DAP secretary-general Lim Guan Eng said only a "moderate Malaysia" that respects the rights of all races, religions and backgrounds in a diverse community can succeed in implementing the government's vision of "shared prosperity" and believes East Malaysia should play an important role.

"Sabah and Sarawak should step up and be the key decision-makers to reject this irresponsible fascist and racist politics.

"By adhering to the basic principle of a moderate Malaysia as outlined in the Federal Constitution, every Malaysian is part of the national fabric of unity, that is inclusive, not exclusive, and recognises differences without any discrimination, and shares responsibilities towards our problems and challenges, especially in achieving shared prosperity," he said in a statement today.

Lim, who is also the finance minister, said that lately, there have been parties that reject a moderate Malaysia by playing up race and religion and fomenting hatred.

"Only a full and unequivocal support for a Moderate Malaysia that does not single out minorities to blame, but is focused on wealth-creation and equitable distribution of wealth from Sabah and Sarawak will ensure that the racists and religious extremists will not succeed in attaining power," he said.

The Bagan MP said a moderate Malaysia with shared prosperity will also benefit Sabah and Sarawak, noting the Pakatan Harapan's commitment to the region in its manifesto.

"Even though some of these promises need time to enable our fiscal position to get back on track following financial scandals and corruption involving RM150 billion, the present federal government is the only federal government to spell out clearly what it wants to do for both Sabah and Sarawak.

"Let us celebrate Malaysia by renewing our commitment not just to national unity and integration but a firm pledge that our shared destiny as a nation must also see shared prosperity for both states in a determined future," he said.

Lim's statement came amid Umno and PAS, the countries two largest Malay parties, formalising a political alliance.

However, analysts have cautioned that the new Umno-PAS alliance could fall short in trying to capture federal power in the next general election as the ethno-religious coalition could turn off the electorate in East Malaysia.