Malaysian Maverick: Mahathir Mohamad in Turbulent Times Read online

  One notorious deal placed Dr. Mahathir in an intimate embrace with Zimbabwe's dictatorial and increasingly erratic president, Robert Mugabe. After a Malaysian company bought a controlling stake in Zimbabwe's biggest thermal power plant, beating out six Western companies, the United States criticized the transaction, while the local trade union movement condemned it as "asset stripping", and the entire board of the electricity authority joined the chorus of protest. The Zimbabwean government sacked the board and went ahead anyway.[105]

  The main aim of so-called reverse investment was to repatriate profits to Malaysia to offset a worrying deficit in the country's services account, itself caused by foreign investors taking out their profits.[106] It was always going to be a long-term gamble, with Malaysian companies prepared to ignore red tape, corruption and political volatility to be first into new markets, counting on Dr. Mahathir to sort out any difficulties they encountered. With the conspicuous exception of Petronas, few of these overseas operations survived the 1997-98 Asian economic crisis. The saving grace for Malaysia was that Dr. Mahathir, for all his Third World and Islamic bombast, did everything necessary to ensure that economic relations with the West prospered while he postured.[107]

  Malaysia's search for prospective markets closer to home prompted Dr. Mahathir to seize the enormous opportunities offered by China's opening, once he was persuaded that the danger of subversion had passed with the formal end of the communist insurrection in 1989. On four trips to China in the 1990s with senior executives in tow as usual, he pushed an economic agenda that was open to all Malaysians, including ethnic Chinese. Malaysian companies invested US$3.1 billion in China between 1996 and 2003, while two-way trade ballooned to US$14.11 billion from US$3.76 billion in the same period.

  In pursuit of commercial returns, as well as regional solidarity, Dr. Mahathir also became an eager advocate of further expanding ASEAN. It had been enlarged to six countries with Brunei's membership in 1984, and Dr. Mahathir wanted to include the rest of the then ten Southeast Asian nations. Recognizing the economic potential of authoritarian states Vietnam, Cambodia, Laos and Myanmar as they switched from central planning to market economies, he correctly calculated they would appreciate his efforts to get them into ASEAN, by offering trade and investment opportunities. Malaysia duly became the biggest foreign investor in Cambodia and secured significant contracts in Vietnam and Myanmar.

  The withdrawal of Vietnamese forces from Cambodia in 1989 opened the door for Cambodia, Vietnam and Laos to join ASEAN. Vietnam was admitted in 1995. But Myanmar's proposed membership was internationally contentious, since the ruling military junta had ignored the decisive victory of democracy leader Aung San Suu Kyi's party in a 1990 election and also had an abysmal record on human rights, forced labour and the use of child soldiers. Dr. Mahathir's was the loudest Southeast Asian voice telling American and European critics, and even some within ASEAN, to mind their own business. ASEAN decided to admit the three remaining countries simultaneously. With Malaysia occupying the rotating chairmanship of ASEAN on its 30th anniversary in 1997, Kuala Lumpur played host and prepared to celebrate as the three became members and fulfilled the ASEAN founding fathers' dream of One Southeast Asia. Amid the preparations, Malaysia unveiled a new ASEAN logo of ten rice sheafs.[108] Unexpectedly, however, Cambodia rained on Dr. Mahathir's parade. After bloody, armed clashes between the ruling coalition partners, Phnom Penh was forced to wait until 1999 to join ASEAN.

  Despite his success in resisting Western pressure over Myanmar, Dr. Mahathir often stumbled in his Asian diplomacy as he sought to play on the world stage and neglected events in his own backyard. And despite his invocation of Asian values, his own failure to observe some of Southeast Asia's rituals and courtesies sometimes put him at loggerheads with neighbours. "He would make sensible suggestions at the ASEAN leaders meetings, but there was, in many cases, no follow-up," said Rodolfo C. Severino, a former secretary-general of ASEAN. Contradicting the Malaysian foreign policy priority list, Dr. Mahathir was more active in the OIC, the Non-Aligned Movement and other Third World forums than in ASEAN, Severino said.[109]

  Dr. Mahathir miscalculated as he followed up Myanmar's admission to ASEAN with an attempt to help bring about reconciliation between Aung San Suu Kyi and the country's xenophobic leadership. A close Malaysian associate, Razali Ismail, a retired diplomat who was appointed the U.N. secretary-general's special envoy for Myanmar, managed to get the two sides into secret, confidence-building talks in 2000.[110] Frustrated over their failure to move on to substantive issues, Dr. Mahathir wrote more than once to Than Shwe, the five-star general who was head of state, and visited Myanmar in 2002.[111] "Very interested in finding a solution to support Myanmar," as a senior Malaysian official put it, and presumed to be carrying a bagful of goodwill, Dr. Mahathir encountered a clique of hidebound generals impervious to a sales pitch, whether from the East or West. Denied a meeting with Aung San Suu Kyi,[112] he abandoned his mission and began vilifying the junta for being an "embarrassment to ASEAN". Engaging in the sort of sniping he once rejected as interference, Dr. Mahathir even raised the possibility that the group might expel Myanmar.

  While Dr. Mahathir was one of the strongest proponents of an ASEAN Free Trade Area (AFTA) that was formed on Thailand's initiative in 1992, he did AFTA no favours when it came to self-interest. With his national car project endangered by the Asian economic crisis, Malaysia sought exemption from the requirement to reduce tariffs on imported foreign vehicles and those assembled locally from imported kits. After heated debate and with great reluctance, AFTA changed its rules to accommodate Malaysia,[113] allowing it a further six years of protection. While the move had little practical effect, it encouraged the Philippines to follow suit with some petrochemical products and reinforced the widespread impression that ASEAN was not serious about economic integration.

  Malaysia took a deep interest in new institutions that were fashioned for Asia after the Cold War, getting involved in the shape and composition of the ASEAN Regional Forum (ARF) on security that was formed in 1994. While government rhetoric conveyed the message that Malaysia was quite at ease with Beijing's rising military profile, Kuala Lumpur sought to use ARF to both engage China and encourage it to play by international rules. With a membership that included China's rivals — the United States, Japan, Russia and India — ARF would, in Malaysia's calculations, balance China if it tried to be more assertive.[114]

  When it came to forming a counterpart economic organization, however, Dr. Mahathir got into a diplomatic dogfight that contributed to his legend. Australia in 1989 proposed the Asia-Pacific Economic Cooperation (APEC) forum, with a core membership of Australia and New Zealand, the United States, Japan, South Korea and the six ASEAN states. The following year Dr. Mahathir launched his rival East Asia Economic Caucus (EAEC), whose proposed membership was limited to ASEAN and the rapidly integrating economies of Northeast Asia: Japan, China and South Korea. Both had their origin in the worrying state of the global economic system, spreading protectionism and a declining U.S. commitment to the values of multilateral, non-discriminatory trade. But they represented vastly different visions: Australia was driven by fear of being shut out if the world fractured into three competing economic blocs, while Malaysia was inspired by a pan-Asian nationalism to create an East Asian identity.

  Ironically, Australia outmanoeuvred Malaysia with the sort of culturally sensitive, deft diplomacy that Dr. Mahathir insisted was alien to the Australians and which made them unsuitable participants in Asian affairs. Knowing that ASEAN held the key, the Australians addressed the group's primary concern, that APEC should not undermine ASEAN's strength and cohesion. They agreed that the annual APEC ministerial meeting would be held in an ASEAN country every second year, and that the secretariat would be located in Southeast Asia — Singapore, as it happened. Crucially, Canberra dispatched one of its most seasoned diplomats, Richard Woolcott, as the prime minister's emissary to sell the concept in each ASEAN country. Having served in
the key ASEAN capitals, Woolcott headed first for Jakarta, where he respectfully sought "advice and guidance" from President Suharto, acknowledged as ASEAN's unofficial leader. The reward for this "proper show of respect" was an expression of Suharto's willingness to think about the idea, which was enough for Woolcott to parlay into ASEAN endorsement by the end of his shuttle.[115]

  By contrast, Dr. Mahathir had not consulted any of his fellow ASEAN members when he floated the idea of an East Asia Economic Group, as it was first called. He also made the mistake of suggesting that it should become "an economic bloc" to "countervail the other economic blocs", which he identified as the North American Free Trade Agreement and the European Economic Community. Later, he backtracked and said that "it should not be a trade bloc". Still, the damage was done. Livid over Dr. Mahathir's rudeness, Suharto vetoed the Malaysian plan, making known his displeasure. Other ASEAN member-states were also concerned about the lack of consultation, and some had misgivings about Dr. Mahathir's anti-Western tone.[116] Australia sided with the United States in opposing an Asians-only grouping, fearing it would draw a line down the Pacific, and Washington pressured Tokyo not to join. The proposal was watered down to the EAEC — a caucus rather than a group, which detractors derided as a "caucus without Caucasians" — and effectively buried within APEC.

  Even after the first APEC ministerial meeting had been held in Canberra, the Malaysians made a serious effort to kill the fledgling process. They arrived at an ASEAN gathering in the East Malaysian city of Kuching in early 1990, arguing that ASEAN should withdraw support for APEC. Indonesia decisively blocked the Malaysian challenge.[117] Protesting over what he called broken promises not to institutionalize APEC, Dr. Mahathir boycotted the first meeting of the group's leaders, hosted by President Clinton in Seattle in 1993. While Dr. Mahathir won an apology from Australia's Paul Keating for calling him "recalcitrant" over his no-show, Dr. Mahathir misjudged where APEC was heading. When Suharto, encouraged by Australia, offered to host a second summit the following year, turning it into an annual event, Dr. Mahathir had little choice but to attend. In what amounted to a Javanese command, Suharto said, "I will invite him and I expect that he will come".[118]

  Long of memory and reluctant to retreat, Dr. Mahathir found a way over the next decade to both revive his EAEC and take revenge on Australia for his loss of face. He directed Malaysian diplomacy to the goal of excluding Australia as much as possible from regional political life. By denying Canberra a seat at the first biennial Asia-Europe summit in 1996, Dr. Mahathir was also able to restrict the Asian side to the potential members of his EAEC: ASEAN plus China, Japan and South Korea. While hosting the annual ASEAN summit in 1997, Malaysia invited the leaders of China, Japan and South Korea to meet with those of ASEAN together and individually. They continued to meet annually in a forum known as ASEAN + 3, which differs only in name from EAEC. ASEAN + 3 activities proliferated, forming the basis of an East Asian community along the lines Dr. Mahathir envisaged.

  So keen was Dr. Mahathir to pursue his vendetta against Australia that he actually harmed ASEAN. In 2000, again using the ASEAN consensus rule that allowed just one country to exercise the right of veto, Malaysia blocked a plan to link Southeast Asia with Australia-New Zealand in a free-trade area. Malaysia did this against the recommendation of an ASEAN task force, which said such a union was "not only feasible but also advisable".[119] As one independent study noted, Australia, in particular, "was made to feel an outsider and a supplicant", despite being a longtime supporter of ASEAN and a contributor of emergency financial assistance to Indonesia and Thailand during the 1997-98 regional economic crisis.[120]

  As Southeast Asia, stripped of much of its economic lustre by the crisis, tried to regain its vitality, it went without some of the US$25.6 billion in gains that the task force estimated would have accrued to the ASEAN side from a free-trade area over ten years. Australian and New Zealand traders, investors and business executives had alternatives, especially the huge markets of Northeast Asia and South Asia, and "They prospered as ASEAN struggled to recover."[121]

  Unfazed by such self-inflicted damage, Dr. Mahathir maintained his ban on Australia's further participation in ASEAN-led regionalism until he retired, justifying it on racial and cultural grounds, a position adopted by no other Asian government. He described Australia, whose 20 million population included six million migrants from about 200 countries, as "some sort of transplant from another region". It was "basically European", he asserted, and could be part of Asia only after 70 per cent of its population was Asian. On another occasion he said, "Australia and New Zealand are not East Asian countries. Geographically maybe they are, but in terms of culture they are not...".[122] "Some of the Asian culture", he said, "should be accepted if not adopted" by the Australians.[123]

  President Suharto felt the same way about Dr. Mahathir, that he should acknowledge the culture of the "Malay world" and be more respectful to a neighbour, namely Indonesia. Historically, Indonesia and Malaysia have a special relationship rooted in serumpun, similar stock, and the idea of blood brotherhood. After Confrontation, in which Indonesia tried to crush the new-born Malaysia militarily, reconciliation was effected gradually in the 1970s through Jakarta's pragmatic policies and Kuala Lumpur's willingness to concede primacy to the Indonesians and their new leader, Suharto, who had replaced the bellicose Sukarno.[124] Malaysia was prepared to play adik, little brother, to abang, big brother, Indonesia.

  Dr. Mahathir, the nationalist, put a swift end to that. His initiatives on South-South cooperation, Islamic policies, peacekeeping, resuscitating the Non-Aligned Movement and active politicking at the U.N. clashed with Indonesia's own ambitions to return to international affairs after a period of dormant diplomacy.[125] Fluent in English, articulate and familiar with global institutions, Dr. Mahathir pressed his advantage at Indonesia's expense. His performance at the Non-Aligned Summit in Jakarta in 1992 in upstaging Suharto, the taciturn host, incensed the Indonesians. They began calling Dr. Mahathir a "little Sukarno", and not just for the fun of it. His Malaysia posed a challenge to Indonesia's regional leadership "on the back of the same anti-Western crusade that is identifiable with Sukarnoism".[126]

  The depth of the antipathy between the two men imposed serious strains on ASEAN, since the two countries were often acknowledged as the cornerstone of the organization. "We could contain it below the leaders' level," said a senior Southeast Asian official, who was deeply involved in ASEAN affairs. "A casual observer would hardly notice it."[127] Looking back on his relationship with Suharto, Dr. Mahathir was unrepentant. "I wasn't rude to him or anything, but I went my own way," he said. "I am not going to be treated like...a little brother."[128]

  Singapore's elder statesman Lee Kuan Yew levelled precisely the same accusation at Dr. Mahathir's Malaysia: seeking an abang-adik relationship with the city-state that was once part of the federation. In truth, their relationship was characterized by interdependence, since they remained connected by historical, familial, cultural, political, economic and strategic ties, not to mention the pipeline that carried vital supplies of Malaysian water to the republic.[129] "When non-vital interests were at stake, we were prepared to humour abang, but not when adik had legitimate interests to defend...," Lee wrote in his memoirs.[130]

  Having clashed directly with Dr. Mahathir in Parliament in the old days, Prime Minister Lee initiated a dialogue with him when Dr. Mahathir became deputy prime minister "to clear away the debris of the past". It seemed to work. As prime minister, Dr. Mahathir exchanged visits with Lee and they quickly resolved a number of issues. Although spats occurred fairly often, Lee noted that on his retirement in 1990 he had made more progress solving bilateral problems in nine years with Dr. Mahathir than in 12 years with his two predecessors.[131]

  Yet relations were souring even as Lee stepped down. An agreement he signed the day before leaving office, covering the joint development with Malaysia of portions of the Malayan Railway land that stretched some 20 kilometres int
o downtown Singapore, would unravel. Lee had negotiated with Malaysian Finance Minister Daim Zainuddin, who had been designated by Dr. Mahathir to settle the terms. While the Singaporeans regarded it as a legally binding agreement, Dr. Mahathir repudiated it later on the grounds that it was unfair.

  After Goh Chok Tong succeeded Lee, discussions about several important matters went nowhere — the long-term supply of water, the relocation of a Malaysian railway immigration checkpoint in Singapore, the timing of pension payments to peninsular Malaysians who had completed employment contracts in Singapore, and Malaysia's request for a new bridge to replace the causeway linking the two countries. Citing environmental concerns, Malaysia in 1997 banned the sale of sand to Singapore, which needed vast quantities over the coming decades to meet its reclamation plans. The following year Kuala Lumpur, without explanation, banished Singapore air force planes from Malaysian airspace, an inconvenience for training and search and rescue operations. Friction increased against the background of a massive Malaysian armed forces modernization and buildup that went some way to reducing Singapore's overwhelming military superiority.

  After two particular incidents, Dr. Mahathir had basically given up on Singapore. He was upset when his security services uncovered a Singaporean spy ring in 1989, arresting five Malaysian military officers and their two Singaporean handlers.[132] Dr. Mahathir's first official meeting with Goh in Singapore in 1990, soon after he assumed the Singapore leadership, also went badly, though it was not apparent at the time. Dr. Mahathir subsequently complained that the new prime minister kept him waiting. The Singaporeans denied it, and said Dr. Mahathir's real beef was that Goh did not go downstairs to greet him but waited in his office, which was his normal practice. Regardless, it was enough to help put Malaysia-Singapore relations in the cooler for the rest of the decade. Dr. Mahathir delegated Foreign Minister Syed Hamid Albar to receive and farewell Goh on subsequent official visits.[133] As Senior Minister in Goh's cabinet, Lee Kuan Yew travelled twice to Kuala Lumpur in just over a year in an attempt to break the stalemate. But while he was able to sign a "skeletal" agreement in 2001, none of the main issues was resolved.[134] Singapore concluded that progress was unlikely while Dr. Mahathir was in power.[135] His announcement in 2002 that Malaysia would unilaterally build half a bridge to connect at the mid-point of the causeway captured the essence of the troubled bilateral relationship.[136]