[asia-apec 715] SACKING OF ANWAR: ANY PROSPECT FOR REFORM?

[appasec]

SACKING OF ANWAR: ANY PROSPECT FOR REFORM?

By Dr Syed Husin Ali


Deputy Prime Minister and Finance Minister of Malaysia, Anwar Ibrahim, was
removed from his senior government posts on 2 September 1998. A day later
he was sacked as Deputy President and member of UMNO, the leading party in
the government coalition. Now Prime Minister Dr Mahathir Mohamad not only
holds the position of Home Minister, but has also assumed the function as
First Finance Minister. He is also  virtually the  Foreign Minister and
Minister of Trade. Mahathir has concentrated power on himself both in the
government and his party; and he has also strong hold on the cabinet, the
court and the media. His dictatorial powers are becoming stronger now than
ever.

Sixteen years ago, six years after his release from a 22 month detention
without trial under the Internal Security Act (ISA) and enjoying great
popularity as president of the Islamic Youth Association (ABIM), Anwar was
successfully enticed by Mahathir, then already Prime Minister and UMNO
president, to join that party. Since then Anwar climbed  very fast until he
reached quite near the peak in the political hierarchy. Mahathir opened
many avenues and opportunities to help Anwar go up. In most people's mind
there was no doubt that Anwar was going to be Mahathir's successor. 

Nevertheless, soon it was clear that there was difference in approach and
style between the two leaders, and both admitted this fact. But they were
mutually supportive of each other and it appeared impossible to separate
them. But by 1997, differences had developed into conflicts between them. A
few days before the UMNO Assembly in the middle of that year, Mahathir
confirmed the existence of a poison pen letter, arising from a report made
to the Premier, alleging Anwar of being involved in a sexual affair with
someone's wife and homosexual activities with a driver. Mahathir's
confirmation brought the matter to public knowledge, and many believed
this to be Mahathir's way of weakening Anwar, who was believed to be
preparing to vie for the president's position in UMNO. Anyhow, not long
afterwards Mahathir and the police dismissed the poison pen letter as false
and a lot of rubbish.

Differences Become Clearer

As time went on, stories about the differences and conflicts between Anwar
and Mahathir became more widespread. When Malaysia began to face its
economic crisis, in the form of depreciation of the ringgit and fall in the
value of shares beginning July 1997, differences between them became
clearer. Right from the beginning Mahathir blamed foreign financial
speculators for the crisis and named George Soros as the main culprit.
Mahathir rejected the pressure to follow Thailand and Indonesia by
accepting help from the IMF and the World Bank. He branded, and quite
correctly too, that both  institutions were instruments of what he
identified as neo-colonialism or new capitalism. He advocated control over
international financial speculation.

Mahathir's position was viewed by some section of the Western ruling elite
as being against  liberalisation and free market, and a section of the
western media began to attack him or gave him poor coverage. But the truth
is that it was Mahathir himself who was responsible for opening the country
to globalisation and the attendant liberalisation and free market policies.
He supported them when they helped corporate figures close to him to amass
wealth. In fact, Malaysia, through its Central Bank, was involved in
speculation over the  sterling in 1992-3, as a result of which it was
believed the bank incurred a loss of around US$6 billion then. Perhaps it
was infuriating for Mahathir that at the same time Soros made enormous
profits.

Although Anwar did not openly oppose Mahathir's stand, yet in many speeches
and interviews outside and inside the country, he quite frequently referred
to weaknesses in the leadership and administration. He often alluded to
terms like corruption, cronyism and nepotism, which were looked down by
Mahathir as originating from the neo-colonial press and regarded by him as
direct attack on him. As Finance Minister, Anwar appeared to be more open
to IMF and World Bank prescriptions for overcoming the crisis.
Nevertheless, he was never on record as stating that Malaysia should
accept IMF bailout.

Anwar's relationship with the highest officials of the IMF and World Bank
appeared to be more than cordial.  This became clearer especially after
Anwar became chairman of the Development Committee of IMF. Anwar was also
becoming a darling of the western media, frequently receiving from them
wide and sympathetic coverage. Some members of the US ruling elite were
also seen to favour Anwar more than Mahathir. For example, during a visit
to the Pentagon, Anwar  was given red carpet treatment complete with gun
salute. His  close relationship with some  high US officials at the time
when Mahathir  was attacking the neo-colonialism did not go down well with
the latter and in fact aroused his suspicion against Anwar.

Fifty Proofs

Things came to a head during the UMNO general assembly in June this year.
Just before the assembly started a book entitled "Fifty Proofs Why Anwar
Cannot Be Prime Minister" was published. Copies of the book found their way
into some conference bags that were distributed among delegates to the
assembly. How could this happen, if not with the blessing of the top
leaders, ask Anwar's "boys". The Secretary General of UMNO dismissed the
complaint by saying that only one bag contained that book. The main
chapters of the book consisted of a list of fifty allegations against
Anwar, which involved sex scandals, as agent of foreign government,
receiving money from foreign intelligence agency and so forth, and  the
poison letter that was exposed by Mahathir  a year ago. The book used foul
and vulgar language. It appeared to be put together in a great hurry.

On the other hand, accusations on corruption, cronyism and nepotism were
hurled at the UMNO top leadership by the head of the UMNO youth wing, Zahid
Hamidi. Mahathir and those around him took it as an attack on him in order
to oust him. He was convinced that Anwar was behind this attack. During the
assembly Mahathir disclosed several lists of people who were awarded
special shares, privatised projects and transport permits. The lists showed
that many prominent corporate figures close to Mahathir and also his
children benefited from these. But it also showed that Zahid and some of
Anwar's family members and close associates also enjoyed similar
privileges. This blunted their attack on Mahathir.

The "50 Proofs", more than these lists damaged Anwar's reputation as a
religious person. It strengthened Mahathir's position. After making a long
and convincing speech at the end of the assembly, it was clear that
Mahathir had won the day. Nevertheless, during the assembly and later, both
Mahathir and Anwar continued to state that they would be mutually
supporting each other. On a few occasions, Anwar pledged his undivided
loyalty to Mahathir, but the latter seemed to be cynical. Anwar's position
continued to be weakened and there was widespread speculation that his days
were numbered.

Anwar's Power Curbed

Not long after the assembly, Mahathir announced the formation of a National
Economic Action Council to be chaired by him with Daim Zainuddin, the
former Finance Minister whom Anwar succeeded, as the chief executive. This
move was viewed by many as an attempt to clip Anwar's wings. NEAC (or more
appropriately Daim) was to take over the main functions of  planning and
executing  measures to overcome the economic crisis. The majority of NEAC
membership comprised ministers, corporate representatives and
administrators. Then Daim was brought back to the cabinet, to enhance his
powers. Soon he announced a National Economic Recovery Plan (NERP).
Although Anwar continued to be Finance Minister, he was without any voice
or power to deal with the key financial and economic matters.

The economic crisis affected a number of big corporate figures who were
burdened with huge foreign loans that had increased following the fall of
the ringgit against US dollars by about 50 percent. Furthermore, listed
companies suffered heavy losses as a result of the fall of the share market
by more than 70  percent, valued at around RM700 billion (or about US$185
billion at current rate). Among these companies were those owned
indirectly through cronies of the UMNO leadership. They were set on using
public money from the Employee's Provident Fund and the Pilgrimage Board
Fund, as well as the country's reserves in order to bail out some of the
crony companies. There was opposition to this and so voices of dissent had
to be shut.

Mahathir immediately acted against the media so that they could  be
controlled effectively. The senior editors of two influential Malay
newspapers - Utusan Malaysia and Berita Harian - and a senior programme
officer of TV3 (a private television channel) were forced to resign. They
were considered to be strong supporters of Anwar. Those who could be
dominated by Mahathir succeeded them.  A few weeks later, the Central Bank
governor together with his deputy also sent in their resignation. They were
regarded as being opposed to Mahathir's assertion that interest rates
should be lowered and that there must be control over foreign exchange.
Meanwhile, Anwar's occasional tennis partner by the name of Datuk Karuppan,
who was earlier investigated in connection with the publication of "50
Proofs" was detained under the ISA and to be charged for illegal possession
of 125 live bullets which carried death sentence. 

Mahathir Acts

On 1 September 1998, Mahathir announced what he promised to be "shocking
measures", which included fixing the ringgit at RM3.8 against the
greenback, allowing a maximum of RM10,000 to be taken in and out of the
country, and  forcing back the ringgit stocked overseas by declaring that
they would regarded as worthless after the lapse of a month. In a more
shocking move, on the following day at 5.30 p.m., the Prime Minister's
Department issued a statement  announcing that Anwar had been stripped of
all his government positions. 

On the same night the television and the next day all newspapers gave full
publicity to four affidavits which were in response to Karuppan's affidavit
requesting to be transferred from the ISA holding centre to an ordinary
lockup. In the affidavits  almost all allegations contained in the "50
Proofs" were repeated. On the night of  3 September Anwar was stripped of
his position in and sacked from UMNO. Apparently, the removal of Anwar from
his government and party positions was precipitated because he refused to
admit guilt and step down. He considers all these  these allegations to be
fabricated and false. 

It is possible that there are several reasons why  these shocking events
took place. But I believe that the main one was that Mahathir and his
associates feared  Anwar would challenge and possibly defeat him in the
forthcoming general assembly due in April 1998. Furthermore, a handful of
billionaires and millionaires who had become very wealthy with the help of
Mahathir wanted him to continue in power in order to protect their
interests and help to rescue their ailing companies. At the same time they
also wanted to be sure that in case anything happened to Mahathir, who was
already 73 and had undergone  heart surgery over then years earlier,  he
would be succeeded by someone reliable. Anwar was not seen as the right
candidate, because not only he has declared to take stern action against
corruption but also he was surrounded by  a new set of ambitious young
businessmen, who seemed to be in great hurry to replace the established
ones surrounding Mahathir.    

Anwar's Moves

After being sacked, Anwar expected to be arrested under the ISA or some
other obnoxious acts. But at the time this article is written, over a week
has passed without anything of this kind happening. Perhaps Anwar is
temporarily saved by the presence of hundreds of media representatives who
have come for the Commonwealth Games. Instead new allegations have been
slapped on him under the Sedition Act and  he is now  also accused of
interfering with police investigation. Right from day one large number of
supporters and well wishers have been coming in droves  every day in
support of Anwar. Every night he addresses thousands of people who gather
around his home. His speeches are recorded and the audio as well as
videotapes are sold widely all over the country. His confidential letters
to the Prime Minister have been distributed publicly too. 

Anwar has announced that he intends  to form a reform movement. But the
meaning of the reform and the nature of the movement have not been spelt
out. His main target is also still vague. He seems to be carried away by
the Indonesian development. Up to date only four organizations closely
associated with him, the main one being ABIM, have announced their
involvement in the movement. Nevertheless, public sympathy for him is
widespread and seems to be increasing, especially among the youths, the
lower classes, professionals and government servants.   

Anwar's main problem seems to arise from UMNO's political culture. A leader
who loses power will easily lose his political support. UMNO leaders often
hold well-paid  positions in government and  enjoy many perks and great
wealth. Therefore, they often quickly turn to and pledge  loyalty to the
leader who still holds power. But these pledges may just be superficial. In
case Mahathir falls, they can easily make new pledges of loyalty, even to
Anwar should he come back to power. Another problem is that Anwar does not
seem to have a compact organisation and he also lacks tested cadres. It is
hard to predict, therefore, how long the support given to him will persist
should he be detained or jailed.

The Future

Anwar has stated categorically that he would neither form a new political
party nor join any of the existing ones. He still seems to be toying with
the idea of being reinstated in the party and government in order to
continue with his reform movement within UMNO. In fact, there are a number
of UMNO divisions within his home state of Penang which, while upholding
Mahathir's leadership, are appealing for Anwar to be reinstated to all his
former positions. This is impossible to happen as long as Mahathir remains
in power. As the Malay saying goes, he will not lick his own sputum.
Further, according to the UMNO constitution, a sacked person can only
reapply to be member after three years. No doubt there have been cases
where a number of members who were sacked following allegations of
involvement in  money politics were taken back after about a year; the UMNO
supreme council apparently has the power to decide so. 

But in the case of Anwar, this cannot happen as easily, because the
allegations against him are too many and too heavy, and made by none other
than Mahathir himself. Now Mahathir seems to have ignored the other
allegations and now concentrates on those relating to sex and moral issues.
Mahathir will try to convince the country that Anwar is not fit to hold
important leadership positions because his real character is not consistent
with  the religious façade that he presents.  Mahathir already has most of
the UMNO leaders in his pocket. But if he  fails to move the public to his
side or should he suddenly die, then only then will Anwar would have a
chance to go back to UMNO, but not necessarily with the guarantee that he
could return to his old positions.

There seems to be not much choice between Mahathir and Anwar. Progressives
can be easily attracted to Mahathir's pronouncement against neo-colonialism
and the fear of foreign capital dominating the country. How genuine is he
and how long can or will he maintain this position? At the same time he
cannot be trusted because he has slowly turned into a one-man dictator,
violating fundamental practices of democracy and basic human rights. On the
other hand Anwar may attract a lot of people because of his populist
approach and  concern for civil society and human rights. But then, there
may be strong reservations among certain quarters  because of his strong
leanings towards the West, foreign capital and IMF. Certainly a third
alternative has become necessary.

Petaling Jaya
                                                       10/9/1998