What Mahathir Has Wrought

A PRE-PATD electronic "Touch and Go" card offers the best way to negotiate the toll booths along the north-south superhighway that traverses the Malay Peninsula from Johore to the Thai border. By an unintended irony, the tide of the card captures the current condition of the Malaysian polity. On the one hand, Malaysia has emerged from the Asian financial meltdown relatively unscathed economically. On the other, a series of political scandals and a bitterly contested election campaign in November 1999 have rocked the United Malay National Organization (UMNO), the ruling party that has overseen the development of this multi-ethnic state--composed of 62 percent Malays, 30 percent Chinese and 9 percent Indians, the beliefs of whom traverse the spectrum of spiritual possibility from animism to Islam.

Almost daily revelations of alleged corruption and sexual misdeeds involving former Deputy Prime Minister Anwar Ibrahim, his adopted brother and his chauffeur have disturbed the quiescence of the recently urbanized Malay middle class, whose undivided loyalty has until now underwritten UMNO rule. This arriviste class, itself the product of state policy; had previously left the demands of modernization to UMNO's guidance. Revelations about buggery in the upmarket Kuala Lumpur (KL) suburb of Bangsar, and allegations of attempts to poison, both literally and metaphorically, the still popular Anwar have, however, tended to disturb middle-class faith in party guidance. At the same time as the state-controlled media revel in the gory details of Anwar's alleged private life, the government bans Austin Powers: The Spy Who Shagged Me in deference to Islamic sensibilities.

The contradictory demands of tradition and modernity, dramatized by the Anwar case, are daily apparent on the streets of the nation's capital, Kuala Lumpur, where professional Malay women seek to marry their mobile phones to their elegantly cut baju kurang, Raybans and matching head scarves. Glass and chrome temples to Mammon sit uneasily beside the sinuous lines of the city's oldest mosque, the Masjid Jamek, and the Courts of Justice, built at the turn of the century. Symbolizing the perceived need to build a dynamic, Asian modernity, the eighty-two stories of the Gothamesque Petronas Towers dominate the until recently sleepy colonial capital. From the towers a state-of-the-art, rapid transport system crosses the city. Ultimately it will join the recently opened KL International Airport, an air conditioned symphony of chrome, glass and marble, with boutiques dedicated to Ferregamo and Bally.

The transformation of Kuala Lumpur and the modernization of Malaysia are the realization of one man's vision--that of the country's longest serving prime minister, Dr. Mahathir Mohamad. Unfortunately, the economic meltdown of the late 1990s required the more grandiose elements of his vision to be put on hold, as the incomplete concrete pillars of the KL rapid transport system bear silent witness. Elsewhere along the north-south highway the costs of short-term loans funding long-term investment is evident. To the north, the empty hotels that line the beaches of Batu Ferenghi on Penang Island illustrate the capricious nature of international tourism. Elegant hotels like the Bayview and the Rasa Sayang, which in the heyday of the Asian miracle catered to discerning Germans and Swedes, are now reduced to hosting pasty-faced, package holiday Brits with a penchant for warm beer and "curry half and half" (half rice, half french fries). Meanwhile further down the coast, Malacca, the pre-colonial center of the Malay world, gradually decays into the sludge of the straits named in its honor. When buildings are not being constructed in Malaysia, they are falling down. The Mah Kota complex on the outskirts of Malacca is a case in point. The hotel is a postmodern pink palace surrounded by recently built streets of empty boutiques catering to tourists who never came. An unfinished aquarium surrounded by rotting corrugated iron advertising SEAWORLD in faded lettering indicates where the miracle died and rotted beneath the tropical rain.

Mahathir sought to address the malaise that gripped his tiger economy by imposing currency controls in 1998. With characteristic insouciance he has also forged ahead with plans to build an "intelligent city" of the future. It will run from the Petronas Towers in downtown Kuala Lumpur to a building site in the jungle, forty kilometers to the south. The building site houses a partially completed paperless administrative center, Putrajaya, and a yet-to-be-built multimedia supercorridor called Cyberjaya. Mahathir intends this $10 billion exercise in Ozymandian hubris to cap his vision of Malaysia transformed.

In order to fund this silicon kampung, however, Mahathir must attract multinational investment in the shape of Sun Microsystems, Microsoft, Intel, Nokia and British Telecom, whose CEOs turned up for the multimedia equivalent of a rumble in the jungle in July 1999. As they approached the Cyberjaya site they were greeted by a curious monochromatic image on a billboard depicting rioters demolishing a car. Above the image a message warned: "Foreign Influence is a threat to National Security."

This capacity to reject foreign influence yet promote foreign direct investment suggests that modernization, Malaysian style, represents an Asian version of doublethink (memorably defined by George Orwell as "the capacity of holding two contradictory views in one's mind simultaneously and accepting both of them"). The impressive postwar growth of Malaysia depended upon its membership in the Western alliance during the Cold War, its openness to the post-Bretton Woods liberal trade order in the Asia-Pacific, and its export-oriented economic strategy. Yet throughout the 1980s Mahathir and his ruling UMNO railed against Western liberalism, launched a Buy British Last campaign, and instituted a Look East economic policy. At regional forums like Asia-Pacific Economic Cooperation (APEC), Malaysia continues to promote a Japan-led East Asian Economic Caucus.

Mahathir's illiberal "heresy" (as he himself termed it) in suspending the repatriation of foreign funds invested on the KL stock exchange [1] and arresting his reform-minded deputy Anwar Ibrahim prompted commentators as diverse as Amnesty International, Indonesian President B.J. Habibie, George Soros and Al Gore to direct a chorus of disapproval at Malaysia's political and economic failings. Given Malaysia's dependence on foreign direct investment and manufacturing exports, it is curious that Mahathir regards foreign influence and the global market with such unbridled suspicion. Does that suspicion simply reflect the uncertain mood swings of an Asian gerontocrat unwilling to go quietly into the political night? Or does it--and the authoritarianism and rhetorical dissonance that go with it--mask irresoluble tensions at the heart of the late developing state that Mahathir christened "Malaysia Incorporated"? What, moreover, will be the future for the once acclaimed but now widely disparaged Malaysian version of the Asian model, after UMNO's somewhat uncertain electoral victory in November 1999?

Constructing Malaysians

THE incoherent character of contemporary Malaysian politics reflects the contingent factors that shaped Malaysia's development. Modernizing states, as Ernest Gellner remarked, require nations. As in many other post-colonial states, building the Malaysian nation has been an anxious affair. There were few cultural resources upon which to draw. Apart from Islam, which wafted over on the boats of spice traders from Moghul India, and the Malacca sultanate that fell to the Portuguese in 1511, there was little in the way of tradition to support a national identity. Somewhat disturbingly for Malaysian amour propre, just as it was the British architect A.B. Hubbock who designed the mosque and railway station that give the nation's capital a distinctively oriental flavor, so it was the British Colonial Office that first cobbled the new state together from the fragments of its Southeast Asian possessions: the Federated Malay States that accepted British advisers, the independent northern sultanates, Sarawak and Sabah o n the island of Borneo, and, initially, Singapore.

In the aftermath of World War II, the British made various efforts to create a viable political arrangement to unite these disparate parts, a task made more urgent by the serious communist insurgency on the peninsula. After a couple of false starts, these culminated in the creation of a Malaysian Federation in 1963. While it solved the problem of disunity, the Federation served to make the question of Malay identity and its relationship to an evolving national consciousness a matter of political urgency. In the uncertain and unstable world of postwar Southeast Asian politics, the very formation of the new state exacerbated regional tension. The Malayan Emergency caused by the communist insurgency (1948-58), followed by confrontation with Indonesia (1963-66), whose irascible first president, Sukarno, violently objected to the new entity, fed a burgeoning siege mentality in the leaders of the new state. Not only were the boundaries of Malaysia a source of anxiety, but the notion of what constituted a Malay--le t alone a Malaysian--was equally unclear. Thus, traditionally, to be Malay was to be kerajaan, or unconditionally loyal to the sultan. At the same time, after 1946 UMNO's brand of populist nationalism emphasized the shared and equal identity of the bangsa Melayu (the Malay nation). But, differently again, to be Malay was to be Muslim. For the more religiously disposed Malays--who eventually were to form the backbone of the Parti Islam se-Malaysia (PAS)--the fact that the privileged status of Islam was written into the 1957 constitution bequeathed by the departing British intimated the future possibility of an Islamic state. For pragmatic political leaders, however, the pressing need for a sustainable Malay unity tended to override these conflicting understandings of feudally, ethnically and religiously defined allegiance.

Related to the uncertain character of Malay identity, there existed the problem of establishing the terms of interracial engagement in the multiracial, postcolonial state. (At the time, of Malaysia's population of around ten million, 56 percent were Malays, 34 percent Chinese, and 10 percent Indian.) Between 1955 and 1969, this meant an electoral "alliance" between UMNO, the Malay Chinese Association and the Malay Indian Congress. This coalition of ethnic elites presided uncertainly over a friable community. The arrangement initially provided for the political dominance of Malay aristocrats, epitomized by post-independence Prime Minister Tunku Abdul Rahman, whose urbane style afforded considerable latitude for Chinese economic influence. But the alliance fell apart in the course of the 1960s, and the fear that Chinese economic power might translate into political domination prompted Singapore's expulsion from the Federation in 1965. Subsequently, in the wake of elections that saw UMNO's parliamentary dominan ce threatened, serious interracial riots involving hundreds of deaths erupted in Kuala Lumpur in May 1969.

The events of May 1969 represented the year zero of the new state. Subsequently, official state ideology animadverted against "communalism." To reinforce this, UMNO altered the constitution, "removing issues considered sensitive from public discourse", and redrew electoral boundaries in favor of rural, ethnic Malay constituencies. The "consociational" contract was renegotiated to facilitate increased Malay economic participation. After a period of emergency rule, Malaysia's second prime minister, Tun Razak, announced a New Economic Policy (NEP) in 1972 that defined the terms of the new contract. Henceforth, the government actively engaged in economic management to ensure that bumiputeras (sons of the soil) directly participated in and benefited from economic growth.

The renegotiated social contract was, moreover, extended to include the offshore states of Sabah and Sarawak. The evolving understanding that the native peoples of East Malaysia shared a common identity with the native Malays, which distinguished them from the nonindigenous, urbanized Chinese, facilitated this development. UMNO's capacity to dominate a new multi-ethnic Barisan Nasional (National Front) coalition in the Malay interest, maintain a two-thirds majority in the federal parliament, and, without quite the same urgency, dominate the state assemblies of the peninsula and East Malaysia was subsequently central to political stability. As Mahathir caustically observed in 1971, Malaysia's internal politics were "racial politics" and its evolving democracy a limited and elite-guided one "to ensure that the mutually antagonistic races of Malaysia will not clash."

The Doctor's Prescription

ON THE BASIS OF this revised contract, Malaysia's post-colonial elite, unlike that of several of its Southeast Asian neighbors, sustained economic growth with equity and maintained political stability without undue recourse to political violence or "extrajudicial killing." Given the inauspicious conditions that shaped the emergence of Malaysia, it was an impressive achievement on the part of UMNO that between 1969 and 1998 Malaysia was transformed from a commodity-based colonial economy of 10 million people into an urbanized manufacturing economy of 22 million with a per capita GDP of $5,000. In the process, the incursion of the party into economic, social and political engineering facilitated both a concentration and centralization of power, as well as an ideological understanding of the state as an incorporated enterprise association.

The deliberate construction of a "nation incorporated" particularly appealed to Malaysia's fourth prime minister, Mahathir Mohamad. Given the Malay conception of power and the need for unswerving loyalty, the political ideology of contemporary Malaysia is largely reducible to the personality of its leader. Mahathir is a self-proclaimed "man in a hurry" who brooks no interference with the realization of his visions. Uncharacteristically for a Malay ruler, he is a self-made man who avoids the elaborate courtesies that elsewhere define Malay social and political etiquette. The son of a Kelantan schoolmaster of Indian Islamic extraction and a Malay mother, Mahathir apparently developed early on an anxiety about identity, an acute sensitivity to the humiliation of subjection (particularly the colonial variety), and a consuming desire to build a new, self-confident Malay released from feudal tutelage and adapted to the needs of a rational modernity.

His involvement in nationalist politics dates from the colonial era, when as an unassuming medical student in Singapore he compiled pseudonymous articles for the Malay press. Indeed, a surgical approach to political problems, combined with anxiety about his own miscegenated provenance and the need to overcome Malay backwardness, seems to constitute the psychological template through which Mahathir assesses such problems. He considers politics

a good profession for people with medical training. Doctors go through the process of observing a patient, recording his or her medical history, then you make a physical examination, do lab tests and finally arrive at a diagnosis. The process is basically the same in politics. [2]

Medical science also contributed a distinctively eugenic and Social Darwinian flavor to his world-view. As early as 1971 Mahathir had controversially identified The Malay Dilemma, the title of a book he wrote in that year. This consisted of the eugenic and climatologically induced Malay propensity to an inbred dependence, fatalism and apathy. The need to address these flaws in the Malay character through state intervention along the lines prescribed by "Dr. UMNO" was of such urgency that dissent from the proposed course of treatment could not be tolerated. Mahathir's political aggression thus masks an acute sensitivity to Malay weakness and an awareness of a need to strengthen the country in order to catch up with a West whose economic achievement he wishes to emulate, but whose free-market blandishments and democratic rhetoric he considers an insidious attempt to reimpose colonial subjection.

Fervent belief in his own diagnostic rectitude, exacerbated by anxiety at the prospect of being left behind, contributed to an evolving climate of political confrontation and crisis after Mahathir became prime minister in 1981. Indeed, he admits to relishing a fight. It permits him to isolate the disease, whether feudal, Islamic, communalist or Western, and surgically remove the infection from the body politic. This mixture of "surgical" ruthlessness, pragmatism and narcissism has consistently characterized Mahathir's approach to the economy, to the Malaysian constitution, to the inchoate opposition and to foreign relations.

Malaysia, Inc.

AS EARLY AS 1971 Mahathir had envisaged the NEP redistributing socioeconomic goods to the economically deprived Malay and other indigenous communities, thereby building a self-confident, entrepreneurial, new Malay identity. While the earlier administrations of Razak and Hussein Onn had seen the NEP as inaugurating a new era of state intervention, it was Mahathir who gave the policy urgency and a definitive shape. After 1981, Mahathir and his favorite financial adviser, Daim Zainuddin, promoted a Malaysia Incorporated strategy creating a bumiputera capitalist class through the partial privatization of state-owned banks and industries. UMNO's investment arm, the

Renong conglomerate, with its various media, finance, infrastructure and tourist interests, exemplified a policy Mahathir has variously described as "affirmative action" and "constructive protection." In 1985 the Heavy Industries Corporation of Malaysia launched a national car, the Proton Saga (really a Mitsubishi Lancer assembled in Malaysia), which seemed to symbolize the success both of industrialization and of the Japan-focused Look East strategy.

The evolution of the NEP under Mahathir also distorted the character of Chinese economic activity. The large Chinese trading conglomerates, like Quek Leng Chan's Hong Leong Group and Vincent Tan's Inter-Pacific Group, increasingly cultivated close ties with key figures in the UMNO elite--like Mahathir, Daim and Anwar--and functioned as their business proxies. The evolving developmental coalition thus coopted the conglomerates into UMNO business politics, while the recently created bumiputera enterprises became inured to state dependence. While business became entangled in politics, the governmental bureaucracy developed an institutional investment in shielding corporate activity from public scrutiny.

The increasing malleability of the constitution and the money politics that became inseparable from the Malaysian electoral process further enhanced both single-party rule and the evolution of state corporatism. In all elections held since 1969, including the most recent one in November 1999, UMNO and its coalition partners have secured the two-thirds majority in parliament necessary to amend the constitution, and they have not been reticent in using it. The constitution has now been altered thirty-four times. Increasingly, the party treats the document merely as a technical mechanism for securing political ends. Through judicious constitutional manipulation Mahathir has eroded judicial independence and the rule of law; undermined the autonomy of state assemblies and the traditional authority of the sultanate; and increased the authority of the party in general and the office of prime minister in particular.

As a commoner and a political outsider who was excluded from UMNO in 1971 for his attacks on the aristocracy's indifference to Malay backwardness, Mahathir particularly has sought to detach the Malays from their feudal past. In that same year, he accused Tunku Abdul Rahman of playing the "grand vizier." In 1983 as prime minister, he succeeded in removing the monarch's power to veto parliamentary bills. And in 1992, when the sultan of Johore assaulted the state hockey coach for questioning his son's big match temperament, Mahathir took the opportunity to curb the aristocracy's extrajudicial authority.

In the same vein, in 1988 Mahathir manipulated an internal UMNO crisis to sack the Lord President of the Supreme Court and two other judges. Subsequently, the judiciary was made directly accountable to the executive. This development, together with the Internal Security Act dating from British rule and the Malayan Emergency--which permitted detention without trial and trial without jury--effectively undermined the rule of law. In the course of the 1980s, a leading critic of Mahathir's growing autocracy observed that parliament, the judiciary and the royalty had surrendered their power to the UMNO executive "to which everything else in the country is subservient." [3]

Alongside a compelling amalgam of incentives and intimidation, building Malaysia Incorporated also required selective ideological recourse to tradition, in order to reinforce party guidance and the rule of the man of prowess rather than the rule of law. Mahathir required Malay loyalty to be transferred from the sultans to the state, while Islam was syncretically blended with the requirements of the latest development policy. Such ideological guidance suited the new affluent and urbanized Malay middle class, the creation of which has been the most significant social achievement of the Mahathir era. Elite demands for musyawarah (deliberation) and muafakat (consensus) evoke a positive response from this psychologically and economically dependent class. Significantly, the Malay nouveaux riches "do not have the same reasons for contributing to politics or speaking out because they would rather not change the system as long as they are the beneficiaries." It is "snob appeal that motivates the middle class" and rei nforces a traditional pattern of deference. [4] As another government critic has observed, the Malay middle class "doesn't care" about political liberalization; "as long as they live comfortably people are happy." [5]

The state-controlled media reinforce this predilection and the government designs elaborate mass mobilization campaigns like Semarak [6] and Malaysia Boleh (Malaysia Can Do) to enhance "social cohesion." The assertion of "Asian values" in the course of the 1990s offered a further source of organic bonding and an additional prophylactic to counter the new external threat posed by "intolerant" Western democrats. Indeed, by 1996 Anwar could detect an "Asian Renaissance" in progress, one that provided a veneer of shared, if ill-defined, Asianness that glossed over both internal and regional differences.

Nevertheless, while Mahathir continues to promote distinctive Asian values, he excoriates Islam and Malay conservatism if either interferes with his latest growth plan. And while he seeks to build a new Malay identity, it is not entirely clear whether it includes or excludes those descendants of nineteenth-century migrants from southern India and China, who are not indigenous bumiputeras.

A related ambivalence governed the attempt to impose Asian values in the regional economic and security arena in the course of the 1990s. To counter what he considered a crude Western plot to reassert colonialism through the "fanatical" advocacy of human rights, Mahathir promoted a pan-Asian policy. Regionally, this took the form of an expanding Association of Southeast Asian Nations (ASEAN), good interpersonal relations among the leaders of its member states, and non-interference in their internal affairs. For Mahathir, events like the financial meltdown and the recent UN-sponsored intervention in East Timor only underline the need for Asian cohesion against Caucasian "belligerency."

Yet behind the rhetorical assertiveness, it was difficult to detect what precisely post-meltdown Asian polities had in common. Indeed, the inability to move beyond the increasingly otiose formula of non-interference, to which Mahathir is addicted, has left ASEAN impotent and embarrassed in the face of mounting regional ethnic and religious tension. The bankruptcy in Mahathir's Asian bonding strategy became apparent when both Presidents Habibie of Indonesia and Estrada of the Philippines criticized the removal of Anwar, while Thailand argued for a policy of "constructive engagement" toward regional problems.

And, curiously, given their shared preference for non-interference, the political elites of both Singapore and Malaysia seem unable to refrain from picking at the scab that formed after Singapore's expulsion from the Malaysian Federation in 1965. In 1997 Lee Kuan Yew's insensitive description of "crime infested" Johore inflamed Malay sensitivities. Subsequently, the ill-timed publication of Lee's memoirs, which once more dwelt on the separation, exacerbated tensions, while the propensity of Singapore banks to speculate on the ringgit hastened Mahathir's decision to impose currency controls and suspend trade in Malaysian shares on the Singapore stock market in September 1998. As the financial crisis deepened bilateral ties frayed over a range of seemingly innocuous issues, from the provision of water supply and the infraction of air space to the Singapore government's construction of a new customs post. Bilateral tension reflects both Singapore's anxiety over the fact that the largely Chinese island rests in what Lee considers a "sea of Malay people", and Mahathir's worries that Singapore's rulers treat Malaysians like "country bumpkins." Whatever else this increasingly fractious relationship entails, it belies a harmonious consolidation of shared values.

The Downside

DOMESTICALLY, the ambiguity in the evolution of Malaysian corporatism has evoked a countervailing centrifugal pull both at the periphery of the new state and within UTMNO itself. The continuing appeal of the Democratic Action Party for the Chinese population, particularly in Penang; the Parti Bersatu Sabah of the Christian Kadazans in East Malaysia; and the Islamic PAS in underdeveloped and Islamic northeast Malaysia--all these reflect intractable racial and religious cleavages. Mahathir characteristically sees these attachments as internal threats rather than the basis for political pluralism. To the manifestation of differences, the party-state reacts with a familiar Asian recipe involving a combination of repression, corruption and conciliation. This strategy is most apparent in UMNO's dealings with PAS. Because of its potential national appeal, and its capacity to challenge Malay unity, UMNO considers the PAS brand of Islam its most serious political threat. Between 1969 and 1978, UMNO contained the Isla mic party within the National Front coalition, but increasing tension over control of the state government in Kelantan, together with the impact of Islamic fundamentalism on a new generation of Malays, prompted PAS to leave the coalition.

For Mahathir a retreat to fundamentalism would undermine the arduous task of nation-building. During the 1980s, therefore, he was engaged in the tricky enterprise of defining Islamic values in a way that both promoted social cohesion and marginalized Islamic radicalism. The recruitment and rapid rise of Anwar Ibrahim, who emerged from a background of Islamic student activism into the foreground of an UMNO "vision team", facilitated this strategy. Depicting PAS as rigidly doctrinaire enabled the UMNO leadership to undermine its national standing. Nevertheless, PAS retained regional control of the government of Kelantan and, after elections in 1999, has extended its grip to neighboring Terengganu.

The underlying propensity to political fragmentation becomes particularly acute in times of economic stress, when elite disagreement at the center reinforces religious and ethnic tension at the periphery. This was evident in the recession of 1986, when members of the UMNO elite questioned opaque government-business links and Mahathir's increasingly autocratic leadership. Elite factionalism culminated in a challenge to Mahathir during the party general assembly in 1987. The narrow failure of this "Team B" challenge prompted its leader, Tunku Razaleigh Hamzah, and his supporters to leave UMNO and form an "unholy" alliance with the other ethnic and religious-based opposition parties. Typically, however, the coalition found difficulty in agreeing on anything apart from distaste for Mahathirism, and it failed to disturb UMNO's vital two-thirds majority in parliament. By 1996 Razaleigh and his supporters had returned, somewhat sheepishly, to the UMNO fold. With Mahathir apparently endorsing Anwar as his heir and t hereby settling the question of succession, UMNO's continuing hold on government seemed assured into the new Pacific Century.

Bouncing Back

THE EVENTS of 1997-99 have severely dented this assurance. The summer of 1998 saw a massive sell-off on the KL stock exchange, the collapse of the ringgit, and Malaysian business more illiquid than Manhattan during prohibition. The crisis questioned the continuing viability of both Mahathir and Malaysia, Inc. in a globalized marketplace. By early September 1998, differences between prime minister and deputy over how to address the economic crisis exacerbated intergenerational tension over the septuagenarian Mahathir's reluctance to relinquish power. Anwar and his advisers saw little alternative to an IMF-style reform of Malaysia's crony capitalism. They also considered political reform its necessary corollary. Reformasi, they felt, offered the opportunity to redress the "mute syndrome" that inhibited the Malaysian governmental process. In a telling reversal of Mahathir's favorite analogy, the poet laureate Shahnon Ahmed compared the prime minister to a blockage in the bowels of the body politic.

In September 1998, following his breach with Mahathir, Anwar and seventeen supporters were detained. In November of that year, Anwar underwent a form of trial on a charge of "abuse of power." Found guilty by the state-appointed chief justice, he received a six-year jail sentence. The detention prompted popular demonstrations. It was not entirely clear whether Anwar's reformasi entailed Islamization or liberalization. After Anwar's imprisonment his wife, Wan Azizah, formed a new party to clarify this, Keadilan Nasional (National Justice), which attempted to transcend ethnic and religious cleavages. At the same time, however, the new party joined forces with the ethnic and religious-based opposition parties, leaving its message still somewhat ambiguous.

The factionalism that rent the UMNO elite during this period and disturbed the quiescence of the usually apathetic middle class rapidly escalated into a political challenge to Mahathir's leadership, demonstrating once again the difficulty that Southeast Asian political cultures encounter in retiring aging men of prowess. It also showed Mahathir's skill in dealing with internal and external threats--both real and imagined--his economic pragmatism, and capacity for ruthless political surgery.

While Anwar's supporters perceived that speculation and the pursuit of "pharaohnic" visions like the Multimedia Supercorridor had caused Malaysia's recession, Mahathir and his finance minister, Daim, saw little wrong with the developmental state. Instead, they maintained, Malaysia had been viciously mugged by global hedge funds.

Consequently, the National Economic Action Council used the state-imposed currency stability to restructure its foreign debt. Malaysia looked east for liquidity. Japanese loans, together with judicious raids on the state pension fund, provided the capital necessary to re-float faltering UMNO-linked conglomerates.

In August 1999 the Malaysian Central Bank announced plans to combine fifty-eight banks and finance companies into six financial groups (subsequently modified to ten). Interestingly, the proposed financial restructuring only reinforces the corporatist links between party and business, for the terms of amalgamation depend not on their bottom lines but on their ties to politically favored UMNO patrons. Fueled by a cheap currency the Malaysian economy rebounded strongly in the second quarter of 1999. If little else, the Malaysian case demonstrates that, structural weakness notwithstanding, the developmental model can survive the challenges of globalization. Moreover, as the economy recovered so too did Mahathir's prestige.

Mahathir's approach to depression economics received international plaudits--notably from the economist Paul Krugman. [7] At home, Mahathir reimposed his political authority. In the manner of the tales of the sixteenth century; Sejaruh Melayu (Malay Annals), the aging ruler removed the adherents of the disgraced pretender from his court and rebuilt links with previously excluded factions. Mahathir publicly reconciled himself with the leaders of Team B and appointed one of their more innocuous members, Abdullah Badawi, as his new deputy. To forestall any possible leadership challenge, Mahathir altered the party constitution, postponing its general assembly until after the federal election held in November 1999.

Outside the party, Mahathir took full advantage of the economic turnaround to revile the opposition and present himself as the defender of Malay and Malaysian interests. The incoherence of the opposition has enhanced his appeal. Thus he portrays the PAS demand for a restitution of Islamic law and their attack upon UMNO "infidels" as extremist, while National Justice, he contends, threatens the inter-ethnic pact that sustained growth and stability. To both the Chinese and the Malay communities, he emphasizes UMNO's pragmatism and evokes the specter of communalist violence perpetrated in the name of reformasi in neighboring Indonesia.

Internationally, he defends the national interest against interfering Western democrats, Jewish speculators and IMF economic colonialism. [8] Here Vice President Gore proved unexpectedly useful. Mahathir shrewdly exploited Gore's support for reformasi--maladroitly delivered at an APEC meeting in Kuala Lumpur in November 1998--to caricature Anwar and the opposition as "foreign stooges." [9] This capacity to play the nationalist and pan-Asian card was again evident in his attack in September 1999 on what he considers Australia's imperialist ambitions in East Timor. Mahathir's ability to appeal to different constituencies in different languages often appears--and often is--inconsistent. But at the same time, this rhetorical dissonance and the repression it necessitates hold together the fragile Malaysian enterprise association that he has so carefully crafted.

IN contemporary Malaysia, anxiety over national identity, the uncertainty of globalization, and the historic propensity to adopt a siege mentality legitimates the UMNO oligarchy and its machinery of corporatist controls. With the example of a disintegrating Indonesia close at hand, the UMNO elite, the Malay middle class (their misgivings over the treatment of Anwar notwithstanding) and the Chinese community all felt reluctantly constrained to support a reorganized UMNO leadership in the November elections. Mahathir milks this anxiety, presenting UMNO-style nationalism as moderate while excoriating opposition reformism as communalist and conducive to political fragmentation. Given the fundamental fragility of Malaysia, the uncertainty of economic recovery, and an external environment more unstable than at any time since the 1960s, pragmatic single-party rule remains central to political order.

The November election--in which PAS increased its representation in the federal parliament and in the rural northeast, and in which Wan Azizah was returned for the Penang seat of her jailed husband--left the succession question unresolved and the Malay community worryingly divided. The fact that the aging gerontocrat has announced that this will be his last term has merely exacerbated the problem. The issue that most troubles the Malaysian polity is not liberalism but succession. The alternative to a smooth leadership transition in an Asian political culture is not liberty but anarchy, and from the contingent perspective of Malaysia, Inc., to democratize will be to disintegrate.

David Martin Jones is senior lecturer at the University of Tasmania's School of Government, and author of Political Development in Pacific Asia (Polity Press, 1997).

(1.) The move froze approximately $10 billion in foreign emerging market funds in Malaysia and left $2 billion of shares in limbo on the Singapore Central Limit Order Book. It also led to Malaysia being removed from the Morgan Stanley Capital International Index and the International Finance Corporation Index.

(2.) Mahathir, A New Deal for Asia (Kuala Lumpur: Pelanduk, 1999), pp. 20-1.

(3.) Chandra Muzaffar, The NEP, Development and Alternative Consciousness (Penang: Aliran, 1989), p. 318. See also the Report of the Committee on International Human Rights of the Association of the Bar of the City of New York, "The Decline in the Rule of Law in Malaysia and Singapore" The Record (January/February 1991), p. 10.

(4.) M.K. Mahadzir, Straits Times, July 13, 1994.

(5.) Murray Hiebert, Far Eastern Economic Review, June 6, 1995.

(6.) Semarak, the Malay for "glow" or "luster", was also an acronym for Setia Bersama Rakyak (Loyalty with the People).

(7.) Krugman, The Return of Depression Economics (New York: W.W. Norton, 1999), p. 145.

(8.) Mahathir, A New Deal for Asia, p. 147.

(9.) Sheila McNulty and Peter Montagnon, Financial Times, November 17, 1998.

Neo-Exceptionalism

This enthusiasm for capital punishment is not easily explained. It flourishes at a moment when most other industrial nations have turned against it. Today it is either abolished or in disuse throughout Western Europe, in most of the former Eastern European Communist bloc countries, and in Russia. Israel, since its founding, has used it only once, with the hanging of Adolf Eichmann. The modern industrial world seems to have abandoned it out of some embarrassed sense that it is a barbaric vestige of an archaic culture. Professor McFeely is hard pressed to explain why the United States, 'with its claim to moral leadership of the world', has gone in precisely the opposite direction. Our 'vigorous use of the death penalty', he notes, puts us in company with Iran, Iraq, the United Arab Emirates, and Yemen.'

Russell Baker, New York Review of Books, January 20, 2000

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