Mahathir sworn in as PM

Mahathir Mohamad was sworn in as Malaysia's seventh prime minister yesterday following his stunning election victory over the coalition that has ruled the Southeast Asian nation for six decades since independence from Britain.

Malaysia's constitutional monarch, Sultan Muhammad V, administered the oath of office just before 10:00 pm, in a ceremony carried live on state television from the national palace in Kuala Lumpur.

Mahathir, 92, was dressed in a traditional black "baju melayu" tunic and sarong, with an Islamic cap on his head. He is the oldest elected leader in the world.

Hundreds of Malaysians were lined up on the road leading to the palace, waving party flags and cheering. The Election Commission announced the result long before dawn and there was some consternation in the capital over the time taken to swear in the new prime minister.

"There is an urgency here, we need to form the government now, today," Mahathir told a news conference earlier in the day.

A palace statement earlier dismissed suggestions that the appointment was delayed. "His Majesty strongly supports and respects the democratic process and the wishes of his subjects," it said.

Mahathir ruled Malaysia with an iron fist from 1981 to 2003. He came out of retirement to take on his former protege, Najib Razak, who was prime minister for nearly a decade.

Mahathir's alliance of four parties trounced Najib's Barisan Nasional (BN), the first time it had ever lost an election.

Earlier yesterday, Najib appeared to raise doubts that Mahathir would immediately take office because no single party had won a simple majority of seats in the 222-member parliament, and it would be up to the monarch to decide.

Official results showed that Mahathir's coalition won 121 seats, comfortably more than the 112 required to rule. But it has not been formally registered as an alliance.

In jubilant mood and cracking jokes, Mahathir dismissed any doubts he would be prime minister. "I got up late, lots of people got up late," he replied when asked why there was a delay in swearing him in, noting that the election result was only officially announced around 5:00 am.

He said he had been assured of support from a raft of parties that would give his government 135 members of parliament.

Najib conceded the election in a news conference yesterday but has not been seen in public since. He did not attend the swearing in ceremony at the palace.

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Malaysian markets were closed and will reopen only on Monday, but overseas investors were nervous about the ouster of Najib and the ringgit lost four percent in offshore trading. An overseas Malaysian equity fund initially showed a 6 percent drop in share values but rebounded partially yesterday.

"This upset ranks up there with Brexit and the Trump election," said Aninda Mitra, a senior sovereign analyst at BNY Mellon Investment Management. "I believe the ringgit will come under pressure as policy continuity will come under a cloud."

Mahathir repeated a promise to repeal a goods and services tax (GST) introduced by Najib and review foreign investments, including major infrastructure projects that are part of China's Belt and Road initiative.

Some economists raised concerns his populist promises could undermine economic prospects at an increasingly challenging time for emerging markets, despite hopes elsewhere he may revive his bold approach to economic management.

Global ratings agency Moody's said some of Mahathir's campaign promises, including scrapping GST and a reintroduction of fuel subsidies, could be credit-negative for Malaysia's sovereign debt rating.

Najib's BN coalition won 79 seats, a collapse from the 133 it won in the 2013 election, which was itself the coalition's worst poll performance ever at the time.

Few had expected Mahathir to prevail against a coalition that has long relied on the support of the country's ethnic-Malay majority.

However, he joined hands with jailed political leader Anwar Ibrahim, his one-time deputy he famously fell out with in 1998, and together their alliance exploited public disenchantment over the cost of living and a multi-billion-dollar scandal that has dogged Najib since 2015.

Mahathir said that one of his first actions would be to seek a royal pardon for Anwar. Before the poll he had promised to step aside once Anwar was free and let him become prime minister.

His wife, Wan Azizah Wan Ismail, was sitting next to Mahathir at his news conference. Under an agreement with Mahathir, she is to be deputy prime minister.

Anwar was imprisoned, first by Mahathir on charges of corruption and sodomy. He was released in 2004 but jailed again by Najib in 2015.

Mahathir and Najib were once allies but they clashed over a scandal around 1Malaysia Development Berhad (1MDB), a state fund from which billions of dollars were allegedly siphoned off.

The 1MDB affair is being investigated by at least six countries, although Najib has denied any wrongdoing and has been cleared by Malaysia's attorney-general.

Mahathir had vowed to investigate the scandal if elected and bring missing funds back to Malaysia. Yesterday, he said that if Najib had done anything wrong he would "face the consequences".