Mahathir malaysian-maverick-mahathir-mohamad-in-turbulent-times
Jan 29, 2015
Its not easy thing to lead the politics in third world. Mahathir was a maverick to change from a traditional Chinese dominated Malaysia to Malay's pride. A must book to read as to how he maneuvered politics and changed Malaysia to a fast developing nation
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- 1. and 277 :'05 307 : 40 352 Cl Barry Wain ZOO9 All rights re)er"Ved. No reproduction, copy or transminlon of this publication may be made without written permission. No portion of this publication may bereproduced, copied or transmitted save with Wf;lIen rmi sion or in iKcordance with the provisions of the Copyright, Designs and Patt'nts Act 1988, or undef Ihe terms of any licence permitting limitedcopying issued by the Cop)'l'ighL UClffislng Agerocy, Saffron HOUSE!, 6-10 I(:jrby Strt'et, London EC1N 8TS. Any person who does any unauthorired aa in felation to Ihis publication may be liable La criminal pr ution and civil claims for damages. Thf, author has asserted hb right to be identified as theauthor 01lhi5 wort: in accordance w,th the Copyright, Designs and PatenhAct 1988. fin;t published lOO9 PAtGRAVE MACMILlAN Palgrave M3Cmillan In the UK is an imp"nt of Macmillan PubUshen; Umited. registered in England, company numbef 185998. of Hourw:lmills. Basingstoke. Hampshire RGZ16XS. Palgrave MiICfTli!lan in the US is a divisfon of St Martin's Press LLC, 175 Fifth Avenue. New YorlIt least by the Straits Timls. An editor called him to the paper's offic(.>$ in Singapore and asked if hl' was intt're:.t('(] In a job as a journalist. No, he was not. Singapore gave birth to an urban myth, Ihat Mahathir thought of himself as an Indian when he elllered university. The story was relold in several gossipy versio ns, losing no nc of it~ appeal across the decad('s. Academics, diplomats and even a former cabin('t COlleague delighted in passing along the dNails, all completely untru(>. Mahathir's father considered himself a Malay and he l'nsured that illl his l'hildren were nothing else but Malay. Politicized by WilT (I//(/l'l'II((' 1:1 In hi$ writings, which began before he went 10 Singapore, Mahathir identified totally with the Malays and show('ti he was intimately familiar with their customs, social life and problems, whether it was education, fish, ing or pudi plimting. His more overtly political Wlltrihutions were polem ical, and uncompromising in dcf(>ncc of Malay rights. Foreshadowing the nationalist stance Ihat would make him a hero to many Malays when he enter('(1 Parliament, he criticized the colonial administration, l'alled for the re-introduction of Malay as an oflicial language, alongside English, and made tht' case for "retarding progrt'ss" sometimes in order to help tht' Miliays advance. Well ahead of his time, hl' also advOt'ated women's rights, argUing espt"'Cially for women to be given opportunities In education and employment.H At the same lime, Mahathir began to reveal critical opin- ions about the Malay'S themselves that would be, their "low aver;lge intelligence quolienl...~~ After graduating, Dr. Mahllthh spent only four years in government s('rvin~ in Penang and Kedah befort resigning to open a private practice, while his wift' was to work as a doctor fo r the governmellt for 2S years. Alt hough the immediate reason fOr his quitti ng was the failure of a superior to support his ilppl iGlI iol for a posting to study In a teHching hospital in Penang to be a surgeon, h(' also wanted to remai n ncar his aging parents. Borrowing money from a brother-in-law. he opcnl'l' indulged in an orgy of killing, looting and lJurning in Kuala I umpur. Although the Alilanre government retaIned a majority In Parlla ment, UMNO lost Mof its 59 scats, on(' of thelll Dr. Mahalhir's. The oppos Itlon won 14 urban scats, 13 of thcm at tl(' cxpen!>C hands. Chin('S{' and IndIan opposition ~upporl('rs paraded through the streets of Kuala Lumpur in cciebrdtion, taunting and insulting the Malays. Fearful that they were losing their last refuge, political dominan('(', the Malays retal- Iated. The} slaughtered each otllt'r with an assortment of f'c"alI.'d the Tunku when ['AS called him "the son of Siam " - a rd- er('nce to hIs Thallllothcr - which impllt'd h(' was unfit to be the leader of the Malays. So, Dr. Mahathi.r said, h(' expectc(1 that the Tunku would have defended him, despite his having "two spoonfuls of Pakistani blood in my body". Having withdrawn earlier at the merest hint of a brush wilh Tunku Abdul Rahman, Dr. Mahathir chose Ihe extreme opposite tack this time: frontal assault. 11 was all or nothing again. And it was hugely risky for anyone hoping to climb the political ladder, though it was almost certainly carefully calculated. As would become clearer later, Dr. Mahathir rarely, if ever, made a pOlitical move without weighing the likely consequences. All Hllrly Itrl ro.JlldiOiI I I) IJmtll/ /'ulitic.... 27 Mort' than most, he realized how deeply unpopular the TUl1ku had become .1I110ng Malays. Ihe Tunku was doubly furious to fi nd that Dr. Mahathir's letter was Itt'ing read throughout the country. While student sympathizers passed on ,nples, til{' letter was systematic;tlly distrihuted by a group that included It,lz,lk's Ili of higher learn- ing were agitating for his removal, making it necessary for the National Operations Council to ban "any meeting, proc('ssion, demonstration or puhlic utterance to get Tunku Alxlul Rahman to '>tep down from offlcc". Dr. Mahathir's letter wa!> abo formally banned. with printing, selling or dis- tributing It punlsh..ble Ily thrre ycar~ Imprisonment and a rille of RM2,OOO. Witll this son of protectiOn, no outsiders could force till' Tunku to quit, Ihough iu~t itS surt'ly he would Ita longer iJave the final sayon m thai Tunku Ahdul Rahman wanled to detain him, but they persuaded the Tunku it would o nly make a martyr of Dr. Mahathir.21 Too late: IIe was already a hero In Malay eyes. rhe rapid seq uence of shattering events - a traumallc election c.1mpaign, his defe,tt, th(' "May 13" violence, the I'unku leller, double expulsion - gave him an al lllost cult-like following In his community. As political '>Cientist Khoo noo 1elk said, "It trilllsformed him from being a failed elecloral Gtlldidate into a living symbol of Malay nationalism."l4 III no siage during his almost three years in thc politiCal wi ldcrttc~s did Dr. Mahathlr lose interest In shaping the debate on MalaYSia'S future. III addition 10 running his clinic and inve....ting, he stepp{'( up his writing. In early 1970, he publishl..'d hi~ best known hook, 71'1' Malay DiI(,III/1/(/,.!5 vhich was promptly banned in MalJysla, remaining proscribed until Ill' be maverick image without the contents of Ih(' book remaining st.'uN, sinC(' it WitS ilvailable in Singapore and he ;lc{"cpIed ~pca ldn g invitations and discus~cd Ihe sub s t;tll("C of it. Two otht'r puhlicatiortS that ilppeilred a few Yl'ars later wert' ubstant!aily written during this pe riod. I'mu/HfIllI)l'IIiasa Kt'ril, publiSht'd in 1974, appeared in English in 19M5 as GI/;/lt' (or SIl/(/lIlJltsillt~~SIll(,II. It adviScopie of Malaya, and should be accepted as the "tlt'lmitive rac{'''. II rejl'cled lion-Malay claims to political, linguistic and lullUral parity with the Malays. but not o n the grounds Ihat the Malays 't're ~uperior in any way. Just as count ries sud ) as the United States and utralia required a certain minimal assimilatioll of migrants to their own n.ttional culture, the Malays had a right to expect the non.Malays to do the ,Hnl.'. The aim was "not dl.'Slgned 10 IX'Tj>ctuate the privileges of the o ri- /olillotl ddlnitiv(' race to thl' exclusion of thl' II{,Wimmigra n t races...sell i(-rs willing to conform to !ttl' characteristics of the dl;'fmitive citizen will in fact IIl'uJlll(, definitive citil.('Tl!'> and will excTcist lill;' s,11lle rights and privileges". III praCticc, they would l1,-,ed to ~ peak Malay .md b(' ed ucated In Mal.lY, Iitough thcy would 11m be required to adopt lsliHlI. Ihe book defillctllb titi(o: "The Malay dik'lllma is whether they should 'lOp trying to help Ih('IIl~l'lvC5 in order that Ihl'y .should IX' proud to be the t)f.)()rcitil.ens of a prospion from a deputy position, he served in a coalition government that had been broadened by Prime Minhter Razak heyond the original Alliance to becon1l' the multi-party National Front. M PAS had renamed itself l'Mti Islam Se-Malaysia and jOined the administration, Dr. Mahathir could not contest his old seat, but moved instehlp for tht' (:mllltr)' before ht, died. As the UMNO General Assembly approached in 1975, Ra7..ak called In Alxlullah Jhmad to discuss tanics for Ihe ell'Clion of tlue1 Apart from working the ground at divisional level to get the votes and avoid last-minute defectioTllo, Abdullah plarHlt'd to have Razak Inlluencc the outcome of the et'Cllol1 hy endorSing his thr(>(> preferred candlda('s in his op('n ing speed1. Alert to that possibility, Tunkll suppo rters o n the Suprell1c Council, at Its last [l(>('tillg before tlte General Assl'mbly, warnC'd him not tu mention pNsonal prefl'rclLces. As (I plOY, Raz.1k suggested that Senu Abdul 1~'lhma ll . UMNO's secretary g('neral and a known Tun ku ally. chcck a draft of the speech, which Abdullah had prepared. Senu left tht' room and retuTlwd 1.hout half an hour later to r Ihe three Wl'J'(' duly elected, and in Razak's preferred order. (;hazali Shafle, who saw himloelf as a rutu rt.' prime minister, was parti- l ularly upset by his failure 10 win a 'ic(' president'S slot. Indeed, the dynamiC (.hazan, a former JX'rmancnt s(lucation and socilll gracl'S, ami was not comfortable speaking Lnglish. Tengku Ra7.aleigh was, in many ways, h b ideal: royal. sophisticated ,md dependable. Uut, as Tengku 1t:'I'Alleigh hilll'iClf 'olunteidents, got the nod. Not close to lIussel n, Dr. Mahathlr wa as surprised as anybOdy. He spec- ulated Ihat Hussein ('ould have' r('lll'd o n sOllie advice an ill l~a7.A1 k gave 21. him. Dr. Mahilthir said lhat whtn he W('nt to ~l'e Hussein, as Kazak was being trl'gan to (cd the heat. The arrest of the two del)lIty ministers "in itself was allacking tiS, indirtly," Mus.1. :lld later.'" GhazaH was abk to jail so mallY people with no rcal ('vid('lIce because 11(' had an unwitting accomplice in Prime Minister Husseill Onn. Upright. honest ami 1l1suitl'{l to the rough and tumble of Malay polit iCS, Hussein did not effectively mlltrol the UMNO he ullexpt'ctedly inhNited, Gha1.ali wa.~ one of two cabilll..'t III('mbt'rs Ilussein r('lied Ilcavily 011 for advice, tlH.' ot] Il'r bel rl~ Flll(lnct' Mill iSh,'r Terlgku Roring protests by f;mllers at Baling in Kl'ep around the d ock for [warly Ihr~ days and nights, wilh ouly brief breaks, by teams of Special nr;mdl officers who focu$Cd 0 11 his socialist leanings and possible communist links. Olle officer spat on his face repeatedly, Then. whl'n lIis head ached ,mel hl" was al his mm t vulnerable, a fTl'Sh interrogator switched subjects. "Syed: he said. ~We kno' that you have connections with the underground. We know Ihat you .....ere the interm('diary betwl'Cn ullderground elements with Dr, Mahathir ,lIld MuS-.:I Hitam, You Illllst tdlus alx>ut this."H At the timl', Syed lIusi n All was puzzled why the police wantell him to implicate Dr, Mnilathir and M u~a . Only llIud} laler, after he had spent !oix yea r~ in detention aC( lIst'u of helpill!- the Communist Party ill"ld dis- )l'minating subversive ldt'a5 ccn a giant step closer 10 the prime ministership. Although the ilntj.communlst campaign fizzled after Ihe death in early 1977 of Syed Jaafar Alhar, Dr. Mahathlr I1vt.'d in ~ collstant fear of being :trrested on the orders of his hillden enemlcs" imd his ""ucccssion "remainl-d uncertain even when he was ver), nearly thef{'H, ilCcording to an associate.'>'! Gha/.ali ll1 Time!> jJublishing group. Dr. Mahathir had a fairly miSerable five year:. a!> deputy prime minister, quite apart from dodging Ghazali's hullet~. Although Hussein Onn had cho~en Dr. Mahathir as hi~ deputy, he did not ~e-cm to tikI.' him personally lind often ignored him. In Dr. Mahathir's a~sessrnent, Hus~ein treated Ghazali 5h3fie and Tengkll Hazaleigh Hamlah ilSde facto deputy preT11icr~, consulting Ghazali on defence and security. and Tcngku Ral.aleigh on ccon- omiD, finance and party affairs. ~1! rheoretically the S{'cond most powerful man In Malaysia, Dr. Maitathir found his title (.-ouoted for almost nothing with Number One. Under tll(' impressron that "I had innuence with him", Dr. Mahathir went to sec Hussein to persuade him not to proceed with till' IlrOSl'cution of Harun [dris for corruption . "lIe took out the file from his safe and banged it on the table." said Dr. Mahat hir. "Then I realil.ed that. although I may be the deputy prime minister, my standing is not thal hi ~h . " lIusseln got IUSl as ilngry when Dr. Mahathlr tried to persuade him to re-examine Abdu llah Ahmad's case.S'I At times, relations between Jiussein ilnd IJr. Mahathlr almost broke down. Musa Hitam ree;lIl('d visiting the deputy prime minis- ter's office when Dr. MalhJthir was complaining about Hussein. ~ I lifted the phone and :iaid, 'Talk to him. YOu're the deputy. Talk to him'. No, no, no. He never did."(l It was extremely lru:itrating for I)r. Mahathir, who was already bursting with many of the ideas that would mark his leadt-rship. He advocated a freewilYto run the length of peninsular Ma12. 50 close to the pinnad{', 1Jr. Mahathlr was slill treated e allowed to go to the Cabinet for other ministerial opinions. "And, of cour~(', he agreed. you know," T('ngku Razalcigh said. "You go up to him and explain to him nicely, he'JI accept il." That I('ft Dr. Milhathir "very unhappy with me", Tentku R(ll.1Idgh said. ~ lIe thought that he being deputy prime minister couldnt gct t hillg~ through, but I (QuId go and whislX'r to Ilussein (lnd everyth ing was OK."6-1 Not only was there no personal chem istry betwet>n leader and deputy, tlley ilbo had starkly contra~ting stylc~. Wher{'as I)r. Mahathlr was ke{'n 10 remake the country from top to bottom, Hussein was caullolIS to the point of dithering. When reading a !)rid, he underHm'd key words three or four times. Loath to make a tough decision be/ore consuillng all parties, he would usually agft'e to "consider it" a:-. a way of postpOning an out- come. One of his favourite expressions was, "OK, I'll slt-ep over it."/o-l 11(' onc(' advi~ed Dr. Mahathir that ~when yOll have a problem, illst don't do .rnything"; It would go away, he ~aid.b~ Even when Hussein reached a decision, he might haw second thought... For example, Dr. Mahathir per~uaded him that MalaYSia should strengthen ih claIm to part of th!' disputed Spratly Island~ in the South Chi na Sea by llCl"Upylng Amboyna CIY. With the navy ready to move in, Hussein "changed his mind one wel'k later", said ])r. Mahathh/!6 The VietnamesE' beat the M(llaysians to the purtell and established a permanent preSence on the cay. In a cabinet shuffle in 197M. Dr. Mahathlr relinquished the education portfolio and bec,1me minister for trade and Indll~try, where he was happy to proceed with some of his plans that did not require govermnent policy changes. He established II heavy industries corporation within his minbtry, and minim ized his unhappiness with Hussein by spending time abroad ~clli ng Malaysia. Dr. Mahath ir'S fOllr years as education minister were remembered for the tough stand he had taken agai nst Hudcnt and acad- emic protests. Ill' forced ~cholarship holders to loign guarantees that Ihey would not bc(:Ollle involved in politics, and amcndl'd the Uni vcrsilie~ ;c1 to give the gov('rnmcnt cxtensive diSCiplinary powers over staff and students who were politically actlve.61 L~ventua lly, Husscl n fell victim to his own philosophy. /s Ihe work piled up, elements in UMNO defied his weak l eadcr~h ip by forcing the readmis- sion of lIanlll Idris to UMNO, after Hussein had insisted on his expulsion followillg his conviction Oil corruption charges. Although Harun's nmrt :Ippeals fa iled In early 1978 and he '('nt to jail, liussein was being prl'ss(>d to pardon him. At the 1978 UMNO Gencrill Assembly. Hussein was humil- Iated by being challcngC'd for the presidency of the party by Sutaiman Palestin, the UMNO publicity chief, who ~ecured just over one-fifth of the VOtes. While Sulaiman was not a S('riollScontender for nalOllil1k'adership, his candidacy was ;m act of defiance by Ifllflm supporters. As a friend of 24. Slliaiman who OPI)()sed I larun's prOset'yond what previously had I:>een acceptable behav- Iour in MalaY!ilall politiCS - att ributes they wert' pleasl,(j to report they I(lckcd. Musa, who scrwd as Dr. Mahathir'~ fITst dcputy prime Illini~ter before quit- ting in aCrimony, butl'nded up on comfortable terms with Dr. Mahathlr, sOWt'r, they were usually considered no more than irritants. nUl with UMNO diVided, they were providing ammunition for Dr. Mahathir's factional rivalsY Chandra MUlllffar, 40, a political scientist who founded and Il'd thl' mul ti- racial reform Illovement Aliran - small but influential and based in Penang - was probably tht' most sllCCt'SSflll [n stirring broader aWaretlt'SS 01 ice of stag- ~crilJg the (ctetltions over many wC!eks and nabbing people at all hours of Ihe day and night deliberately to spn!ad fear ducation minister in the late 1970s, he had supported the sup- pression of the student mOVl'ment and introduced legislation that ended university autonomy. As deputy prime minister in 1979, he had no hesit- ation in using the ISA to detain unionists in a dispute with state-owned Malaysian Airlines System. The rewrd showt'd that the "growing atllhorltarianism" of Dr. Mahathlr's leadership actually began almost the day he too.: over as prime minister.so Constitutional amendments in 1981 empowered the king - in practice, the executive - to pro("iaim a state of emergency even "before the actual occur rence of the event" that might threaten s('curity, economic lik or public order. And his prod,Hllation could not IX' 'Iut'sUoned in court . 11 was a dra:;tlc departure from til(' 1957 Constitution, whkh stipulated that Parliament should decide when an emergcncy ('xisted. Dr. Milhathir also tightc11(!d regulations affecting press freedom sewral timl's bctw{'{'n 1984 and 1987, strcngthe.netl the Official Secrets Act in 1984 and moved to head off any possible political Challenge, espt'Cially from civil socie.ty groups, outside th(' political party system. Under an amendment to the Societies Act, an organization had to register as a "politicill SOCiC'ty" to (otU[J1t'lIt on the polides or activities of the government. Otherwise, the Registrar of S(1in 1982 and 198:~ to accommodate incre(1int'1("t.,I If tllerli' wa:; a liberal gloss to the 2-M administration it was provided by Musa, and his departure left Dr. Mahathir free to indulge his autocratic instincts. Jlaving ta.:en over the Home Ministry from Musa in 1986, Dr. Mahathir would keep it firmly in his grasp for 13 years, usiug the ISA From Oll/(m/ IQ l'I('5;(/e-two split iuds menl 'IllSa reminder of the e.'l:ecutive's vulncra billty iJeforl' an independent judiciary. J High Courl judge orde.red the release of Karpal Singh, Lim's lawyer, ruling thaI his twoyear detention order - approved by Dr. Milhathir as home affairs mlnister- was "made without care, caution and a proper "fnsc of responSibility". Shamelessly, a~ one critic oommentcd, the polin' re.arrestcd II:arpal undcr the ISA it couple of hours aftef he was frcd. The TengJ...u Razalelgh supporters Sl't'king to oV('rturn Dr. 1I.!ahathir's el{'< lion got more than they bargained for when the High Court 111 FE'bruary declared UMNO, the backbone of Malaysian politics since 1946, :1Il illegal organization. While tll{' ruling created consi(fralJle confu~lon and aPIX'arl'fore the Gen~ral Assemhly that Ghafa r had no choice but t'O step down. Anwar not only ~ame vil.x' president unopposed; he also brought to power a slatl' of three vice presidents known as the Vision Team, while other followers captured most seats 011 the Supreme Council. f rom Ollle,,!>t to 1'"."sil/t1lf/lt/ [>rrmil!"f 79 Thl' results signalled danger for Dr. Mahathir, though also a warni ng for anyone tempted to try and exploit the situat ion, for Dr. Mahathir had shown he was politically astute, even lethal, when seemingly cornered. ;nalySI$ calculated th,1I Anwar probably had enough control of tht.' party to fo rce Dr. Mahathlr Into early retirl'mcIlI before long, If he so chose. Dr. Mahat hir was testy when asked by journalists if he wa ~ lo~iT lg his grip on UMNO. "Would yOLI like to lx-t?" he retoned. He made his point about still being boss by wailing a month before officially making Anwar deputy prime minister. ITI another move lO circumvent Anwar's advancemelll, he aplX)illted Muhylddin YasSin, who lOpped Ihe vice presld{'ntial poll for Anwar's team, to a Junior portfolio. Clearly nut confident, though, Or. Mahathir invoked party unity as it highl't cause than democracy and insisted on a "no conl('S1" agrccml'nl wilh Anwar for their positions before 1999. Although their relations were strained al ti me~, Anwar was still Oil track to succeed Or. Mahill hlr as of early 199H, but complications thai arose over the deelx'nillg effects of Ihe Asian economic crisis wrecked transition plans. On 2 S('ptember, II day after introdUCing capHal controls, Or. Mahath ir sacked Anwar as deputy premier and finance minister, claimi ng he was morally llrlfit. The real rcason was that he believed Anwar was trying to ta..e advan tage of the l'COllomic upheaval to unseat him. On 3 September, the UMNO Supreme Council compiled with Dr. Mahalhir's demand lhal Anwar be stripped of his deputy presidency and party membership. On 20 September, /nwar was arrested under the ISA and hcld without access 10 a 1.lwyer or his family. When he appeared in COUft at the ('nd of the month, charged with ahuse of power and sodomy, he had a blal"k eye, the result of being bashed in custody. I)r. Mahathir had learned from 1987, when the ruling political elite fractured over the Tengku Rilzaleigh-Musa challengl'. Ry relTloving imme- diately any pmsihility that Anwar could makt' a return to UMNO politics, Dr. Mahillhir was able to CMry the party's top leadership with him. But lower level leaders and the party rallk and fi ll', as with Malil)' society oots o n. Anwar supporters began deriding him as "prime minister for life". Dr. Mahathir s hatter~1 the irresolution In his closing address 10 the UMNO General Assembly In )Ull{, 2002, abruptly depart ing from his text to .say he was resigning "from UMNO and all positions in the National Front~. As he broke into sobs, supporters mobbed him at the podium, some of them also In lears, imploring him to remain - all live on TV. Dr. Mahathir W,IS taken to a back room, and his deputy, I bdullah Badawi, appeared :Ifter an hour to Say he had been persuaded to stay on. Laler, it was annoullced thilt ill' WOuld rctirt' at the end of October 2003. For 16 mont hs Dr. Mahathl r s{,lyed on in the pOSition he had vowed to avoid, as a lame duck priml' minister, making arrangements so that Malaysia would be run for the foresccable fulUre by his a nointed leaders. IIC' ellsurl"d that Abdullah faced no contest in UMNO elections beforE' he ht.'datory they were '>Ometimes depict('s. Their prizes included ,Ill office block ami convention centre for UMNO, a new hl'adquarters for the National Equity Corporation, and a 55-storey tower for state-controll('(1 Malayan II.Ulking 13M. None (:aust'(( more offence than the RM3 13 mi ll ion contrart awarded by the gov~nllnent to twoJapancse wmpanles to build the sprawling Dayabumi (."omplex in Kuala Lumpur, then MalaYSia's most expensive building, even though a local company bid RM7J million less. Dr. Mahathir's dcfenC(', that the jap.1nese would Introduce new management skills and modern build- Ing techniques, proved hollow. The bumiputra ('ngineering company that the japanese were required to work with subsequently complained that its japanese part ners were using II merely 10 maintain good relations with the government, and said that no technology transfer was taking place. 1l Complaints that Malaysia was reaping few ta ngibl~ benefits from "ook bast extended into Hade, investnU'nt, management and shipping. After nearly three years, Malaysia's trade dellcit with Japan had widened sharply, and the Malaysians had little success in persuading th(' Japanese 10 buy more of their manufacturi..'(1goods. japanese companies were slow to invest In skill-intensive industries in Malaysia, and even slower to transf('T new tcchnology to their Malaysian units and establish research and develop- ment facilitil'S in the country. They also tended 10 bypass local contractors and suppliers and acquire components, materials and services from japan_ Japanese manufacturing cmnpan i~ employed more expatriate managers and staff than most other foreign investors, locking Ma laysians out of decision-maki ng functions ancl itLhihitln!l. their career dt;veloprnelll. With appea ls to Japan to use more Ma laysian vessels for their bilateral trade going unheeded, the shipping imbalance contributed to a large and widen- Ing deficit in their invisible trade as weil.1.l In a hard.hitting speech in August 1984 that reeked of embarrassment, Dr. Mahathir registered his unhappiness over the way Malaysia'S relations 51. 9 4 Mulil)'Sic/ll ,1,wl:'ri(/c with japan had f..lled to c:volve. Accusing Tokyo of conductil1g a colonial economic relationship, he said the Japanese ('(:onomy was extremely pro- teclionist, and the Japanese were guilly of "improper behaviour" over air rights while engaging in "the dishonest and tension-generating" practice of transfer pricing, by which companjes show minimal profit, or even losses, to avoid taxes. "We cannOt and will nOl remain merely as hewers of wood and d rawer~ of wlwsll(lS- at least six were formed in the early and mid-eightles - also wt'nt nowhere. Malaysia lacked the close l-onnections between the banks, government and industry that were nec'O),('d. Mtl'r a liHl'('fold increase in export earnings between 1975 and )9S0, the country's e{"Onomic planners had forecast t'xports to top IlM63 billion by 19H5. They failed to reach nM38 billion. Dr. Mahathir blamed rapIdly advanc- ing technology as well as manipulation by thl' developed counlrl('S for thl' collapse, and dcclart'd that "Ihere is no future in commodities". As trad(' and industry minister as w~1I as d~puty premier from 1978 to 1981, Dr. Mahathir had sold Malaysia to American, European and japanese multinationals as a platfo rm on which to manufacture industrial products lor overseas markel$. But as prime minister he argued that eXI>orIorien ted IIlanufacturing was insufficiellt. "W(' do nOI want to be grounded in the mediocrity of mere assembly operations," he said. Although the world was entering a recession that would incvitably affa " Malaysia, Dr. Mahathir pUSIH.'opuiation - 14 million in IYIB - cars and steel esp('clally we're unlikely to be profi table in the dOlllestic IWlrket unless sheltered behind protectionist walls or sub- lcliLed. Either way, it would lx, a burden on local consumers, who enjoYl'd t'asy acc('SS to imported manufactured good producers in fields already threatened by global oveHOIp..1city. Dr. Mahathir would have none of it. 1-1(.' regarded h('avy industries as an cxpre~:.ion of nationalism that would show how Malays could advance beyond the economic limits previously sct for Iht'Ill.)9 1-1(' was thinJ.;ing beyond indiVidual products, prices and market sharl' 10 the next stage of industrialization, as in South Korea. Seoul had Ignored convenlional adviu' and refused the temptation to conll nue buyi ng steel clwaply frOIll JaIXIIl, Dr. Mahathir said, and now the Soulh Koreans were sclling steel to japan. Ill' was certain heavy industry would bring similar substantial benefitS to the Malaysian onomy through technology, )kills and numerous spin-offs. Large manufacturing enterpriS('s nceded SUPl>Orting indu5lrie:-. and services, which ITlU~t be provided mainly by locals. "Tht' spillover is literally t(('men- dous,~ Dr. Mahathir said. echoing his primary school teacher's message. "Whole Il("W towns spring lip where lndu!>tries arc located.. .new ~ervices and tr,ldl~s spring up." 4( Dr. Mahathir conceded lhal Glrs, for example, could he imported cheaper, but i n~ i 5t'ed lhc capacity to produce whid es was a necessary component of Malaysia's industrialization. Ill" was fnl5 tfilted that marly MalaYSians dId nOI shan.' his enthusiasm about building a great nation and, worse, some did not ('ven bt'lieve it was po~ si)I('. lie urged them to "overcOIII(, tile mental block which condemns liSto being the produccrs of primary comm(xlities to 52. fuel til(' growth of the industrialized coumrie:park an economic take,ofr. Two cement plants, onl" tn Pcrak state and the otll('r on I.ion ma({' as his ofliclal car. Proton's logo Initially featurl'd the crest from Malaysia'S l'oat of arms. and sub- ~l'qu('tcd profitability. But Prawn's success came at a heavy cost 10 MalaYSian consunH'rs: taxes ranging from 140 per L'ent to 300 per Cl'nt on impo rted vehicles, anti up 10 40 per cent on cars locally aSSl'mblcd from imported kits. Built in to the proteCl ion, and little known to the moto ring public being slugged, was an opaq lll' import-lin'mi ng systl'm for foreign cars. Int rod lKed in the mid- 1970s to encourage bumiput ras to enter the vehiCle dist ribution bU5i l11.':;S, titen do mi nated by foreign companies and hliSill('ss groups owned by Chinese Malaysiam, the :.ystcm covered trucks and motorbik s as well as car). With the lTcation of Proton, the licensing system was blended with ta riffs 10 protect the national car. Licensees were grantl'd permits, which (,>very vehid e man ufactured or assembled o utside Malaysia had to secure before it could be imported and sold locally. The Ministry o f internalio nal Trade and Indust ry issued the permits to co mpanies controlled by bu mi- putra investo rs. They d id not have to hid op('n ly, and nor d id they have to pay a .~i llgle cent for a permit, ma king perm its, tn effect , a licclln ' to print mo ney. Licensees typically SOld the use o f thl'ir rights to distri butorships for between RMIO,OOO aml ItMSO,OOO per ve.hicle, depending on thl.' make and model. This dassic tOllgate operation put more than RM 1 billion iI ye,lr in to the pockets of the well-connecteu permit holders and yielded no benefit to the govern mcnI.4Q ~You can buy a home in Malaysia cheaper than you can buy a car," one ,Inalyst wrote in 1 9~9. ~) Malaysian car owners were generally paying th ree times the price of a similar modd i.n the United States. Not o nly Wl're rivals Iloncr It'lll of Proton, were guaran teed handsome ret urns regardless of the vell- Ilre's protitabilily. They were paid to provicll' the teCh nology, components _Hld trai ning, as well as collecting patent, design and other fees. Dissatisfi ed with Proton 's performance in 1988, the Malaysian government repl,lCed the company's bumlpulra management with Mitsullishi executives. Mitsu- hl~hi's wilhdrawal from Proton, through the sale of sh;u('S to other investors, l.'Ilt'Cted the Japanese companies' diminished role in Malaysia.5.l Over the pre- 'Iolls decade, Proton had CUI its dependence on Mitsubishi by acquiri ng auto- englnecri ng companies stich as Ikitaill's Lotus Group International. Proton ,do ~tart ed making its own cllgines, which it previously purchasl'(i fro m MllSlIbishi ,md ig Japanese suppliers. But it was not {'a~y iOT I'roto n to strike out on its Own. Proton's day of reckoning neared as Malaysia met its obligations ullder an ..)I?AN Frl'C Trade Area pact, which required tariffs on all manufacturi.-,d gecame one of the first serious pOIntS o f contentio n bl.'lween Dr. Mahath ir and his succc~sor, Abdullah Hadawi. To rt:vivc Malaysia's flagging economy, which had bc,.I0~ The one Malay who made the top ten in ForIH:S'j rust Malaysian rich list in 2006, Sycd Mokhtar Alhuk- hary, was a T('ialiv(;, l;tlecomer, a businessman who had dilllied wit h Arlwar and in whom Or. Mahathir invested heavily aHer becoming disillusioned with Dairl! Zalnuddln's prot~gb. H>fo Some l"ConomlSIS argued that affirnliltivc action as a means to redistribute wealth more equitably hindered groWlh and competitiveness, I.:lting Malay- sia's rclililve dedlne in Ihe EaSI Asian region: When the NEI' was introduced In 197 1, Malaysia ranked thi rd only to Ja pan and Singapore in terms of GDI' per capita; by 11)90, it had fallen behind South Korea, Taiwan and lIong KOI~g as wcll.I01 And the gap continu",'d to widen, despite Dr. Mahathlr'S denials, leaving Malaysia scrambling to com pete in a globalized world, where China and India were 5Ctllng a sizzling pace. Malaysia'S population, at more than 23 million in 2003, had almost doubled since 1981 while simultaneously being urbanized and ethnically reconrlgured. The portion designatl'd urban swelled frorn just over one-third 0 almost two-thirds. I{esp:>nding 10 incentives offered when Dr. Mahathir set his 70-m ilIIon goal, the birthrate dcfll..-'d established international patterns and did not decline as prosperity increased. Malaysia became one of Ihe youngcst count ries in the region, the envy of others saddled with geriatric liabilities. :r~e Malay birthrate was double that of Chinese and Indians, for Malay fam- rlres could coun t on scholarships and Jobs for their children as well as tax breaks for more than two kids. l~ C.onstituting less than half the p:>pulation in 1981, Malays became a clear and growing malority, without the need to be grouP('d among bumiputras to achieve nalional majority status.)().lngJaya: International lnvl'Slmenl Consultants. undatcd), p. 38. 61. 1J4 MCI!IIy:.iulI MclV('rick 9 Cilrotyn Iiollg. "Muslims first, Mal~yslan ~ St~ond". Sim iis Time~. 21 Aug ust 2006. 10 Khoo 1100 Td k. I'''md()u.~ o{ ,'>fa/mlilifislll; All IlIldlt Conw. IllSt Served': I'rllatizatiun Under M~ha th ir", in Ikfflioll~, p. 283, citing Radin SQc:narno At Iial and hiinal Mnam YuwL 1'w I;xpl'ri("ncc of Malaysl:' ~, in "1'rll'lti1. (arrcsSl:'l1 27 May 2CX)61. 17 Fau....az ,bdul ,ziz, - Mahalhir Vt'nt:'l Frustration ,In I)VD~, II Mily 2006 (art'C"SS(>d 27 Mav 20(6). 16 intervll'w with Mabathir Mohamad, 20 March 2007. 19 Greg Felkcr, -Mahalhlr and the l'olitiC'S of f..;onom ll' Policy in Mal(IYSi,''', in Hff',cliOl.s. p. 2M . 20 Intervle.... with Mahat hir Mohamad. 20 March 201)7, 2 1 IHIC'rvl{'w ....lth D..lm Z:llnmldin, 18 October 2007. 22 IHtcrllcw wit h M..halhir Moh:'mad, 14 August 2007. 2:i Chl'Ong Mi Sui and Adilmh Amin, /Jelim; '11/1' ,f(m Iff/lind II", C"i.~II/(1 (f'etaling Jaya: f'" Time..~, 22 Sc:ptcmber 1997 (Jccessro 24 March Z009). M ter he retirl..'(i, Dr. M;thathir 1m" with $oros In Kuala Lumpur and acC('ptl'(l that the rmancicf was not rl'SpOrl)lhle for tin' Asian flnan cial crisis. ~ M;L (ay.sia'~ Former I..eader M.,h:nhlr 8LrI('S Ihe I latchet with Bnancler Georgl'Soros", CIIi,l I'()I'I, IS IkcemlK'r 2006 (acc('!S(' (ac("('ssed :ll August 20(8). '}3 Koon Yew Yin, ~Whatls Wrong with the NEI'~. iIIircts and ChallC'ngl's Under the Ninth MJlaysla Plan" . 950 Lt'(! IIwok Aun. "Tlw NEI', Vblon 2020, and Ik M Societies Act 1966, UMNO was not permitted to h(-' in business. To conc('al its a~scts, the party us~'(llhe common practice of lI()minee mmpanies o r (',('(:utives, or alternat ively, trusted individuals, prominent ollsin('sSmell who ~urreptitious ly held stakes in various COIll- IltInies on UMNO's behalf. The traj] could lead tllTOugh a bewildering maze pbrOlher also d(>Cided 10 sell his 20 per cent stake - was transferTl'(l in 1974 to rIcot prices soaring to a peak of 8,970 pounds a tonne, and set off a global scr(l like they were gOing to make a killing, the sta kl's Wl'Te soaring drama- tically and Maminco hecame dangl'rollsly l"XIKlSl,ecial occasions. While Bank Bumiputra wa~ being used to buy tin on a grand seall' in London, a wholly owned subsidiMY of the 1>.1nk was being abused in even more breathtaking fashion for l>er~onal gain in colonial liang Kong. Iuml- putra Malaysia Finance Ltd. (IIMF), puty l'rime Minister Musa IIitam_Dr. Mahathlr wanted his own man running a major financial arm of the governlllcnt.21 The details of BM F's decp('nlng troubles were disciost'curc loans, when they were secured at all, was being eroded seriously by the dOwnturn, exposing 13M Fto such large losses that the financial health of Bank Bumiputra ibelf might be at risk. With liM P operating almost autonomously, the lines of responsihility led back to Kuala Lum pur.2~ BMF's lending decisions were made by its own two-man board: Chairman Lorrain [.sme Osman and Mohamed Hashim Shamsudin were both prominent directors of the parent bank. Lorrain was a member of Or. Mahathir's l>allel of economic advisers, while Hashim was Bank BlImiputra's exccutiv~ director, a post that rankw second in the bank's hierarchy. Ibrahim Jaafar, who ran IIMF's day-to-day operations in 1I0ng Kong as genemlmanager, reported directly 10 torrain and Hashim. In an IncriminlLting turn, the Hong Kong-based press dis("overed that two of thes(' three executives, who had controlled 11M!' from its in('('ptioH, had outside business collnections with customers. Ibrahim held large personal overdraft facil ities in lIong Kong banks thai were guaranteed by Carrian. lIashim became a dirt'Ctor of a small company thr(.'C days before it received a cheque for nM 1.1 million from the wife of the chairman of Eda, iust as UMF loaned the group USS40 million _~ As the controversy swirled through Southeast Asia with each fresh round of revelations in Hong Kong, the Malaysian authorities remained tight- liplX.'e groups. "It Is not prudent, but you must rem('mber the ,ltlllosphere in Hong Kong at that time. Hanks were anxiOUS to lend money Simply because the ('(onomy was booming, and when somebody who Is established comes to YOll to borrow money, you don't look too doscly, although by rights you should," he s'lid. "This was their mistake." Dr. Mahathir sidestepped the question of accoulltabilily, promising that Malaysia would "take action" if malpr;lClh.:es were uncov('red, but said the emphasis was on trying to salvage overdue ell'blS. not on "wilch hunting". lie Sas('(! Capri Trading Corporation, fi led a lawsuit in the Ullited States claim- ing it was denied a fa ir share of the proceeds frolll the sale of the propen y.t;; The suit aill-ged that Bank Burniputra ami its senior officers at the time acted "in ('oncert and in conspiracy...to frauduli.'ntly cO[1('ealtht.' lootingN of the prop('tty from Carrian's minority shareholde r~ and credi- tors. It claimed they engaged "In a pattern of rac"eteerin~( by paying Jess than one-third of the prol>C'rty's market va[lI{" deprivi ng millority share- holders of aeJe and continued lending to Goorgl' Tan and Carrian. To avo id (il'tComething we couldn't ovetcomeH .ll'1 In fact, b.lsed on incomplete public information, RM I5 billion was a con- servarivt' estimate of Pcrwaja's losses. Similarly, I~an k Bumiputra dropped at least RM 10 billion. Bank Negara's foreign exchange forays d rllillL,,atc 1.0011 Scandal Tuliay"'. A W 51, 11 March 1986. Dr, Mahalhir', (,OI1lIl1CIII$ we-r(' containC'C1 in t'C(rnlx.'r 1984. 42 Raph:lel l>Om, ~Malaysla n Banker'S Murder ~:SC" lah."> Scrutiny on Loa ns~, AWSf, 2.') July 1983. '13 Raphael I'u ra. "Prime Min i s t('r'~ I'ress Couft'r('lln' ShNls Ught 011 Bumlputra FIII('Inc(''',A WS/, 12J (ac~"eSS('(. 25J3IIuary 2(06). 48 Raphael I'ula, "BulI1il'utra I:inantl.' Officials Resign Over J.oan$~, AWSJ. J NO~'('mbe r 1983. (accessed 4 Scptc,n ix'r 2001:1). I() K. D,.s, "Tin.' Grl'at Di vide", FeU?. 27 NOVl'1l11x.-r 198] , p. 53. 11 "l'('flOlIL g: Th~ Goldl' ll UmhiliClI1:1.4 Mit ~s Over thl' 5,:a", rTFR. 2i'l August 19H I , p.6-l. 12 Ha tinah Tudd, "Thl ProtOIl Saga 5:lga". Ncw 11I1t'ma li()II(/li ~l, No. ]95 (M ay 1989), pp. 14- 15. Jj Leslie Lopcz, "'M a lays l ~ !l Gra nd Pri x Stalls Ou t as 1'.111 5 Pass Up Rare Tid ~ t s~, AWSJ, ]4 M (a cn's~i'([ 6 April 200':11. Uel' won the auki t Uender.. parJi,llllclltary constitUt'l KYfor tht' I)t'mocmtic ActiOll I'~ rt y in the 2001'1 gcnt ral (']ect loll. 102. 196 MlI/lIpi,m Maverick 35 M,uika Via/any and Marti" I'ul('h. ~ Vislon 2020, the Multimedia SlIlX'rCorrldor ;tnd Malaysiau Unlversitil's~, prr>C(,l'd ing) of 15th Bi('llllia l Confcrl'fK' of the Asian Studies Association of Justral1a. Canherra. 29 JWll'- 2 july 2004. .16 Ibid. ] 7 Eric 1:',llis, ~I'rutonomin" , FOr/flllt', 10july 2006, p_20_ 38 iLS, 1"lilfW and i)iane K. Mauzy. '''IIII/W~iilli Politin Undn M allotlii,. (London: It'u tlcdg(', 1~99), p. 174. 39 Chandrafl j, Dill'mma", In 110 iCtly affecting the privileges, position, honours or dignities of the rulers ~ ha ll lx' passed without tile conSl'nt of tlte ConferelK(' of IhLicrs." Without their prior approval, thi.' amendments mOTe than Hk('ly wert' unconstitutional. As Ii.'ader of the exduslv later murdered. Government officials Iinkt..'d PAS 10 both groups, though many Malays believ(.,j olherwise, ronvinc('(1 that S!..'(urity forces mishandled Ihe incidents or ,'ere implicatlxi in them."! Even more SllSpeCI was liIl' crushing of the passive Oarul /rqalll in 1994, a full 26 yl'ars 'Ifter It was fOllnded b}' a charismatic religiOUS teadll'r, Ashaarl Muhanun('(1. Tilt.' movement followed a tradilionallst apprOilch 10 Islam, with mcmbers eating Amh-styre, the men wearing green robes ;lIld turbans and the women in purdah most of till: time. Fol101...crs cstilbllsh('(j self-contilined COnlllllH1CS with hOllses, mosques, schools, clinic:. and veg- etable plOIS, their fac tories prodUCing items for sale: in their own shops. Nation-wide, DaTUI Arqill1l ran 250 kindergartens and grade schools, and operated enterprises :.p;mning food processing and property to tCJ(tile~ and heallh services, with assets of about RMJOO million.hoI In the years before II was banned, Ihe government quietly cleared the way for the group 10 expand to counter i'A5.M When the National "'alwa Council, a governmenI body, declared Darul Mqam a deviant Islamic sect ils lead('rs WNe dctaint'ctations alTlong SOTlle Muslims that tilostates and lose their rights as MusHmsYl5 A 1I10re extreme version of the law, which would have allowed for the prosecution of a Muslim accused of misleading fellow Muslims to vOle for an 0PIXlsitiOn party, was considered during thc dcbatc.106 Johore provld('d for caning and jail sentences for le~bians, prosti- tutes and pimps, and for those found guilty of sodomy, pre-marital st'x and Incest.1U7 At a speI'I('(1on Ihe- diff by dl'Claring Mlilaysia an "Islamic SI'1l1("'. Although he had Ohl'll saId Ih(' Silm(' Ihing l>efor(', and he no doubt sought 10 oUlflank PAS tactlcally aher de-daring ail-oul support for the UnIH.'d Stiltes in 1l(' ~wilr on tcrror" that follow('{1 "Scptcmbl'r I I", Dr. Mahllthir was serious this time, l ie made the announcclllent at a m('t'ting of Parti Gerakan RakY,lt Malay"iil, :11 UMNO coalition partner, and call1'd a gathering of all National Front members to endorse the move, lie latef told P:uliament that Malaysia ""' Invasion of Mghanistan, together with its support for al-Qaeda's Qs.lma bin l.o1den ancl the Mullah Omar-led Taliban regime, further lJ.luered Ihe p.lrty's reputation as a respons, ible, democratic Illov{'nl{~nt d
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