People wait in line to be tested for the coronavirus disease (Covid-19) in Shah Alam, Malaysia.(Reuters)
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Malaysia declares state of emergency as pandemic worsens

The measure comes amid infighting within Malaysia’s largest ruling party, the United Malays National Organisation, on whether or not to hold a snap election by March. UMNO is expected to make a final decision on the matter during its general assembly on Jan. 31.
Bloomberg
UPDATED ON JAN 12, 2021 10:02 AM IST

Malaysia’s king declared a state of emergency in the Southeast Asian nation, in a move that could allow the embattled government to delay elections as it tackles the worsening coronavirus pandemic. The ringgit and the country’s main stocks index declined.

“His Royal Majesty has given consent for the declaration of emergency to be carried out as a proactive measure to contain the Covid-19 pandemic,” the palace said in a statement on Tuesday. The decision comes a day after Prime Minister Muhyiddin Yassin imposed a two-week targeted lockdown in most of the country starting Wednesday to quell the surge in infections.

Covid-19 cases have exploded in Malaysia after a local election in September, with new infections hitting a record-high last week. The government has forecast daily cases to reach 8,000 by late March or late May, based on a predictive modeling analysis. The tally stood at little over 2,000 on Monday. The emergency measure will end on Aug. 1, or sooner if the outbreak abates, according to the statement.

The ringgit fell as much as 0.6% to 4.0760 per dollar, the weakest since Dec. 7, while government bonds extended losses. Malaysia’s main stock index fell as much as 1.3%, led by banks including CIMB Group Holdings Bhd. Muhyiddin is scheduled to deliver a television address on the emergency at 11 a.m. Kuala Lumpur time.

An emergency “may serve as a ‘circuit breaker’ on the domestic political noises, but on the other hand, it could increase the perceived risk of foreign investors on Malaysia,” said Winson Phoon, head of fixed-income research at Maybank Kim Eng Securities.

The measure comes amid infighting within Malaysia’s largest ruling party, the United Malays National Organisation, on whether or not to hold a snap election by March. UMNO is expected to make a final decision on the matter during its general assembly on Jan. 31.

Muhyiddin has maintained that an election should only be held after the pandemic is under control. His attempt to place the entire country under emergency in October -- ahead of a major budget vote that doubled as a confidence test -- was rebuffed by the king.

Malaysia went through political upheaval in 2020 as various factions jockeyed for power after former Prime Minister Mahathir Mohamad abruptly stepped down in February. Muhyiddin emerged as the head of an unwieldy bloc with a majority of only a few lawmakers, prompting repeated concerns about the strength and durability of the government.


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