PENANG, Malaysia - News that former premier
Mahathir Mohamad has been appointed adviser to national
car maker Proton has set tongues wagging again in
Malaysia, particularly because his new appointment comes
hot on the heels of his earlier appointment as adviser
to the national petroleum corporation, Petronas.
Taken together, these announcements have placed
the former political strongman in an influential
position. He who "advises" the national cash cow
Petronas is likely to have enormous influence, while he
who "advises" Proton should have some clout on the
economic front, especially in deciding whether
protectionist measures should continue.
Mahathir
stepped down as prime minister last October after 22
years in power and, back then, Malaysians wondered
whether he would really be content with horseback riding
- one of his favorite pastimes. Then his anointed
successor, Abdullah Badawi, led the ruling coalition to
a thumping victory in last month's general elections -
albeit marred by irregularities.
The decision to
make Mahathir the Proton adviser did not go down well
with all. News reports spoke of a boardroom revolt at
Proton over the appointment, which some felt would be an
obstacle to reforms within the company.
But
despite the protests, last Tuesday the mainstream media
carried a matter-of-fact report on Abdullah's
appointment of Mahathir as adviser without any mention
of the boardroom revolt. "Proton can seek his advice on
many things," said Abdullah, who noted that Mahathir has
had a role in Proton since the car maker's inception in
the 1980s. "Dr Mahathir also said that he would not
interfere in the executive work of Proton. He knows that
the Proton board has the final say."
The news
comes at a delicate time for Proton. Japanese car maker
Mitsubishi is scaling down its stake in the Malaysian
marque, ending its 20-year partnership with Proton.
Meanwhile, speculation is mounting that Proton will soon
link up with another major foreign car maker.
Many analysts believe that Proton is not yet
ready to meet the challenges of regional competition -
even after 20 years - as trade barriers are
progressively dismantled. Some argue that Proton should
be entitled to preferential protection for now as it has
a higher local content than foreign models. But still
others argue that consumers would benefit if there were
a level playing field for all. Cars in Malaysia are said
to be two or three times as expensive as those in many
other countries.
Thus it is likely to be a tough
year ahead for Proton as potential customers sit out and
wait for newer, sleeker models, which are only likely to
surface next year. Much hope is being placed in Proton's
upcoming GEN.2 models and the Campro engine.
But
one of Proton's biggest problems is the lack of
economies of scale. It is too heavily dependent on the
local market, which it controls through protectionist
measures. This is something a tie-up with a foreign
entity might help.
Still, the focus on the
national car has hurt the country in other ways. During
Mahathir's tenure as premier, Malaysia became one of the
most car-dependent nations in Southeast Asia as
Malaysians were encouraged to buy the national car. When
he masterminded the launch of Proton in the 1980s,
Mahathir curtailed foreign car competition by imposing
stiff taxes.
With ruling-party-linked firms
holding interests in toll-highway projects, road
transport was given more prominence as more and more
cars clogged the highways. By comparison, the country is
still in the midst of upgrading its other transport
systems and is attempting to electrify its main railway
route from the north to the south of the peninsula - a
painstakingly slow process that is taking years to
complete.
Therefore, the focus on the national
car appears to have thwarted improvements in public
transportation. There has been comparatively little
investment in improving the speed and efficiency of
public transport, including railways. Critics say there
is no incentive for the state to improve the public
transport network when it is more concerned with
protecting the national car and building more toll ways.
Inter-city trains move along at a leisurely
pace, making them slow and out of date compared with the
high-speed trains found in Japan, Europe and elsewhere.
A journey from Kuala Lumpur north to Butterworth, a
four-hour drive, can take up to twice as long by train.
In Kuala Lumpur, which has light-rail transit
and electric-rail networks, many commuters still prefer
to drive to work because their offices and homes are far
from rail stations, while train-line interchanges and
integration with bus networks leave much to be desired.
Moreover, instead of improving the public
transport infrastructure, the emphasis still is placed
on road construction. In the 1970s, Penang and Singapore
had comparable private-vehicle dependency statistics.
But while Singapore invested heavily in public
transportation, Penang, along with the rest of Malaysia,
allowed a rapid explosion of private vehicles.
On the traffic-clogged island of Penang, for
instance, official plans to build a RM1 billion (US$263
million) Penang Outer Ring Road (PORR) have been met
with stiff resistance from residents who point to a lack
of transparency and a conflict of interest involving
politicians who have an interest in the project.
On April 10 at a talk titled "Penang Lecture
2004: Governance in Search of Public Trust" organized by
SERI, a Penang state government sponsored think-tank,
Tunku Abdul Aziz Tunku Ibrahim, chairperson for
Transparency International Malaysia, labeled PORR a
"first-class corruption case study".
"It has an
enormous potential for unmitigated disaster. It is an
example of everything that constitutes bad planning,
lack of transparency and questionable privatization," he
told the audience.
And while the emphasis on
cars and highway development at the expense of public
transport and inter-city rail can be expected to
continue under the Abdullah administration, it is the
appointment of Mahathir as adviser to Proton and
Petronas that has raised the most eyebrows, as more and
more Malaysians wonder how much power and influence the
former prime minister actually wields behind the scenes.
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