By ABHRAJIT GANGOPADHYAY
KUALA LUMPUR—Malaysian Prime Minister Najib Razak dissolved parliament on Wednesday, making way for an election that analysts say he must win comfortably to avoid being unseated by his own party.
Malaysia's Prime Minister Najib Razak, here last month, dissolved parliament, paving the way for elections within weeks.
And Mr. Najib doesn't merely face challenges from within. The coming contest, which many experts predict will be the closest in Malaysian history, will test whether the United Malays National Organization's traditional political planks of race, religion and economic stewardship can overcome the opposition's pitch for a more open and transparent society in the Muslim-majority Southeast Asian country.
In a live television broadcast, Mr. Najib said the country's king accepted his request to dissolve Parliament. Malaysia's Election Commission will set the date for polls after it hears from the country's state governments on when they will dissolve their respective assemblies. Elections must be held within the next 60 days, but it is widely expected they will come within a few weeks.
"If there is any transition of power at the federal and state level, it will be done in an orderly and peaceful manner," Mr. Najib said.
Analysts say chances of an opposition victory are slim, though the alliance may extend its 2008 electoral gains, when it wrested 82 of 222 seats in Parliament, which left the ruling front short of a two-thirds majority for the first time. The opposition also won five of Malaysia's 13 states in the 2008 polling. Since that ballot, the opposition has edged up to 86 seats in Parliament through special elections, though it lost control of one state.
"There is a high degree of uncertainty on the election outcome, as a large section of youth will be voting for the first time," said Ibrahim Suffian, the director at independent pollster Merdeka Center. Voters younger than 30 make up a quarter of the country's 13 million-strong electorate.
Ceding more seats to the opposition could limit Mr. Najib's ambitions to liberalize the country's economy and propel it onto a faster growth path. A weaker mandate might spur a leadership challenge to Mr. Najib from within his party, analysts say, and could also hinder his efforts to push through unpopular reforms, such as proposals to reduce costly subsidies on food and cooking fuel.
Mr. Najib appealed to voters to return his government to power in an effort to help push through his ambitious $444 billion Economic Transformation Program that he says would transform Malaysia into a high-income economy by 2020.
"Our national transformation is still a story half-told. If we do not keep up the pace of reform, we risk losing out," he said. "So today, I ask you to let me finish the job—to vote for progress, not against it."
The opposition coalition was upbeat on its prospects, as it has been preparing for the battle for the past four years.
"We are at 52% [chance of] taking over Putrajaya," Rafizi Ramli, director of strategy at Anwar Ibrahim's People's Justice Party, told The Wall Street Journal. While Malaysia's parliament is in capital Kuala Lumpur, the federal government runs its administration from a suburb, Putrajaya.
The opposition—consisting of the Islamic fundamentalist Pan-Malaysian Islamic Party, or PAS, the moderate People's Justice Party and the Democratic Action Party, which draws most of its support from the ethnic Chinese minority—has steadily gained support in urban areas.
The opposition has campaigned on specific bread-and-butter economic reforms for the past 2½ years, Mr. Rafizi said.
"Most importantly, this election is about the difference we can make to the people on the ground and it is [these] economic promises and reforms that will make the difference," he added.
The opposition also has also pledged to unwind a race-based affirmative action policy designed to give a leg up to the majority ethnic-Malay population and to reduce corruption, changes that younger voters strongly support, analysts say.
In a February survey conducted by the Merdeka Center, 46% of respondents said the government must tackle corruption. In the past, ministers have faced graft charges.
Since Mr. Najib came to power in 2009, he has made efforts to make governance more transparent.
Government contracts are now available online, and companies that bid for projects are asked to sign integrity pacts. A Whistleblower Protection Act was passed in 2010 and cash incentives were offered to civil servants for reporting corruption that could lead to prosecution.
Write to Abhrajit Gangopadhyay at abhrajit.gangopadhyay@dowjones.com
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