The Malaysian election two weeks ago brought great satisfaction to all dispassionate observers.

Despite some sour protests to the contrary, it showed that democracy is alive and well in Malaysia, and it sent a positive message around the region, especially to dictatorial backwaters like Laos and Vietnam.

Said Phil Robertson, deputy Asia director for Human Rights Watch: “Malaysian voters reaffirmed their commitment to democracy and civic participation with an amazing and peaceful 80 per cent turnout.”

As for the actual result, the governing National Front coalition and its leader, Prime Minister Najib Razak, won comfortably by 133 seats to 89 by the opposition People’s Alliance.

But hidden within that seemingly handsome 45-seat margin were some nasty gremlins that will test the PM’s character and Malaysia’s social cohesion.

After its woeful 2008 election performance, the Front’s dominant member, the United Malays National Organisation, quickly dumped the incumbent PM Abdullah Badawi and shunted in Najib to turn around its fortunes.

But on May 5, not only did he fail to do that, but an additional seven seats were lost, the key state of Selangor was not regained, and most shocking of all, the Front lost the popular vote by a margin of almost 400,000.

It was the narrowest election victory in Malaysian history.

Only among rural Malays in its northern heartland did the Front’s vote hold up. It clawed back Kedah state and made gains in Kelantan and Perak.

But it lost ground heavily in the richer and more politically strategic states of Johor and Selangor, as well as in Najib’s home state of Pahang and in resource rich Sabah.

That said, while the opposition alliance, under its dynamic leader Anwar Ibrahim, did extremely well in urban and non-Malay areas, it failed to win over the huge vote bank of rural Malay Muslims.

The Alliance’s star performer was its Chinese component, the Democratic Action Party, which won a stunning 38 seats – second only to UMNO in the party rankings.

As well, the DAP’s veteran leader Lim Kit Siang hammered the Johor chief minister in the election’s most watched constituency of Gelang Patah.

In contrast, the government’s main Chinese partner won only seven seats, despite massive resources and government sweetners.

Najib called the setback an unexpected “Chinese tsunami”, but in fact the giant wave of discontent began 40 years ago when non-Malays were officially designated as second-class citizens.

The PM had sought to pare back the apartheid-like Malay privileges, but he simply lacked the clout within UMNO to do it.

Still, his anti-reformist opponents within the Front’s more rabid Islamic wing were themselves soundly defeated – as were many of the opposition’s fundamentalist members.

So another positive aspect of the election was the way it confirmed that a majority of Malaysians have no time for Islamic extremists. So where does all this leave Najib and Anwar?

Well, the elder Anwar, 65, had promised to step down if the Alliance did not win the election, but he has already reversed that vow.

If anything, the electorate’s message to Anwar was that he should cede the opposition leadership to someone whose personal life is less tainted and whose political decision-making less erratic.

As for Najib, 59, while he is better off, his failure to reverse the opposition gains made in the last election and his penchant for dithering, means that his grip on the premiership is far from secure.

Later this year, UMNO will hold its annual assembly and it is virtually certain that calls will be made for a leadership review.

The chances are they will fail, not because of Najib’s performance, but because there is a dearth of dynamic and visionary figures in the senior ranks of the party.

Consequently, the incremental gains by the opposition are likely to steadily continue and one day a tsunami will wash away the ruling party’s half-century hold on power – and the world will not end.