SINGAPORE – Malaysia’s Prime Minister Anwar Ibrahim said on Wednesday that his unity government alliance is stable and is now focused on delivering its policies, amid the furore over dropped graft charges against his deputy and planned street protests by the opposition.

Referring to his rivals’ criticism of his government’s actions as part and parcel of a “vibrant democracy”, the Pakatan Harapan (PH) coalition chief said: “That’s politics. But does that cause instability? No.”

Last week, Deputy Prime Minister Zahid Hamidi was granted a discharge not amounting to an acquittal in relation to 47 corruption and money-laundering charges. The court decision was welcomed by his Umno party but decried as political interference by the opposition.

In protest, the youth-based Muda party withdrew its support for Datuk Seri Anwar’s unity government, resulting in the government being one seat short of a two-thirds majority in Parliament.

The governing coalition consists of PH, the Umno-led Barisan Nasional alliance and parties from Sabah and Sarawak.

Muda’s president and only MP Syed Saddiq Abdul Rahman has, however, said the party will still back “progressive” government Bills that require two-thirds support in the Lower House to become law.

Nevertheless, Muda, along with its ally Parti Sosialis Malaysia, are threatening to take to the streets if the charges against Datuk Seri Zahid are not restored. Meanwhile, the opposition Perikatan Nasional is planning a protest in the capital Kuala Lumpur this Saturday.

“You don’t need two-thirds (in Parliament)... You need a strong, formidable government with a strong majority. That we have,” said Mr Anwar, who was speaking at the Milken Institute’s Asia Summit in Singapore.

He said it was more important instead for his 10-month-old administration to have clear economic and social policies and to deliver on them.

These include measures to rationalise subsidies on goods such as fuel and food, which cost the government RM80 billion (S$23.3 billion) in 2022, by making them available only to the lower-income groups.

Mr Anwar also referred to Malaysia’s recently revised US$20 billion (S$27.3 billion) industrial master plan to upgrade its manufacturing sector by prioritising sectors like electronics, chemicals, aerospace, electric vehicles and pharmaceuticals.

He noted that while Malaysia sought to draw foreign investment with its professional workforce, ease of doing business and clear policies, he has been told by investors that the top tier of workers needs upskilling.

“We are now focused on these policies. We will have to make sure that Malaysia is able to attract investments as we did successfully in the 1990s,” he said.

Mr Anwar was Malaysia’s finance minister from 1991 to 1998 under the Mahathir Mohamad administration before he was sacked from the Cabinet and subsequently imprisoned for sodomy and graft.

He has always maintained that the charges against him were politically motivated. His Parti Keadilan Rakyat was formed after street protests demanding justice and reforms following his arrest.

In 2018, his PH coalition posted a historic win at the general election, largely due to its strong anti-corruption platform that galvanised public anger over the multibillion-dollar scandal at the 1Malaysia Development Berhad state fund linked to Umno president Najib Razak.

On Wednesday, Mr Anwar insisted that his government does not compromise on good governance, despite drawing flak for the Zahid court decision that Mr Syed Saddiq said “normalises corruption”.

Mr Anwar said: “As prime minister, I do not concede or compromise on this... That decision was purely (by) the Attorney-General under... the Constitution. He has the sole discretion, and that’s his discretion.”

He was accompanied on a one-day trip to Singapore by Minister of Investment, Trade and Industry Tengku Zafrul Tengku Abdul Aziz and Minister of Foreign Affairs Zambry Abd Kadir.

The Malaysian leader was hosted to tea on Wednesday by Prime Minister Lee Hsien Loong.

Correction note: This story has been updated to indicate that Mr Anwar was hosted to tea on Wednesday by Prime Minister Lee Hsien Loong. The leaders’ wives were not present.