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EIU N The Economist cmt
By web aNtu

7/12/1999 8:35 am Tue


The outcome of Malaysia's November 29th election was not exactly what
the doctor ordered. The prime minister, Dr Mahathir Mohamad, and his
ruling coalition, the Barisan Nasional (BN), won the impressive national
victory they had sought. But they lost votes in the Malay heartland,
which has always been the core of Dr Mahathir's support, and lost
control of a second state to the opposition. Despite this, the ruling
coalition seems in no danger of receding into the background, as have
other dominant (and often authoritarian parties) throughout Asia. The
same, however, cannot be said of the ever-more divisive Dr Mahathir. It
is now increasingly clear that Asia's longest serving elected leader
will not be able to cure what ails his government, or his country.
Ironically, then, Dr Mahathir's victory this week has likely paved the
way for the selection of a new prime minister in Malaysia, who may well
be in place before the end of next year.

The weaknesses in the government that were laid bare by this election,
serious as they are, should not overshadow the magnitude of the BN's
victory. By any normal political standard, Malaysia's opposition should
have been poised to make substantial gains in this election, if not win
it outright. Little more than a year ago Dr Mahathir had his popular
deputy, Anwar Ibrahim, arrested, tried and jailed on dubious corruption
charges-a process that was, at best, clumsily handled by the government
and, at worst, a display of shameful persecution by an authoritarian
leader anxious to silence his critics. Subsequent street protests rocked
the country, and caused many Malaysians, including some of the
government's stoutest supporters, to question its fairness in dealing
with Mr Anwar. Adding to the government's troubles was the deep 1998
recession, in which the economy--after nearly a decade of 9% annual
growth--saw GDP contract by a huge 7.5%. Finally, rising Islamist
sentiment in parts of Malaysia should also have damaged the fortunes of
a ruling coalition that has been steadfastly secular in its approach to

Despite all this, the BN managed to come away with a sizeable victory in
the election, capturing 77% of the seats (148 of 193) in the national
parliament. To a large extent, the powers of incumbency helped the
government do well. The election was called with little notice (to the
dismay of the opposition), and the press dutifully supported the BN.
Government officials also were not embarra#sed to use the power of the
purse to influence voters. Still, Dr Mahathir, who has been prime
minister for 18 years, understands Malaysians. His basic political
strategy--that Malaysia is best served by a secular, modernising,
racially-tolerant, pro- business government--is shared by the vast
majority of Malaysians. Add to this the fractious nature of the
opposition coalition--an uncomfortable mixture of Islamic
fundamentalists, pro-Chinese businessmen and unfocused political
reformers--and a victory for the BN was never in doubt.

The fault lines that emerged from this election, however, cannot be
entirely ignored. The largest party within the BN coalition, the United
Malays National Organisation (UMNO), saw its share of parliamentary
seats fall from 94 in the 1995 election to 74 this time. (Strong support
from Chinese voters helped to offset this.) The leading competitor to
UMNO for Malay votes, the Islamic fundamentalist Parti Islam sa-Malaysia
(PAS), increased its seats from eight to 27. More important, PAS, which
already controlled the state government of Kelantan, also captured
Terengganu. Add to this UMNO's generally poor showing in the heartland
Malay states and Dr Mahathir can hardly afford to be complacent about
the results. PAS's strong showing can also be interpreted as
confirmation of rising Islamic fundamentalism, another issue that Dr
Mahathir ignores at his own peril.

The issues, however, go deeper than party loyalties, which can shift
quickly. While Dr Mahathir made a persuasive case that he was the best
man to lead the country, the events of the past year have made many
Malaysians question basic a#sumptions. Malaysia has been among the most
successful of Asia's rising economies--more modern, more conservative
and richer than many of its neighbours. Most Malaysians a#sumed that
their political, judicial and social systems reflected the country's
broader success. But the manipulation and abuses of the Anwar trials
shattered this notion, as have the sometimes bizarre statements of Dr
Mahathir himself. It is telling that the prime minister timed the recent
election so that some 680,000 newly registered voters--most of them
young and presumably anti- Mahathir--would not be able to participate in
the balloting. Malaysians, as a group, may have been too cautious to
sack Dr Mahathir, but they sent a clear signal of displeasure with
recent events. UMNO officials, including perhaps even some supporters of
Dr Mahathir, now seem to understand that the prime minister is
ill-suited to deal with a political constituency that will ask more
questions, demand more openness and insist on more accountability.

For these reasons, all eyes will now be focused on UMNO's leadership
elections, which will be held sometime next year. (The head of UMNO, by
tradition, also becomes prime minister.) Whether Dr Mahathir will stand
again for the presidency of UMNO is unclear. In the aftermath of the
election, however, he reminded Malaysians that he had been preparing to
retire before the economic crisis hit in 1997. He will almost certainly
reconsider that option now. With an impressive election victory under
his belt, and with the economy now well into a recovery, Dr Mahathir can
make the case--with some justification--that he has seen the country
through difficult times, and that his policies have been validated by
the voters. Many UMNO officials, it seems, will be happy to allow Dr
Mahathir a graceful exit as they go about the business of trying to
remake their party.

Source: EIU ViewsWire

The unstoppable Dr Mahathir

As expected, Malaysia's leader for 18 years has won again with a big
majority. Can anything or anyone dislodge him?

PERHAPS Mahathir Mohamad is entitled to gloat. He has certainly defied
the predictions that were made 15 months ago, when he put controls on
Malaysia's currency a day before sacking his deputy, Anwar Ibrahim.
Because the controls were unfair to foreign investors, critics concluded
that economic ruin would naturally and swiftly follow. And when Mr Anwar
was arrested, beaten by the police chief and tried for corruption and
s###my, foreigners believed that most Malaysians would share their
outrage. Dr Mahathir judged differently. He knows his people. On
November 29th they returned him to power for the fifth time. Once again
he can command more than two-thirds of the seats in parliament.

His hold on power impresses not only other autocratic-minded
politicians; many democrats have also politely extended their courtesies
to Asia's longest-serving leader. Australia's foreign minister,
Alexander Downer, showed a keen understanding of Malaysia's electoral
system when he said that the win doesn't come as a surprise . The
reaction on Malaysia's stock exchange was tame, but only because
investors had guessed how things would turn out.

Most of them are glad that Dr Mahathir has won. They expect the
government to press ahead with its overall economic strategy, which they
prefer, whatever its flaws, to uncertainty. Next year's budget,
announced in October, is expected to generate a deficit of 4.4% of GNP,
thus continuing this year's ma#sive fiscal-led expansion. That should
help to sustain a recovery that is forecast to bring 5% growth this
year, after a 7.5% contraction in 1998.

Still, Dr Mahathir's victory was not absolute. The opposition won 45
seats in Malaysia's 193-seat parliament, doubling the number it won in
1995. Almost all of those were won by the loose alliance known as the
Alternative Front, which includes the Islamic Party of Malaysia (PAS),
the ethnic Chinese-dominated Democratic Action Party (DAP) and the
Justice party of Wan Azizah Ismail, Mr Anwar's wife. Despite Dr
Mahathir's many advantages, including a formidable system of patronage,
the opposition also managed to put a dent in his popular majority: the
ruling National Front coalition won 56% of the votes, down from 65% in
1995, a much lower proportion than the number of its seats would

More importantly, the opposition did especially well among Malays, the
Islamic majority in Malaysia and the backbone of Dr Mahathir's party,
the United Malays National Organisation. UMNO's showing was especially
weak in the four northern states of the Malay heartland. Between them,
PAS and the Justice party managed to win all the parliamentary seats in
Terengganu, take 13 out of 14 in Kelantan, and win a majority of the
seats in Dr Mahathir's home state of Kedah. PAS also retained control of
Kelantan's state government, and gained Terengganu, a state rich in oil
and gas.

Such losses for UMNO may seem small; but they do not happen often in
Malaysia. Dr Mahathir's detractors are hoping that his poor showing
among Malays will weaken his standing in the ruling party. Some UMNO
members are disturbed by the spread of corruption, and by the increasing
concentration of power in Dr Mahathir's hands. Those who are unmoved by
such principles are keenly aware that, if UMNO becomes less united, its
gravy train could be derailed.

Dr Mahathir's most likely successor, Abdullah Badawi, who was appointed
deputy prime minister after Mr Anwar was sacked, has gained a huge
advantage from the election. One of Mr Abdullah's main rivals, Tengku
(Prince) Razaleigh Hamzah, was put in charge of UMNO's Kelantan
campaign, and his own seat was the only one the party won. What kind of
prince, UMNO members will no doubt wonder, cannot even deliver his own

The elections have also hurt Najib Tun Razak, Mr Abdullah's other main
rival. Mr Najib, the son of a former prime minister, is articulate and
clever and controls the powerful education ministry. But he won his
parliamentary seat by only a narrow margin, generating doubts about his
gra#sroots appeal. Many UMNO members doubt his Islamic credentials,
which are expected to become increasingly important following PAS's
strong showing. Many of its 27 seats were won with the help of the
Justice party, but PAS has clearly emerged as Malaysia's leading
opposition party. The DAP did poorly, partly because many non-Malay
voters, keen to preserve economic and racial stability, backed Dr
Mahathir. The DAP's leader, Lim Kit Siang, and Mr Anwar's lawyer, Karpa=
Singh, lost their seats. Although Dr Wan Azizah and four other Justice
members won seats, the party will be PAS's junior partner.

Mr Abdullah is unlikely to challenge Dr Mahathir directly, given the
prime minister's control over UMNO procedures. Instead, Mr Abdullah will
probably settle for being named UMNO's deputy leader at the next party
elections, which must be held by September 2000. That would give him a
clear line of succession if and when Dr Mahathir ever decides to step

The Economist