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FEER: Final Sacrifice: Daim Bows Out
By S. Jayasankaran

8/6/2001 4:51 am Fri

[Daim berundur untuk menyelamatkan Mahathir. Begitu juga Mokhzani. Mahathir sengaja membatalkan beberapa rancangan ekonomi ilham Daim seperti penyelamatan LRT. Dia juga berlembut dengan pelabur luar dengan mengundurkan kawalan modal agar Daim terkena nanti. Tindakan disiplin politik wang bertujuan untuk mempamirkan imej bersih kerana inilah isu panas sekarang ini sehingga BBM menjerit tahun ini. Surat layang dan buku ditulis agar Daim tiada pilihan melainkan berhenti supaya semua fokus jijik tertumpu hanya kepada Daim seorang diri.

Untuk menguatkan lagi kedudukkannya menjelang perhimpunan agung Umno Mahathir menggunakan ISA. Mahathir begitu bimbang kebolehan Ezam dan rakan-rakannya kerana cara mereka menyerang boleh membuat beliau tumbang. Semua pemimpin BA harus meneliti perkara ini.

Selain ISA, akta internet juga muncul bulan lepas dan akhbar Cina telah ditelan bulan ini. Ini semua adalah langkah penting agar semua bangkangan dapat dicengkam dan dipenjarakan.

Apa yang dilakukan oleh Mahathir sekarang adalah langkah-langkah untuk mendapatkan markah dan tepukkan gemuruh dalam perhimpunan agung nanti. Walaupun begitu Hakim Hishamuddin telah menyebabkan arus berubah rentak dan sakit Anwar membuat Mahathir sedikit tersedak kerana Suhakam telah menyokong rawatan luar. Besar kemungkinan keadaan sakit Anwar akan digelapkan dari media agar tidak terlepas ke dewan PWTC. Nanti akan bergemalah (agaknya) dewan itu nanti dengan seribu pujian agar Mahathir berkhidmat sampai mati. - Editor]

The Far Eastern Economic Review
Issue cover-dated 14th June 2001

Final Sacrifice: Daim Bows Out

With the resignation of his finance minister, Premier Mahathir Mohamad's strategy is revealed: Shed liabilities, quell dissent and woo the public

By S. Jayasankaran/KUALA LUMPUR

ON JUNE 1, Finance Minister Daim Zainuddin resigned from government, reinforcing speculation that he had fallen out with Premier Mahathir Mohamad, his friend and mentor since the 1980s.

The parting had little of the acrimony associated with Mahathir's 1998 ousting of Deputy Premier Anwar Ibrahim, but it stoked suspicion that Daim, widely associated with several recent and hugely unpopular deals, was paying a price for increasing public disenchantment with Mahathir's administration. "No reasons [for the resignation] have been given, so people will speculate," says Shahrir Samad, a member of the powerful Supreme Council of Mahathir's United Malays National Organization, the main party in the ruling coalition. "And no one will say the truth, that they are happy to see him go."

Everyone agrees on who will benefit. "This could make Mahathir look good," says a Malay businessman who knows both men. "It shows he's willing to sacrifice close friends."

To read the tea leaves of Malaysian politics is to always refer to the man who calls the shots. And there are two schools of thought regarding Mahathir Mohamad. One has it that the ageing Malaysian leader--he will turn 76 in December--is preparing an exit strategy for an honourable retirement soon. The other is that he's digging in to consolidate his power because he has no intention of going.

Cynics overwhelmingly plump for the latter view. It's not hard to see why. Mahathir has said repeatedly that this would be his last term, but he's said such things before. Over the past six months, the premier has moved to consolidate power by dishing out carrots and wielding sticks. Perceived liabilities, including Daim, have been excised, while sops to popular opinion have been thrown--including the removal of six senior Umno officials from their party positions for their involvement in money politics.

Meanwhile, as if to remind people that leadership is also about making unpopular decisions, Mahathir has moved to quell external dissent.

In the short term, he may have boosted his popularity within Umno, which will help him later this month when the party convenes for its annual general assembly. Daim's departure also means that Mahathir has not only taken over Malaysia's economic management but will supervise the powerful Finance Ministry closely from now on. Mahathir has named himself acting finance minister, and no new minister is likely to have the free hand that Daim enjoyed. That implies that if the Malaysian economy rebounds strongly sometime in the next few years, no one except Mahathir will be able to claim credit. In such a scenario, the timing for an honourable exit is auspicious: The next general elections must be held by 2004.

But there is an obvious potential downside. Business deals, especially those involving taxpayers' money, have come under a critical spotlight amid increasing awareness regarding good governance. That means that the premier will have no one to blame but himself for financial foul-ups such as further bailouts or falling reserves. The Mahathir legacy will depend, ultimately, on whether the premier really intends to introduce more-transparent governance.

One of Mahathir's biggest political liabilities is the involvement of his sons in business. In April, that diminished considerably when his second son, Mokhzani, announced that he was withdrawing from the corporate sector in order to shield his father from accusations of nepotism. Mokhzani sold his stakes in two listed companies at a decided loss. Political analysts conceded that the move would, at the very least, reduce criticism of Mahathir.

Meanwhile, Mahathir said that "filthy rich" businessmen would not be allowed to vie for Umno positions, and that Umno chieftains would no longer be allowed the government contracts that were once viewed as their rightful due.

Mahathir also revealed a less unbending side: In May, he unexpectedly bowed to union demands that the Employees Provident Fund, the country's largest private pension plan, be more accountable to its members.

He's also postponed and called for a review of a planned 6 billion ringgit ($1.6 billion) government rescue of two urban light rail transit systems, one of which is linked to a protégé of Daim. "It's not something Mahathir normally does," says a university economics lecturer in Kuala Lumpur. "He's becoming populist."

At the same time, however, Mahathir has cracked down on the opposition: In April, police arrested 10 dissidents under the Internal Security Act, which permits detention without trial. Two have been released, while on June 2 four others were imprisoned under the ISA for two more years, by order of the home minister.

Meanwhile, the premier "gave his blessings" for a political party allied to his ruling coalition to take over two independent Chinese-language newspapers frequently critical of the establishment (see story below). Also, the government has announced rules to govern Internet journalism and the alternative, mostly anti-establishment, Web sites that have become very popular among middle-class Malaysians.

In between carrot and stick, the biggest casualty may have been Daim. Analysts say that Mahathir began distancing himself from Daim after it became clear that two business deals associated with the finance minister were terribly unpopular. Mahathir associates also allege that Daim "undermined" the premier by complaining about his children's business interests and implying, at meetings with individual businessmen, editors and Umno politicians, that Mahathir ran both party and government arbitrarily.

A business associate of Daim says that the cabinet "drove a wedge" between the two men. While Daim was on leave from April through May, and wasn't attending cabinet meetings, he and his ministry came under severe criticism from his cabinet colleagues. Complaints included allegations that the Finance Ministry interfered with awards of government contracts from other ministries, and criticism of two controversial deals involving a bailout of Malaysia Airlines and the use of pension funds to underwrite a telecoms listing. Both deals involved companies controlled by Daim protégés.

In explanations to the party faithful, Mahathir said he had been "inadequately briefed" about the airline deal while he "knew nothing" about the involvement of the pension funds.

Some analysts wonder if the attack on Daim has been orchestrated ahead of the June assembly. Letters detailing his alleged business dealings have begun circulating in Kuala Lumpur while a new, mostly critical book on Daim sells briskly in bookshops throughout the country.

For his part, the former finance minister has maintained an aloof silence. In the past, Daim has often taken the heat for Mahathir. This time he may have done so for the ultimate goal: preserving the Mahathir legacy