A magnanimous gesture by PM ?

Umno vice-president Tan Sri Muhyiddin Yassin who has been very critical of the transition plan has fully supported the party president’s latest move for an early transition calling it a magnanimous gesture.

“I express my high regard and respect for the president. Pak Lah has magnanimously taken everything into consideration.

“We can see that he has given priority to the party and to the members who have voiced various views.

“He looks like a leader who puts the party’s interests before other interests,” he said Friday after the special Umno supreme council meeting.

Umno has decided to postpone its elections amid growing speculations that embattled Prime Minister Abdullah Ahmad Badawi will resign within months.

Abdullah said that the party will hold its elections in March instead of December as scheduled.

But Abdullah declined to say whether he would quit on that date or run in the party poll. The premier had already said he would quit before the next election, which must be held by 2013, saying he would cede power to his deputy Najib Razak in 2010.

"He's buying time, but I don't think he will be able to push for reforms in the meantime," said one diplomat based in Kuala Lumpur who spoke on condition of anonymity. "UMNO won't allow him to do that."

He this was to 'facilitate an early transition,' but declined to elaborate. Abdullah has said he is likely to resign before June 2010 and hand power over to his deputy Najib Razak. Traditionally, the UMNO president becomes the prime minister.

Abdullah has been claiming that he wants to quit only after his efforts at reforms in the economy, judiciary and administration bear fruit. However, critics have said little progress has been seen since he became premier in 2003.

Malaysia's economic growth is slowing, inflation is at a 27-year high and much-needed reforms promised by Prime Minister Abdullah Ahmad Badawi have not been done.

Abdullah told reporters that he would announce his decision to contest or not at the party's polls before October 9, when the party's district officials start meeting to nominate candidates for the elections.

"It will be my decision whether to contest or not. You can go on guessing, but the decision will be mine," Abdullah said.

"We have taken cognizance of the views of the party members. I think there is a lot of wisdom in today's decision," Najib told reporters.

By postponing the elections three months, UMNO's top leaders appear to have struck a compromise that would allow the 69-year-old Abdullah to exit gracefully.

Abdullah, however, denied he was facing pressure from UMNO leaders, saying only "two or three" of them felt he should step down sooner.

He also said he has no plans to go on leave until March, saying he has much work to do. Abdullah has been claiming that he wants to quit only after completing his program of reforms in the economy, judiciary and administration -- goals that have made little progress in the five years he has been in office.

The postponement of the party election would "calm the situation which has been heating up. It will protect the party and protect its dignity," said UMNO information chief Muhammad Muhammad Taib.

The urgency to boot out Abdullah is also partly due to concerns that he may be incapable of dealing with opposition leader Anwar Ibrahim, who is threatening to engineer enough defections from the ruling party to bring down the government.

The pressure from Anwar has coincided with turbulence in global financial markets caused by the U.S. banking crisis.

Data released on Tuesday showed 24 billion ringgit ($7.04 billion) of portfolio money flowed out of the country in the second quarter of 2008 -- after the March election -- compared with a 21.1 billion ringgit inflow in the first quarter. At the

Abdullah, 68, has failed to implement key pledges such as ending corruption and boosting the independence of the judiciary. The policy drift, along with rising racial tensions, has unsettled both party activists and investors.

The budget deficit is set to balloon to 4.8 percent of gross domestic product this year. Inflation has surged to 27-year highs and his government has flip-flopped on key issues like petrol subsidies, first raising and then cutting prices.

Abdullah is expected to announce that he will not defend his party president's position, possibly just after the Hari Raya holidays.

He will then stay on as party president and prime minister until March 2009. Presumably he will be given some time to complete some of the reforms he promised Malaysians and then be given a grand send off at the party assembly.

A day earlier, Najib told Abdullah that the party assembly and elections would be pushed back to June.

This morning, the two men met privately just before the Supreme Council meeting, and it became March.

Even though no words to the effect were uttered by the council, it is clear that they want Abdullah out sooner rather than later.

Meanwhile, Najib, 55, has an impeccable political heritage. He is the son of Malaysia's second prime minister and the nephew of its third. He also holds the powerful finance ministry portfolio.

Recently however he has been dogged by allegations he had a sexual relationship with a murdered Mongolian woman. Najib has firmly denied the allegations.

If and when he does assume power, he may prove as incapable as Abdullah in staunching Barisan's losses, analysts said.