Malaysia’s coalition strains grow, but investors hold their nerve

[KUALA LUMPUR] A deepening rift in Malaysia’s ruling coalition, over the decision to allow jailed former premier Najib Razak to serve the remainder of his corruption sentence under house arrest, is unlikely to topple Prime Minister Anwar Ibrahim’s government.

But pundits say it could complicate difficult economic reforms and cloud long-term policy certainty needed to draw investments, even as Malaysia continues to enjoy strong investor interest.

Shawn Balakrishnan, Asia-Pacific partner at Penta Group, said that companies making commitments over 10 or 20 years need confidence that policies and commercial relationships can survive not only a change of minister, but also a wider reordering of Malaysia’s coalition system.