The Mahathir Mystique

The architectural hodgepodge that is Kuala Lumpur, Malaysia's capital, is testament to the country's dazzling cultural diversity. In the city center, not far from the Islamic Sharia court, is the British-built former cricket club--nicknamed "the Spotted Dog" for the Dalmatians that colonial planters used to tether out front. Now it's a posh social club ringed by glittering high-rise office blocks and banks. Perched on a nearby hill is the gaudy red-and-yellow Thean Hou Temple, where ethnic Chinese--who provided much of the drive and capital for Malaysia's economic miracle--divine their fortunes.

Just 30 kilometers from KL, a different vision of Malaysia is taking shape. The vast, $5.3 billion city of Putrajaya--now the official seat of government--features man-made lakes, lush landscaping and a mosque designed by an architect from Mecca. This is not just another boring, custom-built national capital a la Brasilia or Canberra. This is a consciously Islamic city, likely to be appreciated by Muslim Malays but not exactly welcoming to the nation's Chinese and Indian minorities. Prime Minister Mahathir Mohamad built Putrajaya for both practical and political reasons--to relieve the cramped conditions of government offices in the capital, and also to burnish his government's Muslim credentials. "Building an Islamic place like this is Mahathir's biggest achievement," said Wan Irman, who works in the magnificent Putra Mosque. "I like living here."

Most Malaysians seem similarly content nowadays, and why not? Under the shrewd stewardship of Mahathir, who is retiring this week after ruling Malaysia for 22 years, their country has been transformed from an economic backwater to an Asian success story. Over the past 20 years, the country's economic output has quadrupled; over the past 30 years, the percentage of Malaysian households that fall below the poverty line has plunged from nearly 50 to an estimated 6 percent (in 2000). Exports have skyrocketed.

But Mahathir, who holds a medical degree and is often referred to as Dr. M., is too complex to leave a simple legacy of prosperity. Asia's longest-serving prime minister has always had a deft sense of how to appeal to the sensibilities of the disaffected, both in his own country and abroad. And he sometimes appears to have a chip on his shoulder. Never the diplomat, he's frequently railed against the IMF, globalization, U.S. manufacturing "dominators," currency speculators (he has called George Soros a "moron") and anybody who gives what he perceives to be short shrift to developing nations.

So it's not surprising that, days before his retirement, he hurled one last toxic rhetorical salvo. At a summit of Islamic leaders in Putrajaya, Mahathir outraged the West (but got a standing ovation from the Muslim audience) by declaring that "Jews rule the world by proxy. They get others to fight and die for them." The comment was a snippet in a speech in which Mahathir acknowledged many of the failings of Islamic societies, condemned violence and militant clerics, urged Muslims to master technology and said that many Western cultural habits were worth emulating. Whether intentional or not, Mahathir's pragmatic message was overshadowed by his inflammatory comment.

The White House described Mahathir's comments as "hate filled." Many people would agree. And yet, in one of many ironic twists, one of Mahathir's biggest achievements has been to bring harmony to Malaysia's dynamic--and, in the past, volatile--multireligious society. (Of Malaysia's 24 million people, nearly two thirds are Malay, 26 percent are ethnic Chinese and 8 percent are of Indian background.) Such is the almost schizophrenic clash between Mahathir's words and actions. He opposed the U.S.-led wars in both Afghanistan and Iraq, accusing Bush of trying to "out-terrorize the terrorists." Yet Dr. M.'s elder children were educated in America. He regularly decries Western trade practices, but the United States is one of Malaysia's biggest trading partners--and has been crucial to the Asian country's economic growth.

It will be a tough act to follow. Nobody knows that more than Mahathir's successor, Deputy Prime Minister Abdullah Badawi. He must not only maintain the success of Malaysia Inc., but beat back a political challenge from the conservative Islamic party PAS (sidebar), and work to heal the diplomatic spats that Mahathir loved to start.

In some ways Abdullah, 63, seems well qualified for the job. In style, he's the polar opposite of his predecessor--low key, consensus obsessed, nonconfrontational, deeply schooled in Islam. Most Malaysians call him Pak Lah--or "Uncle." He had served as Malaysia's foreign minister for eight years.

Under Abdullah, Malaysia's strained relations with Australia and the United States are expected to improve. His background as an Islamic scholar makes him appealing to Muslim Malays. And his upbringing in the diverse, Chinese-majority community of Penang "gives ethnic Chinese some hope, too. Pak Lah speaks some words of Hokkien dialect, and has some Chinese blood," said one senior journalist who's followed his career.

Abdullah is expected to concentrate his efforts on improving education and tackling corruption, which he has denounced publicly, calling it "a terrible disease that can hurt our image and competitiveness." (Malaysia's standing in Transparency International's index of perceived corruption, while improving, is 37th out of 133 countries.) Many wonder if he has the right stuff to end the cronyism and graft that is endemic in Malaysia. Author M. Bakri Musa has described Abdullah as "a Malaysian Jimmy Carter"--meaning ineffectual. He wrote: "His only redeeming quality, apart from his legendary honesty, is his humility." Last week Mahathir ascribed his own success to his capacity "to be nasty when others are not... When people are nice and polite they never get anywhere." That was a telling comment.

Critics--including the U.S. State Department--say Dr. M's record has been tarnished by the incarceration of his onetime heir apparent, Anwar Ibrahim, on what many believe to be trumped-up charges of sodomy and corruption. The erosion of judicial independence under Mahathir "was the severest blow to Malaysia's society and democratic traditions," charges Dr. Kua Kia Soong, a human-rights activist who was detained in 1987 under Malaysia's stringent Internal Security Act. "I had bigger hopes for Malaysia, because I'm aware of what we could have achieved." The 1988 dismissal of judges who'd ruled Mahathir's United Malays National Organization party illegal is seen as another blemish. Agreed political analyst Chandra Muzaffar, "Mahathir was such a powerful leader that it hurt the development of institutions such as the judiciary."

Born in 1925, Mahathir has long been haunted by memories of British colonial rule. A recurring theme in his anti-Western vitriol has been a fear that Malaysia's bumiputra, or native sons--generally meaning ethnic Malay Muslims--might suffer from the economic hegemony of outsiders. His infatuation with grand infrastructure projects, say those who know him, was prompted mostly to fuel the ambitions of his people, to jolt the bumiputra into a whole new industrial and technological mind-set. "We were very rural, we never had any infrastructure," says Mahathir acquaintance Lim Kok Wing. "He wanted to drag people out and make somebody produce a car just to prove that they can produce a car."

Not all such endeavors succeeded. But Mahathir was remarkably deft at one important thing: juggling the competing interests of Muslim Malays and of the ethnic Chinese, whose success in business had traditionally spawned resentment. It was no small feat. When Mahathir became prime minister in 1981, Malaysia was recovering from both the traumatic race riots of an earlier decade and a protracted campaign against communist insurgents. Mahathir was perceived as anti-Chinese and "ultra-Malay." He had written a controversial 1970 book titled "The Malay Dilemma," which offered a chilling race-based analysis of how ethnic Malays were being dominated economically by the more adept Chinese.

To level the playing field, Mahathir expanded upon what the government called a New Economic Policy, or NEP. It was essentially a sweeping affirmative-action plan favoring bumiputra. They got preferential treatment in business and education, guaranteed by law. At the same time, Mahathir knew he couldn't alienate the country's vibrantly entrepreneurial ethnic Chinese. So he engineered the grand bargain upon which Malaysia's success has been based. He reassured non-Malays that economic opportunities remained plentiful while his rhetoric and his policies blatantly favored Malays.

The formula worked to transform Malaysia over the past two decades into an economic powerhouse, churning out not just rubber and tin but computer chips and cell phones. The country now ranks among the world's top 20 trading nations. Per capita GDP has reached nearly $4,000--third in Southeast Asia behind Brunei and Singapore. Between 1988 and 1997, GDP growth averaged 8 percent to 10 percent annually. Poverty rates for both Malay and Chinese families have fallen dramatically. Today, Chinese and Indians are among the most ardent supporters of the ruling coalition.

That's good news for Abdullah. With firm political backing, he can begin the tough task of keeping Malaysia economically competitive. Already, lower production costs in China, India and Vietnam are luring investors away. Investment from foreign manufacturers has dropped in recent years. Some of the country's famous projects, such as the Petronas Twin Towers, are not fully occupied. And the once-hot electronics industry in Penang shows signs of hollowing out. Many of the other heavy-industry projects Mahathir championed in the 1980s have already "flopped pretty miserably," asserts K. S. Jomo, a University of Malaya professor and Mahathir critic. Abdullah must also deal with the reality that economic success has not stopped a conservative Islamic movement from carving out a foothold in Malaysia.

Perhaps, then, Malaysia is due for change. Mahathir almost forcibly modernized a poor country and spoke angrily for the world's have-nots. Now, Abdullah himself suggests it's time to cultivate the "software" that a more mature country needs. Under Abdullah, the atmospherics of government are likely to be less fiery--sort of Malaysia on Prozac. The question is whether Pak Lah can formulate his own prescriptions for consolidating the economic gains, and healing the divisiveness, that his formidable mentor has bequeathed to him.