently pledged millions of dollarsof investment for the state in an attempt to end PAS's shakyreign.

ANWAR IBRAHIM: COMEBACK OR COMPLETE COLLAPSE?

Opposition leader Anwar Ibrahim could also face sleeplessnights during the campaign.

Anwar is barred from standing as a candidate until April2008 because of a conviction for corruption, a charge he saidhad been contrived to wrongly imprison him for six years untilhis release in 2004. So he will not be standing in the March 8poll.

But his party, Parti Keadilan Rakyat (People's JusticeParty), will be contesting, striving to expand its presence infederal parliament beyond the single seat it currently holds.

Keadilan, and by extension Anwar, is either on the brink ofpolitical oblivion or a long-awaited comeback at these polls.

A charismatic Malay leader, Anwar is potentially dangerousbecause he has shown that he can bring thousands of youngpeople from all races onto the streets against the government.

He did that in the late 1990s, becoming a lightning rod forpopular disenchantment with then premier Mahathir Mohamad. ButAbdullah is a much less divisive character, and the politicaland economic climate is not as hot as in Anwar's "Reformasi"heyday.

The main ruling party, UMNO, disowned Anwar during thatperiod and is determined to bury Keadilan at the elections.

Even though Keadilan holds just one federal seat, courtesyof Anwar's wife, it remains important an a political vehiclethat tries to appeal to secular-minded Malays who do not votefor the coalition but dislike the Islamist platform of PAS.

(Editing by Sanjeev Miglani)