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AWSJ: Daim Exit Rumored, Gov. Doesn't Clarify
By Monica Houston
3/6/2001 7:18 am Sun
The Asian Wall Street Journal
Malaysian Finance Min Exit Rumored, Govt Doesn't Clarify
KUALA LUMPUR -- On a day when the leading Malay-language newspaper ran
an article on the front page noting rife speculation on Finance
Minister Daim Zainuddin's resignation, Prime Minister Mahathir Mohamad
didn't take the opportunity to clarify when Daim would return from his
current leave of absence.
Asked Friday whether he had received a letter from Daim on a decision
to step down, Mahathir responded: "So far, nothing yet."
Daim has kept markets guessing. He has repeatedly declined to state
when he will return from his leave of absence from attending cabinet
and party meetings. For the first time last week he raised the
possibility of extending his leave, saying it was "too early" for him
to make a decision on when to return. And the finance ministry hasn't
responded to queries about whether his leave has officially ended.
The Utusan newspaper is linked to the predominant political party,
Mahathir's United Malay National Organization, and Friday's report has
some Malaysia-watchers speculating the article could be aimed at
flushing out a decision by Daim.
A replacement of Daim is important for the political future of the
country because that person would be well-placed to challenge
Mahathir's expected successor Abdullah Ahmad Badawi in the next
general election, as well as within UMNO.
While most observers note any removal or voluntary exit by Daim won't
serve to dramatically alter policy, some say there could be
adjustments to the government's privatization stance, which is under
the charge of Daim. Others note there could be relief among some
international investors, depending upon his replacement. Most agree an
ouster would exacerbate leadership transition uncertainty in UMNO.
Certainly, there are more concerns about friction between Mahathir and
Daim ever since two corporate deals spurred public controversy over
the government's spending policies earlier this year.
Investors had expressed concern when the government bought back a 29%
stake in Malaysian Airline Systems Bhd. at 8.00 ringgit ($1=MYR3.80)
per share, above the market price.
In a separate case, the national pension Employees Provident Fund's
purchased shares in telecommunication company Time dotCom's initial
public listing at MYR3.30, far above the current market price of
Observers say it isn't so much the fact that foreign investors have
shunned Malaysian markets, despite enticements such as a removal of
the 10% exit levy on repatriated portfolio profits and easing property
purchase restrictions for foreigners.
Far more disturbing to Mahathir is the specter of disgruntled voters
when the next election rolls around, they say. The EPF purchase of
Time dotCom shares prompted demands by the public for better
investment decision controls at the fund.
There are even signs of institutional disfavor with government
policies. A recent hallmark decision by a judge to free two persons
detained under the controversial Internal Security Act, and his call
for a review to the act, is an exceptional challenge to the
government's authority. Earlier this week, the Malaysian human rights
commission openly urged the government to reverse its decision to keep
former deputy prime minister Anwar Ibrahim from seeking medical
treatment abroad. Anwar is in prison serving sentences for s###my and
the abuse of power.
The unusual public criticism of the government comes at a time when
UMNO has been trying to close ranks in the face of the opposition.
Malay unity has been the theme ahead of the party's general assembly
And Mahathir is taking action. After months of talking about the ills
of power abuse, UMNO is finally clamping down. The UMNO supreme
council recently affirmed findings by a committee which concluded that
six party members are guilty of "money politics", pending appeals.
Mahathir's housecleaning also includes a proposal to prevent top UMNO
members from holding lucrative government contracts.
Meanwhile, if Daim is replaced as finance minister a power scramble
during the next general elections is likely. Mahathir has said he
won't run again; this July will mark his 20th anniversary as prime
"Whoever takes up (Daim's) position, would be in a very strong
position in the next general election," noted a source, who declined
to be named.
Pundits speculate that two potential contenders for the position
include the Minister for Domestic Trade and Consumer Affairs Muhyiddin
Yassin and former finance minister Razaleigh Hamzah who challenged
Mahathir in a bid for power in 1987 and has subsequently returned to
the UMNO fold.
-By Monica Houston-Waesch,
The South China Morning Post, HK
Resignation rumours and Anwar headache greet returning Mahathir
Prime Minister Mahathir Mohamad returned home yesterday to fresh
rumours that his Finance Minister is quitting and rare rebukes over
the treatment of his jailed former deputy and his supporters.
Dr Mahathir, returning from a summit of developing countries in
Indonesia, denied he had received any resignation letter from Finance
Minister Daim Zainuddin, who he announced in April had taken leave due
to tiredness. A series of government bail-outs for Malay tycoons close
to Mr Daim has drawn public criticism.
Meanwhile, his erstwhile heir, Anwar Ibrahim, is again causing him
headaches. Anwar is serving 15 years' jail for sex and corruption
crimes he says were fabricated to stop him challenging Dr Mahathir for
power in 1998. Dr Mahathir says all of Anwar's trials were fair.
On Thursday, Malaysia's Human Rights Commission said the Government
was wrong to deny Anwar's request for surgery overseas for a slipped
disc. On Wednesday, a judge freed two Anwar supporters, who were
arrested under the Internal Security Act and accused of planning
violent street protests to topple the Government.
Political scientist Khoo Boo Teik called the moves "indications that
the Government should begin to respond more sensitively and more
imaginatively to the widespread disenchantment".
Dr Mahathir said yesterday the Government would study the judge's
decision to free the two detainees, which could have a bearing on the
fate of eight other pro-Anwar activists seeking release after their
arrest nearly two months ago.