Daim Zainnudin Is Considered Pro-Business : Malaysian Leader Names Special Economy Minister 
International Herald Tribune
June 25, 1998
Thomas Fuller

Prime Minister Mahathir bin Mohamad moved Wednesday to shore up support for his own economic policies and dilute those of adversaries by appointing a familiar and powerful ally to his cabinet, former Finance Minister Daim Zainnudin.

Mr. Daim, a business-friendly government veteran who is considered the architect of much of Malaysia's corporate and economic model, was named minister with "special functions" in charge of economic development.

The functions were not immediately defined, but analysts said that his role would overlap with that of Finance Minister Anwar Ibrahim and that the move thus seemed likely to undermine or weaken the position of Mr. Anwar, who until now has been largely in charge of economic policy in the cabinet.

["The prime minister can now delegate economic tasks to two individuals," a source close to the cabinet told Agence France-Presse, adding that Mr. Mahathir now had a way to "check and balance Anwar," whose support has been growing in the governing party.

["I think it was a shock to Anwar," he said, adding that Mr. Mahathir made the decision to appoint Mr. Daim without consulting others.]

The appointment of Mr. Daim, who is credited with helping Malaysia emerge from economic recession during the 1980s as finance minister, follows Malaysia's first economic contraction in 13 years. The country's gross domestic product shrank 1.8 percent in the first quarter.

Mr. Anwar, who is also deputy prime minister as well as Mr. Mahathir's anointed successor, has often sided publicly with the austere measures recommended by the International Monetary Fund, and has tended, on such key issues as bank lending policy, to favor high interest rates

Mr. Daim, himself a successful businessman, is seen as more sympathetic to the plight of companies squeezed by the economic crisis. He has in recent weeks criticized banks for keeping interest rates high. Financial analysts and officials at Malaysia's central bank fear that lower rates could undermine the country's currency, the ringgit.

"Anwar wants to take the painful road, which is closer to the IMF approach: Let's close banks and companies which are not performing," said Abdul Razak Abdullah Baginda, executive director of the Malaysian Strategic Research Center.

"Daim's argument would be: Do not allow companies to go down. Find a way so that they are restructured and give them a new lease of life."

Mr. Daim's appointment also served to quash any doubt about Mr. Mahathir's position within his party, the United Malays National Organization, or UMNO — doubts that were raised after a raucous party convention over the weekend.

In what was seen as a jab at Mr. Mahathir's 17-year leadership, the head of UMNO' s youth wing, Ahmad Zahid Hamidi, had called for an end to cronyism and nepotism during a speech to delegates.

"Why were big loans to big businessmen approved so easily when small guys had to wait so long to get a loan of 50,000 ringgit?" ($12,500) Mr. Ahmad Zahid asked.

The prime minister responded the next day by posting hundreds of names of people who have won government projects in recent years, a list which included his accuser, Mr. Ahmad Zahid.

Before his appointment Wednesday, Mr. Daim served as both an adviser to the prime minister and as the executive director of the National Economic Action Council, formed in January to map out policies to combat the 11-month-old economic slump.

Copyright © 2006 the International Herald Tribune