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Malaysia banks on Mr
Right
Keith Andrew Bettinger
WASHINGTON - As the torch of Malaysian
leadership passes from Mahathir Mohamad to Abdullah
Ahmad Badawi, pundits are scrambling to figure out what
to make of the new prime minister. Abdullah, it has been
decided, has a number of hurdles to overcome, and while
not possessed with the unique attributes of his
predecessor, he does have certain qualities that could
help him steer Malaysia nearer its lofty "Vision 2020"
goals.
While doubters keep pen and paper at the
ready to chronicle any signs of behind-the-scenes
manipulation by Mahathir, challenges from Islamic
fundamentalists or any economic indicators that would
doom Abdullah's administration in its infancy, the new
prime minister has indicated that his ascendancy will be
measured and calculated. It will have to be if he is to
balance trends toward fundamentalism in his country
against Malaysia's relationship with its No 1 trading
partner, the United States. He inherits criticism from
abroad for Malaysia's draconian Internal Security Act
(ISA), but any moves toward liberalization could
strengthen the opposition and weaken his grip on power.
Malaysia is indeed at a crossroads; Abdullah will make
or break his career with the decisions he makes as
Mahathir fades into the background.
In terms of
economics, Malaysia is on the brink of a new phase of
development. Malaysia was the grand Southeast Asian
success story of the 1990s - the great hope for the
developing world. Bucking conventional wisdom and
eschewing the Washington Consensus, Malaysia emerged
relatively undamaged from the Asian financial crisis,
poised to continue its meteoric rise through
middle-income nationhood. Malaysia's growing affluence
stemmed from its export-oriented economy and its success
in transforming itself from reliance on commodities to
finished goods and high-tech products. During the 1990s
Malaysia benefited from its relatively cheap labor force
and became a hub for silicon chips.
Now Malaysia
faces greater competition from abroad. Many observers
have pointed to China as a threat to Malaysia. In the
mid-1990s, Malaysia was attracting US$5 billion to $7
billion a year in foreign direct investment (FDI). While
China's FDI is approaching $50 billion annually,
Malaysia's has dipped below $1 billion. Some analysts
warn of a great sucking sound as jobs move out of
Malaysia to take advantage of cheap, abundant labor and
a liberalizing business environment. However, with
balanced policies and a sensible eye toward the future,
Malaysia may be able to increase its fortunes in tandem
with the People's Republic. Things have been looking
positive for Malaysia; the stock market is up, and the
economy has experienced 4.5 percent growth this year and
is projected to grow by another 5-6 percent in 2004.
These figures are down from the average 7 percent
pre-meltdown growth rates experienced in the 1990s, but
Malaysia's economy has entered a new phase in which the
goal should be slower, sustained growth.
Dr
Arvind Panagariya, former chief economist for the Asian
Development Bank, focused on China by explaining how its
rise could benefit other nations as well. "It's a big
opportunity," he said. "The Chinese market is evolving
in such a way that other countries, if their policies
are right, can do well. China's market is not closed."
Panagariya then added: "If Malaysia can compete with
China now, they will able to compete later."
Specialization would improve Malaysia's
position. As China continues to develop, wages will need
to rise, as people desire a higher standard of living.
Panagariya said that unfettered markets in Malaysia will
enable experienced entrepreneurs to take advantage of
opportunities in China. One current example is palm oil,
one of Malaysia's most abundant commodities, which is
selling briskly in India and China, where consumers are
choosing vegetable over animal oils.
Abdullah
Badawi has said publicly that he will continue
Mahathir's economic policies. But this by itself is a
vague statement providing few clues for international
investors; Mahathir was praised for his handling of the
1997 Asian financial crisis but has been jeered for
rewarding friends and "picking winners". However,
Abdullah has railed against the cronyism and corruption
so ingrained in the Mahathir regime, and as time goes
by, he should feel more comfortable in criticizing his
former boss. He will seek to make Malaysia more
attractive to foreign investors by cracking down on
corruption and mindless bureaucracy while improving the
efficiency of the civil service.
One early test
of his ability will be how Abdullah handles the recent
imbroglio over a contract to improve a stretch of
railway; the multibillion-dollar contract had been
awarded to a Indian-Chinese partnership, but just 10
days before he retired, Mahathir reneged on the promise,
instead awarding it to Syed Mokijtar al-Bukhary, a
reclusive Malay tycoon with personal ties to Mahathir.
This type of contract is an example of the type of
cronyism that marred the Mahathir years; critics often
assailed the administration over billions of dollars
spent on megaprojects, such as the Putrajaya capital
district, the Kuala Lumpur International Airport and the
KL monorail.
Abdullah has indicated that he will
move away from big-ticket spending and will instead
focus on agricultural and small business development.
This may have the serendipitous bonus of discouraging
cronyism because agricultural development and small
businesses are harder to skim huge amounts of money off
the top of, and these types of projects will be less
accessible and less attractive to the old-guard tycoons.
Then Malaysia may enjoy the best of both worlds -
increased transparency and competitiveness to go along
with the lure of a well-developed infrastructure.
Abdullah does not have the solid hold on the reigns of
power that will allow him to be perceived as favoring
one group over the others. If he allows cronyism to
flourish anew, he risks losing credibility with younger
Malaysians still forming their political loyalties.
Abdullah's reputation as a consensus-builder
should further soothe the misgivings of international
investors. In addition to the aforementioned criticisms,
Mahathir has also been attacked for his autocratic
management style. K S Jomo, economics professor at
University Malaya, wrote recently in the Far Eastern
Economic Review that "the quality of Malaysian
policymaking would have been considerably enhanced by
genuine popular consultation in the national interest,
rather than presuming to know what was best for the
nation. There are few instances when greater
consultation, transparency, and accountability would not
have helped."
His style not withstanding,
Abdullah does not have the political capital to dictate
his terms. He will need to be more open to other views
and will need support of other leaders to buttress his
administration. In the long run, this will provide
stability and more enlightened policymaking. As Abdullah
follows a moderate path, institutions that were cowed
under Mahathir may slowly reassert their constitutional
purview. This will increase transparency and improve
governance, enhancing Malaysia's image among
human-rights watchers.
The new prime minister
will have ample opportunity to prove himself in
international politics as well. Malaysia's geostrategic
location makes it a key variable in the international
calculus of power politics. Abdullah's predecessor has
been somewhat of an enigma for global-minded statesmen.
Mahathir's anti-Semitic rantings and periodic outbursts
aimed at the West have won him few friends, and have
perhaps hindered Malaysia's relations with the West,
preventing it from taking a greater role in regional
affairs.
Dr Bridget Welsh of Johns Hopkins
University's School for Advanced International Studies
said that since Abdullah is a more consensus-oriented
leader he may be able to soothe the recently rocky
relations between his country and Australia and the US.
In the past there were "leadership issues causing
needless negative energy", Welsh said, adding that the
United States should give Abdullah and other leaders
some time to consolidate their positions and suggested
patience.
So far, though, Abdullah is making
progress. Welsh cited the recent release of prisoners
jailed under the controversial ISA as an example.
Releasing former deputy prime minister Anwar Ibrahim,
whose health is deteriorating, would be a further sign
of goodwill and would "show that Badawi is standing on
his own ... that he is different". Welsh, the editor of
Reflections: The Mahathir Years, cautioned that
it is still too early to make judgments on Abdullah's
chances.
Abdullah is well equipped to deal with
international issues. In addition to a term as finance
minister, he served as foreign minister for eight years.
He will have a chance to define himself quickly, as
Malaysia is the chair of the 114-member Non-Aligned
Movement and the 57-member Organization of Islamic
Conference (OIC). Abdullah, though seen as a moderate,
has excellent credentials with his country's Bumiputra
(Malay) majority; he was trained as an Islamic scholar.
This should enhance his credibility in the OIC. Thus,
while Mahathir was lauded by some Muslims for his
remarks about the Jews, Abdullah's background will
enable him to be more of a model, leading by actions
rather than words.
Abdullah has a chance to be
the prototype of a new kind of Islamic statesman, rather
than a fiery demagogue. This could woo supporters away
from the Parti Islam SeMalaysia (PAS), although he may
have difficulty in reconciling Malaysia's relationship
with the United States with his political imperative of
appealing to the Muslim majority, among whom US foreign
policy has not been well received. Abdullah has shown
promise, though. This year, while Mahathir was on a
two-month vacation, Abdullah had a "dry run" as acting
prime minister and diplomatically voiced Malaysia's
opposition to the US-led campaign in Iraq while keeping
internal protests manageable.
He will also have
an opportunity to reinvigorate the Association of
Southeast Asian Nations (ASEAN), which many analysts
have claimed is mired in a procedural swamp that
prevents its members from getting anything done. With
the recent debacle in Cancun, Mexico, and protests in
the streets wherever the carnival that is the World
Trade Organization sinks its stakes for a meeting,
regional trade agreements have a great deal of appeal.
India and China have both expressed interest in
forging ahead with a free-trade area in Southeast Asia;
if Malaysia can move these projects forward it would
enhance its prestige in ASEAN. Abdullah's Islamic
credibility and his diplomatic manner would serve him
well as a regional leader; if he plays his hand well he
could be a bridge between ASEAN and the United States,
interpreting and guiding US policies toward the region
while steering regional initiatives in a direction that
is amenable to the heterogeneous populations of the
ASEAN nations and to the US as well.
Southeast
Asia is an important nexus in the "war on terror"; while
it is becoming more obvious to the administration of US
President George W Bush that terrorism is a global
problem, it seems apparent to other nations that US
policies are shortsighted and ignorant of local
realities. And though it would be down the road a bit,
given the realities of the current world, Abdullah may
be able to cultivate "soft power", that is influence
over other nations, especially by making friends in
Washington and subtly informing the leadership there
while making monetary and manpower contributions to
international reconstruction efforts in Iraq and
Afghanistan.
The United States will be eyeing
Abdullah's policies vis-a-vis the PAS, which now
controls two states, Terengganu and Kelantan. Under
Mahathir, Islamic extremism never had the chance to
thrive, but in the past few years the PAS has gained
ground on Abdullah's United Malays National Organization
(UMNO), much to the consternation of the US. The PAS has
declared jihad against the United States, and PAS
demonstrators clad in Osama bin Laden shirts protested
the campaign in Afghanistan outside the US Embassy in
Kuala Lumpur. While the running joke at the US State
Department is that the United States had no problem with
Malaysia, just one particular Malaysian, Mahathir has
been the only Muslim leader in Asia with the courage to
take on Islamic schools that are hotbeds of teaching
hatred and terror. Abdullah will be watched like a hawk
for any sign that he favors a relaxation of Mahathir's
policies against fundamentalism.
Mahathir has
been synonymous with Malaysia. He has been labeled a
visionary and will go down as a national hero in
Malaysia. There is good reason for this. During his
tenure, Malaysia's per capita income grew from RM4,630
in 1982 to RM$14,877 ($3,915) in 2003; a true middle
class developed and now most citizens have houses and
cars. Regardless of his eccentricities, this is a
marvelous feat; the "Malaysian Dream" has become a
reality.
Now Abdullah Badawi takes over. No one
has accused him of being a visionary, but he may be
exactly what the doctor ordered: a steady hand to guide
Malaysia into a new millennium, using a "nip-and-tuck"
style of modifications to improve the country's
governance. Abdullah will face the difficulty of moving
away from Mahathir's shadow and asserting himself, while
not arousing the ire of the former prime minister.
Abdullah has shown that he is politically skilled, but
he will need support and a certain amount of luck to
succeed.
While the challenges are formidable,
Abdullah Ahmad Badawi just might be the right man at the
right time for Malaysia.
(Copyright 2003 Asia
Times Online Co, Ltd. All rights reserved. Please
contact content@atimes.com for
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