The Guillotines of Power: Why Mahathir Prefers Anwar In Jail, Part 1

Anwar’s insatiable avidity for power had been on UMNO’s map for quite a while.

Raggie Jessy

When Mahathir assumed power in 1981, he saw fit to curtail freedom of expression across the board. His subordinates sang praises of his policies, while those who didn’t bemoaned their fate before guillotines in anguish. In a sense, you could be critical of Mahathir, but not too critical. If you were, you’d find yourself in the doghouse gnawing on skeletons from your closet.

Let me rephrase all of that just for your convenience.

Back then, if you messed with Mahathir, he’d mess with you. The situation would then get very messy, right up to a point where you’d crumble under the weight of your own mess. And once you succumbed to the pressure, Mahathir would sweep you right out the door, along with all the mess you created.

And back in 1996, Anwar began messing with Mahathir.

Everyone who was anyone in UMNO knew Anwar. He begrudged Mahathir his rank long enough to dance on the razor’s edge. It wouldn’t surprise me one bit if you found him rummaging through the old man’s garbage for smut. He’d then spin unbelievable yarns of an uncanny old man with a passion for men. Well, the tortoise got to the hare on that first.

Now, Anwar is quite the brash and presumptuous operator. He had a knack for taking circuitous routes in putting two and two together. That is to say, when Anwar was suspicious of someone or something, he wouldn’t act within his province. Rather, he’d work under the counter in a roundabout manner, scheming and crafting manoeuvres to take the bull not by its horns, but by its balls. And that pretty much pissed people off.

And that pissed Mahathir off.

You see, Mahahir had always run a tight ship. He imbued a sense of peril among subordinates, who always had another think coming whenever they called into question his integrity. To appear courageous and impeccable, Anwar knew that he’d have to stick out from the crowd. He began pursuing avenues to sully Mahathir’s reputation at all cost, even if it meant casting aspersions at his protégé. And he knew that he’d have to get away scot-free.

Put differently, Anwar needed to let his henchmen from UMNO know that he was virtuous and someone to be reckoned with. He needed his subordinates to believe that Mahathir was no exception to the rule of law, and that two plus two always came to four in his books. In essence, Anwar needed to sail under false colours at Mahathir’s expense.

With that, he began digging into what may have been a complicit confederacy between Eric Chia and Mahathir. That is to say, he was about to fix Mahathir’s wagon.

1. The Mahathirian Economy

I must admit though, that Mahathir juggled pecuniary circumstances with the dexterity of a seasoned economist. Basically, he had a rule; as long as the races were reasonably adequate, they’d avert from minding one another’s business. At least, I think he had such a rule. And to draw up articles that circumscribed this rule, Mahathir ushered in the likes of Daim Zainuddin, who just about told the maverick of a statesman how and where he’d strike gold.

Mahathir’s economy was vigorous, with growth averaging at 7% in the 90’s. GDP per capita rose from RM 1,090 in 1970 to RM 14,924.3 in 2000 as Mahathir lured human resource from plantations to manufacturing. In essence, the economy hinged on key policies that paid due attention to technology, knowledge and research.

Mahathir institutionalized the concept of Malaysia Incorporated 2 years after being sworn in as Prime Minister. Malaysia Incorporated enabled the country to function as a business conglomerate. The move involved massive restructuring exercises and privatization initiatives, meant to spur the economy by mitigating fiscal burdens from national coffers.

The effort paid off when Foreign Direct Investment (FDI) began zapping in like greased lightning. In principle, Mahathir believed that debt begets wealth when effectively administered with apposite resources. And like any other company, Malaysia’s economy was pivoted on long term debt management.

The ensuing cornucopia of employment opportunities improved living circumstances among lower income segments, the upshot of which was the burgeoning of literacy rates from 58.1% in 1970 to 87.4% in 2000. The span was pronounced by a plunge in urban and rural poverty, while the middle class more than doubled in constitution since the 70’s.

But dissension began creeping in and took refuge in the hearts of average breadwinners from the middle income segment. Chiefly Malays, they felt disgruntled at being cozened into a sense of repletion by a Government they pinned their faith on. It was ironical indeed, considering that they comprised of an order that stood to benefit most from the NEP. Instead, they now felt deprived of their ‘birthright’. Put differently, they felt that the government owed them more favours than they were granted.

You see, there was more smoke billowing out from the corridors of power than a chimney could afford. As much as Mahathir seemed committed to Razak’s New Economic Policy, his administration was smitten by a culture of patronage. There appeared to be disproportionate gains trailing to UMNO affiliated individuals and enterprises. That is to say, capitalists were fast delineating Malaysian politics with a culture of elitism, as government linked companies began devouring more from the economic pie than they could chew.

2. The one where Mahathir saved the day

In July 1997, financial speculators laid a gambit on Malaysia’s currency right after the Thai Baht was devaluated. Caught unaware, Malaysia plunged into what may have been the worst among recessions to have hit the nation since independence. Stock and currency brokers admonished their clientele against clinging on to white elephants as ratings plummeted from investment grade to junk by the fourth quarter of the year.

When KLSE’s (Kuala Lumpur Stock Exchange) composite index plunged to floor at a historic 262 points on the 1st of the month September, 1998, a significant faction of Chinese businesses were left whole, while Bumiputra segments to the economic quotient scrambled. The Gross Domestic Product (GDP) shrivelled by 8.4% in the first six months of 1998, with the remaining quarters witnessing a negative growth of 10%. The future seemed bleak, with the economy hanging on a thread and balancing acts anchored on weak fundamentals.

Mahathir was quick with evasive manoeuvres. He jolted financial institutions worldwide, particularly the International Monetary Fund (IMF) when he pegged the ringgit against the US dollar. But his derring-do relieved the currency of further speculation. He went on to assemble the National Economic Action Council (NEAC), which began contemplating a non-Bumiputra and foreign partake in local companies with larger stakes.

The proposition was aimed at addressing the decline in Bumiputera connexion with publicly-listed stock, as ownership plunged from 29 percent in June 1997 to 27 percent in February 1998. The market value of Bumiputra owned equity had dwindled 54 percent a year post-crisis.

Conversely, a sizeable proportion of Chinese companies persevered via restructuring exercises, particularly those with diverse business interests. The Lion (William Cheng) and Sungei Way (Jeffrey Cheah) groups retained substantial portions of their business concerns, while several groups emerged financially stronger post crisis; incepted as a construction company, the YTL group (Francis Yeoh) diversified into power generation and amassed MYR 5 billion in cash early in 2001 alone, which supplemented their financial persuasiveness.

Mahathir turned a deaf ear to NEAC’s proposition and began bailing out Bumiputra enterprises on the brink of collapsing. Should his regime have taken heed of NEAC’s proposition, cash-rich Chinese enterprises would have gained leeway towards recapitalizing or gaining acquisition of Bumiputra companies with straitened circumstances.

Put differently, should Mahathir had knuckled under pressure to allow a market driven economy, we’d have retrograded to an era reminiscent of the 60’s, where the communally inclined and egotistical Chinaman looked down over picket fences with wooden smiles as the Malays grappled with uncertainty. Now, that would have sent 26 years of blood, sweat and tears up in smoke. That is to say, every effort made to improve Bumiputra partakes of the economic pie via the NEP would have been in vain.

Well, you pretty much get the idea. Speculators screwed the economy up, while Mahathir did what he did best; he anchored the ringgit on granite while protecting the Bumiputra segment from exploitation. And quite frankly, he did a hell of a good job.

3. The one where Anwar stole Mahathir’s thunder

Anwar’s insatiable avidity for power had been on UMNO’s map for quite a while. During the 1998 UMNO General Assembly, both Anwar and Zahid Hamidi attacked the Government over what they perceived to be a culture of nepotism and cronyism that had seeped into mainstream politics. Rhetoric they spewed seemed uncannily similar to that articulated by reformists in Indonesia, who had overthrown Suharto just a month earlier.

Anwar alluded to the mores of bailing out enterprises affiliated with the government. He attributed corruption to such advocacy, appearing to be quite the liberalist as he contended in favour of an economy bereft of Government intervention, much like laissez faire. While many taciturnly espoused the contrarian position, almost nobody was willing to set Mahathir’s hoofs on fire from the podium. Nobody except Anwar, who began firing shots arrows Mahathir’s bows over a culture of nepotism and cronyism he accused his boss of sanctioning.

Anwar’s left-field rhetoric was unorthodox, particularly since it emanated from a minister associated with the ruling UMNO. His apparent candour and charisma struck a chord or two with many who longed for an end to UMNO’s culture of condescendence and preponderance. As it seemed, Anwar quickly became an enigma to Mahathir, while his adherents were milking on him to guide them to the sweet land of salvation and vindication.

But Anwar’s timing was dubitable; the country was faced with a crisis that threatened to plunge the nation into a recession it may never have recovered from.

Granted, a culture of nepotism and cronyism had permeated through the corridors of power. But any Government would have resorted to extreme manoeuvres in forestalling the digression of its currency and safeguarding national interests when attacked by currency speculators. And that’s precisely what Mahathir did. From that frame of reference alone, Mahathir did what he did with the deftness of a true statesman.

That said, Mahathir had Malaysia anchored on weak fundamentals. Circumstances were dire, because Malaysia thrived within a bubble always on the verge of collapsing. In principle, Mahathir set the economy on steroids, while none of his subordinates dared bring him around for fear of being given their marching orders. He was never acquiescent to politics of consensus, particularly where it concerned the economy.

And there’s a good reason for that. Mahathir bemoaned the cancer colonialists had plagued the nation with. To him, the British had spurred fissures that kept masses segregated over articles of faith decades post independence. With noble intentions, he set out to do what no leader had managed in the past; to bring Malays to the forefront of economic and technological supremacy. The only problem with Mahathirism was this; he set the NEP to overdrive.

Which brings me to my point; Anwar was right, in that Malaysia was moored on weak fundamentals. Mahathir advocated a culture of business patronage that was of service to a select few. As Anwar had it, these practises gave rise to economic mismanagement and the misappropriation of funds. The only problem with Anwar was his timing, never mind the why and wherefore.

So on one hand, Anwar attempted to grab Mahathir by his balls when the economy was at the verge of collapsing, while on the other, Mahathir did what any statesman would have done to safeguard national interests, particularly when under attack by currency speculators.

Rest assured, Anwar never really did get to grab Mahathir’s balls, while his protégé was closing in on him…slowly, but surely.

Read Part 2 at: http://www.malaysia-today.net/the-guillotines-of-power-why-mahathir-prefers-anwar-in-jail-part-2/