Two key allies of Malaysian PM Anwar turn opponents, launch new party

[KUALA LUMPUR] The departure of two former Cabinet ministers from Malaysia’s ruling party is unlikely to topple Prime Minister Anwar Ibrahim’s government, but it could renew doubts over his ability to push through reforms in a politically charged climate, said analysts.

Once seen as one of the key strategists behind Parti Keadilan Rakyat (PKR), Rafizi Ramli is now charting a new political path outside the party, betting that growing voter frustration with the unity government can translate into support for a fresh political platform.

The former economy minister, who was also PKR deputy president, announced on Sunday (May 17) that he and former natural resources and environmental sustainability minister Nik Nazmi Nik Ahmad would take over the Parti Bersama Malaysia (Bersama) as their new political vehicle, while urging supporters to join the party.

Political analysts said the split did not come as a surprise after close to a year of tension between the duo and PKR’s leadership.

The move has turned the two long-serving leaders of PKR – who spent more than two decades in the party founded during the Reformasi era – into open challengers of Anwar.

This comes at a time when the prime minister is trying to manage frustration over rising costs of living, rising external risks and challenges on the macro front.

CGS International said that while Malaysia’s economic growth momentum appears resilient, risks are increasingly tilted to the downside going into the second half of 2026, as elevated commodity prices and rising inflation could weigh on consumption and trade.

The latest political development is also likely to revive concerns over Malaysia’s political stability, particularly as it involves a former senior Cabinet member who once played a key role in shaping the government’s economic agenda.

Rafizi served as economy minister from December 2022 until his resignation in May 2025.

He oversaw key policy initiatives, including the roll-out of the Madani Economy framework and subsidy rationalisation plans. He also took charge of efforts to attract foreign investment into strategic sectors such as semiconductors, data centres and the Johor-Singapore Special Economic Zone.

While his tenure was marked by efforts to push structural reforms and fiscal consolidation, Rafizi also faced criticism over the pace of implementation, cost-of-living pressures and several controversial policy proposals, including targeted subsidy measures.

Political analysts noted that the emergence of another political splinter movement could add to longer-term concerns over fragmentation within Malaysia’s reformist bloc and the durability of the unity government ahead of the next general election.

“Investors generally prefer political continuity and policy clarity,” said Liew Wui Chern, a policy analyst and lecturer at Universiti Tunku Abdul Rahman. “The bigger question is whether this eventually evolves into a broader political realignment or remains a niche opposition movement.”

The announcement coincided with the Pakatan Harapan (PH) convention in Johor Bahru, the ruling coalition’s first such gathering since 2022.

What is Bersama?

Bersama, or the Malaysian United Party, is a Penang-based political party officially registered in December 2016.

The party was founded by Tan Gin Theam, who contested both the Bukit Bendera parliamentary seat and the Air Putih state seat in Penang during the 2018 general election, but lost his deposit in both contests.

Speaking on Sunday, Rafizi said the decision to pursue a new political path had been in the works for some time. He acknowledged that registering an entirely new party could prove difficult due to regulatory hurdles.

As a result, Rafizi and Nik Nazmi opted to take over an existing smaller party after discussions with Bersama’s founders and an assessment of the party’s future direction.

Confronting scepticism

The duo will join Bersama next week and will contest independently in the coming state polls or national general election, which must be held by Feb 17, 2028.

“We are not tied to any coalition,” said Rafizi. “We are multiracial and open to contesting anywhere,” he added, noting that the goal is to introduce a new political culture and fielding strong candidates, blending youth with seasoned individuals.

“I know some analysts believe a new party like ours is bound to lose its election deposits… But what they fail to realise is that we are crazy enough not to care. This is a kamikaze mission,” he said.

“It doesn’t matter if we lose our deposits and face public ridicule. If I end up retiring as a ‘failed politician’, so be it; it doesn’t bother me in the slightest.”

Nik Nazmi said that many Malaysians, particularly the youth, feel that key reform promises remain unfulfilled.

After the announcement, PKR secretary-general Fuziah Salleh told local media that the party is preparing to initiate legal action under the anti-hopping law against Rafizi and Nik Nazmi, given their pre-emptive announcement to take over the Bersama while still members of PKR.

She added that PKR is also mulling disciplinary action against the several party MPs who attended the duo’s briefing on Sunday.

Not a surprise move

Rafizi and Nik Nazmi, who was also former vice-president of PKR, resigned from the Cabinet in May 2025 after losing in the PKR party elections, where Nurul Izzah Anwar defeated Rafizi for the deputy presidency.

Rafizi has since become increasingly vocal in publicly criticising party leadership and Anwar, triggering disciplinary action from PKR. The former economy minister has received two show-cause letters from the party’s disciplinary board.

Liew Wui Chern, a policy analyst and lecturer at Universiti Tunku Abdul Rahman, said leaving PKR and starting a new party may be the most viable political option for the duo, especially for a liberal-leaning technocrat like Rafizi.

“If they remain in the party, both of them may not be selected to defend their respective seats in Pandan and Setiawangsa in the next general election,” Dr Liew told The Business Times.

He added that some disenchantment with Anwar’s administration, on issues ranging from policy reforms and rising cost of living, could benefit the new political platform.

“Against this backdrop, running independently in the coming election could actually increase Rafizi’s chances of securing more votes.”

Triggering domino effect

Professor Wong Chin Huat, a political scientist at Sunway University, noted that this new movement could trigger a domino effect, prompting other disgruntled lawmakers to follow suit.

Such a wave would weaken Anwar’s political leverage. For context, a loss of just 10 MPs would reduce PKR’s parliamentary presence to 21 seats and shrink PH’s tally to 71.

This would pull the Madani government’s overall majority, even when counting the six former Bersatu independents, down to 143 seats. Crucially, this would also drop the ruling coalition to five seats short of the coveted two-thirds supermajority.

To pass critical constitutional amendments – such as imposing a 10-year tenure limit on the prime minister or separating the roles of the attorney-general and the public prosecutor – Anwar would be forced to negotiate a bipartisan deal with the Perikatan Nasional opposition.

“It would not cause a collapse,” Prof Wong noted. Still, it would “weaken (Anwar’s) hand in negotiating with key coalition partners like Barisan Nasional, Gabungan Parti Sarawak and Gabungan Rakyat Sabah.”

Vote-splitting force

Dr Liew doubts the duo’s new move will pose an existential threat to the ruling coalition, although it could emerge as a major vote-splitting force against PKR in the next general election.

Lau Zhe Wei, associate professor at the Department of Political Science at International Islamic University Malaysia, said Malaysia’s political system – particularly in Peninsular Malaysia – remains heavily party-centric, making it difficult for breakaway parties to survive.

Even PKR, which emerged from the Reformasi movement in the late 1990s, took years before gaining meaningful electoral traction, while Bersatu and Pejuang also struggled despite being led by prominent political figures such as Mahathir Mohamad and Muhyiddin Yassin.

“I do not see strong prospects for it unless its role is mainly to split votes away from PKR,” Dr Lau said.

The climate remains challenging. Following a recent visit to Kuala Lumpur, OCBC Research said the matter on when the elections would be called was “the elephant in the room” during discussions.

It added that elections pose a binary risk to Malaysia’s economic growth and reform prospects. “The current leadership has demonstrated credibility in advancing economic reforms in a measured but meaningful manner,” the research house said.

“This momentum could be at risk of slowing or stalling, in a worst-case scenario, but could be accelerated if the administration retains or gains a stronger mandate.”