Malaysia PM Najib calls for unity in Merdeka Day speech as polls loom

Malaysia Prime Minister Najib Razak (centre) with retired army officers Oliver Culvelt Samuel (second, left) and Mohamed Sharif Kalam (second, right), both of whom raised the national flag on the eve of Aug 31, 1957, at the full dress rehearsal for the National Day parade at Dataran Merdeka. BERNAMA

KUALA LUMPUR (Reuters) - Prime Minister Najib Razak called on all Malaysians to stand by his administration on Wednesday (Aug 30) in his last national day address before he has to call what could be his toughest general election.

Najib's popularity has taken a hit from a multi-billion dollar scandal linked to his pet project, the 1Malaysia Development Berhad (1MDB) state fund.

He also faces simmering discontent over rising living costs and a growing challenge from his former mentor turned foe, Mahathir Mohamad.

"In the spirit of independence, now is not the time for us to break ranks," the prime minister said in a statement on the eve of the 60th anniversary of independence from Britain. "In the era of this government's administration, there is no greater gift to the people, in the true meaning of independence, than a government that has the ability to deliver on its promises."

Najib, who became prime minister in 2009, has until mid-2018 to call a general election before his five-year term ends.

Political and government sources have told Reuters he could call it later this year.

He is under pressure to increase his ruling coalition's parliamentary majority - which was cut considerably in the two previous elections as urban voters in particular threw their support behind the opposition.

A national day parade on Thursday will include a special segment on an "era of development" under Najib.

He said in his message that the government - led by a coalition that has ruled since independence in 1957 - has delivered on its promises to maintain a robust economy while providing world-class infrastructure and targeted aid. "It is clear that the rate of development and growth of our country quickened significantly, especially since 2009," Najib said.

The election, in which he will face an opposition led by veteran former premier Mahathir, will indicate to what extent he has shrugged off the scandal over 1MDB, which he set up in 2009 to promote economic development.

He has resisted demands to step down over the last two years following reports that more than US$700 million was deposited in his personal bank account.

Najib has denied any wrongdoing.

The fund is the subject of money-laundering investigations in at least six countries.

The US Justice Department is conducting a criminal investigation into it, and has also launched civil lawsuits to seize some US$1.7 billion in assets it says were bought with misappropriated 1MDB funds, the largest action by the department under its kleptocracy asset recovery initiative.

Najib has also had to the face the anger of palm oil farmers who have accrued big debts linked to state plantation company Federal Land Development Authority.

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