This will negatively affect policymaking, policy continuity and social stability, it says.
The worsening Covid-19 pandemic will likely further threaten the unity of the Perikatan Nasional (PN) government, said Fitch Solutions in a Country Risk & Industry Research report.
Malaysia already has elevated political risks but it is becoming worse due to a perception that the government has failed to contain the outbreak so far.
It said this will negatively affect policymaking, policy continuity and social stability.
“We at Fitch Solutions see a worsening of political risks due to widespread and growing dissatisfaction with the government’s handling of the Covid-19 outbreak.
“Furthermore, rising public anger is likely to affect the unity of Prime Minister Muhyiddin Yassin’s government, and we expect an escalating blame game over the issue ahead of promised elections.
“Risks of protests are also rising as a result, and elections not being held over the coming months could serve as a spark for Malaysians to take to the streets,” Fitch Solutions, the research arm of Fitch Group, said in the report released today (June 8).
“Accordingly, we have revised downward our short-term political risk index score to 65.2 out of 100, from 66.7 previously, to reflect these risks,” it added.
Malaysia has seen its Covid-19 daily caseload rise to the thousands in recent months, along with the implementation of multiple lockdowns with confusing instructions, it said.
It added that as the public is coping with the lockdown, there have also been high profile cases of celebrities and politicians flouting lockdown rules.
Though Muhyiddin had said the state of emergency declared in January was meant to combat the Covid-19 pandemic, the third wave had worsened in the past month.
Fitch Solutions said this is an aggravating factor in the dissatisfaction of the electorate.
“Indeed, perceptions are likely to have turned significantly against the prime minister and it is likely that the move is now viewed more widely as a bid to stave off challenges to his rule, which he had been vulnerable to due to a slim majority in Parliament, rather than a sincere attempt to control the outbreak,” it said.
Fitch Solutions pointed to the popular #KerajaanGagal hashtag on Twitter, which is frequently used to criticise the government’s handling of the pandemic, as an example of the people’s growing frustration with this current administration.
Netizens had also gathered more than 80,000 signatures as of June 3 to call for the resignation of International Trade and Industries (Miti) Minister Azmin Ali, it noted.
The petition accused Azmin of undermining the current total lockdown by allowing multiple exemptions for companies to continue operating.
Fitch Solutions also said it has consistently highlighted various risks to government unity since the PN government was formed in March 2020.
With the rise in public anger, the PN government’s unity is threatened even further, it said.
“Our view continues to play out amid the worsening public fallout over its handling of the pandemic. Yet another public blame game has started over the exemptions.
“Indeed, Azmin, the chief target of the public’s anger regarding the exemptions granted to businesses, appeared to shift the blame away from himself, pointing out that a total of 15 ministries were responsible for the approval of such exemptions, despite the government clarifying that all applications would be handled by Miti,” it said.
Fitch Solutions also noted that Defence Minister Ismail Sabri Yaakob had posted on social media a picture of him closing a door with the caption “I shut the front door, but…”, which it said was likely a veiled comment against Azmin’s handling of the exemptions.