Malaysian Prime Minister Abdullah Ahmad Badawi this weekend appeared to be ending his political career on a forlorn note, on a “working visit” to the Gulf States while his hand-picked party candidate, Wan Ahmad Wan Farid lost a crucial parliamentary by-election in the conservative eastern state of Terengganu to a fundamentalist Islamic opposition candidate, Abdul Wahid Endut.

The loss of the seat doesn’t cripple the Barisan Nasional, the ruling national coalition of ethnic political parties, which maintains a healthy 139-83 majority in the Dewan Rakyat, or Parliament. But the defeat probably guarantees a period of continuing political turbulence as factions within Badawi’s United Malays National Organisation jockey for position and the opposition Pakatan Rakyat, headed by Anwar Ibrahim, considers ways to maximize its growing political clout.

In particular, within UMNO, Badawi’s son-in-law, Khairy Jamaluddin, faces an uphill battle to become head of the party’s youth wing in elections in March. Khairy, who was intensively involved in the Terengganu race, faces Mukhriz Mahathir, the son of the former Prime Minister, Mahathir Mohamad, who has been doing his best to drive Badawi from power. Many of the Badawi people will probably slip into political oblivion when the prime minister goes, especially if Khairy loses the UMNO Youth position.

If the opposition continues its upward trajectory, sources within the Malay political structure told Asia Sentinel over the weekend, ultimately questions will have to be asked about how an unwieldy coalition of Parti se-Islam Malaysia – a fundamentalist Islamic party, the Democratic Action Party – a putatively socialist and Chinese chauvinist party – and Parti Keadilan Rakyat, made up of urban, moderate Malays – will be able to stay together, let alone govern without centrifugal forces pulling it apart. PAS, for instance, favors strengthening and extending Islamic religious laws across the country, while both of the other component parties are increasingly secular and do not want to see the country regress to religious hegemony. A long-time political adage, somewhat exaggerated, is that Muslims believe that if they eat pork it will send them to hell and that the Chinese believe they must eat pork or they will die. But it does demonstrate how deep the cultural divisions are between the opposition components.

The Terengganu loss is the second straight parliamentary defeat for the Barisan since its relative electoral drubbing last March when it lost its two-thirds majority in the Parliament for the first time since Malaysia became a nation 50 years ago. And, at a time when the increasingly politically unpalatable deputy prime minister, Najib Tun Razak, would like to call a general election after he is scheduled to take power from Badawi in March, it raises concerns about whether the ruling coalition and UMNO in particular is losing its grip on the electorate.

Badawi is being basically driven out of his own party because of loss of the two-thirds majority, particularly by the furious criticisms leveled at him by the splenetic octogenarian former prime minister. However, a wide range of political observers in Kuala Lumpur say Badawi’s lack of success wasn’t because he agreed to follow in Mahathir’s footsteps, playing crony politics and keeping the status quo, but that he didn’t do enough to clean out the mess Mahathir had left behind him, with a thoroughly ineffective and largely corrupt judiciary, a large rent-seeking class of UMNO cronies growing fat on government contracts, and other problems.

That has been compounded by the outgoing prime minister’s indecisiveness and lack of attention to politics, exemplified by his decision to leave for the Middle East on his current junket instead of staying home to fight what his party regarded as a crucial by-election. Although Badawi had picked Wan Ahmad over the objections of some UMNO leaders to be the Terengganu candidate, it was Najib who took personal charge of the race along with Khairy, at one point staging a circus-like event in the town of Kuala Terengganu to hand out hundreds of millions of ringgit in contracts to local businessmen.

The Barisan is now bracing for state elections in the East Malaysian state of Sarawak later this year in which the long-serving leader of the state, Abdul Taib Mahmud, is under increasing fire for having lost touch with the electorate and for perceptions of corruption.

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The Terengganu race was especially disturbing for the Barisan because the government poured billions into development funds and other goodies in the seaside town, set in the traditional Malay heartland on the East Coast. A special trust fund to manage the state's oil royalty with starting capital of RM10 billion was established and RM408 million was paid as the state's oil royalty. Then was a controversial "lucky draw", in which about 600 government contracts worth RM30,000 to RM 200,000 (US$8,400-US$56,000) each were dished out to local contractors in a ceremony personally presided over by Najib. Just before the election, the government also announced in an unprecedented move that it would provide RM50 million in direct funding to the boards of directors of Chinese schools.

So what happens when money stops talking? This is probably the Barisan's biggest worry. Pork-barrel politics is the coalition's mainstay. Over the years, the coalition has held onto power with its politics of development – a new school building, town hall, playground, mosque or some infrastructure. Helping them along are allowances from the Welfare Department processed on the spot during elections by simply matching Malaysian identity cards to the electoral rolls.

"All's not well with BN. The slide continues. BN should count its blessings for not losing by a bigger majority," political analyst Khoo Kay Peng wrote in his blog after the results were announced. "…It should have been a bigger majority for PAS."

The economy, which continues to plug along at a relatively mediocre pace as global economic activity stalls and Malaysia’s electronics and commodity exports decline in value, is another drawback for Najib’s plans for a snap election. The streets of Chinatown and shopping malls were eerily quiet a week before Chinese New Year. Usually, the ethnic Chinese will compete to consume during this period to look their best, whether with new cars, new clothes, new hair or a spread of seasonal snacks to feed their guests.

Analysts have said this election was too close to call because of the inscrutability of an electorate voters known for strong party allegiances and the fickleness of Chinese voters, which consisted of about 11 percent of the electorate, or 8,735. Mixed with local resentment of perceived waste of state oil royalty on extravagant projects that have little benefit for the electorate or the popularity of the candidates, interpretations of the election results have been mixed.

Certainly, it has been an election of strange scenes, none stranger than rivals working together under the Pakatan banner. For decades, the fundamentalist, Malay-centric PAS and the Chinese-dominated, secular DAP have been bitter rivals. But this election the DAP went all out to woo the Chinese voters on behalf of PAS and PAS returned the favor for the Chinese. Nik Aziz Nik Mat, the Kelantan chief minister and PAS spiritual advisor, who known for his more extreme views, was photographed eating in a non-halal restaurant where pork and alcohol, verboten for Muslims, were served although he ate food specially catered for him.

Throughout the election senior party leaders of the DAP and PAS danced delicately around the touchy issue of Islamic hudud laws which mete out corporal punishment like chopping off hands for theft. Even Anwar, usually noted for his ambiguity on controversial issues, reportedly said that if hudud only applies to Muslims, then it should at least be discussed. In the end, Parti Keadilan Rakyat (PKR), which Anwar leads, along with DAP and PAS agreed that Pakatan decisions will be made on a consensus basis.

The task for Najib, who has been personally beset for months over a variety of scandals, is to clean out his party to overcome growing public unhappiness over corruption within UMNO, particularly with the longtime practice of awarding lucrative construction and other contracts to UMNO stalwarts and cronies. Najib himself is the subject of questions over massive defense procurement contracts awarded to close friends while he was defense minister.

Najib’s task is not being made any easier by widespread belief in Kuala Lumpur that he was somehow involved, however peripherally, in the execution murder of an attractive Mongolian translator, Altantuya Shaariibuu, in October 2006, allegedly by two police bodyguards under his supervision. His close friend, Abdul Razak Baginda, was controversially acquitted of the charge of participating in the murder, but not before numerous reports surfaced that Altantuya had been both men’s lover and that she had been attempting to blackmail Razak Baginda.

Last week one of the two bodyguards on trial for Shaariibuu’s murder said they had been approached to do something about the woman by Najib’s chief of staff. The trial is to resume this week. Neither Najib nor his chief of staff has been questioned by police or asked to testify in the long-running trial. He has repeatedly sworn to Allah that he had never met the woman.