The ruling Barisan Nasional coalition is expected to suffer losses in elections expected early next year as it grapples with rare street protests and ethnic tensions, experts told a forum here.

But Prime Minister Abdullah Ahmad Badawi's BN government should maintain its two-thirds majority in Parliament unbeaten since independence in 1957, they said.

Unprecedented street protests demanding electoral reforms and highlighting racial discrimination erupted in Kuala Lumpur this month, posing one of the biggest challenges to Abdullah since he took over from the largely authoritarian and abrasive Dr Mahathir Mohamad in 2003.

"I think that even with the parameters shifting at this particular juncture, it is extremely difficult for the opposition to break the barrier of the two thirds. Period," said Bridget Welsh, a Southeast Asian expert at John Hopkins University.

Opposition parties in Malaysia, she said, did not provide a viable alternative electorally as they were still very personality driven and ideologically divided with limited capacity in terms of "real representation and aspect of governance."

'The only place to go is down'

The BN secured the largest majority in about three decades, sweeping 198 parliamentary seats to the combined opposition parties' 20 seats, in the last elections held in 2004.

But Welsh predicted Abdullah's Umno, BN's lynchpin, could lose up to 15 parliamentary seats in upcoming polls and its senior coalition partner MCA could drop about six seats.

"The reality is electorally, the only place he has to go is down because he has 91 percent of the seats and it is very hard to go much higher," she said.

Islamic opposition party PAS, which rules Kelantan, also has a "good chance" of losing the only opposition held state to Umno amid an influx of new voters, she said.

Aside from rising prices and other economic issues, race, religion and ethnic concerns are going to matter considerably in the next elections, she said.

Pek Koon Heng, an expert on Chinese politics in Malaysia from American University, highlighted dissatisfaction over an affirmative action policy favouring majority Muslim Malays over other races.

Many ethnic Chinese and Indians feel the time has come for a review of the New Economic Policy, framed after bloody race riots in 1969, after studies showed that Malays have already achieved the target of 30 percent corporate ownership.

But the government last year introduced another benchmark – household income – to measure Malay progress in an indication that the controversial policy would remain at least up to 2020, Pek said.

Unease over NEP

"There is a lot of unease about how the New Economic Policy is measured. With the uncertainty – the moving targets – it (the policy) can go on forever," Pek said.

"Although they accept the policy… because we need political stability but then to subject generations and generations of Malaysians to the policy, they say, 'sometimes we need to do something about this.'"

Citing an opinion poll conducted this year, she said Chinese Malaysians were "least satisfied with the economic conditions and Prime Minister Abdullah's leadership and most likely to vote for the opposition."

The ethnic Indians are also discontented. At least 30,000 of them defied police warnings and held rare protests in Kuala Lumpur earlier this week against what they see as racial discrimination.

Police beat them with batons and used tear gas and water cannon to disperse the rally.

Welsh said the protests were a critical "test" for Abdullah's coalition government.

A key problem in the government is "the rising dominance of Umno and Malay chauvinism of Umno (which) do not listen to the other voices within the coalition," she said.