The opposition’s “Penang model” also highlights risks to investors from an opposition victory, which promises to unravel five decades of cosy relations between the government and big business in what would be Malaysia’s biggest political shake-up since it gained independence from Britain.

Led by former Deputy Prime Minister Anwar Ibrahim, the opposition says it will review suspicious contracts and cancel some, including an $800 million rare-earths plant built by Lynas of Australia. Its manifesto also pledges to break up “monopolies” in certain sectors.

“We wouldn’t want to take any action that would destabilize the market, but at the same time it doesn’t mean they can get off scot-free, no,” Mr. Lim, who will campaign nationwide, said in an interview. “The imperative should be there are no crony-driven contracts.”

When Mr. Lim, who had been imprisoned for 18 months under draconian security laws in the 1980s, took office in Penang, he began a social and economic experiment that outraged traditionalists. For example, he made sure that state public works contracts were being awarded through open, computerized tenders, rather than direct negotiations.

Some portrayed it as a dangerous move to tear down the county’s system of affirmative action, introduced after race riots in 1969 between Malays and economically dominant Chinese. Mr. Lim says he was focusing on distortions in the policy that had enriched an elite few.

“It was pure pork-barreling,” Mr. Lim said of the old system.

The affirmative action program is credited with nurturing a Malay middle class, but so-called “bumiputras,” Malays and indigenous people, still make up the majority of low-income Malaysians. Economists say the policy has deterred investment and driven a brain drain, especially of ethnic Chinese, entrenching Malaysia’s “middle-income” trap.

The Penang reforms helped level the playing field for small Malay businesses, Mr. Lim said, enabling them to win contracts based on merit rather than connections. Smaller firms still have special protection because all contractors for “class F” jobs, those valued at as much as 200,000 ringgit, or $65,000, must be bumiputra by federal law.