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Asiaweek: Discord Rules
By Penny Crisp
22/4/2001 12:47 am Sun
The wagons are circling but not around Mahathir.
Is this the last stand?
By PENNY CRISP
The orchestra strikes up for another turn around the dance floor. By
now, most Malaysians know the tune. It starts with rising ethnic
tensions. Then the economy kicks in - sluggish, with future prospects
dim. Discord within the dominant ruling party, the United Malays
National Organization, spills out from behind closed doors.
Oppositionists are restless. Minor parties in the governing coalition
start to squirm. In undertones, the political survival of Prime
Minister Mahathir Mohamad is questioned. And with a crashing of police
cymbals cued by the Internal Security Act, it all ends in jail.
In the nearly 20 years under helmsman Mahathir, Malaysia has followed
this score several times, and Dr. M was always smiling at the end. It
has been played out again recently, but this time there are
none-too-subtle shifts in cadence. Once quick to fall in line behind
the prime minister's line, the loyal backing choir is no longer easily
assuaged. The Malay electorate, trades unions, businessmen and even
members of UMNO are openly standing apart from Mahathir.
In recent weeks the Malaysian Trade Union Congress, the country's
biggest labor group, called for an unheard-of nationwide picket over
various complaints - not least the decline of its state-controlled
pension fund. Unionists accused the government of using the fund to
help out a politically connected tycoon. "Enough is enough," says
congress secretary-general G. Rajasekaran. "The time has come for us
to go out and make ourselves heard."
In turn, business pressure is rising for a revision of the ringgit
peg. Foreign direct investment slowed to a trickle last year. Last
week most gross domestic product forecasts plunged from 7% to between
3% and 4%. "Capital controls have sent all the wrong signals," says
William Kaye, head of the Pacific Group in Hong Kong. "Few people are
now interested in investing in Malaysia because they have a habit of
changing the rules all the time."
Other grumblings are more familiar. Formerly loyal voters began
deserting Mahathir's Barisan Nasional coalition, led by UMNO, after
the prime minister fired his annointed successor and deputy, Anwar
Ibrahim, in 1998. Electorally the government since has gone from bad
to worse, culminating in December with the loss of a formerly safe
state seat on Mahathir's home ground. This cut deep into the UMNO
psyche, unleashing the previously obedient to start publicly
criticising the prime minister. "I don't think there is a problem with
UMNO," says Shahrir Samad, a former cabinet minister and current
member of UMNO's Supreme Council. "The problem is with the
Once, Mahathir knew exactly where he wanted Malaysia to go. He had a
vision - one that most Malaysians largely shared. It encompassed an
economy that wasn't a joke. It asserted a strong Malay sector in a
racially mixed society. It shook off colonial baggage and stood
proudly on its own feet. Now 75, Mahathir has accomplished much of
that - often through the sheer force of his will. But the payoff is
that newly confident Malaysians feel bold enough to challenge him. For
them, his vision is no longer relevant. Says James Wong Wing On, a
former opposition parliamentarian and now a political columnist for
the Chinese-language daily newspaper Sin Chew Jit Poh: "For the first
time for more than 20 years the outcome of the next elections is very
At the moment, a poll two years down the track is the least of
Mahathir's worries. In keeping with his habit of firing at all targets
when under siege - preferably before they realize they are targets -
he allowed the police to arrest seven oppositionists on the eve of an
April 14 public rally in Kuala Lumpur. The rally, which marked the
second anniversary of Anwar's conviction on corruption charges, went
ahead anyway. There were no untoward incidents. But as Asiaweek went
to press, the activists were still being held under the controversial
Internal Security Act (ISA), which allows for indefinite detention
Mahathir claimed the police had evidence that rally organizers -
mainly members of the Keadilan opposition party formed by Anwar's
wife, Wan Azizah Ismail - had planned to use bombs and even rocket
launchers. Hatta Ramli, a leader of the main Malay opposition group,
Parti Islam se-Malaysia (PAS), dismisses the notion. "They have come
to a level where they will use any excuse to stifle the opposition,"
he says. "If they have the evidence, bring the people to court instead
of keeping them under the ISA."
Meanwhile, the trade union congress remains unrepentant over its call
to arms. Citing what it calls "five burning issues about the Employees
Provident Fund (EPF)," it has urged its 550,000 members to picket the
fund's offices all over Malaysia on May 12 to reinforce their
complaints. Chief among the union's claims is that the EPF investment
board, appointed by powerful Finance Minister Daim Zainuddin, used
members' money to buy into the initial public offering of Time dotCom.
Labor leaders expressed their anger after the fund announced its
lowest dividend payout in 26 years. At the same time, it revealed a
paper loss of about $25 million on the Time dotCom deal, which was
largely shunned by other investors. Furious unionists say the EPF
lacks transparency and accountability.
"Some people are accusing us of playing politics or playing into the
hands of dissidents," says union congress secretary-general
Rajasekaran. "But our members are just fed up with the way EPF has
managed our money - changed the rules in clear and utter disregard of
the interest of EPF contributors." He says the fund reduced its annual
dividend because of bad investment decisions. "Then they had audacity
to go and bail out . . . Time dotCom. Why do these people need to be
bailed out from a poor people's provident fund?"
On the economic front, a key aspect of Malaysia's "miracle" growth in
the 1980s and early 1990s was foreign direct investments by
multinationals seeking a manufacturing base. The country regularly
pulled up to $6 billion a year in new investments for manufacturing.
That figure was down to $2 billion last year. Malaysia now ranks below
South Korea, Thailand and India. Emerging markets guru Mark Mobius,
who runs funds worth $12 billion for the Templeton group, says
investors worry about political stability, lack of corporate
governance and cronyism. But above all, he says, uncertainty over the
ringgit peg has stymied growth. (He believes the peg will go sooner
rather than later.) Reasons Mobius: Why invest in Malaysia now when
you can invest after it has adjusted the peg downward by 15%-20%? Adds
Pacific Group's Kaye: "What does Malaysia have to offer that other
countries in Asia don't?"
But the Mahathir broadsides keep coming. He renewed attacks on Anwar
while officiating at the country's International Islamic University on
April 17. This shows he is "under intense pressure again from within
UMNO and the Malay community in general," says columnist Wong. Three
trusted lieutenants lost out in UMNO divisional elections this month,
indicating that even his powerful faction is losing authority in the
party. "The Mahathirian vision is transforming into something else,"
says Wong. "As the order [in UMNO] becomes more democratic, more
centers of power are emerging."
Snipes one middle-ranking UMNO leader: "Mahathir is a desperate man
looking for desperate solutions." One day he tries to talk to PAS on
Malay unity, the next he talks tough to Keadilan over street protests.
"He is trying to tighten the grip on the media, rein in civil
servants, woo younger voters and women voters. It's all contradictory.
Every day he's trying to do something new." Or something old. Like
playing out that familiar tune. One last dance, anyone?
With reporting by ASSIF SHAMEEN and ARJUNA RANAWANA Kuala Lumpur
BUZZ Speaking of revision - or vision, at any rate ... Malaysia's
perennial Prime Minister Mahathir Mohamad has a dream: the rise of the
thoroughly modern Muslim. By too stridently shunning the secular
world, he says, Muslims missed the Industrial Revolution and are now
in danger of being left behind in the Information Age. Muslims have a
duty to acquire knowledge and skills, says Mahathir - including skills
to defend themselves against enemies. In the case of cloning, for
instance, he says Muslim scientists have to acquire the same skills as
their Western counterparts to frustrate their "evil designs." If you
can't beat 'em, join 'em. And then clobber 'em good.