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Fwd: The "Asian Way ": From Miracle to Meltdown
By web aNtu
21/8/2000 8:05 am Mon
The impressive economic performance of tast Asian' economics of 7-9%
growth for 15 years prior to the currency crisis was particularly intriguing to
social scientists and warmly applauded by international financial agencies
such as the World Bank as the "East Asian Miracle." There was a tendency to
focus on East Asia's economic strengths whilst down-playing its structural
and institutional weaknesses. Those that warned of such serious weaknesses
inherent in the East Asian high-growth economic development pattern were
often dismissed as proponents of the free-market model of development or dogmatic
Marxists unable to come to terms with developing economies transcending the Third
Word underdevelopment trap.
Many among the triumphalists included critics of the Western neo-liberal economic
rationalist agenda who attempted to counterbalance the "rolling back of the state"
by highlighting the efficacy of state coordinated industrial policies of the more
successful interventionist East Asian states, Plagued by relatively high levels of
unemployment, large trade deficits and low levels of economic growth, Western
governments were urged to learn from the East Asian developmental state model.
Regional publications, business news agencies and media networks such as
CNBC1 a#sisted in perpetuating the psychology of boom by their uncritical
reporting of the East Asian economies. Their strong reliance on "expert"
commentators connected with the research arms of banks, investment houses,
brokerage houses, mutual funds and hedge funds, that have a vested interest in
promoting optimistic economic forecasts, goes some way towards explaining the
entrenchment of the boom psychology.
At the other end of the triumphalist spectrum were the culturalists who attributed
East Asia's impressive economic performance largely to its uniquely East Asian
cultural attributes. Some of the unique attributes identified were strong
communitarian values that placed societal interests over and above the narrow
self-interest of the individual, emphasis on hard work, education and delayed
gratification. This perspective was enthusiastically promoted by some academics
with specialist knowledge of Asian culture who were keen to "?unlock the mysteries
of the East," and conservatives attracted to the "Asian Way" value of upholding the
family unit and minimalising social welfare expenditure.' Political leaders from the
high performing East Asian economics, such as Singapore's Lee Kuan Yew and
Malaysia's Mahathir Mohamad, a#sisted in the reification of the Western orientalist
conception of Asia by becoming vocal champions of the "Asian Way" discourse.
Inter-alia, this served as an effective ideological instrument against domestic
demands and international pressure to democratise. Not surprisingly, the "Asian
Way" cultural discourse was enthusiastically endorsed by autocratic governments
such as the former Indonesian New Order regime, Burnia's military junta and the
leadership of the Peoples Republic of China (PRC). Non-Asians, particularly
Western organisations and leaders, who ventured to criticise the democratic and
human rights record of these governments were chastised for being ethnocentric,
culturally insensitive and accused of deliberately attempting to sabotage the high
levels of East Asian economic growth.
East Asia's impressive economic growth for much of the 1980s and 1990s,
overshadowed its myriad economic and socio-political weaknesses. During the
"miracle years," money-politics, corruption and authoritarian rule were commonly
trivialised and not considered as a seri:)us impediments to long term economic
development. Indeed, authoritarian rule was viewed by many business leaders,
foreign investors and scholars as providing the economic prerequisites for future
political development. This prioritisation of economic development over political
development is strongly reminiscent of the post-war Rostowrian modernisation
theories that are premised on a linear evolutional development.
The tendency to gloss over East Asia's structural and institutional weaknesses and
the excesses of authoritarian rule has been short-circuited by the xegion's
economic crisis. Governments that aided and abetted the worst excesses of
money-politics and 5kuthoritarian rule have fallen or are under immense pressure
to reform. Those that have collapsed have been replaced by others ostensibly more
committed towards greater economic and political reform. Public demands for
genuine reform, greater transparency and accountability in the region have spread
like a contagion and attained the status of a mantra. An energised and empowered
civil society has provided the impetus to contest and renegotiate existing systems,
values and ways of doing things.
The article examines the manner by which political and economic governance in
Southeast Asia has become more complex particularly with the internationalisation
of finance and information technology. Can the political crisis be profitably
understood as a "wake-up" call for these nations to re-appraise former approaches
of political governance towards greater transparent, accountable and democratic
practices? Are authoritarian states inherently unstable due to their inability to
effectively and genuinely implement the required economic and political reforms?
These pertinent issues and questions will be examined by analysing the political
ramifications of the economic crisis on Southeast Asia, with particular focus on
Singapore and Malaysia.
Power of Finance Capital
",It (the currency crisis) is a challenge because the power is not in this country. If it
were something in this country, I can manage. It is elsewhere, outside my reach .... ."
East Asian governments have adopted different perspectives and explanations for
the economic crisis. Some, like the Singaporean government, appear to have
accepted the more orthodox economic interpretations which largely attributes
internal economic factors for the crisis, and are supportive of the IMF's policy
prescriptions. Reformist governments in Thailand and South Korea have blamed the
policies of previous governments for exacerbating the economic downturn whilst
expressing concern with the severity of the IMF prescriptions. By contrast, Mahathir
has consistently maintained that the region's economic woes were precipitated by
the speculative activities of international financial markets and therefore largely
externally induced, Prominent investors such as George Soros have been criticised
for engineering huge profits by taking short-term speculative positions in regional
currencies which have destabilised regional economics. While there is
considerable evidence to support Mahathir's a#sertions, his condemnation of
currency speculators is indeed ironic in view of the Malaysian government's own
history of currency speculation. For example, between 1992-1994, Malaysia's
Central Bank (Bank Negara) is said to have lost US$6 billion in money market
Economists such as Jeffrey Sachs from Harvard University and JoMo Sundaram
from the University of Malaya have consistently argued that the East Asian financial
crisis was not a result of government profligacy but a crisis made mainly in the
private and under-regulated financial markets. Sundaram has pointed to the
collapse of the Bretton Woods System of fixed exchange rates in the early 1970s,
the subsequent adoption of the flexible exchange rate system and the liberalisation
of the financial sector as having created the volatile conditions a#sociated with
currency transactions and reckless speculation. Additionally, the regime of
under-regulated financial liberalisation has enhanced the frequency of currency
crisis and circumscribed the capacity of governments to determine industrial policy.`
Such perspectives are supported by the fact that many of the East Asian economies
that crashed possessed the neo-liberal economic "fundamentals" by way of budget
surpluses, low inflation, high savings and low taxation. Even the Singaporean and
Taiwanese currencies, whose national economic "fundamentals" are commonly
believed to be robust, have suffered a,significant depreciation.` In August 1998,
Hong Kong's authorities spent US$15.2 billion combating speculators who attempted
to make ma#sive profits by short-selling Hong Kong's currency, stocks and futures.
Nobel Laureate James Tobin, Jomo and Martin and Schumann have also pointed to
the unbridled globalisation of financial markets and the increasingly footloose global
flows of finance capital which are largely engaged in speculative activities in the
currency and stock markets as the major source of economic instability. Alarmingly,
financial markets can and have severely punished governments for what are
deemed to be "irresponsible" policies even though such policies may be in the
national interest. For example, budget deficits have been deemed as "irresponsible"
even though they may, in Keynesian fashion, be required to stimulate economic
activity in times of economic downturn.` Politicians and policy makers are now
under additional pressure to be accountable and invoke the support of their
domestic constituents and the international forces a#sociated with finance capital.
It is commonly acknowledged that in countries like Indonesia, the financial crisis
was exacerbated by the IMF's structural adjustment programmes (SAP) which
demanded immediate government actions such as the closure of the "sicker"
financial institutions. This was tantamount to sending danger signals to investors to
pull their capital out before they lost it altogether. Investor pessimism and panic
quickly set in as the currency crisis in one country. triggered off a currency crisis in
neighbouring countries and investors pulled their capital out of the region in
anticipation that these currencies were on the verge of collapse. This phenomenon
has been referred to as the "herding effect." In such a pessimistic environment,
large numbers of depositors converted their currency to US dollars in anticipation of
further devaluation of the local currency?' The sharp devaluation of the East Asian
currencies, particularly the Thai baht and Indonesian rupiah, also caused the panic
selling of local currencies by local companies who wanted to protect themselves
against their short-term US dollar debts. Buying the US dollar was a protection
against future devaluation.
Irrespective of whether or not one agrees with the a#sertions of Sachs, Sundaram
and Tobin that the economic crisis was primarily triggered by the unbridled
excesses of the international financial system, the crisis has served to highlight the
inherent faultlines in many of the SoutheastAsian economies. A serious structural
weakness included the limited progress in ascending the value-added and
technological ladder due to the limited investment in social capital, science and
technology?' In view of the competition from lower wage economics such as China,
the shortage of qualified scientists and engineers, limited university-industry
collaboration and insufficient investment in education and research constituted a
major drag on labour productivity. Compared, with the relatively equitable income
distribution levels in the Newly Industrialising Economies (NIEs) particularly in the
earlier stages of their industrialisation, the income gap in most Southeast Asian
nations have remained wide. In particular, the rural-urban income disparity has
widened and poverty levels have remained high." In countries such as Thailand
and Indonesia, the concentration of infrastructure and industrial activity in and
around the major cities has served to widen the urban-rural income disparity. In
contrast to the NIEs, Southeast Asian economies are more reliant on foreign direct
investment to fuel their industrialisation and possess a relatively weak indigenous
business cla#s. As elaborated below, the money-politics phenomena to a large
extent can be attributed to the political patronage requirements of Chinese
businesses and the rentseeking activities of well-connected indigenous
To be sure, the nations hardest hit by the economic recession, such as South
Korea, Thailand` and IndoAcsia,11 had accumulated huge current account deficits
(CAD) and indulged in excessive private sector borrowing. However, it is worth
noting that such current account deficits were not a new phenomenon as Malaysia
and Thailand had incurred a CAD of close to 10% of GDP for a decade leading up
to the 1997 crash. The CADs of nations like Malaysia and Thailand were made
worse by the linking of their currencies to the appreciating US dollar. Many of these
Asian currencies became overvalued thereby rendering their exports more
expensive and less competitive particularly in the face of competition from low-cost
producers such as China. Due to their appreciated currencies, imports became
cheaper thereby generating the conditions for a current account and trade deficit.
The ballooning CAD, like a vicious circle, no doubt contributed to investors loosing
confidence in many East Asian currencies.
A substantial proportion of the private sector debt was in the form of short-term
foreign loans used to finance long-term projects. These loans were readily obtained
from the avalanche of capital that poured into East Asia largely from OECD nations
from the early 1990s. Fund managers and banks from the United States, Europe and
Japan in search of high profit margins pumped in enormous amounts of short-term
credit into the region. The influx of capital was facilitated by the globalisation of
financial markets and encouraged by the financial liberalisation of many East Asian
economics from the late 1980s. The ma#sive inflow of foreign capital together with
the high local savings rates contributed significantly to the high investment rates.
The liberalisation of financial markets in many East Asia economics without
governments strengthening their regulatory and supervisory systems is an important
factor contributing to the climate of over-investment and excessive private sector
speculation. Many Southeast Asian governments failed to check the private sector
borrow~ir-,,ci for the less productive sectors such as real-estate and stock market
speculation which culminated in the phenomenon of a#set price inflation and the
cla#sic "bubble economy". For example, in Malaysia, nearly half of total bank loans
were used for speculative investments in property and the stock market." To
aggravate matters, bank lending in many East Asian nations was not solely based
on the feasibility of projects and their commercial merit but often on the political
connections of the applicant. This practice of "relationship banking" has long been
a feature of the East Asian financial system. Additionally, many banks tended to
avoid disclosing information on the true nature of their offshore loans
In addition to the over~investment into the less productive and speculative
activities, the burgeoning CAD and national debt can also be attributed to
grandiose multibillion dollar mega-infrastructure projects. In Malaysia, they include
the Petronas Twin Towers that is currently the world's tallest building, the
construction of a new international airport, plans for a new national capital called
Putra Jaya costed at least US$8.1 billion, the development of Cyber Jaya or the
"Asian Silicon Valley," the US$20 billion Multimedia Super Corridor and US$6
billion Bakun hydro-electric dam project in East Malaysia. In explaining the
psychological import of these grandioseprojects, Mahathir declared, 1t is good for
the ego .... It is important because small people always like to appear tall."
Indonesian mega projects that have since been postponed include the world's
longest bridge linking Sumatra and Malaysia, 9 power projects worth US$4.9 billion
and the US$560 million Jakarta Tower. Former Indonesian Minister of Technology
and current President Yusuf Habibie's expensive obsession with aeronautical
technology was to cost the nation US$2 billion with the construction of a
pa#sengerjet called N2130. Large amounts of state funds were also channelled into
projects such as the national car Timor Putra which was controlled by Suharto's
son Hutomo Mandala Putra. In an attempt to emulate Japan and the NIC strategy of
strategic industrial targeting, the Indonesian state's nurturing of the aeronautical and
automobile industry was projected as a bold economic nationalist strategy of
leap-frogging towards the technological league of the more industrialised nations.
Instead, the nation appeared to have leap-frogged backwards and closer to the
economic chaos of the Sukarno era.
The Roots and Rise of Money Politics
A common feature of countries hardest hit by the South Asian economic crisis is the
prevalence of nepotism and money-politics where the most successful businesses
were those that have forged close political links to senior politicians and
bureaucrats. The terms crony capitalism and money-politics have been
interchangeably used to describe this relationship.
In Indonesia, where the Chinese make up less than 5% of the pop uAation but
purportedly own more than 70% of the nation's corporate wealth," the crony
capitalist system was strongly based on the close links between cukongs or wealthy
Chinese conglomerate beads and their patrons in the bureaucracy or government.
When placed within a historical context this relationship is somewhat antiquated and
has its roots in the pre-colonial era. In many of the absolutist kingdoms of
pre-colonial Southeast Asia, the Sultan was keen to appoint foreigners to important
commercial functions because they did not have a strong political base within the
community. The "Kapitan Cina" (commercially successful influential Chinese
merchants and leaders of the Chinese community) were granted lucrative licenses
for tax collection and opium smoking. As long as the Chinese merchants retained
their separate identity, they were favoured over indigenous merchants in the belief
that they posed less of a political threat to the absolutist power of the ruler.
The commercial standing of the Chinese community was further reinforced during
the colonial era when they were encouraged to engage in commercial "middleman"
activities that Europeans were not particularly interested in but were nevertheless
crucial for the functioning of the colonial economy. Much like the Sultans of the
precolonial era, the British and Dutch authorities granted tax farming, gambling,
liquor and opium monopolies to selected Chinese merchants. Many of these "opium
kings" became very wealthy and from the early twentieth century ventured into
more respectable commercial activities such as tin mining, rice milling, retail and
wholesale trade, shipping, rubber cultivation and banking. Importantly, these
Chinese merchants, like many of their successors in contemporary Southeast Asia,
possessed wealth that far surpa#sed their level of political influence and remained a
vulnerable and insecure force that could be easily exploited. By contrast, the
indigenous populace in colonial Malaya were encouraged to engage in agricultural
and non-commercial activities or were forced to engage in the cultivation of crops
such as sugar for the colonial authorities in the Dutch East Indies. It is not
altogether surprising that the income disparity and superficial social relations
between the indigenous and Chinese communities, particularly in the predominantly
Muslim-based nations of Southeast Asia, sowed the seeds of problematic
post-colonial ethnic relations.
Upon attaining political independence, post-colonial political leaders were
confronted with national economies dominated by Western and Chinese interests.
Inter-alia, the implementation of economic nationalist strategies such as import
substitution industrialisation (ISI) in the immediate post-independence decades was
an attempt to rectify colonial economic structures. However, unlike the relatively
impressive record of ISI strategies in establishing the foundations of export oriented
industrialisation (E01) in Northeast Asian nations like Japan, South Korea and
Taiwan, the ISI record in most Southeast Asian nations was less than impressive.
Many infant industries that were protected from foreign competition remained
internationally uncompetitive and inefficient and were managed by business groups
that were politically well-connected. In Indonesia, large state-owned enterprises
(SOE), like the Indonesian state petroleum company Pertamina, were badly
mismanaged by its military managers so that by 1976 Pertamina accumulated debts
of US$10.5 billion which amounted to 30% of Indonesia's GDP. Furthermore, these
SOEs did little to nurture a genuine indigenous entrepreneurial cla#s or erode
Chinese dominance of the economy. Indeed, the economic clout of Chinese capital,
particularly from the early New Order years, was- solidified as they became
increasingly involved in commercial alliances with the political elite.
It is worth pointing out that former President Suharto's close links with multibillion
dollar conglomerate heads, such as Liem Sioe Liong of the Salim Group have their
roots in the pre-independence era. Liem supplied Subarto with military supplies and
provisions in Indonesia's war of independence against the Dutch. Suharto's
business "dealings" with Liem and other Chinese businesspeople such as Bob
Ha#san were consolidated in the 1950s when he was a military commander of the
Central Java Diponegoro Division. For much of the New Order era, Suharto's
children strengthened their commercial links with Liem and other Indonesian
Chinese conglomerate heads. This business partnership carved up lucrative
monopolies in wheat, flour, soyabeans, clove and garlic. Bob Ha#san's close
personal ties with Suharto a#sisted in his control of numerous monopolies in the
timber industry, expansion into banking and development of commercial
partnerships with Suharto's children.
The few pribumi or indigenous Indonesian businesses that have become successful
were also those that established close links with the "first family." As in
neighbouring countries like Malaysia, moves towards economic deregulation as a
consequence of the sharp decline in revenues from petroleum and other primary
commodities from about the mid-1980s, disproportionately benefited eukongs and
other crony capitalists. Not surprisingly, the economic dominance of a small group
of patrimonia!' and crony capitalist groups served to alienate the less
well-connected Chinese and p, -i'bumi businesses who became vocal critics of
the Suharto government particularly after the economic crisis swept through the
President Habibie's professed crusade against the crony capitalist practices of the
previous administration has been generally received with scepticism given the fact
that right up to the May 1998 riots he failed to voice serious concerns about the
need to eliminate such practices. Habibie's extensive family business interests
stemming from his period as a senior Minister in the Suharto administration may go
same way towards explaining his previous stance. Much like the rentier commercial
activities of Suharto's children, Habibie's family members and relatives have
exploited their political connections by monopolising commercial interests on Batam
Island where he was head of the Batam Industrial Development Authority. His sons
and aunts are involved in a joint venture to build a US $ 100 million resort in Batam
while brother Timmy is building a US$1 billion container terminal on the island.
Habibie's brother-in-law holds the exclusive right to manage Batam's ports and his
sister-in-law operates a taxi monopoly on the island.
In Malaysia, the controversial New Economic Policy (NEP) (1970-1990) was
conceived after the Alliance coalition's poor showing in the 1969 Federal elections
and the subsequent outbreak of race riots. Having lost its customary two-thirds
representation in parliament and nearly loosing the states of Penang and Selangor
to the opposition, the Alliance coalition government recognised the imperative of
placating Malay frustrations with their socio-economic marginality. For example, on
the eve of the May 1969 riots, the Malay ownership of the corporate sector was
less than 2% compared to the Chinese share of 37%. Articulating Malay grievances
with their marginality, outspoken UMNO politician Mahathir Mohamed was sacked
from the party for his scathing criticism of UMNO leaders for not doing enough to
rectify the inter-ethnic income disparity. With his expulsion, Mahathir's political
credibility and public profile rose for having the temerity and courage to demand
radical changes to the political economy of the nation.
To some extent, the post-independence ethnic schism has been attenuated by the
NEP's success in narrowing the inter-ethnic income gap. A larger Malay middle
cla#s has emerged with the establishment of new tertiary educational institutions
and by providing scholarships to study in foreign and in local tertiary institutions.
Complimenting the emergence of a sizeable Malay middle and professional cla#s, a
Malay business cla#s was also nurtured. Their standing was strengthened by NEP
policies such as the requirement for publicly listed companies to allocate 30% of
their shares at par value to bumiputesas. Under the Industrial Coordination Act of
1975, all companies were expected to employ a minimum proportion of bumiputeras,
particularly at the executive and managerial levels in order to attain or renew their
licenses. Newly established banks extended liberal loan arrangements to Malay
businesses who were also given preferences by the government to obtain licenses,
credit and government contracts. These policies expanded the share of Malay
corporate ownership from 2% in 1970 to 30% in 1990. By 1985, Malay businesses
constituted 30% of all businesses registered in the country compared to only 14%
in 1970.11 Importantly, the growth of Malay capital did not occur at the expense of
non-Malay capital as the nation's "economic pie" grew. For example, Chinese, and
Indian shares of equity increased from 32% to 46% during the life of the NEP.
Chinese income also rose faster and higher than Malay income.
While inter-ethnic tension has been diffused by the emergence of a more confident
Malay community as a consequence of the narrowing of inter-ethnic income
disparity, intra-Malay income disparity has worsened. In particular, urban,
middle-cla#s Malays rather than rural Malays have disproportionately benefited
from the NEP. This has been effectively capitalised upon by the Islamic oriented
party PAS which currently governs the rural-based northern state of Kelantan.
PAS's electoral support base is strongly derived from Malays who have missed out
on the benefits of the NEP and the high-growth years of the 1980s and 1990s.
Many urban Malay who have become disillusioned with the ostentatious lifestyles
of UMNO politicians, the pervasiveness of money-politics and the alienating
secular lifestyles of the larger cities have also turned to PAS for moral succour.
Ironically, the attenuation of inter-ethnic tension appears to have been replaced by
the heightening of intra-ethnic cla#s tension.
Jomo and Gomez have argued, that the NEP policies have favoured larger
business interests at the expense of smaller businesses thereby sowing the seeds
of dissension within the Malay business cla#s. Like their Indonesian counterparts,
the politically well-connected have easy access to government created rents. The
phenomena of money politics has been exacerbated by many Malay
businesspeople who have expediently joined UMNO and run for public office
primarily to strengthen their business interests and obtain contracts and licenses for
their "friends." The changed social composition of UMNO, reflected in the decline
of school teachers as UMNO gra#s-roots leaders from 41 % of UMNO delegates in
1981 to 25% in 1987, is illustrative of the emergence of money-politics. By
contrast, nearly 20% of UMN0s divisional heads were millionaire
businesspeople-politicians in 1995. Ironically, the NEP's success in addressing the
nation's major challenge of the 1970s and 1980s (narrowing the inter-ethnic
disparity) had sowed the seeds of the major national challenge of the 1990s, that of
Some of the politically connected that have attained extensive commercial a#sets
under the auspices of the NEP include former politicians and civil servants such as
former Deputy Prime Minister Gafar Baba, former Finance Minister and current
Minister of Special Functions Daim Zainuddin and Halim Saad. Their commercial
prowess were consolidated by privatisation policies that were initiated to counter
the effects of the mid-1980s recession. Often without going through the process of
open tender, numerous state-owned enterprises (SOE) were acquired by UMNO
companies, former politicians, senior bureaucrats and their Chinese and Indian
business a#sociates. Political connections rather than the competitiveness of one's
bid strongly determined the outcome of tenders for lucrative and large infrastructure
public projects. For example, the UMNO linked holding company United Engineers
(UE) was successful in winning the tender to build the multi-million dollar
North-South Highway in 1986 even though it did not have previous experience in
highway construction.' In 1990, UE won another lucrative RMI.6 billion contract to
construct the second Singapore-Malaysia causeway. Suffice to say, there was no
open bidding for these contracts.` With the help of soft loans from government
banks, the UMNO linked Fleet Holdings and the Renong Group have become major
players in Malaysia's corporate life having accumulated interests in the media,
property development, industrial ventures, stock exchange and tourism .4' The
blurring of government and party lines has arguably' distorted the economic
development of the nation.
While the earlier generation of Chinese entrepreneurs were apprehensive towards
the NEP and tended to adopt short-term business practices and strategies, the
younger generation of Chinese entrepreneurs have pragmatically adopted
rent-seeking alliances with Malay capitalists and politicians. They include
conglomerate heads such as Vincent Tan of the Inter-Pacific Group. Like their
Indonesian counterparts, their close alliances with influential sections of the
indigenous elite has been augmented by strengthening commercial links with the
Overseas Chinese or "guanxi" commercial network. Gomez has observed that they
have also acted as Ali-Baba or "business proxies" for their UMNO patrons and
funded the campaigns of particular UMNO politicians for senior positions in the
party." During the "boom years," significant sections of the Chinese community
appeared to have developed a strong sense of pragmatic acquiescence with the
prevailing modus operandi. This was evidenced by their solid electoral support of
the Barisan National government in the 1995 general elections.
The pervasiveness of money-politics and corruption, which purportedly extend to
the highest public offices, have caused considerable foreign investor unease and
frustration amongst the business people with weak political connections. Malaysia's
reputation for corruption has been highlighted by the 1998 Transparency
International Index which rated the country a poor 32nd place. In an attempt to
rectify Malaysia's less than savoury image, an Anti-Corruption Bill was pa#sed in
July 1997 which gives the nation's Anti-Corruption Agency greater scope for
investigations and bringing charges." However, a major flaw in the Anti-Corruption
Bill is that public officials still do not have to publicly declare their a#sets. Arguably,
the declaration of a#sets by public officers would be effective in tempering the
tendency to accumulate wealth during their tenure of office. Recognising the
importance of the declaration of a#sets in mitigating corruption, the newly installed
Thai and South Korean governments have judiciously required public officials to
publicly declare their wealth.
Just as the IMF has gone to considerable lengths to protect the interests of foreign
banks and investors who were burnt by the regional economic crisis, the Malaysian
government has undertaken strenuous efforts to bail out favoured business groups.
In September 1997, Mahathir announced the formation of a RM60 billion fund to
rescue selected companies that were rocked by the stock market crash. However,
the credibility of the rescue operation was mired by the fact that it was funded by
public bodies such as the state superannuation system, commonly referred to as the
Employment Provident Fund (EPF). In the process of propping up the stock prices
of certain companies, the EPF lost RM60 billion by late 1997.51 In another example
of selective bail-out, the UMNO linked United Engineers Malaysia, in November
1997, embarked on a highly irregular RM2.34 billion takeover of its parent company
Renong and in the process was allowed to flout regulations." Accounting for 8% of
the outstanding loans to the financial system, Renong was billed as being too big to
fail. Renong's bail-out has been rationalised by the government as a means of
preventing a social backlash from the Malay community as it constitutes a "strategic
Bumiputera firm" which if allowed to fail, would be tantamount to the regression of
the pre-NEP era of extreme Malay economic marginality."
The networks of money-politics based on political patronage were starkly evident
when Prime Minister Mahathir's son's debt-laden shipping company Konsortium
Perkapalan Berhad (KPB) was bailed out by funds from the state petroleum
company Petronas in March 1998. This bail-out helped to obliterate some US$420
million of Mirzan Mahathir's debts.The highly selective rescue of well-connected
private companies with the aid of state funds contributed towards intra-UMNO
divisions. In a bold move against Mahathir, UMNO youth leader Ahmad Zahid
Haimidi, reputedly an Anwar supporter, denounced the prevalence of corruption
and cronyism in the party prior to UMNO's General a#sembly in July 1998. Since
his sacking from the Deputy Prime Ministership and detention in September 1998,
Anwar's supporters have campaigned vigorously against nepotism, money politics
Without stringent and transparent institutional mechanisms in place, moves towards
political liberalisation may not effectively mitigate against the entrenched practices
of money-politics and corruption. This point was made apparent to the Thais when
the shift towards political democratisation in the early 1990s did little to improve the
nation's chronic problem of corruption. Indeed, there is evidence to suggest that
corruption may have worsened during the earlier phases of Thailand's political
liberalisation. This can be attributed to the practice of politicians buying votes to win
public office and then recouping through kickbacks on government contracts and
exploiting other financial opportunities. It is worth noting that many of the finance
companies that collapsed had close links with politicians who had used them to
launder illicit earnings and finance their investments.
Serious attempts have been made by the reformist oriented Thai government to
redress the scourge of money-politics. They include the drawing up of a new
constitution geared towards creating a participatory based democracy that makes it
more cumbersome for politicians and bureaucrats to abuse state power for private
gain. Under the new constitution, the cost of winning an election is reduced by
splitting large, multimember constituencies into smaller, single seat constituencies
and by providing free television and radio airtime during elections. Elected officials
and their immediate family members must submit statements of their a#sets and
liabilities to the National Corruption Commission.` Any allegation of corruption
against a public official that is backed by 50,000 signatures has to be investigated
by the Counter Corruption Commission.11 Importantly, Thailand's incipient
petitionary political culture serves to nurture political participation and empowerment
of the ma#ses whilst setting a democratic standard and model of political reform for
other ASEAN nations.
Even the supposedly corruption free island republic of Singapore has not escaped
the taint of corruption. In 1996, Senior Minister Lee Kuan Yew and son Deputy
Prime Minister Lee Hsien Loong admitted to receiving discounts on purchases of
luxury apartments from a publicly listed company Hotel Property Ltd (HPL) where
Lee Kuan Yew's younger brother is one of the Directors. Lee and son, with the
support of Prime Minister Goh Chok Tong, were not reprimanded for the 12%
discounts when purchasing the HPL properties. The government had apparently
accepted their argument that as they did not solicit the discounts and were
somehow unaware that they did received the discounts, even though it collectively
amounted to more than S$1,000,000, they had therefore not wilfully acted
improperly. Suffice it to say, in more transparent, accountable and vigorous
democracies, public officials have been known to resign for less serious corruption
allegations. As the a#sets of public officials do not have to be made public in
Singapore, speculation and rumour-mongering remains rife about the previous
discounts attained by PAP politicians and the extent of a#sets accumulated by them
while in public office. To placate the strong undercurrent of public disquiet with PAP
politicians acquiring property at discounted prices, Prime Minister Goh has required
Ministers to provide detailed information on their ties with the developer and
whether any discounts, special terms or treatment` was received before they and
immediate family members purchase properties.
Long before the HPL affair, public disquiet with the financial remuneration of PAP
politicians were fuelled by their generous salaries which easily surpa#s their
counterparts in industrialisqd countries like Japan and the United States. Lee Ktian
Yew" justified their generous salaries as a means of minimising the otherwise strong
temptation to engage in corrupt activities. Argued Lee, "Pay political leaders the top
salaries that they deserve and get honest, clear government or underpay them and
risk the Third World disease of corruption." In an attempt to squash public criticism
of Ministerial salaries, the government released a 1994 White Paper entitled
"Competitive Salaries for Competent and Honest Government" which recommended
that the salary of ministers be pegged at two-thirds the average mean income of the
highest paid professions.70 The logic behind the pegging of ministerial salaries to
corporate high-flyers was that this was the most effective way of attracting the
talented to public office. Instructively, arguments pertaining to the importance of
politicians possessing a strong commitment and duty to public service, ironically a
Confucian junzi trait the PAP leadership have in the past attributed to themselves,"
was not highlighted in the White Paper. That PAP politicians have to be paid
salaries that supersede their political counterparts in Japan or the United States in
order to entice them into public office and prevent them from succumbing to the
"disease of corruption" is in itself an indictment of the calibre and commitment of
The Erosion of Democratic Processes and Institutions
Democracy can take on various forms and work in different ways in societies with
dissimilar histories, structures and stages of economic transformation. As more than
one political model can manifest democratic principles, liberal democracy is only
one variant of democracy. Such a perspective contradicts the view of
modernisation theorists who have highlighted the linear relationship between
economic development and democracy. Refining of the modernisation theory within
the East Asian political context, Crouch and Morley have purported that the more
industrialised a nation, the more democratic it is and the less industrialised, the
more authoritarian. Those that are industrialising at the intermediate level tend to be
semi-democracies. This perspective goes some way towards explaining the
democratic advances in countries such as Taiwan and South Korea but fails to
explain the restricted progress towards genuine democracy in industrialised
In order for democratic institutions and processes to function and thrive, the system
of cheeks and balances and principles of transparency and accountability need to
be firmly institutionalised and safeguarded. This can be effectively maintained by
upholding the rule of law and ensuring that the judiciary, legislature and executive
remain independent of one another. The nurturing of an autonomous civil society
and the safeguarding of fundamental rights such as freedom of speech can act as
important pillars in upholding the integrity of democratic institutions. Importantly,
holistic democratic perspective and practices generally go beyond highlighting the
importance of political rights and encompa#s principles of economic democracy
such as the right to material wellbeing and opportunity for meaningful employment.
Such rights tend not to be highly prioritised even in liberal democracies where the
logic of market forces prevail.
In Southeast Asia, authoritarian governments tend to base their legitimacy and
democratic credentials on the fact that elections are held on a regular basis.
However, these "elections without turnover" often operate under conditions that
restrict the ability of opposition parties ability to compete freely and fairly for
electoral support. They are commonly not granted the same access to the
mainstream media which more often than not acts as an organ of the dominant party.
In Suharto's Pancasila democracy, only two opposition parties were permitted to
participate in elections on the premise that a multiparty system was culturally alien
and inherently destabilising. The Indonesian parliament (Majilis Perwakilan Rakyat
or MPR) was made up of less than 40% elected parliamentarians and only met once
every five years. In the 32 years of Suharto's reign, no legislation was pa#sed in
the largely appointed body." The kowtowing nature of the MPR was demonstrated
when in early 1998 it unanimously re-elected Suharto without any challenge and
accorded Suharto more draconian security powers to quash the riots and civil
unrest engulfing the nation. As the economic crisis worsened, Suharto, having
adopted the feudal persona of a Javanese king, became even more detached from
the rising levels of public dissent and increasingly sought advice from cronies,
close relatives and dukuns (soothsayers).
With the weakening electoral clout of Singapore's PAP government in the early
1980s, constitutional engineering initiatives have increasingly been used as a
means of strengthening its political base. Prior to the 1988 elections, the electoral
system was profoundly altered by the implementation of the Group Representative
Constituency (GRC) legislation that initially integrated three adjoining constituencies
into an electoral ward. The GRC system was rationalised on the grounds that it
would ensure multiracial representation in parliament as each GRC team had to
include an ethnic minority candidate. However, the integration into GRCs of
electoral constituencies where opposition support was strong and the steady
expansion of GRC wards have fuelled suspicions that it is essentially an electoral
device geared towards shoring up the then eroding electoral position of the PAP.
Another innovation geared towards ensuring that Singaporeans need not rely on
Opposition politicians to express dissenting opinion in Parliament was the
Nominated Member of Parliament (NMP) bill in 1989. Playing the role of the "loyal
Opposition" six NMPs representing different sectors of society have been appointed
by the President on the advice of a special select committee appointed by the
PAP-dominated parliament. In 1993, the office of an elected President was created
to ostensibly block future governments from squandering the nation's financial
reserves. The stringent eligibility requirements for the office lend weight to the view
that the office was yet another ploy to preserve the political hegemony of the PAP.
It is particularly instructive that only 0.01 % of the island's population would be
eligible for the post, effectively disqualifying the vast majority of Singaporeans.
In his 17 years as Prime Minister of Malaysia, Mahathir Mohamad has
incrementally strengthened the powers of the executive at the expense of other
centres of power such as the legislature and judiciary. As a result, the system of
checks and balances, principle of separation of powers and the rule of law have
been seriously impaired. Even within the executive, Mahathir's clout is
recognisably more potent than any of his predecessors. Potential and overt
challengers to his supreme position in UMNO have been summarily removed amidst
charges of treachery, corruption and immorality. The string of ill-fated Deputy Prime
Ministers who occupied the position for no longer than five years include Musa
Hitam, Razaleigh Hamzah and more recently Anwar Ibrahim. In keeping with the
strengthening powers of the executive, the constitutional power of the Yang
di-Pertuan Agong or King to a#sent all Bills pa#sed in parliament was eroded by
the 1984 Constitutional Amendment Bill. The King eventually a#sented to the Bill
under immense pressure following Mahathir's efforts at mobilising ma#s public
support for the Bill with the help of the local papers and ma#s rallies.
It is widely recognised that the independence of the judiciary in Singapore and
Malaysia has been politicised and its integrity compromised. In 199 1, the Bar
a#sociation Of New York observed that the Singaporean and Malaysian
governments have undermined the independence of the judiciary and eroded the
principle of the rule of law.80 Judges whose rulings have not been in the interest of
the government have been routinely transferred or dismissed. After a series of
independent court rulings that challenged the legal standing of UMNO and
facilitated the formation of a splinter UMNO party, the Lord President Salleh Abbas
was suspended and eventually dismissed in 1988. A flagrant disregard for
international judicial norms was exemplified by the Malaysian Federal Court's ruling
against Dato' Cumaraswamy who is the United Nations (UN) Special Rapporteur on
the Independence of Judges and Lawyers. His alleged wrongdoing centred on
statements made to a reporter in London that he was investigating complaints that
highly placed businessmen were manipulating Malaysia's judicial system. In ruling
against Dato' Curnaraswarny, the Federal Court disregarded Article 22 of the
United Nations Convention on Privileges and Immunities which accords UN experts
the privileges and immunities necessary for the independent exercise of their
function. Another indictment against the integrity of the Malaysian judiciary was
levelled by Anwar just days before his detention when he predicted that judges
who might be neutral in hearing charges against him had been "...quietly moved or
The integrity of Singapore's judicial system has been under question by a wide
range of bodies and institutions such as Amnesty International, Asiawatch, the
International Commission of Jurists and the United States State Department. The
financially ruinous defamation suits that have been successfully filed against
opposition politicians have aroused deep apprehensions about the independence
of the judiciary in cases that affect opposition politicians or have political
implications. Having observed the proceedings of a defamation suit by senior PAP
leaders against an opposition Workers Party Secretary-General in 1997, the
International Commission of Jurists representative Stuart Littlemore issued a
statement affirming the politicisation of the Singaporean judiciary. "The Singaporean
leadership has a long-standing record of using the High Court as a mechanisim for
silencing its opponents - by suing them for statements that, in any comparable
jurisdiction, would be seen as part of the robust political debate inseparable from
democratic freedoms, and by being awarded such unconscionably high damages and
costs as to bankrupt the defendants, forcing them out of Parliament. The abolition of
all appeals to the Privy Council in London in 1994, after it pa#sed a ruling in favour
of an opposition Workers Party politician J. B. Jeyaretnam and questioned the
propriety of the Singapore court's ruling, has rendered defamation by PAP
politicians a potent instrument of intimidation.
Numerous reports have alleged police mistreatment of detainees in the form of sleep
deprivation, continuous interrogation in freezing rooms that are totally dark and
where they have had their clothes stripped and doused with cold water.
"Confessions" are commonly obtained from Internal Security Act (ISA) detainees
and accepted as a bone fide "statutory declaration." With the 1989 Constitutional
amendment to eliminate judicial review of ISA detainees, the ISA's power of
detention without trial has become a powerful instrument of intimidation at the ready
disposal of the government.
"....... stability that is not democratic is one of mere appearance, containing within
itself the seeds of destructive disorder like a time-bomb." Arend Lijphard
Transparency, accountability and reform have attained the status of a mantra since
the outbreak of the currency crisis. Having learnt from the lessons of recalcitrant
authoritarian regimes unwilling and unable to creatively respond to the challenges
of the economic crisis, newly installed governments in South Korea and Thailand
have attempted to base their legitimacy on the implementation of a reformist agenda.
Their implementation of economic reform and management of political crisis is likely
to be more effective than the more authoritarian governments owing to their relative
responsiveness to the aspirations of the larger society.
The case for democratic governance has been strengthened by the Thai
government's implementation' of unpopular economic and social reforms through the
arduous but necessary process of consultation with the various interest groups in
civil society. Despite Thailand's economic travails, there is minimal civil unrest and
no military intervention. To date, a majority of Thais are thought to be relatively
satisfied with the Chuan government's efforts to design a new Constitution aimed at
limiting money politics." Additionally, the image of Prime Minister Chuan Leekpai
and Foreign Minister Surin Pitsuwan as the democratic face of Southeast Asia have
placed them in a strong position to credibly represent the interests of Thais and
other Southeast Asian nations in international forums.
Authoritarian leaders such as Singapore's Lee Kuan Yew have acknowledged the
importance of the reform agenda: "I believe the root cause of many an economic
crisis is political. The depth of the crisis and the speed with which a country is able
to emerge from it depends upon whether the government has the political will and
popular support to implement the tough measures that are necessary to overcome the
crisis." However, for Lee, economic reforms do not need to be accompanied by
genuine political reforms and popular support does not necessarily require greater
autonomous and democratic space within civil society. What was required in
economically beleaguered countries like Indonesia was not greater democratisation
but more of Singapore's brand of authoritarian style of "good governance.""' Such a
perspective runs counter to the view held by democratic theorists such as Arend
LIjphart who have a#serted that long-term political and economic stability requires
strong democratic foundations.
The historical experience of many countries in East Asia suggests that a significant
segment of society may be willing to engage in a pragmatic temporary trade-off of
civil liberties and workers rights in return for significant improvements in material
standards of living. This perspective goes some way towards explaining the
tolerance for authoritarian and semi-authoritarian governments during periods of
economic growth.` To some extent, Suharto's longevity cannot be explained simply
in terms of the New Order regime's recourse to repressive measures. In the 1960s
and 1970s, the regime's legiti~ macy rested strongly on the myth of having saved
the nation from foreign-inspired and supported Communist'forces. By the early
1980s, legitimacy was strongly based on Suharto's reputation as "Bapak
Pembangunan" (Father of Development) with the attainment of high levels of
economic growth and reduction of poverty." Similarly, Mahathir's political longevity
can be attributed to his relative success in upgrading the technological and
industrial base of the nation as demonstrated by the national car project and
planned multi media super highway scheme.
As the legitimacy of many authoritarian governments is strongly
performance-based, a serious economic crisis and its accompanying social
dislocations can severely erode their legitimacy. When divisions emerge within the
ruling elite, demands for economic and political reform tend to a#sume greater
potency. Prolonged and widespread civil unrest can further serve to widen existing
divisions within the political and social elite. Significantly, civil unrest leading to the
fall of a government in one country can have the demonstration effect of inspiring
civil unrest and the destabilisation of governments in neighbouring countries. This
phenomena, also referred to as the ripple, contagion, snowballing or domino effect,
has been greatly a#sisted by the rapid diffusion of information on the strategies
adopted by pro-democracy groups in the region. In the mid- 1980s, the Filipino
People's Power movement strongly inspired, invigorated and emboldened
neighbouring reformist movements in South Korea, Taiwan, Burma, Indonesia and
China. Indicative of the demonstration effect, the newly formed Indonesian elite
dissident group Petisi 50 (Petition of 50) in 1988 called for greater democratisation
to solve the nation's problems by making references to the democratic advances in
neighbouring Asian countries.
Both South Korea and Taiwan began to liberalise from the late 1980s after
widespread civil protests included large segments of the formerly depoliticised
middle cla#ses. Despite the detention of the popular Burmese National League for
Democracy (NLD) leader Aung San Suu Kyi and restrictions placed on opposition
parties, the party won by a landslide in the 1990 elections. However, the
chequered impact of the Filipino, Taiwanese and South Korean democratisation
movements on Southeast Asia can to some extent be attributed to the return of rapid
economic growth after the brief period of recession in the mid- 1980s. For example,
the Malaysian economy between 1988 and 1990 grew by an average annual rate
of 9.1 % compared with a negative growth of 1 % in 1985.[?] Additionally, signs of
organised dissent were contained by the closure of some newspapers and ma#s
detention without trial of opposition members, gra#s-roots activists and dissidents in
Malaysia and Singapore in 1987. Potential and overt challenges to Mahathir's
leadership of UMNO in the mid-1980s resulted in the resignation of Deputy Prime
Minister Musa Hitam and his successor Tengku Razaleigh after the latter narrowly
lost the UMNO presidency in 1987.
Authoritarian governments in multi-ethnic societies such as Malaysia and
Singapore have not been averse to exploiting the nations delicate racial fabric by
periodically raising the spectre of race riots. For example, the Malaysian Chinese
and Indian communities have been advised by National Front leaders not to
participate in the reformasi movement or risk undermining the nation's fragile
multi-ethnic harmony and political stability. In short, Anwar Ibrahim's dismissal and
the reformasi movement have been expediently reduced to an intra-Malay political
altercation and by implication should
not overly perturb non-Malays. Recognising UMNO's increasingly unstable
political base within the Malay community, Mahathir has expediently courted the
Chinese community by a#suring them, through inuendo and more direct language,
that unlike the fate of the Indonesian' Chinese, the Malaysian Chinese have a stake
in the country under his leadership.
In Singapore, the Indonesian political crisis and attacks against the Chinese
community was initially projected by the state controlled mainstream media as
pribumis venting their anger against: the historically victimised and scapegoated
Chinese community. The political capital gained from promoting this perspective is
derived from reinforcing the insecurity complex of the predominantly Singaporean
Chinese community. Importantly, it enhances the stature of the PAP government as
a guardian of Chinese interests in a capricious Malay-Muslim region. In the
post-Cold War era of diminishing communist bogeys, the continued existence of the
ISA, which allows the state to detain citizens without trial, has been justified as
necessary for containing communalists inclined towards fermenting ethnic tension.
However, this justification has been commonly understood as a smokescreen to
contain dissenting views against the PAP's authoritarian rule.
In response to the rising tide of democratic sentiments, the concept of an
Asian-style democracy had been energetically promoted, particularly from the late
1980s, to counter domestic and international pressures to democratise. The concept
was purposefully articulated through the "Asian Way" discourse and official state
ideologies such as the Singaporean Shared Values and Indonesian Pancasila
Democracy. In the tradition of many senior PAP politicians and bureaucrats were
proud advocates of the culturalist "Asian Way" discourse, Chan Heng Chee has
listed some of the characteristics supposedly shared by East Asians. They include
having a communitarian impulse that is stronger than the individualistic impulse and
greater respect of authority, a strong interventionist state and dominant political
parties maintaining office for long periods of time.
The simplistic character of the "Asian Way" discourse and tenuous nature of the
performance-based legitimacy of many governments in Southeast Asia has been
made more obvious by the political challenges that quickly emerged once the
momentum of high growth ground to a halt in 1997. Governments in Thailand and
Indonesia collapsed amidst widespread civil protest while the fate of the Burmese
military regime appears to be increasingly precarious. The Malaysian government
has attempted to attenuate public disquiet with the economic recession by raising
the spectre of foreign plots against the country and proclaiming a new era of
neo-colonialism. In an outright denial of the role of students and other groups in
civil society in Suharto's political demise, Mahathir attributed it to the pernicious
work of foreigners. Commenting on the lesson he had learnt from Suharto's fall,
Mahathir opined, 'What 1 have learnt is that it is possible for foreign people to
influence people in the country, agitate them and cause them to overthrow the
government." Opposition politicians and critics of Mahathir's handling of the
economic crisis have been condemned as foreign agents."'
Despite Mahathir's anti-Westerri rhetoric, the Indonesian "contagion" was to visit
Malaysia shortly after the Indonesian May riots. Divisions within UMNO were
exacerbated by disagreemeins over the bail-outs of favoured firms and the
economic prescription required. Indicative of the intra-UMNO schism, Deputy Prime
Minister Anwar Ibrahim made veiled criticisms of the Mahathir backed bailouts of
politically connected Malaysian businesses. On June 1998, he referred to the
economic crisis as having "...unleashed a gale of creative destruction..." that would
"...cleanse society of collusion, cronyism and nepotism," In a direct contradiction of
Mahathir's stance, Anwar raised the spectre of the Indonesian pro-democracy
movement by stating that the "...weakness in internal policies contribute to some of
the problems... If we are unwilling to accept this, then we may face the Indonesian
situation where the people demanded changes.
The wide media coverage of Anwar's reformist stance and the prominence
accorded to issues such as nepotism and corruption, brought sharp rebuke from
Mahathir and other conservative forces within the party. This was manifested in the
resignation of Hamidi as UMNO Youth leader, senior editors from Berita Harian and
Utusan Melayu and senior television executives seen to be sympathetic towards
Anwar's reformasi agenda. Mahathir's criticism of the Central Bank over its tight
monetary and high interest rate policy led to the resignation of the Governor and
Deputy Governor of the Central Bank in 1998.
Ominous signs of widening intra-UMNO division and its weakening support base in
the Malay rural hinterland was made evident by UMNO's consecutive electoral
defeats to the Islamic-based party PAS in the 1997 Telok Intan, Perak and 1998
Arau, Perlis parliamentary by-elections. Mounting schisms within the Barisan
National coalition was made obvious by Gerakan's resolution at its June 1998 party
conference that called for the end of money -politics. 101 Anwar's sacking and
subsequent detention under the ISA in September 1998 and the detention and
expulsion of numerous UMNO politicians reflects Mahathir's attempt to purge UMNO
members in favour of reformasi. While the upper-level UMNO leadership may have
supported Mahathir's actions against Anwar, there appears to be considerable
disquiet within the politically potent UMNO gra#sroots who form the core of UMNO's
political base. Many have joined the opposition party PAS as a means of
registering their disillusionment with the UMNO leadership. A 1998 poll conducted
for UMNO indicated that 80% of party members do not believe the charges against
Anwar. In an attempt to stall a possible challenge by the UMNO rank-and-file
against his leadership, Mahathir shrewdly rescheduled the UMNO general
a#sembly elections from June 1999 to the following, year.
Without doubt, the manner by which Anwar was sacked, detained and physical
abused whilst held under the draconian Internal Security Act (ISA) has outraged the
public's sense of natural justice and more specifically eroded the traditional Malay
reverence for the "leader." This was clearly demonstrated when Mahathir was
heckled anjing (dog), which is the ultimate Malaysian insult, after the UMNO
Supreme Council Meeting had sacked Anwar from the party."' Public faith in the
impartiality of public institutions such as the judiciary and police force has
nose-dived with the sordid revelations of police brutality surrounding Anwar's
detention and trial. These disclosures have confirmed long-held suspicions that the
police routinely physically and mentally torture detainees as a ' means of extracting
confessions.Public outrage at the excesses of the executive and complicity of the
judiciary, police force and media has galvanised the reformasi protest movement
into forming numerous inter-ethnic non government organisations.` Adopting a
united front approach, they have forged close links with one another., local
opposition parties and pro-democracy movements in the region.
Measures geared towards preventing the economy from sliding further into
recession will strongly determine the Malaysian government's ability to contain the
reformasi movement. The stabilisation of the ringgit with the imposition of economic
policies such as the capital control measures may have tempered some middle
cla#s and business apprehension with the government's management of the
economic and political crisis. In particular, the capital control measures have
prevented overseas speculation in the Malaysian ringgit,"' stabilised the economy
and received the reserved endorsement of prominent economists such as Paul
Krugman. Importantly, the capital control measures have been endorsed by the
Malaysian International Chamber of Commerce and Industry, some trade unions,
consumer groups and non-government organisations such as the Third World
Network."' The latter groups tend to view international financial agencies such as
the International Monetary Fund, its financial liberalisation agenda and the current
dynamics of the international financial system as the overarching and more
pernicious threat to the sovereignty of Malaysia and other developing economics.
As Singapore slides deeper into recession, dissenting establishment voices that are
normally oblique and couched in polite language have become more a#sertive. The
generally compliant business community has expressed disappointment with the
PAP governments June 1998 off-budget measures to combat the economic crisis."'
In a rare feat of cross-party unanimity, some PAP and opposition MPs have called
on the government to do more, by way of relief, for companies and families hard hit
by the regional economic crisis. "' Earlier in the year, Nominated Member of
Parliament (NMP) Zulkifli Baharudin and several PAP MPs spoke out against
Singapore Films Amendment Bill which bans a wide range of political films and
videos and gives authorities looking for political films the power to conduct
searches and seizures without warrant. Zulkifli a#serted that the bill disadvantages
the opposition parties in view of the fact that the PAP has numerous dissemination
outlets at its disposal. As the number of worker retrenchments continues to surge,
expressions of dissatisfaction with the policy of encouraging skilled foreigners to
Singapore have been raised at by various quarters."' The need to re-examine
social welfare policies, which have long relied strongly on the resources of private
welfare organisations, has been advanced by NMP Claire Chang.
The growing yearning for greater democratic space was highlighted at a
state-sponsored conference on democracy in May 1998. Articulating these public
aspirations, the high-profile Singaporean amba#sador Tommy Koh called for a
"...culture of tolerance..." and "...a real need for the government not to visit those who
express dissenting views with retribution, This creates an atmosphere of fear. Calls
for Singaporeans to be accorded their constitutional right to exercise free speech
and a#sembly have been articulated by opposition politicians such as Chee Soon
Juan from the Singapore Democratic Party, NMP Zulflkli Baharudin and bodies
such as The Roundable. Repeatedly imprisoned for refusing to pay fines for
speaking in public without a permit in January 1999, Chee has sought to expose
and challenge the constitutionality of laws such as the Public Entertainment Act by
highlighting Section 14 of the Singaporean Constitution which explicitly guarantees
Singaporeans freedom of speech, a#sociation and a#sembly. By stressing the
importance of democracy in facilitating the island republic's ascend towards a
knowledge-based economy, Chee has undoubtedly struck a sympathetic chord
with many concerned Singaporeans. Others such as NMP Zulkifli Baharuddin and
journalist Cherian George have proposed the establishment of freespeech venues
without the need to apply for public permits on the grounds that "...The government
cannot monitor and regulate society forever and in the next phase of Singapore's
development, the public would have to be counted on to weigh competing interests
on its own. " By placing the need for greater democratisation firmly within the
context of Singapore's shift towards a knowledge based economy, the PAP's
authoritarian style of governance has been expediently contested on economistic
Reforming the ASEAN Way
Roundly applauded for its achievements during the "miracle years," the
a#ssociation of Southeast Asian Nations (ASEAN) has with the onset of the
economic crisis come under intense scrutiny and pressure to re-appraise its
"ASEAN Way" conventions. The cardinal "ASEAN Way" approach of projecting a
united front by not criticising other ASEAN members publicly and the
"speak-no-evil" diplomacy based on non-intervention in the domestic affairs of
ASEAN members has been blasphemised by the "war of words" between various
ASEAN nations. Additionally, its controversial "constructive engagement" approach
towards the Burmese SPDC military junta has been taken to task by the more liberal
oriented governments of Thailand and the Philippines for failing to improve the
SPDC's economic and human rights record.
One of the weak links in the ASEAN solidarity image has been the deep-seated
tension between the Singapore and Malaysia governments. By the earlier half of
1998, the problematic relations between both nations degenerated into petty public
bickering and hostile recriminations stemming from a raft of disputes such as the
administration of Malaysian customs, immigration and quarantine (CIQ) services in
the Malaysian run Tanjong Pagar railway station in Singapore. The CIQ dispute
escalated with the release of the first volume of Lee Kuan Yew's memoirs that
portrayed Malaysia's founding leaders as morally lax. Lee blamed the UMNO
dominated Alliance Federal government for inciting the 1964 race riots in Singapore
and the failure of Singapore's merger with the Malaysian Federation from
1963-1965. Lee's overt disapproval of Suharto's preference for Habibie as
Vice-President in early 1998 has also contributed to Singapore's strained ties with
Indo'nesia. A firm advocate of the concept of "democracy without turnover," Lee
provoked the ire of the Thais when he pronounced at an international forum in 1998
that the financial crisis in Thailand stemmed from the nation's rapid turnover of prime
ministers and cabinets. Lee's unsolicited views on the domestic affairs of
neighbouring countries have clearly contravened ASEAN's policy of
Singapore's well-publicised fracas with Malaysia and Indonesia was proceeded by
a war of words between Malaysian leaders and Filipino President Estrada and
Indonesia's Habibie over Anwar's physical a#sault whilst detained under the ISA.
Their comments and veiled threats to boycott the 1998 APEC summit in Kuala
Lumpur served to further strengthen the push to reform ASEAN's non-intervention
principle, deemed to be out-of-step with diplomatic realities, international norms
and morally bankrupt. Leading the intellectual argument for a reformed, rejuvenated
and relevant ASEAN, Thailand's Foreign Minister Surin Pitsuwan has a#serted that
ASEAN reform its non-intervention policy in favour of an approach based on
flexible engagement. Pitsuwan's flexible engagement proposal is based on
transparent and "open-dialogue" amongst ASEAN nations and government's
adopting "people-centred" approaches with civil society.` Such an approach would
help to improve ASEAN's international image and relations with regional groupings
such as the European Union. To date, ASEAN's international image has been
somewhat tarnished by the lack of creative solutions to the political instability in
Cambodia, poor management of the Indonesian forest fires in 1997 and repressive
actions of many ASEAN governments against dissenting groups. It has also failed to
adopt effective concerted measures in tackling the regional economic crisis. In view
of the intensification of regional and global interconnectedness, it is imperative
thatASEAN adopt creative and transparent approaches if it is to remain relevant
and effective in confronting the complex challenges of the new millenium.
Until the outbreak of the economic crisis in 1997, many advocates of East Asian
exceptionalism believed that East Asia's high growth would continue indefinitely,
proclaiming the twenty-first century as the Asian century. Singapore's Lee
Kuan-Yew confidently purported that, "The tide is rising for East Asia .... Soon we
shall talk to them [the West] more on equal terms." During the "miracle years,"
money-politics and nepotism were tolerated and authoritarian rule institutionalised
with the ideological a#sistance of the "Asian Way" discourse. However, the
tsunami-like ferocity of the regional economic crisis has exposed the fragility of
authoritarian rule and raised questions about the propriety the "Asian Way."
It is worth noting that the economic crisis has been viewed with an element of
hubris by some Western governments and opportunism by international financial
agencies and global capital wanting to further liberalise East Asia's economies. The
push for economic reform based on minimal state intervention has been
spearheaded by international agencies such as the IMF. Having blamed
endogenous factors such as cronyism, corruption and nepotism for the economic
crisis, there is scant recognition of the role of indiscriminate financial liberalisation
in spearheading the unregulated and destabilising flows of global capital in
rapacious pursuit of quick and high returns. To some extent, the capital control
measures of the Malaysian government have highlighted the need to regulate the
destabilising effects of unregulated, short-term and speculative capital movements
by restructuring the current international financial architecture.
The political crisis confronting many of the authoritarian states suggests that
authoritarian regimes are not equipped in containing the socio-political forces
unleashed by the economic transformation of the high growth years. In particular,
the fall and destabilisation of governments in Indonesia and Malaysia was to a large
extent precipitated by the severe erosion of their performance-based legitimacy.
The political turmoil unleashed by the economic crisis clearly demonstrates that the
legitimacy of Southeast Asian governments can be better secured by the coupling
of economic well-being with greater accountability and political space for civil
participation. Authoritarian forms of governance are increasingly recognised as
inherently stable and inimical in providing the political and economic prerequisites
for the challenges of the new millenium.
Pre-existing intra-elite divisions have escalated into outright power struggles
between the dominant conservative and reformist factions,"' the, former unwilling to
allow for greater democratisation whilst the latter establishing links with reformist
movements to extend the existing parameters of democratic space. If the elite
reformist factions prevail, the initial reforms instituted are likely to be incremental
and cautious but nonetheless significant in terms of strengthening the possibilities
for further reforms. As the Thai Foreign Minister Surin Pitsuwan has insightfully
opined "Change will come, but it will be incremental".
Southeast Asia's economic and socio-political landscape is undergoing a
metamorphosis. Like a baptism of fire, the chequered but determined struggles of
pro-democracy movements in the region represent a deep yearning for national
entities to be rejuvenated through genuine reform. The political agenda, practices
and perspectives of the "ASEAN Way" and "Asian Way" are coming under intense
challenge in recognition that economic reforms can only be effective if they are
accompanied by concomitant reforms in the socio-political sphere. Paradoxically,
such dramatic change would not have been possible without the turbulence of the
1 . East Asia includes countries in Northeast Asia and Southeast Asia.
2, They include social scientists such as Walden Bello and Stephanie Rosenfeld,
Dragons in Distress: Asia ~ Miracle Economies in Crisis, Penguin, London, 1990;
Yoshiliara Kunio, The Rise qf Ersatz Capitalism, Oxford University Press,
Singapore, 1988; R. Higgott and R. Robison (eds.), Southeast Asia.. Essays in the
Political Economy of Structural Change, Routledge & Kegan Paul, London, 1985; E.
Gomez and Jomo K.S., Malaysia ~ Political Economy: Politics, Patronage and
Profits, Cambridge University Press, Cambridge, 1997.
3. Paul Krugman a#serted that East Asian economic growth was unsustainable and
required greater improvements in innovation, technology and total factor
productivity. The high levels of growth was largely due to the transition of the labour
force from rural to industrial regions, education of the workers and catch-up in
capital stock. Refer to his article, "Myth of the Asian Miracle," Foreign Affairs,
V61.73, No. 6, 1996.
4. Refer to Alice Amsden, Asia's Next Giant: South Korea and Late Industrialisation,
Oxford University Press, New York, 1989 and Robert Wade, Governing the Market:
Economic Theory and the Role of Government in East Asian Industrialisation,
Princeton University Press, New Jersey, 1990.
5. CNBC is a subsidiary of Time Warner's CNN broadcasting network.
6. Walden Bello, "Fuelling the Psychology of the Bubble Economy," The Nation
(Bangkok), 9 February, 1999.
7. Refer to George Lodge and Ezra Vogel, Ideology and National Competitiveness:
An Analysis of Nine Countries, Harvard Business School Press, Boston, 1987 and
Peter Berger and Hsin Huang Hsiao (eds.), In. Search qf an East Asian
Development Model, Transaction Books, New Jersey, 1990.
8. G.Rodan, "Civil Society and Other Political Possibilities in East Asia," Journal
~f'Contemporary Asia, Vol. 27, No. 2, 1997, p. 170.
9. Ibid, p. 17 1.
10. Refer to W.W Rostow, Stages of Economic Growth, MIT Press, Cambridge, 1960.
11. Cited from 'I've Lost My Voice," Asiaweek, 27, March, 1998.
12. D.M. Jones, Political Development in Pacific Asia, Polity Press, U.K., 1997, p.
13. Straits Times Interactive, 6 November 1997.
14. Jonio Sundaram, 'Migers in Trouble," paperpresented at theAsia-Pacific
Conference, Glebe High School, Sydney, November, 1997.
15. The Singapore and Taiwan dollar lost nearly 20% of their value against the US
dollar in the first few months of the crisis (Straits Times, 22 Jan. 1998).
16~ The Singaporean and Hong Kong authorities have cooperated to deter
speculators taking advantage of the different regulations on stock futures contracts
traded in both cities (New Straits Times Interactive, 18 November 1998).
17. Hans-Peter Martin and Harald Schumann, The Global Trap: Globalisation and
the a#sault on Democracy and Prosperity, Pluto Press, Sydney, 1996.
18. In recognition of the potentially damaging nature of finance capital, Tobin has
advocated deterrence measures against short-term speculation by way of a tax on
currency transactions to be agreed upon internationally and administered by the
19. This argument has been cogently put by David Held in "Democracy and
Globalisation," Alternatives 16,1991,p.203.
20. Jeffrey Sachs, "To Stop the Money Panic," Asiaweek, 13 Feb. 1998.
21. A. Shameen, "Making Sense of a Crisis," Asiaweek, 31 Oct. 1997.
22. Gerald Tan, ASEAN.. Economic Development and Co-operation, Times
Academic Press, Singapore, 1996,p.34. Refer to Anne Booth, "Southeast Asian
Economic Growth: Can the Momentum Be Maintained?," Southeast Asian Affairs
1995, Institute of Southeast Asian Studies, Singapore.
24. In Thailand, short-term foreign loans constituted 51 % of GDP in 1996. Her
foreign currency debt is approximately US$90 billion (Sydney Morning Herald, 16
Aug. 1997), Refer to N. Chanda, "Rebuilding Asia," Far Eastern Economic Review,
12 Feb. 1998.
25. Indonesia's private sector owes US$65 billion in foreign loans. This debt is
largely short-term (Sydney Morning Herald, 17 Jan. 1998). In Feb. 1998, the
Indonesian government revealed that the national debt was US$ 137 billion (Sydney
Morning Herald, Feb. 1998).
26. "The Asian Crisis: An Interview with Nouriel Roubini," Dateline, 27 Jan. 1998
27. In 1997, it stood at 5.4% of GDP which is the largest of the ASEAN-4 nations
(Asiaweek, 31 Oct 1997).
28. Senior banking supervisory personnel from government agencies in Indonesia
(Central Bank) and Ja pan (Ministry of Finance) have been accused of accepting
kickbacks and engaged in corrupt activities (Far Eastern Economic Review, 12 Feb.
29. Asiaweek, 31 Oct. 1997.
30. To the Singaporean government's credit, the liberalisation of financial markets
had been augmented by prudential supervision of the financial and securities
market. It stands out as the only government in SoutheaseAsia to have seriously
initiated pro-active measures to curb the excessive credit expansion in real estate.
Acting on early warning signals, the government in early 1996, imposed high tax
surcharges on property resold less than 3 years after purchase to curtail real estate
31. Far Eastern Economic Review, 2 July 1998.
32. This project was to be undertaken by Suharto's daughter Titiek Prabowo.
33. Straits limes Interactive, 17 September 1997.
34. Straits Times Interactive, 11 Jan. 1998.
35. Japan, US and EU have protested to the World Trade Organisation (VYTO)
over the "unfair trading' conditions accorded to the Timor Putra car project and
Indonesia's violation of its free trade commitments.
36. P. Lubeck, "Winners and Losers in the Asia-Pacific," in G. Thompson,
Economic Dynamism in the Asia-Pacffic, Routledge, London, 1998, p.295.
37. For an insightful exposition of this phenomena please refer to Anthony Reid,
SoutheastAsia in the Age of Commerce 1450-1680, Vol. 2, Yale University Press,
New Haven, 1993.
38. Adam Schwarz, Indonesia: A Nation in Waiting, Allen & Unwin, Sydney, 1994,
39. "Now, Habibie Inc.," Asiaweek, 5 June 1998.
40. The "Bumiputera" share of the major professions (doctors, lawyers, architects,
engineers) was 5% in 1970 and rose to 29% in 1990.
41. The Chinese ownership of the corporate sector has increased from 37% to 40%
whilst the foreign ownership has decreased from 60% to 30%. Refer to James
Jesudason, Ethnicity and the Economy.. The State, Chinese Business, and
Multinationals in Malaysia, Oxford University Press, Singapore, 1989.
41 Ibid, p. 176.
43. P. Lubeck, op.cit., p. 292.
44. E.T. Gomez and Jorno K.S., Malaysia's Political Economy: Politics, Patronage
and Profits, Cambridge University Press, Cambridge, 1997.
45. Ibid, p. 67.
46. A. Bowic, "The Dynamics of Business-Govemment Relations in Industrialising
Malaysia," in A. Macintyre (ed), Business and Government in Industrialising Asia,
Allen & Unwin, Sydney, 1994, p. 182.
47. Ibid, p. 96-97.
48. E.T. Gomez, Political Business: Corporate Involvement of Malaysian Political
Parties, James Cook University Press, Townsville, 1994, p. 13 1.
49. Bowie, op.cit., p. 183.
50. Op.cit., p.37-39.
51. The Hong Leong Group was reported to have supported the former Finance
Minister Anwar Ibrahirn's successful 1993 bid for the UMNO Deputy Presidency.
Refer to E.T.Gomez and Jorno K.S., 1997, op.cit., p. 129.
52. For an analysis of the 1995 general elections, refer to Lily Rahim, "The 1995
Elections and the Politics of Pragmatism," Current Affairs Bulletin, Vol. 72, No. 4,
December 1995/January 1996.
53. For example, no charges were brought against former Chief Minister Rahim
Tamby Chik for the enormous amount of wealth he ama#sed during his tenure as
Malacca's Chief Minister. Ministry of International Trade and Industry Minister
Rafidah Aziz similarly did not have to answer to the charge of chairing a committee
that approved special share allocations to her son-in-law. Refer to "The New Anti
Corruption Act: Missed Opportunity," Aliran Monthly, August, 1997.
54. Cited in Asiaweek, 5 May 1998.
55. Under the new bill, sentences for those found guilty of corruption has been
significantly increased. The maximum fine rose to RM 100,000 with a jail sentence
of up to 20 years (Gp.cit.).
56. In Thailand, these declarations have been publicised in the press. Asiaweek, 20
57. Not surprisingly, the EPF dividend of 6.7% in 1997 was the lowest in 20 years.
Refer to G. Rajasekaram,
"Lowest EPF Dividend in 20 Years," Aliran Monthly, April, 1998, p. 9.
58. S. Husin Ali, "Economy in CriAs," Aliran Monthly, April 1998, p. 17.
59. Walden Bello, "The Malaysian Enigma," Focus on Trade, No. 13,
60. KPB's debt was RM 1 .6 billion by the end of 1996 or triple the value of its
capital. Refer to "The Bailout
Business," Asiaweek, 27 March, 1998.
61. "Thailand Gets the Bill," The Economist, 9 August, 1997, p. 21.
62. Senior bureaucrats are also subject to financial scrutiny. J. Spragur and J.
Gearing, "Will the Diet WorV: The Thai Charter Takes Graft Off the Menu,"
Asiaweek, 20 May, 1998.
63. M. Vatikiotis, "The Reform Tango,- Far Eastern Economic Review, 5 Nov. 1998.
64. As a publicly listed company HPL was in breach of the Stock Exchange of
Singapore rules when it failed to get the the permission of its shareholders before
granting generous discounts to numerous members of the Lee family.
65. Goh Click Tong appointed the Finance Minister Richard Hu and the Deputy
Managing Director of the Monetary Authority of Singapore Koh Beng Seng to
investigate the HPL discounts granted to the Lees. It is particularly noteworthy that
the Gob had not directed bodies such as the Commercial Affairs Department (CAD)
or the Corrupt Practices Investigation Bureau (CPIB) to investigate the matter. The
CPIB have in the past investigated corruption allegations against the former
Ministers Teh Cheang Wan and Wee Toon Boon.
66. Opposition MPs have argued that Ministers should declare their a#sets. This
was rejected by Coh who argued that such requirements were not needed as it
would make public office less desirable. Refer to W. Femandez, HPL Condo Sales:
Questions Answered, Straits Times (Weekly Edition), 1 June 1996.
68. In Singapore, top ranking bureaucrats earn US$34,571 per month compared to
their US counterparts who earn US$7,224 per month. Refer to John Quah,
"Singapore's Model of Development," in Henry Rowen (ed), Behind EastAsian
Growth, Routledge, London, 1998, p. 110.
69. Straits Times, 23 March 1985.
70. These professions were identified as banking, accounting, engineering, law and
senior positions in local manufacturing companies and multinational corporations.
Nominated Member of Parliament Lee Tsao Yuan asked why the annual salary of
S$600,000 for a Minister was not enough to meet their needs whilst Kanwaljit Soin
warned that the proposal might have the effects of "inviting cynicism and devaluing
the worth of Ministers." Refer to Kwok Kian Woon, "Singapore: Consolidating the
New Political Economy," Southeast Asian Affairs 1995, Institute of Southeast Asian
Studies, Singapore, p. 30 1.
71. Junzi are honourable men in high public office who have a duty to do right for
the people, and who in rum have the trust and respect of the population.
72. Refer to S. Huntington, "Will More Countries Become Dernocratic?," Political
Science Quarterly, Vol. 99, No. 2, 1984 and S.M. Lipset, "Some Social Requisites of
Democracy: Economic Development and Political Legitimacy," American Political
Science Review, Vol. 53, 1953.
73. H. Crouch and J. Motley, "The Dynamics of Political Change,- in J. Morley
(ed), Driven by Growth, M.E Sharp, Armonk, 1993.
74. The two opposition parties were Islamic United Development Party and
75. Over half of the 1,000 members of the MPR were appointed. Many of them were
Golkar leaders and senior officials in the military.
78.To qualify as a candidate, a person must have no less than 3 years experience
as a cabinet minister or a chief executive officer of a company with a paid-up
capital of more than S$ 100 million. They must be at least 45 years of age, not
insane or bankrupt and must not serve more than one year in jail or been fined
more than S$2000 in the last 5 years. Refer to L. Rahim, "Consent, Coercion and
Constitutional Engineering in Singapore," Current Af irs Bulletin, 70(7), 1994, p. 24.
79. Khoo, op.cit., p. 206.
80. Cited in D.M. Jones, op.cit., p. 51.
81. Khoo, op.cit., p..292.
82. "World Lawyers Call for IJC Intervention," Aliran, April 1998, p.23.
83. Craig Skehan, "Anwar Warns of Evil Conspiracy," Sydney Morning Herald, 7
84. United States Department of State, Singapore Country Report on Human Rights
Practices.for 1997, Bureau of Democracy, Human Rights and Labor, 30 January,
85. "Singapore: Party Rules the Courts, Jurists Warn," Sydney Morning Herald, 4
86. For an insightful account of the treatment of ISA detainees refer to Francis
Seow, To Catch A Tatar: A Dissident in Lee Kuan Yews Prison, Yale Centre for
International and Area Studies, New Haven, 1994.
87. A December 1998 opinion poll by the Suan Dusit Institute revealed that Prime
Minister Chuan Leekpai was the most popular politician. "Chuan is Thais Favourite
Politician," Straits 77mes, 1 January 1998.
88. Quoted in Straits Times Interactive, 22 January 1998.
89. "Riots Not a Call for Dernocracy," Straits Times 16 June 1998.
90. Quoted in Anders Uhfin, '7ransnational Democratic Diffusion and Indonesian
Democracy Discourses," Third World Quarterly, Vol. 14, No. 3, 1993, p. 53 1.
91. Mark Thompson, "Late Industrialisers, Late Democratisers: Developmental States
in the Asia-Pacific,"
Third World Quarterly, Vol. 17, no. 4, 1996, p. 643.
92. Poverty was reduced from 64% in 1975 to 11.4% in 1995. Refer to Asiaweek, 29
93. It is worth noting that the failure of reformist movements in one country can also
have the effect of discouraging reformist movements in other countries. Additionally,
the demise of an authoritarian regitne could well result in its replacement with
another authoritarian regime.
94. Khoo Boo Tek The Paradoxes of 'Mahathirism, Oxford University Press, KL,
95. The Malaysian Indian Congress President has warned the Indian community to
stay clear from the r~Ibi-~nasi movement. Refer to A liran, December 1998, p.21
and Straits Times Interactive 16, Novemher 1998.
96. More than 10 major Chinese a#sociation has come out in support of Dr.
Mahathir and the Malaysian Chinese a#sociation. Refer to B. Pereira, "Chinese
Malaysians Behind Government, " Straits Times, Jan, 4, 1999.
97. Francis Scow, op.cit., p. xxv.
98. Chan Heng Chee, "Democracy: Evolution and Implementation," in R. Bartley et
al, Democracy and Capitalism: Asian and American Perspectives, ISEAS, Singapore,
1993, p. 21-24.
99. Straits Times Interactive, 21 July 1998.
100. Straits Times Interactive, 25 June 1998.
101. B. Pereira, "Mahathir Raps Oppostion Parties," Straits I71mes Interactive, 21
102. S. Jayasankaran, "Read the Signs,- Far Eastern Economic Review, 18 June
104. Straits Times Interactive, 29 June 1998.
105. Some UMNO party leaders have apparently been jeered by gra#s-roots
members when they attempted to explain Mahathir's actions against Anwar. Refer to
S. Jayasankaran, "The Ringmaster," Far Eastern Economic Review, 15 October
106. Cited by WaidenBello, "The Malaysian Effigma," Focus on Trade, No, 3 1,
107. By postponing the UMNO general a#sembly elections, Mahathir has helped to
shield the newly appoil
Deputy Prime Minister (DPM) Abdullah Ahmad Badawi from any attempts to unseat
him as DPM.
108. P. Ramakrishnan, "The Fear Is Gone," Aliran, December, 1998, p. 10.
109. The Attorney General Mobtar Abdullah in January 1999 acknowledged that
the Royal Malaysian Pol was responsible for Anwar's physical a#sault while in their
110. Surveys conducted for UMNO reveal that 7 out of 10 Malays are unhappy
with the way Anwar v sacked and subsequently treated. Refer to M. Hiebert and S.
Jayasankaran, "A Single Spark," 1 Eastern Economic Review, 2 October, 1998.
Calls for Mahathir to-resign were made by oppositi parties and non-government
organisations after an outbreak of rioting in October 1998 (Straits Tin Interactive, 26
111. They include Gerak (Malaysian Peoples Justice Movement), Gagasan
(Coalition for Peoples Dem( racy) and ADIL (The Movement for Social Justice).
112. W. Bello, op.cit. .
113. Refer to Martin Khor, '7urning the Tide Against Financial Liberalisation," New
Voice (~f Asia, Vol. Issue 1, 1998, p. 41.
114. Straits Times Interactive, 18 July 1998.
115. Chua Lee Hoong, "MPs Call for More Moves to Stimulate Economy," Straits
Times Interactive, March 19g&
116, Violators can be fined up to $90,000 or jailed up to two years. A political film
has been broadly defint as any moving image made by or on behalf of a political
party, directed towards any political end, ( which contains partisan or biased
comments on an issue of public controversy. The government hz argued that the bill
was necessary to prevent the "McDonaldlisation" of political campaigning. Refer t
C. Lydgate, "Government Crackdown on Political Films Angers Opponents," Sydney
Morning Herah 7 March, 1998.
117. A. Hamilton, "A Question of Censorship," Asioweek, 27 March 1998.
118. Straits Times Interactive, 29 June 1998.
119. Chiang has a#serted that the current family-comm unity -state fonnula may not
be adequate in the futur, because of the aging population. There are also too many
small welfare groups providing similar ser vices, lacking in economics of scale and
run by volunteers who lack experience. The current problem~ require more
centralised and coordinated welfare services. Refer to Chua Mui Hoong, "Many
Helpin~ Hands May Not Be Enough," Straits Times Interactive, 12 August 1998.
120. A. Hamilton, "Lets Talk About Openness," Asiaweek, 26 June, 1998,
121. Refer to Lily Zubaidah Rabim, "Costly Fight for Democracy in Singapore," The
Nation (Bangkok), 3 March, 1999.
121 Noted Lee, "The market was disturbed by [Suharto'sj criteria for the
Vice-President that required a mastery of science and technology. They believed
that this pointed to a Minister whom they a#sociated with Indonesia's high-cost
projects. If the market is uncomfortable with whoever is the eventual VicePresident,
the rupiah would weaken again." Quoted in Sang Won Sub, "Neighbourhood
Relations," Asiaweek, 4 September, 1998.
123. Edward Tang, "Lee's inappropriate comments upsets Thais," Singapore
124. Cited in The Alternative ASEAN Network on Burma (Altscan-Burma) Press
Release, 27 July, 1998.
125. Lee Kuan Yew, "Tide Rising for East Asia," Straits Times Weekly Edition, 8
126. An Indonesian Joint Fact-Finding Team on the May 1998 riots has linked the
riots to an "elite political struggle." The Team noted that much of the rioting was
instigated rather than spontaneous and confinned that Indonesia has a political elite
willing to cause social turmoil for its own interest. Refer to J. Manuel Tesoro,
"a#sessing the May Riots," Asiaweek, November 13, 1998.
127, Quoted in M. Vatikiotis, "The Reform Tango," Far Eastern Economic Review, 5 Nov. 1998.
Link Reference : The 'Asian Way': From Miracle to Meltdown