Commentary: With Muhyiddin’s resignation and Najib’s jail term, Malaysia politics heats up in 2026
Malaysian Prime Minister Anwar Ibrahim enters the new year facing escalating challenges within and outside party ranks, says University of Tasmania’s James Chin.
by James Chin · CNA · JoinRead a summary of this article on FAST.
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KUALA LUMPUR: At the turn of the new year, Kuala Lumpur is buzzing with uncertainty. A series of sudden political developments has placed the nation on edge, signalling turbulent times ahead for both the unity government and the opposition.
From leadership shake-ups in Perikatan Nasional (PN) to courtroom setbacks for former prime minister Najib Razak and a resounding rejection of peninsular parties in Sabah's recent state election, Malaysia's political landscape appears fractured on multiple fronts.
The most immediate eruption comes from the opposition coalition PN. On Dec 30, 2025, former prime minister Muhyiddin Yassin announced his resignation as PN chairman, effective Jan 1.
The brevity of his statement, thanking supporters without naming a successor or explaining the move, raised eyebrows. Notably absent was any mention of relinquishing his presidency of Bersatu, PN's anchor party, suggesting he intends to keep that role despite stepping down from the coalition's top post.
HANDOVER AMID BREWING TENSIONS
This partial retreat appears calculated, possibly planned for months, with the New Year's timing allowing a smooth handover amid brewing tensions.
Speculation in political circles centres on Parti Islam Se-Malaysia (PAS), PN's dominant partner, pushing for influence. PAS favours either one of its own leaders or Bersatu deputy president Hamzah Zainudin as the next PN chairman. Hamzah, openly backed by PAS leadership, may also be a potential challenge to Muhyiddin's Bersatu presidency.
Such a shift could realign PN dynamics, with Hamzah seen as more palatable to PAS on key issues, and Hamzah’s ability to play hardball with Prime Minister Anwar Ibrahim.
This PN turmoil follows a dramatic fallout in Perlis, Malaysia's smallest state. Late December saw a crisis when assemblymen withdrew support from PAS-appointed Chief Minister Mohd Shukri Ramli, who resigned citing health reasons.
He was swiftly replaced by Bersatu's Abu Bakar Hamzah, costing PAS one of its prized chief minister posts. The episode exposed deep rifts between Bersatu and PAS, with accusations of betrayal flying and threats of PAS exiting the PN coalition government in Perlis.
TROUBLE FOR THE UNITY GOVERNMENT
Meanwhile, the ruling unity government faces its own storm, centred on the enduring loyalty of the United Malays Nationals Organisation (UMNO) to former leader Najib Razak. On Dec 22, 2025, the High Court rejected Najib's bid to serve his remaining sentence under house arrest, ruling a purported royal addendum invalid.
Days later, on Dec 26, Najib was convicted in his largest 1MDB trial, for abuse of power and money laundering involving over RM2 billion (US$500 million). He received an additional 15-year jail sentence and massive fines. These twin blows dashed UMNO's hopes for Najib's release via pardon or royal intervention.
Frustration boiled over in UMNO Youth, which demanded the party exit Anwar's coalition for failing to secure Najib's freedom. The wing announced a special convention on Jan 3 to debate withdrawing support unless demands are met.
Compounding federal woes was the Nov 29, 2025 Sabah state election, where Pakatan Harapan (PH) suffered a rout. Local parties, riding a "Sabah for Sabahans" wave, dominated, with Gabungan Rakyat Sabah (GRS) securing 29 seats and Parti Warisan 25.
PH won just one seat, Democratic Action Party (DAP) lost all its strongholds, and Barisan Nasional (BN) won 6 seats compared to 14 in 2020. The results underscored growing Borneo unhappiness against peninsular dominance and a sharp rise in state nationalism and regional identity politics.
CHAOS ACROSS THE DIVIDE
What does this portend for 2026? In short, chaos across the divide.
On the surface, Prime Minister Anwar Ibrahim appears secure, with PN in disarray. Yet vulnerabilities abound.
A revitalised PN under new leadership, potentially Hamzah, could pose a formidable challenge, especially if it bridges Bersatu-PAS divides. Najib's saga remains a distraction, fuelling UMNO unrest and undermining Anwar's unity government narrative.
UMNO Youth calls for an all-Malay government with UMNO, PAS and Bersatu, excluding the Chinese-based DAP, has gained traction among some UMNO factions.
Rhetoric between UMNO Youth and DAP has escalated, with daily barbs eroding the governing coalition harmony. Anwar has not publicly commented on or intervened in the bickering.
Meanwhile, reforms undertaken by the unity government have not met expectations. The mid-December cabinet reshuffle filled key trade and economy ministerial posts, but was seen by some analysts as lacking boldness.
PRESSURE FROM BORNEO
The real pressure in the new year will come from Sabah and Sarawak. Sabah's election reinforced state nationalism, while Sarawak remains a fortress from federal politics.
Anwar faces implementing Sabah's court-affirmed 40 per cent revenue entitlement from 1974 onward, a multibillion-ringgit obligation. If Anwar agrees to pay this amount, even by instalments, it will cause the Malay establishment in the peninsula to turn against him. This is a political certainty. Yet any delay could alienate crucial Borneo support.
Ultimately, 2026 looms as a crucial year for Anwar ahead of the 16th general election (GE16), due by February 2028. He has to show he deserves to win. His opponents never forget to remind him that he did not win the last GE, and that the king asked him to form a government, which he was only able to do that with support from Borneo.
Will Borneo give him another chance, or can he win big in Malaya alone with PH and BN? He must deliver tangible wins to justify his appointed premiership back in 2022.
As the new year dawns, Malaysia's political snake pit shows no signs of settling. Anwar enters without holiday respite, facing escalating challenges within and outside party ranks. Stability hinges on deft navigation of these eruptions, failure risks deeper fragmentation in an already polarised nation.
James Chin is Professor of Asian Studies, University of Tasmania, and Senior Research Associate, Tun Tan Cheng Lock Institute of Social Studies, Malaysia.
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