KUALA LUMPUR (Reuters) - Malaysia's deputy premier Najib Razak looks to have an easy path to the top job in ruling party elections in March, but an unseemly scramble for power around him could damage his efforts to rebuild the government.
Najib was effectively handed the premiership of Malaysia when Prime Minister Ahmad Abdullah Badawi said on Wednesday that he would stand down in March as the leader of the main ruling coalition party, the United Malays National Organization (UMNO).
Despite one declared challenger, the party presidency looks to be settled but the battle for deputy and other posts will be messier.
Horse trading and "money politics" as officials lobby to get closer to power could further taint the image of the party that has ruled Malaysia for 51 years.
"The realignment of backers and allies, and the race for power and positions, has begun," said Zainal Aznam Yusof, a respected Malaysian economist and a member of a government council set up recently to deal with economic problems.
"One dreads to hear the sound of money greasing the wheels of UMNO," Zainal wrote in an editorial in the New Straits Times.
That could damage Malaysia's chances of attracting new investment and fending off the fallout from the global financial crisis, which is set to cut demand for its exports.
Local investment bank CIMB this week cut its 2009 growth forecast to 3.0 percent from 5.0 percent.
After decades in power, corruption and nepotism have grown to plague UMNO and the entire Barisan Nasional governing coalition, alienating core Malay voters who feel they have gained little while party leaders and the elite have prospered.
It was a pledge to stamp out corruption that won Abdullah a landslide victory in elections in 2004, and the failure to do so saw the government slump to its worst ever election result in March 2008 and eventually forced him out of office.
Malaysia's ranking in the Transparency International corruption index fell to 43rd from 37th during his tenure.
Najib's possible challenger, former finance minister Tengku Razaleigh Hamzah, said corruption was on the rise in UMNO.
"I have received numerous complaints of money politics, and I hope the Anti-Corruption Agency will take action against the culprits," Razaleigh was quoted as saying in the Star paper.
While Najib is viewed as a stronger leader than Abdullah, he is still vulnerable to attack by the opposition, which is riding a wave of popularity under new leader Anwar Ibrahim.
Anwar, himself a former deputy prime minister, used arms procurement contracts undertaken while Najib was defense minister to attack the government in the election campaign.
When he formed his new government after the March elections, Abdullah was forced to defend Najib, saying there was no proof he was involved in any corrupt activities.
A leading blogger is also currently in court relating to charge of sedition over allegations he made that Najib was involved in the murder of a Mongolian model. Najib has firmly denied those charges and said they are a smear.
Anwar returned to the attack on Thursday during his trial on what he says are trumped up charges of sodomy, a reprise of the issue that saw him kicked out of office and imprisoned in the late 1990s.
"Certainly not. He never talks about reforms in the judiciary, free media, democratic process. He hasn't given clues how he can manage the economy," Anwar said when asked whether Najib would be a better leader than Abdullah.
MAHATHIR PULLING THE STRINGS?
One of the first critics of Abdullah was former Mahathir Mohamad, prime minister for 22 years. It was Abdullah's decision to end some of Mahathir's expensive infrastructure projects that triggered his decision to quit UMNO and his subsequent sniping.
Now that Abdullah is going, Mahathir will return to UMNO -- and possibly his influence.
"It's not Najib that is going to rule. It's Mahathir going to pull all the strings from now on, from behind the scene," said Terence Gomez, professor at the University of Malaya.
That means Malaysia is unlikely to see big reforms under Najib of the kind that are needed to reassure investors who want issues such as lack of transparency in the judiciary addressed.
At the same time, the prosecution of bloggers and others who challenge the government is likely to rise under Najib. A recent crackdown at has drawn criticism from human rights and journalist groups and important trading partners such as the U.S.
"We are going to see a clear repression or suppression of media space," Gomez said.