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By Razak Ahmad and Niluksi Koswanage
PUTRAJAYA, Malaysia, April 9 (Reuters) - Malaysia's prime minister named a slimmed down cabinet on Thursday that was largely untainted by corruption and staked his government's survival on pushing through economic reforms.
Najib Razak, who became Malaysia's sixth prime minister last week, will keep control of the finance ministry to oversee a $16.7 billion spending package to help the country weather its worst recession since the Asian financial crisis a decade ago.
"The era of excessive government control and government knows best is over," Najib told a press conference as he announced his 28 cabinet colleagues.
Even though he named reformers to key economic posts, analysts said the line-up showed there would be little political change as Najib seeks to fight off a surging opposition which has won three parliamentary by-elections on the trot.
Among the key reformers were Ahmad Husni Hanadzlah who was named to the powerful post of second finance minister.
He will be backed up by Deputy Finance Minister Awang Adek Hussein, a former assistant governor at the central bank while current Second Finance Minister Nor Mohamed Yakcop will head a key economic advisory body.
Another important figure is international trade minister Mustapa Mohamad, who guided the country out of the 1998 crisis while at the finance ministry and who will oversee free trade talks with the United States, which accounts for 10 percent of exports.
"The appointment of an economic advisory body plus the appointment of highly experienced economic experts ... all of whom are serious people with good track records and are not known for excessive politicking means he has chosen a good team that should be able to get the job done," said Mohamed Mustafa Ishak, political analyst at the Northern University of Malaysia.
Malaysia is Asia's third most export-dependent economy after Hong Kong and Singapore and Najib has pledged to reduce the country's reliance on electronic and commodities exports which have fallen sharply in the global downturn.
The government forecasts the economy could shrink as much as one percent this year although some private sector forecasts say the decline could be 5 percent, the worst since the economy contracted 7.4 percent in 1998.
A NOD TO MAHATHIR, BUT NOT A POLITICAL "WOW"
One of the main issues Najib has to grapple with is corruption in his party, the United Malays National Organisation (UMNO), which is the lynchpin of the National Front coalition that has ruled this Southeast Asian nation for 51 years.
That Najib managed to avoid appointing ministers who are known to be corrupt was a major achievement, analysts said, although there were no obvious political reformers in government.
For Najib's government to survive sustained attacks from the opposition, which scored its best ever results in state and national elections last year, he will have to reach out to the country's ethnic Chinese and Indian voters.
Najib also handed a deputy minister's job to the son of influential ex-premier Mahathir Mohamad who ruled Malaysia for 22 years and sought to bolster support in states where he is vulnerable.
The appointment of ministers from UMNO's ethnically based satellite parties which were all but wiped out in the 2008 elections showed Najib's narrow room for action.
"It does not have the wow factor. We see defeated leaders from (coalition) component parties being given positions," said political analyst Khoo Kay Peng.
Among the ministers appointed, there were six from Sabah and Sarawak -- poor, resource rich states that are the main target for opposition leader Anwar Ibrahim's assault on the government.
"The appointment of several ministers from Sabah shows that the National Front is very much afraid of losing Sabah," said Ooi Kee Beng, from Singapore's Institute of Southeast Asian Studies.
While the fear factor looms large for Najib ahead of elections that must be held by 2013, there has been little sign voters have embraced their new prime minister.
Before taking the top job Najib ran two losing by-election campaigns, one of which saw former deputy premier Anwar returned to parliament after 10 years following imprisonment and a ban on holding office.
After Najib's appointment as premier, the National Front was humiliated in a key parliamentary by-election.
(Additional reporting by Soo Ai Peng, Varsha Tickoo, Julie Goh and Loh Li Lian; Writing by David Chance; Editing by Dean Yates)