Malaysia Worries Over Mahathir's Succession
International Herald Tribune
September 7, 1998
Thomas Fuller

Until recently, Malaysian officials had a stock response to businessmen asking why they should invest here instead of in other countries in the region. They would say that unlike many of its neighbors, Malaysia was stable. The country had a clear successor to Prime Minister Mahathir bin Mohamad.

All that changed last week with the abrupt dismissal of Mr. Mahathir's deputy, Anwar Ibrahim, a man who had come so close to being the country's top politician that for two months last year while Mr. Mahathir was traveling outside the country Mr. Anwar was given the title of acting prime minister.

Now, not only is Malaysia without a clear successor to Mr. Mahathir, but the prime minister, 73, has said he will not choose a new deputy until a party election in the middle of next year. In the meantime Malaysia is facing its most serious economic crisis since independence from Britain 41 years ago.

Other countries in the region — notably Thailand, Indonesia and South Korea — have selected new leaders since the onset of the economic crisis.

Allies of Mr. Mahathir — Asia's longest-serving leader — are now asking out loud whether he has taken on more than he can handle by firing Mr. Anwar and personally taking over the Finance Ministry last week.

"My view is that whoever wants to be minister of finance — that's a full-time job," Daim Zainuddin, a former finance minister and longtime friend of Mr. Mahathir's, told a group of foreign reporters Friday.

"Dr. Mahathir will find that it is going to be very tough to be minister of finance, prime minister and minister of home affairs," he said, referring to the prime minister's current portfolio.

"Every decision made is going to affect the nation," he said of the job of finance minister. "One wrong move — that's it. The whole economy may go down."

Mr. Daim, who was brought into the cabinet in June as a minister of "special functions," is the country's most successful businessman and is not believed to harbor larger political ambitions.

He said he felt "very tired" in his job planning strategies for combating the economic crisis, a post which Mr. Mahathir asked him to take.

Appointing a new finance minister is a difficult move for Mr. Mahathir because whoever is appointed to the powerful post may be perceived to be the prime minister's successor.

It's a decision, analysts say, that Mr. Mahathir may not be ready to make — partly because there are no obvious choices among the country's political leadership.

In the 17 years Mr. Mahathir has been at the helm, strong-willed politicians in Malaysia have either agreed with the prime minister's policies or been shown the door.

"In his private moments I think Dr. Mahathir feels very disappointed and sad," said a source close to the government who insisted on anonymity.

"He knows that time is limited for him. And the only person who could have taken over from him and got respect is Anwar," the source added.

In private conversations, politicians and analysts still wonder exactly why Mr. Anwar was fired.

He is under investigation by the police over allegations of campaign financing, sedition and sexual indiscretion. But Mr. Mahathir has refused to offer reasons for the firing, saying that the decision was made by the governing political party — tantalizing Malaysians into thinking that perhaps there was a yet unspoken reason for the move.

"We do not have to give any explanation over the matter," Mr. Mahathir said. "We find him not suitable — that is all."

The timing of the move against Mr. Anwar was also peculiar. It came as the country was preparing to host later this week thousands of athletes and spectators coming to Kuala Lumpur for the Commonwealth Games.

More importantly, Mr. Anwar's firing came two days after the country embarked on a radical experiment, banning the use of its currency outside its borders and fixing it at 3.8 to the dollar, thereby insulating its small, trade-dependent economy from the world's currency markets.

The new currency regime — closely watched by other countries hit by the economic crisis — will require constant adjustments and monitoring, central bank officials say. Yet Malaysia has no full-time finance minister and no central bank governor; Ahmad Mohamed Don, an ally of Mr. Anwar's, held the latter post before resigning in protest against the currency controls. His deputy left with him.

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