In an interview with The Associated Press, the prime minister-in-waiting also said he plans to run in a by-election this year to become a member of Parliament but that he isn't in a rush to take over the top job.
Anwar, 70, was convicted of sodomy in 2015 in a case he said was politically motivated. His sentence expires June 8 but he was given a royal pardon on Wednesday and freed from custody after last week's stunning electoral victory by his alliance led by former foe Mahathir Mohamad.
Anwar said poor Malays will benefit more from merit-based policies that are transparent. He said the New Economic Policy, instituted in 1971 following bloody riots fueled by Malay discontent with the relative affluence of ethnic minority Chinese, has been abused to enrich the elites.
The program, which gives preference to Malays in government contracts, business, jobs, education and housing, is credited with lifting millions of Malays out of poverty and creating an urban Malay middle class. It is also blamed for a racial divide between Malays, who account for two-thirds of Malaysia's 31 million people, and minority Chinese and Indians who have long complained about government discrimination.
The policy is a sensitive issue, with many Malays fearing they will lose their privileges under a new government. Many ethnic minorities have left Malaysia in search of better opportunities elsewhere.
"I have said that the NEP should be dismantled but the affirmative action must be more effective. I believe that poor underprivileged Malays will benefit more through a transparent, effective affirmative action policy rather than the New Economic Policy which has been hijacked to enrich the few cronies," said Anwar, a Malay.
Anwar, who changed Malaysia's political landscape with his reform movement after he was sacked as deputy prime minister in 1998, said he had expected his alliance to win with a small margin but didn't expect the victory to be so complete.
He said defeated Prime Minister Najib Razak had been "self-indulgent" and underestimated public anger over the corruption scandal involving the 1MDB state fund that is being investigated abroad.
"He was full of himself, thinking he could succeed and even toying with the idea that he will regain a two-third majority (in parliament) which is clearly outrageous to most people but he is convinced," Anwar said. "He is just oblivious to the stark realities, he is in a cocoon."
Anwar said Najib called him on the night of the May 9 polls after it was clear that Najib's National Front coalition, which ruled Malaysia since independence from Britain in 1957, was losing. He said Najib appeared to be still in denial and that he advised Najib to concede defeat.
U.S. investigators say Najib's associates stole and laundered $4.5 billion from the 1MDB fund. Najib denied any wrongdoing. The new government has barred Najib and his wife from leaving the country and police early Thursday raided Najib's house in search of evidence.
Anwar was once a high-flyer in the National Front but was convicted of homosexual sodomy and corruption after a power struggle in 1998 with Mahathir, who was prime minister for 22 years until 2003. He was freed in 2004 and convicted again in 2015 of sodomy, which he said was concocted to destroy his political career.
Anwar worked from his prison cell to forge a new opposition alliance by ending his two-decade feud with Mahathir, a gamble that paid off when the alliance won the polls. Mahathir, 92, has taken office as the world's oldest elected leader.
"It's a long wait ... the struggle is 20 years. There was continued humiliation, victimization but it's OK, we survived. There's no need to complain too much," Anwar said. "I think we should focus our attention now on how to alleviate the poor, how to reduce this inequality, how to stop these excesses and endemic corruption which is part of the culture now."
Anwar said forgiving Mahathir and rebuilding their friendship in the country's interest wasn't as difficult as he thought and that they can "emerge as two great friends again."
He played down concerns of possible tension with Mahathir, saying he would not hold any Cabinet post for now to give Mahathir "a free hand" in running the country. But Anwar said he plans to return as a lawmaker by running in a by-election this year as well as spend time with his family and travel abroad for speaking engagements.
He praised Mahathir as an "indefatigable fighter."
"He chose a good ending to this episode. I don't want to deny that we had serious disagreement on policies and excesses but now he said, 'Look, I owe it to this nation that I loved and I want to make amends and the corrective measures,'" Anwar said.
Anwar said the new government faces huge challenges in cleaning up the financial mess left by 1MDB and putting in effective policies, but he is confident Malaysia can emerge as a "beacon for democracy and justice in the region and more so in the Muslim world."
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