Malaysian Maverick: Mahathir Mohamad in Turbulent Times Read online

  Despite being aware of corruption's corrosive nature, Dr. Mahathir had given higher priority to realizing his vision than ensuring honesty and integrity in the people who were supposed to deliver it. Long before he climbed the political ladder, Dr. Mahathir wrote a lengthy essay in which he described corruption as a "disease" and a "crime" that could weaken a country and allow it to be conquered. He blamed corruption, in the form of regular payments to local chiefs, for the fall of the Malay states into British hands in the nineteenth century. It was not sufficient to condemn corruption, he said; society should actively "cleanse itself of corruption".[14]

  But once in the political fray, Dr. Mahathir compromised. As deputy prime minister, he had tried to persuade Prime Minister Hussein Onn not to prosecute for corruption Harun Idris, a former chief minister of Selangor, who helped Dr. Mahathir return to UMNO. Hussein, with a reputation for rectitude, sent Dr. Mahathir packing — and Harun to trial and jail.[15] As prime minister, Dr. Mahathir had promised to instill the fear of God into the hearts of civil servants on the take,[16] but again his actions belied his threat. He held nobody accountable for the half dozen financial scandals that cost Malaysian taxpayers tens of billions of ringgit during his time in office. Even friends noted his backsliding. Zainuddin Maidin, an associate from Kedah who was later appointed a deputy minister, said Dr. Mahathir had shown "extra anxiety not to lay himself open to accusations of abuse of power" by requesting guests not to give gifts at his second daughter's wedding in 1982. But ten years later, said Zainuddin, Dr. Mahathir had exposed himself to criticism over his children's participation in business, with some observers seeing "similarities" between him and Indonesia's President Suharto.[17]

  Dr. Mahathir's stock response was that he lacked evidence to prosecute. "If you show us the proof, we will surely take action," he said a few years after taking office,[18] a line he used up to and beyond retirement. While it was undoubtedly difficult to prove corruption, Dr. Mahathir rarely indicated that exposing and punishing the corrupt was a serious objective. Indeed, he frequently sent signals to the contrary, indicating that meeting ambitious growth targets and raising the status of bumiputras was paramount. "I don't want the Malays to ask too many questions about the wealth of their fellow Malays," he once said. "Why don't we ask how the non-Malays acquired their wealth?".[19] Dr. Mahathir retained the services of a number of senior officials and ministers considered by the public to be corrupt, prepared to tolerate their perceived ethical flaws as long as they performed their assigned tasks. He rejected demands by the opposition and non-governmental activists that he give the Anti-Corruption Agency independent status, preferring to keep it answerable to him.

  At the UMNO General Assembly in 2000, 19 years after he became president, Dr. Mahathir had broken down and wept over "money politics", which put a price on almost every party post. He explained later his "one great fear" was that a prime minister might come to power through corruption, and therefore "everything possible" should be done to ensure that only "clean leaders" were elected. Reminded that some vice presidents and Supreme Council members were suspected to have bought votes to get elected, Dr. Mahathir protested that "I cannot work on the basis of accusations. I must have clear evidence."[20]

  In no time at all, Prime Minister Abdullah managed to obtain some of the evidence that had eluded Dr. Mahathir. Abdullah was aware that his anti-corruption campaign had raised expectations, but that a sceptical public doubted the authorities would net more than the usual ikan bilis, little fish, and reel in some recognized sharks. The separate arrest of Eric Chia, a prominent businessman, and Kasitah Gaddam, the Minister of Land and Cooperative Development in Abdullah's Cabinet, was meant to answer the sceptics. Chia was charged with criminal breach of trust when he was managing director of state-owned steelmaker Perwaja Trengganu Sdn. Bhd., while Kasitah was accused of abusing his position when he was executive chairman of Sabah Land Development Board. Both pleaded not guilty. Although their appearance in court only days apart was given maximum exposure in the local press and became a minor sensation, their prosecution in early 2004 raised doubts about Abdullah's commitment to a serious clean-up.

  Chia was a close friend of Dr. Mahathir, who had personally recruited him in 1988 to run Perwaja, a pillar of Malaysia's troubled venture into heavy industry. Not long after Chia resigned in 1996, it was revealed that the company was insolvent with massive debts, and the Anti-Corruption Agency was called in to investigate. That the aging and ailing Chia was being charged eight years later looked odd, to say the least. In addition, the amount he was accused of diverting to a non-existent company in Hong Kong, RM76.4 million, was a fraction of Perwaja's losses and would not be able to explain what went wrong. As for Kasitah, he was an appointed senator and the least known member of the Cabinet, from Sabah state in East Malaysia, and his alleged offences also dated back a decade.

  The convenient indictment of Chia and Kasitah, while no doubt welcomed by the public as a sign that the government was actually cracking down on corruption, also reinforced the impression that the Anti-Corruption Agency served a political purpose. And the disclosure by one of Abdullah's ministerial colleagues that 18 more high-profile cases were awaiting action only strengthened that suspicion. It appeared that translating investigation into prosecution might still depend on the advantages, if any, it offered to the political leadership.

  While Abdullah deserved the sobriquet Mr. Clean in the sense that he had not enriched himself, his family and friends had benefited from the system of patronage he was supposed to be dismantling. A brother, who was in the catering business, had received a 15-year contract for the armed forces canteens when Abdullah was defence minister. Recently, the brother had been awarded the privatization of the national airline's catering service, with reports of a generous, guaranteed return for nine years. Abdullah's Cambridge-educated son, Kamaluddin, was identified as one of the country's fastest-rising corporate figures. According to a local business magazine, Kamaluddin, 36, the major shareholder in rapidly-expanding Scomi Bhd., a publicly listed oil and gas supplies services company, was the tenth wealthiest Malay in 2004, with assets of more than RM320 million.

  Abdullah also had another reason to divert attention elsewhere at this time: serious U.S. allegations that Scomi Precision Engineering Sdn. Bhd., a company part-owned by Kamaluddin, had produced centrifuge components suitable for developing nuclear weapons. The Malaysian police and Abdullah were quick to deny the accusations, after they appeared in the international media in February 2004. They said Scomi Engineering did not have such capabilities, and had fulfilled a contract believing it to be lawful. But their claims carried little credibility. The Pakistani bomb-maker who ran a nuclear black market network, Abdul Qadeer Khan, had made several visits to Malaysia and logically would have met top officials. Kamaluddin also had close relations with the Dubai-based Sri Lankan, Buhary Syed Abu Tahir, described by President George W. Bush as the network's "chief financial officer and money launderer". Despite a clear conflict of interest — given his position as home affairs minister in charge of the police as well as prime minister — Abdullah ignored calls for an independent inquiry.

  Much more substantive were Abdullah's economic-policy forays, venturing where angels had long feared to tread: close to Dr. Mahathir's toes. Abdullah indefinitely postponed the construction of a RM14.5 billion electrified, double-track railway line that was to have stretched the length of peninsular Malaysia. On the face of it, the decision was straightforward: Facing a nagging budget deficit, the government chose to shelve the deal, which would have been Malaysia's largest privatization venture, as it included the sale of the country's unprofitable state railway company. But this particular deal had sensitivity written all over it. Dr. Mahathir had approved the contract only days before his exit, giving it to a consortium led by the listed conglomerate, Malaysia Mining Corporation Bhd., which was controlled by a favoured friend, Syed Mokhtar Albukhary. Domestic critics contended that the proposed railway would not be c
ommercially viable and would strain the government's finances, while China and India protested on other grounds: Kuala Lumpur earlier had signed letters of intent with units of their state rail companies and Malaysian partners to build the railway.

  While government officials insisted that Abdullah's flip, following Dr. Mahathir's flip-flop, was not directed at any particular person or company and did not represent a rejection of Dr. Mahathir's policies, business executives and political analysts read it otherwise. Budget constraint was certainly a valid concern: After six straight years of deficit spending, Dr. Mahathir had left the country bleeding red ink. Overspending reached its peak near the end of his tenure, when the government blew almost its entire RM110 billion development budget for 2001-2005 in the first three years. In his last budget speech, Dr. Mahathir added a further RM50 billion for development in 2004-2005.[21] Inheriting a budget deficit for 2003 of 5.5 per cent of gross domestic product, considered worrying by some officials, Abdullah vowed to narrow and gradually close the gap.[22]

  But balancing the books was also an excuse for Abdullah, who was bent on jettisoning the entire concept of mega-projects, which symbolized the excesses of the Mahathir era. The railway package had another strike against it, a fatal one, as far as Abdullah was concerned. Like most privatization projects granted under Dr. Mahathir, it had been negotiated privately on unknown terms, without an open bidding process and public disclosure when the award was pending.[23] And like many of the others, it had gone to a businessman widely perceived to be a crony, one who had won a total of RM22 billion in government infrastructure contracts in the past six months.[24] His credibility on the line, Abdullah bit the bullet.

  A few weeks later, Abdullah cancelled another privatization venture awarded to Syed Mokhtar: a 60 per cent interest in Southeast Asia's biggest hydroelectric dam, Bakun in Sarawak, which carried a RM6.4 billion price tag, down from the originally projected RM15 billion. Although the dam would go ahead because construction had started, the "think big" credo at the heart of Dr. Mahathir's philosophy was out of fashion, if not dead. "Never mind that I may not build great monuments or glittering cities," Abdullah subsequently told a business group.[25] He said Malaysia needed to return to the basics of economic development, starting with agriculture and agri-based industries.

  In another initiative to boost his popularity, Abdullah ordered a searching inquiry into the police force, a move that quietly addressed the wider issue of "institutional degradation", as regional analyst Manu Bhaskaran termed it. Public unhappiness over the performance of the police had long given way to disgust and resignation. At the top, the force had been politicized after serving the same party, UMNO, for more than 40 years, while at street level it had proved ineffective in stemming a rising tide of crime that included everything from murder to rape and armed robbery. As foreign residents complained about a growing sense of insecurity, locals noted an increase in police payoffs, violence and extra-judicial killings.

  To indicate he meant business, Abdullah appointed a rarely invoked royal commission, headed by a judge and given sweeping investigative powers, to carry out the review. But the terms of reference contained no mention of corruption, and focused only on general issues such as "the role and responsibility of police in implementing law", organizational structure, and human resources needs. The overwhelming majority of the 16 members of the commission were close to the government or UMNO. They duly delivered a report that savaged the police force, though not until Abdullah had safely navigated his general and party elections.

  The spotlight on the police inevitably drew critical attention to other institutions and services that had deteriorated over time. Other sections of the bureaucracy, particularly the education, immigration, customs and transport departments, had slipped. The Election Commission, nominally independent but located within the Prime Minister's Department like the Anti-Corruption Agency, functioned as an arm of the government. Parliament, where the National Front habitually held a two-thirds majority that enabled it to amend the Constitution at will, appeared to be an empty shell, poorly attended by elected members and given little chance to scrutinize vital legislation. Saddest of all, Malaysia's once proud and independent judiciary had fallen into international disrepute after a head-on clash with Dr. Mahathir.

  Although he conspicuously took the high moral road in distancing himself from Dr. Mahathir, Abdullah was motivated in large measure by self-interest: no less than political survival. Planning to call an early general election, he needed to win handsomely to face UMNO and confirm his place as president of the party. If he attended UMNO's General Assembly weakened or wounded in any way, he might be challenged for the party's leadership, and there was no guarantee what might happen if factional fighting convulsed the party. With vote buying endemic in UMNO, Abdullah lacked an established financial base if he were tempted, uncharacteristically, to play the money game.

  Abdullah's electoral imperative was not just to lead the National Front to another victory. He could do that with minimal effort, since the opposition was not strong or unified enough, and did not have the resources to halt the entrenched, multi-party juggernaut. To secure his position as prime minister and not be considered a seat warmer for some ambitious UMNO rival, however, he needed to recover the support of the Malay majority that was lost in the last general election, after the persecution of Anwar Ibrahim. He had to show that UMNO once again spoke for the Malays. And, to do that, he must abandon some of Dr. Mahathir's unpopular predilections, if not Dr. Mahathir himself.

  In the contest for Malay support with the opposition Parti Islam Se-Malaysia (PAS), Abdullah held a significant personal advantage over Dr. Mahathir, who had been demonized by the more-religious elements. From one of the most respected Muslim families in Malaysia — his father, grandfather and great grandfather were all prominent Islamic leaders,[26] and he held a degree in Islamic studies — Abdullah was an elusive target for PAS's conservatives. He was able to lead prayers, a significant symbolic act that Dr. Mahathir was unable to do — in fact, he led prayers for the deceased PAS leader Fadzil Mohamad Noor in 2002[27] — and his less adversarial style was more effective and harder to counter. He did not brand PAS leaders "liars" and "hypocrites", as Dr. Mahathir had, and nor did he stage frontal attacks on the ulama. In political terms, when the competition was fiercest for the hearts and minds of the Malay community, PAS had lost the ideal opponent in Dr. Mahathir. Abdullah, with his impeccable religious credentials and sense of restraint, was worrying.

  Creatively, Abdullah unveiled the concept of Islam Hadhari, a progressive form of the faith designed to undercut the appeal of PAS's allegedly more dogmatic and less tolerant Islam. Although vague in content — the religious affairs minister described it simply as a balanced approach to life — Islam Hadhari offered a set of principles for Muslims to participate successfully in a globalized economy. Closely associated with Abdullah and his clean reputation, Islam Hadhari was critical because Dr. Mahathir's strategy of trying to outbid PAS on religion had culminated in his declaration in 2001 that Malaysia was already an Islamic state. So it was a case of which Islam was the right Islam: the version pursued by UMNO, or that followed by PAS. With Anwar Ibrahim, the person who had given substance to UMNO's Islamic commitment, still in jail, Abdullah had to Islamize the party anew for its ongoing war with PAS.

  The injustice suffered by Anwar was another troubling issue bequeathed by Dr. Mahathir that required deft handling if Malay support were to be recouped. Abdullah could have eased the pressure and undercut PAS and its allies by granting Anwar's request for special parole to go abroad for medical treatment for a back injury, aggravated when beaten in custody in 1998. But in the process of consolidating his own position, Abdullah was reluctant to do anything that might revive Anwar's political fortunes, a calculation that also reflected a degree of personal animosity between them. Instead, Abdullah took the opposite tack to Dr. Mahathir and stopped badmouthing the incarcerated Anwar, hoping his silence and the passage
of time would allow the matter to fade away. After meeting secretly with Anwar's wife and learning that his condition was worsening, Abdullah ordered that Anwar be transferred from prison to a government hospital.[28] The Malaysian Federal Court's decision in September 2004, overturning Anwar's conviction for sodomy, lanced the boil, as one commentator put it, from Abdullah's standpoint: Anwar was free, but was not allowed to run for office for four years because his corruption conviction still stood.[29]

  But while Abdullah enjoyed the praise heaped on him by international human rights and legal organizations over Anwar's release, Dr. Mahathir seethed. He called a press conference and declared he was "mildly surprised" by the court's decision. The clearest indication that he was deeply upset, however, was the presence at his side of his wife and three of their children, a most unusual event.[30] Later, Dr. Mahathir said he still believed Anwar was guilty.

  With Malaysia's external relations, as in domestic affairs, the relaxed Abdullah found that a smile and a warm greeting went a long way. In the case of Singapore, Australia and the United States, a prime ministerial hand extended in friendship amounted to no less than a diplomatic breakthrough after Dr. Mahathir's prickly nationalism. Apart from the intrinsic value of being on polite terms with allies and neighbours, Malaysia realized practical gains by reducing the animus in contacts with them.

  Abdullah lost no time in making a courtesy visit to Singapore, signalling that he wanted an end the impasse in their relations. He suggested they settle the easiest of their differences first and not let the hardest hold the rest hostage. "We have to pluck some low-hanging fruits before the musang," a nocturnal civet cat, "comes and takes them away," he said. For Singapore, it was vindication of a decision taken years earlier "to sit things out" until Dr. Mahathir had departed.[31] The improvement in atmospherics opened the way for two-way strategic investments, with Temasek Holdings, a Singapore state-owned investment company, leading a surge of capital northward. Four months after Abdullah took over, his government approved Temasek's purchase of a 5 per cent stake, valued at RM1.6 billion, in national phone utility Telekom Malaysia.