Anwar’s appointment caps a three-decade long political journey from a protege of veteran leader Mahathir Mohamad to protest leader, to a prisoner convicted of sodomy, to opposition leader and, finally, prime minister.
Markets surged upon the end of the political deadlock. The ringgit currency posted its best day in two weeks and equities rose 3% on the Kuala Lumpur stock exchange.
A general election on Saturday ended in an unprecedented hung parliament with neither of two main alliances, one led by Anwar and the other ex-premier Muhyiddin Yassin, immediately able to secure enough seats in parliament to form a government.
The 75-year-old Anwar has time and again been denied the premiership despite getting within striking distance over the years: he was deputy prime minister in the 1990s and the official prime minister-in-waiting in 2018.
In between, he spent nearly a decade in jail for sodomy and corruption in what he says were politically motivated charges aimed at ending his career.
The uncertainty over the election threatened to prolong political instability in the Southeast Asian country, which has had three prime ministers in as many years, and risks delaying policy decisions needed to foster economic recovery.
Anwar leads a multi-ethnic coalition of parties with progressive leanings while Muhyiddin’s alliance reflects more conservative, ethnic Malay, Muslim views.
His supporters expressed hope that Anwar’s government would head off a return to historic tension between the ethnic Malay, Muslim majority and ethnic Chinese and Indian minorities.
“All we want is moderation for Malaysia and Anwar represents that,” said a communications manager in Kuala Lumpur, who asked to be identified by her surname Tang.
“We can’t have a country that is divided by race and religion as that will set us back another 10 years.”
Anwar told Reuters in an interview before the election that he would seek “to emphasize governance and anti-corruption, and rid this country of racism and religious bigotry” if appointed premier.
His coalition, known as Pakatan Harapan, won the most seats in Saturday’s vote with 82, while 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.
Barisan said on Thursday it would not support a government led by Muhyiddin, though it did not make any reference to Anwar.
Muhyiddin’s bloc includes the Islamist party PAS, whose electoral gains raised concern among members of the ethnic Chinese and ethnic Indian communities, most of whom follow other faiths.
Authorities warned after the weekend vote of a rise in ethnic tension on social media and short video platform TikTok said it was on high alert for content that violated its guidelines.
Social media users reported numerous TikTok posts since the election that mentioned a riot in the capital, Kuala Lumpur, on May 13, 1969, in which about 200 people were killed, days after opposition parties supported by ethnic Chinese voters made inroads in an election.
Police told social media users to refrain from “provocative” posts and said they were setting up 24-hour check-points on roads throughout the country to ensure public peace and safety.
The decision on the prime minister came down to King Al-Sultan Abdullah Sultan Ahmad Shah, after both Anwar and Muhyiddin missed his Tuesday afternoon deadline to put together a ruling alliance.
The constitutional monarch plays a largely ceremonial role but can appoint a premier he believes will command a majority in parliament.
Malaysia has a unique constitutional monarchy in which kings are chosen in turn from the royal families of nine states to reign for a five-year term.
As premier, Anwar will have to address soaring inflation and slowing growth as the economy recovers from the coronavirus pandemic, while calming ethnic tensions.
The most immediate issue will be the budget for next year, which was tabled before the election was called but has yet to be passed.
Anwar will also have to negotiate agreements with lawmakers from other blocs to ensure he can retains majority support in parliament.
“Anwar is appointed at a critical juncture in Malaysian history, where politics is most fractured, recovering from a depressed economy and a bitter Covid memory,” said James Chai, visiting fellow at ISEAS-Yusof Ishak Institute in Singapore.
“Always regarded as the man who could unite all warring factions, it is fitting that Anwar emerged during a divisive time.”