Malaysian PM resigns in favour of deputy

Malaysia's king Thursday accepted the resignation of Prime Minister Abdullah Ahmad Badawi after six years in office, clearing the way for a smooth transfer of power to deputy Najib Razak.
Abdullah and then Najib met King Tuanku Mizan Zainal Abidin for successive audiences at the palace to seal the long-planned transition.

"PM Abdullah offered his resignation to the king. The king is understood to have accepted it," a senior official told AFP on condition of anonymity.

Government officials Wednesday said the king had agreed that Najib could be sworn in as prime minister at 0200 GMT Friday.

Najib was last Thursday officially declared president of the United Malays National Organisation party, effectively smothing his path to the premiership because of its dominance of the political scene.

He said he would reveal details Friday of the direction he wanted to take Malaysia amid economic crisis and political uncertainty, with the core of his roadmap being a programme aimed at uniting the multi-racial nation.

"I think this new thrust will ensure there will be a fairer distribution of government allocations and assistance to all communities," he said Wednesday.

Analysts say he faces an enormous challenge to rejuvenate his UMNO party, which has floundered since disastrous election results last year, and cushion the country from the worst effects of the global meltdown.

Malaysia, Southeast Asia's third largest economy, has been hit by slumping exports and manufacturing, with more than 26,000 people losing their jobs so far this year.

A slew of economic data for January underlined the scale of the problem.

Industrial output fell 20.2 percent year-on-year, manufacturing sales sank 22.7 percent and exports plunged 27.8 percent to hit their lowest level since 2001.

Najib, who is also finance minister, unveiled a stimulus package worth 16.2 billion dollars earlier this month, but warned that the export-driven economy could shrink by 1.0 percent this year despite the massive spending.

He will face his first big test as prime minister next Tuesday with three by-elections that will be seen as a referendum on his fledgling leadership.

"He will inherit a divided party with trust in the government at its lowest ebb and a strong opposition," political analyst Shahruddin Badaruddin told AFP earlier.

He said Najib's challenge would be "to unite the fractured elements of the party."

Najib has an impeccable pedigree as the son and nephew of two former prime ministers, but he has been dogged by controversy and Shahruddin said he had to stem the allegations against him.
He has repeatedly denied opposition allegations connecting him to the 2006 slaying of the mistress of his close aide -- a Mongolian woman whose body was blown up with military-grade explosives.

"He must end all the rumours and allegations about the Mongolian case once and for all," Shahruddin said.

"It has affected his image locally and internationally," he added. "As long as these rumours persist, it will make it hard for him to do what needs to be done."

UMNO leads the ruling Barisan Nasional coalition which has ruled Malaysia for more than half a century since the former colony gained independence from Britain in 1957.

However, last year it put up its worst electoral performance for 39 years, leading to calls for Abdullah to step down.

The coalition of race-based parties -- which also represent ethnic Chinese and Indian communities -- were mauled by the opposition led by former deputy prime minister Anwar Ibrahim.

The opposition seized an unprecedented one third of seats in parliament and now controls four states.

Agence France-Presse - 4/2/2009 4:19 AM GMT