By JAMES HOOKWAY | JANUARY 10, 2012
WSJ

KUALA LUMPUR—His unexpected acquittal on sodomy charges Monday frees Malaysian opposition leader Anwar Ibrahim finally to look past his trial and on toward the country’s coming national election.

The verdict by Judge Zabidin Diah at the High Court could also warm this key Muslim nation’s relations with the U.S. as the Obama administration tries to build stronger ties across Asia. Malaysia’s government described the verdict as proof it doesn’t try to sway court decisions, a frequent accusation of Mr. Anwar and other opposition activists. Mr. Anwar himself, speaking to a swarm of television crews outside the packed courtroom, described it as a surprise and a vindication.

Now the 64-year-old opposition leader is shifting focus to the election, which must be called by March of next year. Analysts predict it will be a closely contested battle between him and Prime Minister Najib Razak for the center ground of a country that has shown a growing desire for political and economic change over the past few months.

Speaking to The Wall Street Journal at the court Monday, Mr. Anwar said the trial will galvanize the opposition. Over the past week he traveled to several key electoral battlegrounds where he accused Mr. Najib’s government of holding back reform, an allegation it denies.

“Our focus is very clearly on the election. We are no longer a democracy at a time when there are great changes sweeping the world,” Mr. Anwar said. He said the Muslim world, which used to regard Malaysia—with its gleaming skyscrapers and monorail networks—as an icon of development, no longer looks to the country as a model for growth.

Mr. Anwar looked gray and haggard in court, where a conviction could have sent him to prison term of up to 20 years—removing one of the few politicians capable of uniting Malaysia’s fractured opposition parties to challenge the ruling National Front coalition, led by the United Malays National Organization, which has governed the country since independence from Britain in 1957.

Mr. Anwar has long portrayed himself as a political and economic reformer. His distinctive goatee and snappy spectacles have become something of a symbol for modernization across much of Southeast Asia and beyond.

Sacked as deputy prime minister after challenging Mahathir Mohamad’s leadership of UMNO in 1998, Mr. Anwar launched a series of massive street protests in Kuala Lumpur, Malaysia’s largest city. He was soon arrested on charges of breaking the country’s sodomy laws by having sex with his speechwriter and chauffeur—his conviction would be overturned in 2004, a year after Dr. Mahathir retired—and beaten up in prison by the then-chief of police.

His second brush with the sodomy laws began in 2008. After Mr. Anwar led a revitalized opposition in elections that gave it more than a third of the seats in Malaysia’s Parliament, a former male aide, Saiful Bukhari Azlan, accused him of sodomizing him in a Kuala Lumpur condominium unit, an incendiary allegation among the country’s conservative majority Muslim population.

Mr. Anwar condemned the charges as a government-instigated stunt to destroy his political comeback, which the government denied—and the trial’s outcome may serve to provide momentum for Malaysia’s opposition, especially if Mr. Anwar can direct his followers’ energy toward the vote. Outside the High Court Monday, more than 5,000 Anwar supporters, some wearing plastic Anwar masks and many chanting “reformasi” (Malay for “reform”), gathered as helicopters circled overhead and riot police kept a cautious watch.

Now that he doesn’t have to work flat-out on staying out of prison, Mr. Anwar will be able to spend time building a political machine, said James Chin, a political science professor at the Malaysian campus of Australia’s Monash University.

“In other words it will be a real competition now,” said Mr. Chin, who puts the chances of Mr. Anwar’s opposition defeating Mr. Najib at 50-50.

Other analysts pegged the odds lower, and Mr. Najib, the 58-year-old son of a former prime minister, might actually be able to claw out an advantage from the court decision, especially internationally. Analysts said a guilty verdict would likely have led to a round of international condemnation for Malaysia’s government and for Mr. Najib, who in recent months has invested substantial political capital in reviving close ties with key trade partners such as the U.S. and Britain.

Malaysia, once know for its stinging attacks on hedge-fund managers such as George Soros, is emerging as a key player in Washington’s plans to create a Pacific-based free trade pact known as the Trans-Pacific Partnership. In addition to extensive trade and commercial commercial, the relationship also includes military-training links. For the U.S., which had urged a fair trial for Mr. Anwar, the acquittal enables a stepping up of the engagement.

“U.S.-Malaysia ties have improved under Mr. Najib,” said Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore. “The U.S. will certainly be relieved by the result.”

The U.S. is recalibrating its foreign policy more around the fast-growing economies of east Asia and away from post-9/11 conflicts in Afghanistan and Iraq. In recent months, relations with countries such as Vietnam have shown a sudden improvement as U.S. diplomats make their case the region needs a good relationship with Washington in order to adapt to China’s growing economic and military clout. Myanmar has joined in, releasing some political prisoners and pushing economic and political change in a bid to develop ties with America and Europe and wean itself off China’s economic support.

Monday’s verdict also gels with Mr. Najib’s recent moves to win back support from Malaysia’s center ground. He has rolled back unpopular elements of a decades-old affirmative-action program designed to benefit the country’s majority ethnic-Malay population, and has introduced greater press freedoms.

Mr. Najib makes a point of demonstrating—especially to younger Malaysians—that he understands how the country is changing, regularly using social media such as Twitter to burnish his political brand, often attending concerts and in one case making a prank call on a local radio disc jockey.

Embracing more change, though, is a “a high-risk strategy” for Mr. Najib, said Bridget Welsh, a professor at Singapore Management University and a long-time observer of Malaysian politics. “Mr. Najib is making this next election all about him,” she said, and if fears grow among conservative members of the ruling party that he’s weakening their grip on the country, they may move to oust him.

The issue for Mr. Najib now may well be whether Mr. Anwar’s acquittal heightens that fear.
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—Patrick Barta in Singapore and Celine Fernandez in Kuala Lumpur contributed to this article.