The fate of Malaysia politics, its markets and Prime Minister Najib Razak may hinge on palm oil farmers

Sanjit Das | Bloomberg | Getty Images

Workers gather harvested palm fruit at a palm oil plantation in Bukit Basout Estate, Perak State, Malaysia, on Wednesday, May 10, 2017.

The opposition, with stronger support among urban Malaysians angry with a series of corruption scandals, has typically struggled to dislodge the ruling United Malay National Organization (UMNO) party’s stranglehold on the rural heartlands.

That may change after influential former Prime Minister Mahathir Mohamad quit the ruling party last year, formed his own party — called Bersatu — and defected to the opposition.

Though still fragmented, the opposition is betting that its re-alignment and Mahathir’s involvement will narrow the chances of the incumbent cruising to victory in polls due mid-2018.

“I think we could really make a dramatic impact,” said Wong Chen, a member of the opposition People’s Justice Party, said in an interview in late July. “Bersatu’s main role is to take the fight to the rural areas where UMNO is strongest.”

Bersatu president is former Malaysian Deputy Prime Minister Muhyiddin Yassin. He and Mahathir are “very combative, very old school politicians with deep roots in the rural areas,” Chen said.

Paul Stadlen, who handles media inquiries for Najib, did not respond to CNBC’s e-mailed requests for comment.

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