KUALA LUMPUR - Malaysia’s new Prime Minister Anwar Ibrahim on Friday said his primary focus would be on the cost of living as he takes office with a slowing economy and a country deeply split after a close election.

Datuk Seri Anwar, 75, was sworn in as premier on Thursday, capping a three-decade political journey from a protege of veteran leader Mahathir Mohamad to protest leader, a prisoner convicted of sodomy and opposition figurehead.

Mr Anwar, who was appointed by Malaysia’s King on Thursday following an inconclusive election, said his primary concern was the economy and that he would have a smaller Cabinet than those of previous administrations.

“My priority now is addressing the cost of living,” he told a news conference after reporting for duty at the prime minister’s office.

Mr Anwar has yet to announce any Cabinet appointments for his coalition government. He had earlier indicated there would be two deputy prime ministers in his Cabinet - one from former ruling alliance Barisan and another from smaller political blocs in Malaysia Borneo.

His appointment ended five days of unprecedented post-election crisis.

His rival, former prime minister Muhyiddin Yassin, had refused to concede, challenging Mr Anwar to prove his majority in Parliament. But on Friday, Mr Muhyiddin said he accepted Mr Anwar’s appointment and his bloc would play the role of the opposition.

Tun Dr Mahathir, another of Mr Anwar’s long-time rivals, congratulated the new Prime Minister in a message on Twitter. The pair’s on-off feuds have dominated Malaysian politics for the past two decades.

Parti Islam Se-Malaysia (PAS) said it would discuss an offer from Mr Anwar to join a unity government, as the Islamist party that made unprecedented gains in the elections positions itself as the key representative of the Malay community.

PAS won the most seats of any single party in last Saturday’s election and is poised to hold considerable sway in Malaysian politics whether it joins Mr Anwar’s government or stays in the opposition.

On Friday morning, Mr Anwar arrived at the Perdana Putra, which houses the Prime Minister’s Office, for his first day of work.

Dressed in a baju Melayu, he waved to journalists camped outside the building and mingled with civil servants at the lobby before proceeding to his office on the 5th floor of the building.

Mr Anwar said that the people of Malaysia had long been awaiting change.

“We will never compromise on good governance, the anti-corruption drive, judicial independence and the welfare of ordinary Malaysians,” he said late on Thursday.

The campaign for last Saturday’s election pitted Mr Anwar’s progressive, multi-ethnic coalition against Mr Muhyiddin’s mostly conservative ethnic-Malay, Muslim alliance.

But neither leader won a majority, which raised the risk of a stand-off exacerbating instability in ethnically diverse Malaysia, which has had three prime ministers in as many years. The wrangling also risked delaying policy decisions needed to foster economic recovery.

The constitutional monarch, King Al-Sultan Abdullah, defused the crisis by appointing Mr Anwar after consultations with various politicians.

“Anwar’s tasks have just started, to unite a very polarised and divided nation, based on race and religion,” said former lawmaker and coalition ally Lim Kit Siang.

Markets surged on Thursday on the end of political deadlock, but investors will be monitoring how Mr Anwar manages the aftermath of the election.

Malaysian stocks on Friday morning were flat, after 4 per cent gains the previous day, while the ringgit extended gains, up nearly 1 per cent.

Mr Anwar’s supporters expressed hope that his government would avert a return to historic tensions between the ethnic Malay, Muslim majority and ethnic Chinese and Indian minorities.

Mr Anwar’s coalition, known as Pakatan Harapan, won the most seats in Saturday’s vote with 82, while Mr Muhyiddin’s Perikatan Nasional bloc won 73. They needed 112 - a simple majority - to form a government.

The long-ruling Barisan bloc won only 30 seats - the worst electoral performance for a coalition that had dominated politics since independence in 1957.

Mr Anwar said Barisan and an alliance of parties from Malaysian Borneo had pledged support, giving him a convincing majority. He indicated that there would be two deputy prime ministers - one from each of the blocs.

On Friday, he said another Borneo bloc had also joined, giving him the backing of more than two-thirds of members of the 222-seat Parliament.

A two-thirds majority will allow Mr Anwar’s government to amend the constitution. No Malaysian government has held such a majority in the Lower House since 2008.

Mr Muhyiddin’s bloc includes the Islamist party PAS, whose electoral gains raised concern within the ethnic Chinese and Indian communities, most of whose members follow other faiths.

Authorities have warned of a rise in ethnic tension since the vote on social media and short video platform TikTok said this week was on high alert for content that violated its guidelines.

The most immediate issue facing Mr Anwar beyond picking a Cabinet will be the budget for next year, which was proposed before the election was called but has yet to be passed.

Mr Anwar said he would convene Parliament on Dec 19 for a vote of confidence to prove his majority in the Lower House. REUTERS, THE STAR/ASIA NEWS NETWORK, BLOOMBERG