Malaysia to hold by-elections in test of Najib after Sarawak win

[KUALA LUMPUR] Malaysia will hold by-elections next month after two lawmakers were killed in a helicopter crash, a fresh chance to assess Prime Minister Najib Razak's popularity after a recent win for his ruling party in the Sarawak state election.

Polls in Sungai Besar in Selangor state and for Kuala Kangsar in the northern Perak region will be held on June 18, Election Commission Chairman Hashim Abdullah said in a televised press conference.

Deputy plantation minister Noriah Kasnon and Wan Mohammad Khair-il Anuar Wan Ahmad, chairman of the Malaysian Palm Oil Board, were among six people killed when the chopper they were traveling in crashed last week in Sarawak.

Both were lawmakers from Mr Najib's United Malays National Organisation and were re-elected to parliament in the 2013 general election.

Mr Najib has faced political tensions for nearly a year over funding scandals and financial troubles at a state fund. He got a boost when his Barisan Nasional coalition kept power with a bigger majority in Sarawak, the nation's largest state located across the South China Sea from peninsular Malaysia.

While his pledges of developmentfunds may have swung votes in Sarawak, voters on the peninsula may be more attuned to the turmoil surrounding the premier.

Barisan Nasional's Sarawak win - it secured 72 of 82 seats - was also helped by a fractured opposition, as parties fielded multiple candidates in some seats. The Pan-Malaysian Islamic Party, or PAS, has called on other opposition groups to avoid three-way contests in the two by-elections, the Star newspaper reported Friday.

The seats have traditionally been contested by PAS, deputy president Tuan Ibrahim Tuan Man was quoted as saying.

While Mr Najib has retained the support of senior officials in his party during the scandals, the key is how rank-and-file voters - his support base is ethnic Malays in rural areas - view his performance, particularly as economic growth slows. Mr Najib has often relied on handouts to the poor to bolster his standing.

Debt-ridden state fund 1Malaysia Development Bhd, whose advisory board Mr Najib has chaired, defaulted on a bond payment last month amid a dispute with Abu Dhabi's International Petroleum Investment Co.

The Malaysian fund is the subject of global investigations into alleged money laundering and embezzlement.

Questions are also still being asked by Mr Najib's detractors, including former premier Mahathir Mohamad, over US$681 million that appeared in his personal accounts before the 2013 election.

Barisan Nasional, in power since independence in 1957, won that vote by its slimmest margin yet. The next national poll is due by 2018.

The government has said the money was a private donation from the Saudi royal family, and most of it was later returned. Both 1MDB and Mr Najib have denied wrongdoing.

BLOOMBERG