Political parties were reported to have begun preparations for the polls as early as January 2008. As in 2004, the incumbent Barisan Nasional (BN) coalition, the ruling political alliance since independence, as well as opposition parties represented primarily by Democratic Action Party (DAP), the Pan-Malaysian Islamic Party (PAS), and Parti Keadilan Rakyat (PKR) contested the election.
As with all preceding general elections following independence, the parliamentary election was won by BN, but yielded one of the worst results in the coalition's history. Opposition parties had won 82 seats (out of 222 seats in parliament) or 36.9% of parliamentary seats, while BN only managing to secure the remaining 140 seats or 63.1%. It marked also the first time since the 1969 election that the coalition did not win a two-thirds supermajority in the Malaysian Parliament required to pass amendments to the Malaysian Constitution. In addition, 5 of 13 state legislatures were won by the opposition, compared with only one in the last election.
The Malaysian Parliament was dissolved on February 13, 2008 by Prime Minister Abdullah Ahmad Badawi with consent of the Agong, from which a general election will be required to be held within the 60 days, between February 13, 2008 and April 13, 2008. The announcement of the dissolution was done a day after the Prime Minister publicly denied that Parliament would be dissolved on February 13.
Speculation on the exact polling date was rife, as political analysts expected polling to be held after the Chinese New Year in February 7 and during the week-long school holidays from March 7 to 16, as schools will be available for use as polling stations. Political analysts saw a March election as an attempt by the Prime Minister to garner a fresh mandate before a slowdown in the global and Malaysian economies, and in an effort to bar Anwar Ibrahim from contesting, as he is permitted to re-enter politics on April 14, 2008.
On February 14, the Election Commission announced nominations would be held on February 24, with general election set for March 8. This will allow for 13 days of campaigning to take place. Anwar Ibrahim subsequently criticised the Prime Minister on the choice of date, calling the move a "dirty trick" and a sign of "Prime Minister Abdullah [...] getting personal." There were expectations that a Member of Parliament from Anwar's party, Parti Keadilan Rakyat, would resign after that date to pave the way for a by-election which Anwar could contest to attempt a comeback in Parliament. At the time these claims were unsubstantiated, however, the expectations were fulfilled when Answar's wife vacated her seat.
The Merdeka Centre ran a survey in 2008 to gauge public sentiment and the result was published soon after. There was a series of issues raised by all sides in the run up to the election. Among the issues are inflation, shortage of goods, fuel subsidies, rising crime, majority government, mismanagement, corruption, the demand for free and fair elections by a group of NGOs and political parties under the Coalition for Clean and Fair Elections (BERSIH), racial equality especially as highlighted by HINDRAF, Internal Security Act detainees, the case surrounding the Royal Commission of Inquiry into the Lingam Video Clip and the eligibility of former Deputy Prime Minister, Datuk Seri Anwar Ibrahim.
Anger among ethnic Indians regarding issues such as restrictions on jobs, education, freedom of religion, right and a widespread feeling of loss of dignity have played a part during the 2008 parliamentary elections in Malaysia. One of the other main issues brought up has been whether the election would be conducted fairly. The opposition has pointed out these issues are gerrymandering of electoral districts, uneven media access, outdated electoral systems, election fraud and vote buying.
Besides, it was also alleged that the anti-Khairy Jamaluddin sentiment became another main factor of Barisan Nasional's heavy losses, as stated by Tun Dr. Mahathir bin Mohamad. Khairy Jamaluddin is the son-in-law of the current Prime Minister Abdullah Ahmad Badawi and was alleged of influencing the Prime Minister when making critical decisions.
The general election involves 222 parliamentary seats and 505 state assembly seats. In the last election, 219 parliamentary seats were up for contest. The three newly created seats — Igan, Sibuti and Limbang — resulted from a border re-demarcation exercise in Sarawak. There are in total 576 state seats but Sarawak did not dissolve its state assembly in anticipation of the election. The last state election for Sarawak was held on May 20 2006.
Prime Minister Abdullah Badawi's ruling United Malays National Organisation (UMNO) party and their Barisan Nasional (BN) partners ran a younger crop of candidates with fewer ties to former Prime Minister Mahathir Mohamad, the architect of the country's affirmative-action policies in the election. Abdullah said he needed "one or two more terms" to successfully complete various economic projects he has started.
The government wished to retake the mandate of the opposition state of Kelantan from PAS, promising the Kelantanese people major development projects and jobs. Awang Adek Hussin, a deputy minister heading UMNO's campaign in Kelantan said that if voted in they would repair or build 500 mosques, including a Grand Mosque, in order to woo Muslim voters.
In Sabah, chief minister and Sabah BN chairman Musa Aman announced that the same formula used in the 2004 election would be used in this election with regards to the allocation of seats among BN's component parties of Sabah. Sabah BN has used the same allocation formula for both the parliamentary election as well as for the state election. In this election, UMNO will contest in 13 parliamentary seats, Parti Bersatu Sabah (PBS) will contest in four, United Pasokmomogun Kadazandusun Murut Organisation (UPKO) in four, Sabah Progressive Party (SAPP) in two, Parti Bersatu Rakyat Sabah (PBRS) in one, and the Liberal Democratic Party (LDP) in one.
BN coalition rolled out a major publicity campaign with a slogan promising "security, peace, prosperity" in advertisements that featured prominently in newspapers and on television.
The main Malaysian opposition parties, which comprise of the Democratic Action Party (DAP), Parti Keadilan Rakyat (PKR) and the Pan-Malaysian Islamic Party (PAS) planned to deny the ruling coalition a two-thirds majority in Parliament in a bid to loosen the government's five-decade grip on power as reflected by their manifestos. The three parties highlighted Malaysia's rising crime rate, consumer-price inflation and government corruption throughout the election campaign. Civil Society groups unofficially merged five opposition parties under a banner called the Barisan Rakyat (People's Front) in which they agreed on certain policy matters, particularly two civil society documents: The People's Declaration, and The People's Voice; and agreed not to contest against each other in any seats. The five parties include DAP, PKR and PAS, as well as Parti Sosialis Malaysia (PSM) and the United Pasok Nunukragang National Organisation (PASOK).
Part of the opposition campaign took place in cyberspace and new media, utilising new technologies such as blogs, SMS and YouTube. Currently, major newspapers and television stations, which are partly owned by parties in the government coalition, only mention the opposition in passing. On March 2, PAS President Abdul Hadi Awang challenged Abdullah Badawi to hold a televised debate similar to those held by U.S. presidential candidates. However, government leaders stated there was no place for such debates in Malaysia, claiming the focus should be on debating with locals concerning local issues affecting them.
The Opposition had also increased focus on Abdullah Badawi's performance in the last few years and being a poor leader who sleeps on the job. They mentioned that as a result of his weak leadership, matters such as crime, corruption and racial and religious tensions have increased. On March 4, campaigning in Malaysia's general election took on a personal tone as rivals slung accusations of nepotism, hypocrisy, boorish language and sexist tactics. It was also suggested Abdullah is grooming his son-in-law, Khairy Jamaluddin, as Malaysia's future leader.
In terms of raising funds, the Opposition appealed to the public through websites and blogs for supporters to contribute funds through credit cards and bank transfers to help them print campaign posters and hold public forums. The Opposition had repeatedly pointed out that they are unable to match the ruling coalition's massive spending power.
Previous elections in the country had fueled complaints that an allegedly subservient Election Commission, gerrymandering, vote fraud, compliant media, misuse of government resources and massive vote buying gave the National Front or Barisan Nasional an unfair advantage. It had been highlighted to the Election Commission of Malaysia that its electoral roll has been suspect, because of the discovery that it contains nearly 9,000 people aged more than 100. This raised suspicions that the books are contaminated with dead voters which leaves the election vulnerable to fraud.
Further discoveries of people who have been born in the same year possessing different identity cards (IC) and living in many different localities, were uncovered by Malaysians for Free and Fair Elections (Mafrel). These people are registered to vote in various places throughout the country. These issues led to questions regarding the fairness of the elections.
It was also highlighted by the Opposition that certain postal voters were issued with two ballot sheets. This was discovered during checks with the Election Commission when they were preparing postal voting kits. Activists from BERSIH say each ballot was also attached to a letter identifying the voter along with the voting slip serial number, so it would be easy to trace who voted for the opposition. Electoral reform activists said that a number of seats that the opposition could win could be decided by postal votes and that those casting postal votes do not have the freedom to choose the candidate they want.
Human Rights Watch, which had been monitoring the election process, stated that government restraints on expression, assembly and access to state media would deny Malaysians a fair vote. Calling the electoral process "grossly unfair", Human Rights Watch called on the government to address concerns with fraud in the electoral rolls, and to provide opposition parties access to state media. De facto Law Minister Nazri Aziz accused Human Rights Watch of bias, saying they were attempting to discredit the electoral process because "they know the National Front will win".
On March 17, a week after the release of election results and one-third win by opposition parties, BERSIH claimed the Opposition would have obtained a parliamentary majority if not for fraud. Sivarasa Rasiah, BERSIH spokesperson and newly-elected PKR MP for Subang, stated:
[The opposition] would have had an outright win if this were a free and fair election...To win another 30 seats (to form a majority in parliament) all [they] needed was just another 56,000 votes...Just because the opposition won big does not mean the election was free and fair. [They] are calling for a royal commission to investigate the electoral process.
Citing 72,058 unreturned ballot papers — of which 41,564 were for parliamentary seats and 30,494 for state assembly seats — BERSIH alleged that many of these ballots had in reality been cast for the opposition or spoilt but were discarded, further pointing to the fact that most of them were postal ballots. BERSIH spokespeople did not rule out further street demonstrations.
On June 2, 2007, the Election Commission made public the proposed use of indelible ink to mark participating voters at polling stations, and its use officially confirmed by the Commission's chairman Abdul Rashid Abdul Rahman on August 13, 2007. Its introduction was a measure precluding electoral fraud by preventing duplicate votes, and would mark the first time indelible ink was to be used in a Malaysian general election.
Early reaction to the proposal was mixed. Both DAP secretary-general Lim Guan Eng and PAS president Abdul Hadi Awang welcomed the move, with Abdul Hadi's party voicing interest in the type of ink used. PKR vice-president Tian Chua initially remained skeptical unless the EC "implemented the system". Members of BN were more critical, with UMNO secretary-general Mohd Radzi Sheikh Ahmad, MCA secretary-general Ong Ka Chuan and Gerakan vice-president Teng Hock Nan proposing the use of other systems, such as a fingerprint-based biometrics system, as alternatives. An additional comment by BN against the use of the indelible ink was the lack of assurance the ink used will contain safe or halal ingredients, taking into account Muslim voters. On August 9, the National Fatwa Council declared the ink safe for use, after receiving a lab report from the Chemistry Department of Universiti Kebangsaan Malaysia.
On March 4, 2008, four days before polling, the Commission announced it was canceling the plan, citing concerns about the constitutionality of the measure — without a constitutional amendment permitting the practice, it could be illegal for a polling clerk to stop a voter from voting even if his or her finger was already marked with indelible ink. The Commission chair also claimed intelligence concerning possible conspiracies to undermine the electoral process by applying ink to the fingers of those who had not yet voted, and said it would be best to refrain from adopting the measure for the sake of public order and security. According to the Election Commission, the decision to cancel the use of indelible ink was based on reports that certain parties tried to "sabotage" the election process in Kedah, Kelantan and Perlis. The police has arrested several persons that tried to smuggle the ink through neighboring Thailand.
Opposition parties widely condemned the move. PKR Deputy President Syed Husin Ali alleged that the Commission was "colluding with BN to allow cheating in the coming general elections," and claimed that this was proof the government felt the Opposition would perform well on polling day. Dzulkifli Ahmad, a PAS and BERSIH leader, said that both organisations opposed the move, and that "We want to make it clear that we are entering this election under protest". Dzulkifli added that BERSIH would file a complaint after polling day. Lim Guan Eng declared that the decision would only benefit the ruling coalition, and demanded an explanation for the claim of adverse effects on public security: "It is ridiculous that the use of indelible ink can put the whole country into chaos and ruination." Lim condemned the waste incurred over RM2 million having been spent purchasing 47,000 bottles of indelible ink from India, as of February 23, and said that the DAP would be investigating legal avenues to reverse the decision.
Response from the ruling coalition was mixed. Deputy Prime Minister Najib Tun Razak, an UMNO leader, found the reversal "appropriate", citing concerns that people would be misled into applying similar-looking ink to their fingers, denying them the right to vote. In a statement, MCA described the measure as "disappointing", saying the late announcement meant opposition parties would unnecessarily politicise the situation.
In response, several leaders of the Malaysians for Free and Fair Elections (Mafrel), including Mafrel chair Abdul Malek Hussin and deputy chair Syed Ibrahim Syed Noh, have refused to accept EC accrediting as official observers, saying they refused to legitimise the decision. Officially, they said, any EC-accredited Mafrel member could observe the polling process, and they would themselves carry out all other duties as observers, except those requiring EC accreditation such as observing the polling process from within polling stations. Abdul Malek added that Mafrel strongly protested the decision as contrary to its own recommendations, and compared the measure to withdrawing all currency from circulation because of the presence of counterfeit notes. He further questioned the legal reasoning behind the decision, arguing that as Parliament had speedily passed a constitutional amendment to extend the tenure of the EC chairperson, any necessary constitutional amendments could have been introduced and passed well in advance.
After the election, Anwar Ibrahim claimed that the failure to use indelible ink had cost the PKR-DAP-PAS coalition 15 seats in Parliament, adding that "It is not unrealistic to imagine that we could actually have won a majority right then. Two weeks after the polls, several NGOs including the Malaysian Voters Union asked the Attorney-General to officially charge four men who they alleged had been arrested for involvement in the supposed conspiracy. As of March 24 2008, the men had not been remanded by a court, nor charged with a crime; their arrest was not publicised.
In May, Home Minister Syed Hamid Albar told Parliament in his written response to a question from Fong Po Kuan that "there was no evidence at all to show the ink was smuggled in from Thailand... From the witness statements, no individual, syndicate or any particular party was identified to be involved in this (ink smuggling). The complainant and witness' statement were based on hearsay and no individual was identified positively.
As polls opened in Malaysia on March 8 from 8am to 5pm, voters casted ballots for 222 parliamentary seats and 12 state legislatures, with voter turnout among Malaysia's 10.9 million eligible voters estimated to be 70 percent. Barisan Nasional won 91 percent of parliamentary seats in 2004 election, but its majority is expected to be clipped this time as it suffers a backlash from ethnic Chinese and Indians. Early vote counting showed the Barisan Nasional was already faring badly in early tallies across the country with the exception of Sabah, Sarawak and Johor, as claimed by Kelantan United Malays National Organisation (UMNO) state chief Annuar Musa. The opposition began claiming using their own estimates that they have denied the government its two-thirds majority in parliament.
Barisan Nasional was able to return to power and form the next government, with a simple majority but without the crucial two-thirds majority in parliament. It is BN's worst performance in Malaysia's general election since independence in 1957, winning only 63.5% (140 out of 222) of parliamentary seats that were contested; the only other time the 14-party coalition failed to win a two-thirds majority was in 1969 when it secured 66% of the seats. Component parties in BN, including the Malaysian Chinese Association (MCA), Malaysian Indian Congress (MIC), and Gerakan, saw its number of state and federal seats severely reduced by half or more. UMNO also saw its number reduce significantly but not by as much as half. Also noted were MIC president S. Samy Vellu, Gerakan acting president Koh Tsu Koon and PPP president M. Kayveas, who were trounced in their respective election contests. Malaysia's Prime Minister Abdullah Ahmad Badawi was sworn in for a second term on 10 March 2008, defying calls to quit after presiding over the ruling coalition's worst ever election performance.
The results of several states have been rather surprising to everybody involved. Many of the states BN have lost are those on the western coast of Peninsular Malaysia where it has traditionally focused most of its attention to. These states experienced more development and investment than other states, and account for much of the country's population. The remaining states that have given BN its simple majority are states that are economically weaker than what the opposition have gained.
One of the parliamentary seats won unopposed by BN was in P.182 Pensiangan, which was won by Joseph Kurup of Parti Bersatu Rakyat Sabah (PBRS). The two candidates who were supposed to contest in this seat was Danny Anthony Andipai of Parti Keadilan Rakyat and Saineh Usau (independent). Both were disqualified after submitting their nomination forms after 10:00 am. It was alleged by both rejected candidates that they were blocked from going to the nomination centre. Police reports were lodged on this matter in Keningau. Joseph Kurup on the other hand claimed that he was punched after being declared winner of the seat. He also lodged a police report on this matter.
On February 26, 2008, independent contender Junak Jawek dropped out of the polls for the new Parliamentary seat of Igan. Wahab Dolah of BN was declared the winner. This brings the total number of uncontested wins by National Front to ten seats as of February 27, 2008 comprising of eight parliamentary and two state seats.
Some PKR candidates have alleged fraud, claiming they received offers from BN not to contest. Rahamat Idil Latip, the PKR candidate for the Parliamentary seat of Santubong, claimed he was told he would receive RM300,000 if he withdrew his nomination. After jokingly asking for RM3 million, he was told that it would be considered.
The opposition dealt a heavy blow to the Barisan Nasional government by taking the state of Penang. Although Penang was regarded as a hotly contested state, the outcome unexpectedly turned out to be a landslide win with the opposition, the Democratic Action Party (DAP) gaining the majority of the state seats. Many seats saw the opposition winning over two-thirds of the votes, rather than the usual 50-50 distribution. BN only won 2 of the 13 parliamentary seats and 11 of the 40 state seats, its worst performance in Malaysian history.
In terms of party landscape, Gerakan, which has led the state since 1969 was defeated, and essentially wiped out of the political landscape, winning only 3 state seats and 2 parliamentary seats (none of which were in this state), not being able to hold on to a single seat in state or federal level—over 30 years of rule gone in one night. Some interesting individual constituencies include Jeff Ooi, who rose to fame with his blog that was constantly critical of the ruling government and made his first foray into politics this election under the DAP, winning the Jelutong parliamentary seat.
Another significant blow was the defeat of Gerakan Acting President, Tan Sri Dr. Koh Tsu Koon, who was looking to move up from state politics, decided not to run for his state seat and subsequently gave up his Chief Minister post of 18 years, to challenge the Batu Kawan parliamentary seat. Some speculated this was part of a larger ambition to be a cabinet member, only to lose to newcomer P. Ramasamy of the DAP by a large margin of 9,485 votes.
The state of Kedah, which along with Penang, has traditionally produced a substantial bulk of past and present BN leaders (including Tunku Abdul Rahman, and Mahathir Mohamad), also overwhelmingly rose to the call of the opposition. BN only won 4 of the 15 parliamentary seats but did better by winning 14 out of 36 state seats, while the Opposition took the remaining 22 of the 36 state seats, with the Pan-Malaysian Islamic Party (PAS) winning 16, Parti Keadilan Rakyat (PKR) four and the DAP and an independent, one each.
PAS retained control of the state of Kelantan, despite a vigorous campaign by the ruling Barisan Nasional, winning 38 of the 45 state assembly seats along with PKR (which has won one seat). It was a personal setback for Prime Minister Abdullah Ahmad Badawi who had promised millions of dollars in development aid, intending to boost the chances of the Barisan Nasional coalition. The win marks the fifth consecutive time PAS retains power in Kelantan since 1990 and surpasses PAS' previous record of continuous electoral wins in Kelantan—four between 1959 to 1978.
Being the most developed state of the country and receiving the most absolute benefits due to spillover effects from developing the capital, Kuala Lumpur, Barisan Nasional party leaders were blindsided when Selangor rose to the call of the opposition. Many thought it was a safe stronghold of BN loyalists as it has been all along a centralist state leaning towards BN. According to The Star's summary of the state: "Barisan will undoubtedly retain the state but look out for some interesting, even tough, fights in certain parliamentary and state seats where the Opposition is fielding some strong candidates". Far from being the truth, BN ended up with only 5 of the 22 parliamentary seats and 20 of the 56 state seats, leaving the state government in opposition hands. The state Bernama news agency said that opposition parties had claimed 35 of the 56 seats in the Selangor state legislature but did not give a breakdown between PAS and the other parties.
In Perak, the Barisan Nasional suffered shock losses, including MIC president S. Samy Vellu's Sungai Siput seat and PPP president M. Kayveas's Taiping seat. UMNO suffered several major setbacks in the party's traditional strongholds, while most MCA, MIC, PPP and Gerakan candidates were defeated by DAP candidates.
Perak was nonetheless was one of the most tightly contested state of the nation with BN-Opposition parliamentary seats split into 13-11 and state seats into 28-31, still giving the opposition the chance to decide the state's government.
Kuala Lumpur is a federal territory divided into 11 parliamentary constituencies. In this election, the opposition won ten seats (five are held by DAP, four by PKR, and one by PAS), while Barisan Nasional won only one. In the previous election, BN held 7 seats while DAP held 4 seats.
The petition was filed by PKR’s Danny Anthony Andipai, who was also a candidate for the seat.
He had named Kurup, returning officer Bubudan OT Majalu and the Election Commission as respondents.
Kurup won the seat uncontested on February 24 nomination day after Andipai’s candidacy was rejected after he had submitted his nomination papers after the 10am deadline.
On the nomination day, both Andipai and another candidate Saimeh Usau had missed the deadline and wanted to submit their papers after the expiry of the deadline.
They claimed they have been blocked on their way to the nomination centre.
They were subsequently allowed to do so, with Andipai’s nomination papers accepted at 10.25am and Saimeh’s forms five minutes later.
However, during the one-hour objection period from 11am, Kurup had raised objections to the late submissions and they were accepted by the returning officer. He then disqualified the two candidates from contesting.
Kurup is the president of the Parti Bersatu Rakyat Sabah president and was subsequently appointed Deputy Rural Development Minister after the general election. He is also a former Sabah deputy chief minister.
Sabah Progressive Party (SAPP) has decided to pull out of the 14-member Barisan Nasional Government, taking away two MPs and at least two of its four assemblymen who will remain independent.
The decision to pull out was made at the SAPP supreme council meeting where its president Datuk Yong Teck Lee obtained the support of nearly all of its 35 members and declared that SAPP was not joining Pakatan Rakyat.
Yong said his party would remain independent in the opposition bench until a time came when SAPP was ready to be back in government.
With substantial wins in several states, opposition parties were required to form state governments led by Opposition members on a scale unseen in recent decades.
It was confirmed Mohamad Nizar Jamaludin was to become the next Menteri Besar of Perak by the Regent of Perak Raja Nazrin Shah. Sitiawan state assemblyperson Ngeh Koo Ham was also appointed the deputy Menteri Besar. An Indian candidate will be appointed the second deputy Menteri Besar, the candidates comprising DAP's A Sivanesan (Sungkai), KS Keshvinder Singh (Malim Nawar), VN Sivakumar (Tronoh) and A Sivasubramaniam (Buntong), and PKR's S Kesavan.
The appointment of the Perak Menteri Besar was not without drama as the coalition was not seen as cooperative. After the regent of Perak give consent on the informal coalition of DAP-PRK-PAS, each party submitted one name for the post of the new Menteri Besar, the regent of Perak having selected PAS nominee, Mohamad Nizar. DAP assemblymen were instructed to boycott the swearing-in ceremony which was suppose to be held on 13 March 2008 as instructed by DAP advisor Lim Kit Siang, a statement which he retracted and apologised to the Perak Sultanate the following day. Seeing a tussle between DAP and PAS, the Regent of Perak decided to postpone the swearing in ceremony until he sees a letter of undertaking signed by all 31 assemblyman voicing support of the appointment of Mohamad Nizar Jamaludin as the Menteri Besar.
The state of Terengganu, which Barisan Nasional won with a two-thirds majority, was the last state to have no appointed Menteri Besar. In the formation of the new Terengganu state government, the government under Prime Minister Abdullah recommended Idris Jusoh as Menteri Besar, which received full support of twenty-three of the 24 Barisan Nasional state assemblymen who elected. But on the 22 March, the office of the Sultan of Terengganu announced the appointment of Kijal assemblyman Ahmad Said instead of Idris Jusoh.
The Prime Minister claimed that the appointment of Ahmad Said was unconstitutional as it went against the wishes of the assemblymen and the Prime Minister's office who have supported Idris Jusoh candidacy for Menteri Besar. Ahmad Said was subsequently stripped of his UMNO membership "for disobeying the party's leadership".
On 26 March, Prime Minister Abdullah Ahmad Badawi and Sultan Mizan Zainal Abidin met at Istana Negara to resolve the impasse. The Prime Minister accepted the King's appointment of Ahmad Said as Chief Minister of Terengganu. He also apologised to the King for the public spat over the appointment of the menteri besar, explaining that there was no intention to disparage or humiliate the royal household. This apparent backdown was due to threat that the royal household would be prepared to dissolve the state assembly if there had been a motion of no-confidence against Ahmad Said by the 22 Umno state assemblymen.
Cheras MP Tan Kok Wai (DAP) mooted the possibility of having mayoral elections for Kuala Lumpur, but the Federal Constitution needs to be amended to allow such a change. There had not been an elected mayor in Malaysia since such elections were suspended in 1965.
Political uncertainty as a result of the formation of a significantly different Malaysian government, coupled with worries of a global economic slowdown due to negative economic development from the United States, led to uneasiness among investors in the benchmark Kuala Lumpur Composite Index (KLCI) and an immediate plunge in the KLCI.
On March 10, the first trading day since the election, stocks in the KLCI fell 9.5%, or 123.11 points, from 1,296.33 points to 1,173.22 points by 5.00 pm (MST), its biggest one-day decline in a decade. Trading in the KLCI was automatically halted for an hour after stocks fell beyond the 20% by 29.8% , as a measure to curb "panic selling"; the KLCI resumed trading at 4.00 pm. Among trading companies severely affected were government-linked companies, including blue chip Sime Darby, (down 50%), UEM World (down 24%), Tenaga Nasional (down 15%) and the Malaysian Resources Corporation (down 34-39%). By the end of March 12, the KLCI was able to recoup 60% of its losses, before suffering losses due to unfavourable developments on the ongoing subprime mortgage crisis in the US. The value of the ringgit had also dropped by a little over 1% against the US dollar, trading at RM3.2075 per US dollar on March 10, down from the previous trading day's close of around RM3.166 to the dollar. Government bond prices ticked down at the open, with the yield on the 10-year benchmark rising up to 3.754 percent from 3.708 percent on Friday. An analyst remarked foreign investors had lost the political stability premium enjoyed prior to the election and might abandon investment prospects in Malaysia.
Doubts on the prospect of large scale projects initiated or managed by the Abdullah Badawi administration between 2004 and 2008 were also highlighted; the Opposition vowed to assess major government projects, including the DAP's plans to review the Penang Global City Centre, a $7.8 billion real estate development project in Penang which have not gain approval from the local state council even after launching ceremony was held officiated by Malaysia's Prime Minister, Abdullah Badawi. The administration's previous proposals to form economical hubs in the northern, eastern and southern regions of the Malaysian Peninsular, Sabah and Sarawak had previously attracted investors, local and foreign, and boasted the KLCI, but also raised questions on how the cost of billion-ringgit projects will be paid for.
Other analysts see the emergence of a stronger Opposition in the parliament as an opportunity for improved transparency and corporate governance. A managing director of a multinational asset management house commented "A powerful opposition is a positive development in the longer term, providing some checks and balances for trillion-ringgit government spending.
Standard & Poor's Ratings Services reports the general election has no immediate effect on the sovereign ratings on Malaysia and still maintains both the local and foreign currency rating for the country. It added budgetary decisions and fiscal policies are still in the ruling party's hands as it only requires a 51% majority instead of a two thirds majority. Moody's Rating Service also shares in view and did not change its sovereign rating of A3.
On March 9, United States State Department spokesman Kurtis Cooper issued a statement that the US government is ready to cooperate with the newly formed Malaysian government, adding Abdullah remains a viable partner for the US "on a wide range of issues of mutual interest", despite BN's heavy losses in the election and decreased popularity of the party. Among them is the planned conclusion of stalled Free Trade Agreement negotiations between Malaysia and the US in the next eight months before the next US presidential election.