(Adds details, potential appointees)
By Razak Ahmad
KUALA LUMPUR, April 6 (Reuters) - Malaysia’s new Prime Minister Najib Razak will likely retain his finance ministry portfolio in a cabinet shakeup in order to oversee the delivery of a 60 billion ringgit ($16.77 billion) economic boost.
A high-level source with direct knowledge of the matter told Reuters the new cabinet line-up would be announced either on Wednesday or Thursday before Najib leaves for Thailand to attend the East Asia Summit, his first overseas trip as prime minister.
The source said Najib will “most likely” retain his finance ministry portfolio, “as he would need to oversee the economy which is going through a challenging period”.
Malaysia is Asia’s third most export-dependent economy and has been hard hit by the global economic downturn. Najib earlier announced 60 billion ringgit in new spending and loans to cushion the impact on growth and jobs.
He needs to tackle the economic slump, the worst since the Asian financial crisis of a decade ago, and rebuild the coalition that has ruled Malaysia for 51 years but recorded its worst result in national and state elections a year ago.
He faces a parliamentary and two state seat by-elections on Monday, viewed as a key early test of his political ability.
Cabinet members must hold seats in either the House of Representatives or the Senate. Malaysia at present has a 32-member Cabinet, including the prime minister and deputy PM.
The new cabinet will likely see a significant reshuffle mostly from within the ranks of Najib’s United Malays National Organisation (UMNO) party, the lead component in the ruling National Front coalition. [ID:nKLR38533]
UMNO, the party that last month elected Najib president, provides nearly two-thirds of Cabinet appointments.
Najib has pledged wide-ranging political reforms to turn around the ailing coalition and took a big step when he announced he would free some political prisoners and review the Internal Security Act that allows imprisonment without trial.
Longer term, Najib has promised to move Malaysia away from its heavy dependence on electronics exports, which account for almost 40 percent of the total, and commodities and oil and into the higher-value services sector.
A high-level government source told Reuters late last month several of the 27 current ministries, such as education and higher education, would be merged to improve efficiency.
A separate energy ministry would also be set up.
The composition of Najib’s economic team is key to his performance and according to several media sources, former second finance minister Mustapa Mohamed could return to the cabinet.
An economic expert with a first class degree in Economics from Melbourne University and a Masters in Economic Development from Boston University, Mustapa was appointed second finance minister in 1998, serving under then premier Mahathir Mohamad in a post created in the wake of the Asian crisis.
Another key UMNO leader with related economic experience and skills Najib can draw upon is Deputy International Trade Minister Ahmad Husni Hanadzlah, who has risen steadily through UMNO’s ranks.
A local newspaper on Monday reported key Najib loyalist Jamaluddin Jarjis tipped to be appointed in the new Cabinet.
Chinese language daily Nanyang Siang Pau, quoting unnamed sources, said Jamaluddin is likely to be appointed Second Finance Minister, a post he once held from 2002 to 2004.
$1=3.577 Malaysian ringgit Reporting by Razak Ahmad; Editing by Jerry Norton