As it completes 100 days in office, the prospects of Anwar Ibrahim led government remain precarious due to internal strife in UMNO, its major coalition partner. With six state elections due this year, it is not certain that the federal government will survive. Whether bad economics will add to political instability will be known when the government presents its maiden budget later this month. So far the government has made all the right noises about tackling debt and the fiscal deficit, redirecting subsidies, and making Malaysia competitive with ASEAN rivals, but the pulls and pushes of Malaysian politics will finally decide the economic policy.

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