Voters in Malaysia’s southern state of Johor went to the polls on Sunday in a regional election seen as a significant test for Prime Minister Anwar Ibrahim’s coalition government. The vote comes amid growing tensions within the ruling alliance over economic policies, ethnic relations, and the pace of reform.

Although the state election will not directly affect Anwar’s parliamentary majority, it highlights challenges facing his administration. Anwar, who took office in 2022, has been credited with restoring stability following years of political turmoil. However, his coalition comprises diverse factions, including the former dominant Barisan Nasional (BN), which has shown signs of dissatisfaction with its subordinate role compared to Anwar’s Pakatan Harapan alliance.

BN, which has governed Johor since 2022, opted to run independently, without Pakatan’s backing. Analysts consider BN the frontrunner, but the party faces strong challenges from both Pakatan and the opposition Perikatan Nasional alliance, which is led by the reinvigorated Islamist party PAS.

Internal friction within the coalition has intensified as progressive members push for quicker reforms, while differing views persist on how to address ethnic and religious issues in the country’s multi-ethnic, predominantly Muslim population. Anwar has suggested he might call an early national election—originally not due until 2028—if these divisions continue to deepen.

Johor’s election is closely observed beyond politics, particularly by investors. The state, bordering Singapore, has become an emerging financial center with significant investments in data centers and artificial intelligence. Efforts are underway to establish a special economic zone with Singapore, further raising Johor’s regional economic profile. However, many residents face rising living and property costs, partly linked to the proximity to Singapore’s wealth and development.

The poll also marks the electoral debut of Bersama, a new party led by former economic minister Rafizi Ramli, once a close ally of Anwar but now a rival. Bersama has attracted several defectors from Pakatan, adding complexity to the political landscape.

The Johor election precedes another regional vote in Negeri Sembilan scheduled for August 1, which will provide a further gauge of the national alliance’s cohesion. In Negeri Sembilan, Pakatan is expected to contest all 36 state assembly seats, having won nearly half in the previous election. Together, these state contests will provide insight into the durability of Anwar’s government amid ongoing political and social debates.