Welcome to APEC . . .
By Peter Hartcher
When the prisoner with the black eye, Anwar Ibrahim,
was still Malaysia's deputy prime minister and the region
was still thriving, he wrote a provocative book which
argued that Asia's economic triumphs "must not blind us
to the parallel rise of corruption: bribery, nepotism, and
the abuse of power". And in the foreword he included
this tribute to his mentor, the Prime Minister: "I am
indebted in a very special way to Dr Mahathir Mohamad
. . . For his tolerance and for his giving me the latitude to
articulate my thoughts, I am indeed grateful."
Mahathir, a generation older than Anwar, seemed to
smile in an indulgent, paternal sort of way on the implied
criticism in his cheeky protege's work.
Indeed, it was Mahathir who described their relationship
as that of father and son.
But two years later, when Anwar again warned against
corruption and challenged Mahathir on policy to deal
with the economic crisis, the father turned on his son. He
cut off the electricity to Anwar's official residence at 5.30
pm on September 2, sacked his deputy and had him
arrested for the same offence -- corruption.Anwar also
stands charged with homosexuality, which Mahathir has
long claimed to be a symptom of Western decadence.
The subliminal message? That Anwar, who championed a
more market-friendly Western-style economic policy, has
been soiled by Malaysia's would-be neo-colonialists from
the West -- the currency traders and their handmaidens
in Western governments.
The black eye is also symbolic of the political struggle,
but painfully literal; Anwar says he was beaten by police
in his cell, a touch that has shocked Malaysians.
So now, when Anwar writes of Mahathir from Sg Buloh
Prison, he describes him as "an old wounded lion who is
desperate to keep his hold on power. The man has lost
all his scruples and, indeed, his very sanity . . . a senile,
power-drunk tyrant". And he predicts that after the Prime
Minister has finished waving goodbye to the leaders after
next week's summit of the Asia-Pacific Economic
Co-operation group (APEC) in Kuala Lumpur, Mahathir
will declare a state of emergency.
It is perverse that a grouping which has no formal rules
but depends entirely on co-operation should be hosted
this year by one of the most divisive leaders in the world.
Since the advent of Asia's crisis, Mahathir has managed
to pit Malaysian against Malaysian, Malaysia against
Asia, Asians against Asians, Muslims against Jews, and
East against West. Not bad for a 72-year-old man with
heart trouble who heads an economy smaller than
NSW's.If the international economic upheaval's
post-crisis trauma is an earthquake, just about all the fault
lines that have gaped open seem to run through Kuala
Lumpur.
First, Mahathir's decision to purge Anwar has galvanised
Malaysians into staging their biggest anti- government
protests in 30 years. The move is opposed by 70 per
cent of Malays, according to surveys by the ruling
political party, Mahathir's UMNO, reported in the Far
Eastern Economic Review.
Second, the treatment of Anwar has fractured the
30-year-old Association of South-East Asian Nations
(ASEAN). The leaders of both the Philippines and
Indonesia have broken the ASEAN code of conduct to
publicly criticise Mahathir over the affair, and the Filipino
President, Joseph Estrada, is refusing to meet his host at
next week's conclave in Kuala Lumpur.
Third, Mahathir has angered a range of regional countries
with his decision -- on the same day that he told Anwar
"to resign or be sacked with grave consequences" -- to
isolate Malaysia from the free flow of capital.Malaysia's
capital controls are a scar on an ASEAN agreement to
deal with the crisis in a market-friendly way, and Thailand
is complaining that they have damaged its trade. All
regional countries fret that Malaysia has damaged their
credibility with foreign investors.
Fourth, Mahathir's Government seems to be threatening
APEC's core programs of market-opening. The Trade
Minister, Ms Rafidah Aziz, says that unless APEC can
solve the problems of the crisis countries, they "may hold
back on commitments to opening up their markets". And
in dividing East and West, Mahathir has outdone himself.
In one of his best pieces of demagoguery, he said:
"Today tens of millions of workers have lost their jobs,
thousands of companies have been bankrupted, banks
and finance companies have closed down taking with
them the deposits of their clients.
"Today millions of people are without food and medicine.
Today governments are unable to function . . . Today
shops are looted, people are raped and killed.
"And all these things and more are happening because
our governments have to be disciplined, to be forced to
become transparent, to remove obstruction to the free
flow of capital, to the purchase and control by foreigners
of national banks and businesses . . .
"While the market forces were disciplining us, they were
making billions of dollars for themselves. Apparently, the
market forces have to be well paid for disciplining
governments . . ."Who are the market forces? Certainly
they are not the locals. These market forces are foreign,
located in some countries where they cannot be seen."
More specifically, he has said that they were a Jewish
conspiracy, that they were hedge funds, that they were
the Jewish American hedge fund figurehead George
Soros -- Soros hasn't actually managed a fund in over a
dozen years -- and that they were currency dealers. But
they were always in the West. Read, New York and
London.
And Mahathir has been angry that these forces, whom he
has labelled "the attackers", have been unrestrained by
their host governments and have been aided and abetted
by the IMF.
What happened to Mahathir? He was always
opinionated, he always liked to demonise the West for
the domestic audience, but he was also canny. He never
went so far as to scare off foreign investors. He was
careful to avoid fights with his neighbours.
BankBoston's head of regional research in Singapore, Bill
Overholt, says that Mahathir got himself into the
economic equivalent of an arms race; when regional
markets started to fall, Mahathir was so stridently critical
of the markets that they feared capital controls and fled
Malaysia with greater alacrity, making Mahathir even
angrier until he finally reached for the capital controls.
"Each side's fears lead to behaviour which brings on the
very thing that is most feared," says Overholt.
And as for the move on Anwar, perhaps the best
explanation comes from Mahathir himself. He said at a
party meeting in June that "foreign forces" would use the
financial markets to destabilise the leadership; that the
leader and his challenger would fall on each other; that
the financial markets would not relent until a compliant
leader was triumphant.
So Mahathir closed Malaysia to the financial markets and
jailed his challenger.The awful irony is that many of
Mahathir's criticisms of the financial markets have now
become orthodoxy in the West and even the US is now
seeking controls on hedge funds, for instance.
But Mahathir's strident divisiveness guarantees that no
Western leader will give him any credit. The US and
Canadian leaders have refused even to meet him in his
own capital city because of his treatment of Anwar.
"Malaysia has chosen to become a heretic, a pariah,"
Mahathir writes in a new book called Currency
Turmoil. "We may fail of course, but we are going to do
our damnedest to succeed even if all the forces of the rich
and powerful are aligned against us."
afr.com.au
|
