The neoliberal reformer
* Malaysia Pro-democracy activists are rallying to defend sacked Finance Minister Anwar Ibrahim. On social questions, however, Anwar offers fewer guarantees than Malaysia's authoritarian Prime Minister Mahathir Mohamad. Syed Husin Ali* Malaysia's Deputy Prime Minister and Finance Minister, Anwar Ibrahim, was removed from his senior government posts on 2 September. The next day he was sacked as Deputy President of UMNO and expelled from his party, the leading constituent in the government coalition.
As a result, Prime Minister Dr Mahathir Mohamad not only holds the position of Home Minister, but has also assumed the function of First Finance Minister. He is also virtually the Foreign Minister and Minister of Trade. Mahathir has concentrated power in himself both over the government and his party; and he also has a strong hold on the cabinet, the courts and the media. His dictatorial powers are becoming greater than ever.
Sixteen years ago, six years after his release from a 22 month detention without trial under the Internal Security Act (ISA) and enjoying great popularity as president of the Islamic Youth Association (ABIM),
Anwar was successfully enticed by Mahathir, then already Prime Minister and
UMNO president, to join that party. Mahathir opened many avenues and opportunities to help Anwar rise quickly through the political hierarchy. In most people's mind there was no doubt that Anwar was going to be Mahathir's successor.
There was always a difference in approach and style between the two leaders.
But they were mutually supportive, and it appeared impossible to separate them. But by 1997, differences between them had developed into conflicts.
A few days before the UMNO
Assembly in the middle of that year, Mahathir confirmed the existence of a poison pen letter alleging Anwar's involvement in a sexual affair with a married woman, and homosexual activities with a driver. Although Mahathir (and the police) later dismissed the letter as false, public knowledge Mahathir weakened Anwar, who was believed to be preparing to vie for the president's position in UMNO. Differences become clearer
When Malaysia began to face its economic crisis, in the form of depreciation of the ringgit and fall in the value of shares 20 International Viewpoint #304 beginning July 1997, differences between the two leaders became clearer. Right from the start Mahathir blamed foreign financial speculators for the crisis and named George Soros as the main culprit. Mahathir rejected the pressure to follow Thailand and Indonesia by accepting help from the IMF and the World Bank. He quite correctly identified both institutions as instruments of "neo-colonialism". He also advocated controls on international finan-
Mahathir's position was viewed by some sections of the Western ruling elite as being against liberalisation and free markets. A section of the western media began to attack him or gave him poor coverage. But the truth is that it was Mahathir himself who was responsible for opening the country to globalisation and the attendant liberalisation and free market policies. He supported those policies when they helped corporate figures close to him to amass wealth. For example, Malaysia's Central Bank, was involved in speculation on the British pound in 1992-3. It seems the bank incurred a loss of around US$6 billion. The Prime Minister's future enemy George Soros made enormous profits from
Although Anwar did not openly oppose Mahathir's stand, he frequently referred to weaknesses in the leadership and administration. He often used terms like corruption, cronyism and nepotism, which Mahathir called "terms originating from the neo-colonial press, " and a direct attack on him. As Finance Minister, Anwar appeared to be more open to IMF and World Bank prescriptions for overcoming the crisis. (Though he never publicly stated that Malaysia should accept an IMF bailout.)
Anwar's relationship with the highest officials of the IMF and World Bank appeared to be more than cordial, especially after he became chairman of the IMF's Development Committee. Anwar was also becoming a darling of the western media, receiving wide and sympathetic coverage. Some members of the US ruling elite were also seen to favour Anwar more than Mahathir. During a visit to the Pentagon, Anwar was given the red carpet treatment complete with gun salute. Anwar's close relationship with some high US officials at the time when Mahathir was attacking neo-colonialism did not go down well with the Prime Minister and in fact aroused his suspicion against Anwar. Fifty Reasons
Things came to a head during the UMNO general assembly in June this year. Just before the assembly, a book entitled Fifty Reasons Why Anwar Cannot Be Prime Minister was published. Copies of the book found their way into some conference bags that were distributed among delegates to the assembly.
The allegations against Anwar involved sex scandals, called him an agent of a foreign government, and accused him of receiving money from foreign intelligence agencies. The book included the poison letter exposed by Mahathir a year earlier.
During the assembly Mahathir disclosed several lists of people who were awarded special shares, privatised projects and transport permits. The lists included many prominent corporate figures close to Mahathir, including his children. But it also showed that some of Anwar's family members and close associates had enjoyed similar privileges. This blunted their
Anwar's power curbed
The economic crisis affected a number of big corporate figures, burdened with huge foreign loans after the 50% fall of the ringgit against the US dollar. Furthermore, listed companies suffered heavy losses as the stock market fell by over 70%. Shareholders lost an estimated
RM700 billion (US$185 bn.). Among the worst-hit companies were those owned indirectly through cronies of the UMNO
The government decided to use funds from the Employee's Provident Fund and the Pilgrimage Board Fund, as well as the country's reserves in order to bail out some of the crony companies.
There was opposition to this, articulated in a number of Malaysian media. Mahathir immediately acted to bring journalists and publishers under tighter control. The senior editors of two influential Malay newspapers - Utusan Malaysia and Berita Harian - and a senior programme officer of the private television channel TV3 were forced to resign. All were considered to be strong supporters of Anwar. Their replacements were all men who
could be dominated by Mahathir.
A few weeks later, the Central Bank governor and his deputy resigned. Both men opposed Mahathir's assertion that interest rates should be lowered and control over foreign exchange re-established. Mahathir acts
On September 1 Mahathir announced what "shocking measures". . These included fixing the ringgit at RM3.8 against the US dollar, allowing a maximum of RM10,000 to be taken in and out of the country, and declaring all ringgit stocked overseas to be worthless, unless they were repatriated by the end of the month.
In a more shocking move, the following day, Anwar was stripped of all his government positions. Television and newspapers immediately publicised affidavits repeating many allegations contained in the 50 Reasons. On 3 September Anwar was expelled from UMNO
There are several reasons why these shocking events took place. The main one being that Mahathir and his associates feared Anwar would challenge and possibly defeat him in the UMNO general assembly. Furthermore, a handful of billionaires and millionaires who had become very wealthy with the help of Mahathir wanted him to continue in power in order to protect their interests and help to rescue their ailing companies. At the same time they also wanted to be sure that in case anything happened to 73-year old Mahathir, he would be succeeded by someone reliable. Anwar was not seen as the right candidate, because not only has he declared to take stern action against corruption but also he was surrounded by a new set of ambitious young businessmen, who seemed to be in a great hurry to replace the established ones surrounding Mahathir. Anwar's moves
After being sacked, Anwar expected to be arrested under the ISA or fall victim to foul play of some sort. This did not happen immediately, because of the presence of hundreds of media representatives at the Commonwealth Games.
Large numbers of supporters and well wishers came to Anwar's residence every day. Every night he addressed thousands of people outside his home. Audio and videotapes of his speaches were sold widely all over the country.
Anwar says he intends to form a reform movement. But the meaning of the reform and the nature of the movement have not been spelt out. His main target is also still vague. He seems to be carried away by developments in neighbouring
The main organisation involved in the new movement is the Islamic Youth Association (ABIM), which Anwar used to lead. Nevertheless, public sympathy is widespread and seems to be increasing, especially among youth, the lower classes, professionals and government servants.
Anwar's main problem arises from UMNO's political culture. A leader who loses power can easily lose his political support. UMNO leaders often hold well-paid positions in government and enjoy many perks and great wealth. Therefore, they often quickly turn to and pledge loyalty to the leader who still holds power. But these pledges may just be superficial. If Mahathir falls, they could easily make new pledges of loyalty, even to Anwar.
Another problem is that Anwar does not seem to have a compact organisation. He also lacks tested cadres. After his arrest, it is hard to predict how long the support given to him will persist. The future
Anwar has stated categorically that he would neither form a new political party nor join any of the existing ones. On the eve of his arrest, he still seemed to be toying with the idea of being reinstated in the party and government in order to continue his reform movement within UMNO. A number of UMNO divisions within his home state of Penang, while upholding Mahathir's leadership, were appealing for Anwar to be reinstated to all his former positions.
This is impossible as long as Mahathir remains in power. As the Malay saying goes, he will not lick his own spit.
Mahathir seems to have ignored the other allegations against Anwar, and now concentrates on those relating to sex and moral issues. He will try to convince the country that Anwar is not fit to hold important leadership positions because his real character is not consistent with the religious façade that he presents.
Mahathir already has most of the UMNO leaders in his pocket. But if he fails to move the public to his side or should he suddenly die, then Anwar would have a chance to go back to UMNO, but not necessarily with the guarantee that he could return to his old positions of
For progressive people in Malaysia, there is not much choice between Mahathir and Anwar. One may approve of the Prime Minister's pronouncement against neo-colonialism and the fear of foreign capital dominating the country. But how genuine is he?
How long can he or will he maintain this position? In any case, Mahathir cannot be trusted, because he has slowly turned into a one-man dictator, violating fundamental practices of democracy and
On the other hand Anwar may attract a lot of people because of his populist approach and concern for civil society and human rights. But there may be strong reservations among certain quarters because of his strong leanings towards the West, foreign capital and the IMF.
In other words, a third alternative has become necessary. * * Dr. Syed Husin Ali is President of Parti Rakyat Malaysia (Peoples Party) and author of Two Faces: Detention Without Trial (Kuala Lumpur: Insan, 1996), the story of his imprisonment between 1974 and 1980 under the Internal Security Act.
Howard's way