Bazuki Muhammad MALAYSIA S DILEMMA

special report REUTERS/Bazuki Muhammad MALAYSIA’S DILEMMA The man who made Malaysia part of the “East Asia Miracle” with a massive inflow of foreign...
Author: Deirdre Curtis
6 downloads 0 Views 1MB Size
special report

REUTERS/Bazuki Muhammad

MALAYSIA’S DILEMMA The man who made Malaysia part of the “East Asia Miracle” with a massive inflow of foreign direct investment doesn’t think much of it today. Mahathir’s thinking is at odds with government policy. But it gets to the heart of a debate over the future of the former emerging market star now in danger of becoming an also-ran, stuck in the dreaded “middle income trap” and plagued by racial divide.

JULY 2011

malaysia’s dilemma

july 2011

FLYING THE MALAYSIAN FLAG: Jasmit Kaur and daughter Manishajeet wear headbands depicting the Malaysian national flag during National Day celebrations, marking the 53rd anniversary of country’s independence, in Kuala Lumpur August 31, 2010. REUTERS/Samsul Said

Malaysia’s dilemma: Can it reform and discriminate? By Bill Tarrant PUTRAJAYA, MALAYSIA, July 7

D

r. Mahathir Mohamad sits at a vast desk cluttered with work, hands clasped before him and looking at his visitors with a slight smile. Dr. M, as he is popularly known, was prime minister of Malaysia from 1981 to 2003, the first commoner to ever hold the post in a land with nine sultans. His demeanor suggests the country physician he once was, ready with a frank diagnosis—and in his first interview with the foreign media in five years, he doles out prescriptions for what ails his nation. The man who made Malaysia part of the “East Asia Miracle” with a massive inflow of foreign direct investment doesn’t think much of it today.

The former miracle economy, now a muddle, needs a new policy direction, he says in his office in Putrajaya, the administrative capital he built on old plantation land in the 1990s. “We should not be too dependent on FDI anymore,” says Mahathir. “We’ve come to the stage when locals can invest. They have now the capital. They have the technology. They know the market. And I think they can manage big industries.” [Full Interview, pg 8] His thinking is at odds with government policy. But it gets to the heart of a debate over the future of Malaysia, a former emerging market star now in danger of becoming an also-ran, stuck in the dreaded “middle income trap.” Foreign investment has been dwindling since the onset of the 1997-1998 Asian financial crisis. Capital outflows have even exceeded inflows in four

of the past five years. This has been accompanied by an alarming “brain drain” of emigres voting with their feet against Malaysia’s prospects. Malaysia is counting on foreign investment to provide a quarter of the investments needed to fund projects under its “Economic Transformation Programme,” which aims to turn the country of 28 million into a fully developed nation by 2020. That comes to an average of more than $11 billion a year, compared with an average of $3.1 billion since 1997­—by any measure an ambitious target. The challenge is vastly more complicated by the exodus of talent that hits directly at ON THE COVER: A Malaysian ethnic Chinese closes the door of a temple in Kuala Lumpur July 5, 2011. REUTERS/Bazuki Muhammad

2

malaysia’s dilemma

july 2011

LIGHT MOMENT: Ethnic Malays and an ethnic Indian leave office after work in Putrajaya outside Kuala Lumpur in this January 3, 2007 file photo. REUTERS/Bazuki Muhammad



We should not be too dependent on FDI anymore. We’ve come to the stage when locals can invest ... And I think they can manage big industries Mahathir Mohamad

Malaysia at a glance Population GDP per capita Exports (Mar 2011) High-tech exports*

100 km

Penang

PENINSULA MALAYSIA

8

27.4 mln $7,030 7.8% y/y 47%

Annual GDP growth – % chg y/y

CPI – %

6

4

4

3

2

2

Kuala Lumpur Port Klang

Putrajaya Cyberjaya Malacca Iskandar

5

0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1

Sources: World Bank, Reuters. *As a percentage of manufactured exports. All data as of 2009 unless otherwise specified. Reuters graphic/Christine Chan

Malaysia’s aspiration to become a high-income nation focused on knowledge-based industries. “For Malaysia to stand success in its journey to high income, it will need to develop, attract and retain talent,” the World Bank said in a March report. “Brain drain does not appear to square with this objective: Malaysia needs talent, but talent seems to be leaving.” The rise of China and India in the region has overshadowed the export-dependent “Tiger Cub” economies of Southeast Asia, all struggling with their own reforms. Thailand has been at a dangerous political impasse for six years. Indonesia is consistently ranked as among the world’s most corrupt countries. The Philippines is battling long-running insurgencies. Yet Malaysia does not compare well with its peers in the eyes of investors. A March report by Bank of America Merrill Lynch ranked Malaysia the second least popular market after Colombia among global emerging market fund managers and tied with India for least favourite among Asia-Pacific managers. A chief difficulty is the nation’s balky affirmative action programme. Ethnic Chinese account for most of the brain drain. The reason 60 percent of them gave for why they moved out of the motherland was “social injustice”, a World Bank survey says. They are referring to the “Bumiputra” (sons of the soil) policy that discriminates against Chinese and Indians, who account for a third of the population, in favour of majority Malays for all kinds of things—places in universities, jobs, shares in companies, home mortgages, government contracts. The government acknowledges the policy has been widely abused, with Malay front men offering their names to Chinese businesses to obtain government contracts, an arrangement known as “Ali Baba”, after the character in Arabian Nights who gains entrance to the treasure cave of the 40 thieves with the magic words “Open Sesame”. Prime Minister Najib Razak has launched a new edition of the policy called the New Economic Model that is meant to correct the inequities, mainly by making preferences needbased and not race-based. But as the World Bank report noted, “limited headway has been made on this front.” It is certainly not popular with the rank and file Malays in Najib’s UMNO party. Making significant reforms to the system is crucial to Malaysia’s aspirations, but any rollback of privileges for the majority is a big political risk for any government that tries it. It is the Malaysian dilemma.

31/05/11

3

malaysia’s dilemma

THE IMPOSSIBLE GAME

Idris Jala, the minister in charge of greatly boosting investment and wooing back emigres under the Economic Transformation Programme (ETP), calls it the impossible game. He is an unlikely character in the Malaysian Cabinet, a Christian from the Kelabit tribe in Sarawak on Malaysian Borneo who spent most of his career running companies, including the Malaysian unit of Royal Dutch Shell and Malaysia Airlines. “I am a true believer that real transformation goes hand in hand with the game of the impossible,” Idris says in an e-mail interview. He sets impossible targets, is “very directive” and pushes his team constantly “to do the right things, but differently” until they are finally “one step ahead of you”. “When you do transformation, you cannot achieve big results by democracy,” he notes. The ETP aims to attract 1.4 trillion ringgit ($466 billion) by 2020 in a dozen broad industries. Only 8 percent of that will come from the government, which has long dominated the economy, either directly or through government-linked firms. Idris disclosed to Reuters that foreign investment will account for 27 percent of the total. He wants to climb the value ladder in the targeted industries. Take birds’ nests, for example. Nests made with the saliva of swifts have been collected for centuries from huge limestone caves in Idris’ home state of Sarawak to make the most expensive soup on earth. Processing them would give Malaysia a bigger chunk of a global market worth $3.3 billion, he said. Foreign investment will also provide many of the 3.3 million jobs that will be created under the ETP, whose over-arching goal is to raise per capita income to $15,000 from $6,700 in 2009. A challenge will be to upgrade skills in a labour force long geared to basic manufacturing and plantations, attract foreign talent, and try to reverse some of the “brain drain.” About 700,000 Malaysians work abroad. A new agency called “Talent Corporation” has been given this task, offering tax breaks for Malaysians to return home and easing visa restrictions for foreigners. But the shift from low-cost manufacturing and plantations to more knowledge intensive work needs to take place in an environment where creativity and freedom of inquiry can flourish to draw talent and investment. The Malaysian model of ethnic preferences has not been conducive to that.

july 2011

Malaysia’s diaspora and brain drain Malaysia’s worldwide diaspora is estimated at 1 million people in 2010 and geographically concentrated Percent (in 2010)

Diaspora (total emigration)

Brain drain

Country Singapore Australia Brunei United Kingdom United States Canada New Zealand

0

10

20

30

40

50

Note: Brain drain = Emigration of persons with a tertiary education or above to destination country. Source: World Bank Reuters graphic/Christine Chan

MEGA-PROJECTS

Mahathir remains a towering figure. In public forums and in his blog, he is a scourge to the government of the day, influential, for instance, in forcing the early retirement of his anointed successor, Abdullah Badawi. But while he’s a critic of his successors, he is a strong defender of the Malaysian system he built. Mahathir came to office as the foremost champion of Malay privileges. Under his administration, the “Bumiputra rules” led to a mingling of politics and business that largely benefited a coterie of Malay and Chinese businessmen. Huge government building projects kept the contracts flowing and the political machine running. Mahathir says as much in the interview, citing the slowdown in big projects as the reason for the steady attrition of Chinese support for his successors in office.



FOR MALAYSIA TO STAND SUCCESS IN ITS JOURNEY TO HIGH INCOME, IT WILL NEED TO DEVELOP, ATTRACT AND RETAIN TALENT... [IT] needs talent, but talent seems to be leaving World Bank Report

27/05/11

“What is happening is the Chinese feel that in the economic area, the business area, they are not receiving the kind of benefits they got during previous times,” he said. “The moment I stepped down, all the projects were stopped ... When you stop big government projects, a lot of people—well, their businesses will go down.” In March, Mahathir published an 809page autobiography, “A Doctor in the House.” His main motivation in writing it was “to make corrections of the opinions and the accusations that were leveled at me”—especially that he systematically undermined the judiciary. It is the biggest stain on his record. He authorised the arrest of his deputy and heir apparent, Anwar Ibrahim, on sodomy and corruption charges after the two men fell out over how to handle the Asian financial crisis. The trial was denounced in and out of Malaysia as a farce that called into question the rule of law. The financial crisis and Anwar’s conviction marked a watershed. Foreign investors became wary about Malaysia, and a country once a haven for foreign investment was shunned. “Ten-twenty years ago, Malaysia was it,” said a regional president of a European-based distribution company. “But then came 1997 and the rule of law was exposed for what it was. We once looked at Malaysia for a regional headquarters but rule of law and the bumi policy made us choose Singapore instead.” Mahathir retired in 2003, but Malaysia has yet to inspire confidence again. Economic growth has fallen along with investment, averaging 4.6 percent in the decade that ended in 2010 from an average 7.2 percent in the 1990s.

Released in March

4

malaysia’s dilemma

july 2011

FIELD OF CYBER DREAMS

Putrajaya is a monument to Muslim Malay culture. Graceful minarets and gleaming blue domes dominate the skyline and a bridge across an artificial lake was inspired by the famous one in Isfahan, Iran. More than 90 percent of the residents are Bumiputras. Across Putrajaya lake from Mahathir’s office is a curious community of knowledge workers called Cyberjaya. The town is a place where the contentious “bum rules” do not apply. Cyberjaya (cyber success) is home to about 500 IT companies and two universities. It has a daytime population of 41,000 but only 14,000 fulltime residents sleep there overnight. This town is filled with futuristic-looking buildings but has few residential neighbourhoods and little in the way of amenities, not yet anyway. Cyberjaya was one of Mahathir’s last big projects. It was to be Malaysia’s answer to California’s Silicon Valley, the key difference being this one would be a ready-made town, built on old plantation land, in hopes technology innovators would come. Cyberjaya offers foreign investors a waiver of the “Bumiputra” rules that require equity stakes and employment for ethnic Malays. It also guaranteed the Internet would not be censored, in a country that kept the media on a tight leash. Cyberjaya was part of a grand plan to avoid the emerging market middle income trap Malaysia was falling into because it could no longer compete for manufacturing jobs, especially with China. Then the financial crisis hit and Mahathir’s response spooked potential investors. Blaming Jewish conspirators for the crisis, he imposed capital controls to stop short-selling of the ringgit. Anwar was arrested the day after that. Some $30 billion in portfolio investment fled Malaysia in 1997; most of it has yet to return. Key foreign investors scrapped plans for Cyberjaya and for years Malaysia struggled to woo them back. The effort now appears to be bearing fruit. Last October, Hewlett Packard launched a multi-purpose client servicing center in Cyberjaya, the single biggest investment by a technology multinational in Malaysia. HP said it would provide 4,000 jobs. It joins Dell, DHL, IBM, Fujitsu, Nokia and DoCoMo among others in the 29-square-kilometre town. Since 2009, Cyberjaya has attracted 7.12 billion ringgit in investment, compared with a total of 4.62 billion ringgit in the previous 11 years. Success has given Hafidz Hashim, managing director of Cyberview Sdn Bhd, the town’s developer, a new problem. “Entertainment,” Hafiz said when asked what his “citizens” want the most. He is known as “the mayor of Cyberjaya because his company acts as both builder and city manager.

PAST AND PRESENT: Malaysia’s then-Prime Minister Abdullah Ahmad Badawi (C) is flanked by his predecessor Mahathir Mohamad (L) and Abdullah’s deputy Najib Razak after the opening of the “Perdana” Leadership Foundation, a foundation to preserve, develop and disseminate materials by and on Malaysia’s past prime ministers, in Putrajaya outside Kuala Lumpur in this May 10, 2005 file photo. REUTERS/Bazuki Muhammad

More than half the projected investment over the next three years will be for residential property, Hafidz said in an interview. Cyberview has already built a community center and clubhouse and plans to build a huge entertainment complex, along with more shops and restaurants. It is far from Malaysia’s answer to Silicon Valley, though. Cyberjaya is home to server farms, data storage facilities and client service centers, the low end of the Internet economy. There is little in the way of R&D underway. Arvin Singh, 22, has just quit his job at the HP plant because he was “constantly doing the same thing over and over again” and not growing on the job. Most of his co-workers were content to

remain in this “comfort zone,” he said. “But one must constantly work to expand one’s knowledge,” Singh says, adding he plans to study overseas to get further qualified. Hafidz said one of his biggest challenges is meeting the skills companies in Cyberjaya need, and which Malaysia’s education system is not providing. He has set up a “Knowledge Workers Development Institute” where companies can send workers for training, and on-the-job training programmes. Cyberjaya’s success after a sputtering start has inspired similar projects in the country. The most ambitious is one emerging just north of Singapore called Iskandar Malaysia. It

Malaysia’s FDI flows 15000

FDI flows – current $ bln Inflows

Outflows

Net outflows

12000 9000 6000 3000 0 -3000 -6000

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

Source: UNCTAD Reuters graphic/Christine Chan

16/05/11

5

malaysia’s dilemma

july 2011

HAVING FUN: A young Malaysian Muslim, Batrisha Norhisham, 6, plays at a playground in Kuala Lumpur July 6, PAYING RESPECTS: A Malaysian of Chinese origin burns paper money during Chap Goh Meh festival at a temple 2011. REUTERS/Bazuki Muhammad in Dengkil outside Kuala Lumpur in this February 17, 2011 file photo. REUTERS/Bazuki Muhammad

HINDU SHOWER: A young Hindu devotee takes a shower before starting his pilgrimage to the sacred Batu MUSLIM PRAYERS: Malaysian Muslims listen to a prayer during a special ceremony to mark Moharram Caves temple during Thaipusam festival in Kuala Lumpur on in this January 31, 2007 file photo. REUTERS/Bazuki in Putrajaya outside Kuala Lumpur in this December 29, 2008 file photo. REUTERS/Bazuki Muhammad Muhammad

will eventually be a metropolis three times the size of Singapore with theme parks, international schools and colleges, hotels and hospitals, a movie studio, a financial centre and luxury homes. It has attracted $23 billion in promised investments, nearly half from overseas. Iskandar is one of five “economic growth corridors” Malaysia is developing with incentives to foreign investors. They are, in effect, investment zones ring-fenced from the mainstream economy where business and politics have long entwined.

FEAR FOR FUTURE

Months after Mahathir took power in 1981, a Malaysian Chinese banker packed up his family in the southern city of Johor Bahru and moved to Singapore. He had grown uneasy about the future as Mahathir took an increasingly interventionist approach to the economy and ramped up the affirmative action policy. Those uncertainties have only increased for a Chinese community that abandoned the ruling National Front coalition in the 2008 general election and are now deserting the country in ever mounting numbers. The World Bank said the Malaysian diaspora has quadrupled over the past three decades. “People are unhappy about the way the

(policy) has been exploited, the way it has degenerated into some kind of apartheid policy,” said the banker, who requested only his surname, Lee, be used. “They say come back, we’ll give you tax breaks. But when you move back, you’re not talking just about your career, but your children’s future. And it’s this perception of uncertainty that holds them back. They feel the society they have moved to is more assuring that the one they came from.” Lee’s son, a medical doctor, said the overseas Malaysian Chinese community has now become anxious about the growing force of political Islam. Last year, 10 churches and two mosques were desecrated after a Malaysian high court ruled Christians could use the word Allah for God in their literature. “A lot of people are now worried about a hyper-religious government taking power, and then all that they worked so hard for goes up in smoke.” Kalimullah Hassan, former Group Editor of Malaysia’s pro-government New Straits Times publications, understands their anxiety. A Bumiputra himself, Kalimullah worries about the emergence of right-wing politicians trying to win back Malays, nearly half of whom

voted for a multi-ethnic opposition coalition headed by Anwar Ibrahim in 2008. “To unite the Malays, they raise the bogeyman—other races, specifically the Chinese and foreigners who are supposedly out to displace the Malays in their own homeland – and in doing so, they’ve upped the ante in race relations,” Kalimullah says. The politics of patronage is no longer working because there isn’t enough largesse to spread around in a country whose population has nearly tripled since 1970 and with capital inflows and growth slowing, Kalimullah says. What Malaysia needs now more than ever is the meritocracy Prime Minister Najib has proposed in his New Economic Model. Otherwise its human capital will be stunted, he says. “In the mid-to-long term, Malaysia is going to be left further behind by a world which has already realised that human capital is its greatest asset.” Additional Reporting by

Razak Ahmad

Editing by

Mike Williams Neil Fullick 6

malaysia’s dilemma

july 2011

Piece by piece, Malaysia builds new metropolis by Singapore By Xue Jianyue

Singapore left the Malaysian Federation in 1965 and ties since then have hit many a rough patch. But last year they signed agreeike a giant Lego project, ments to settle long-standing Malaysia is assembling the issues, including railway land bipieces of an investment secting Singapore owned by Mazone that is destined to become a laysian rail operator Keretapi Tametropolis about three times the nah Melayu (KTM). size of neighbouring Singapore. CIMB research regional econoAn area of mostly rubber and mist Song Seng Wun said that Singaoil palm plantations covering 2,217 pore’s private sector companies have square km (855 square miles) in been the biggest and oldest investhe southern state of Johor is being tors in Johor, but what was missing turned into international schools, was strong participation from govhospitals, hotels, theme parks, luxuernment-linked companies. ry homes and a financial district. “Singapore Inc. has been cauOne of the first pieces of the detious about investing in Johor,” velopment, appropriately enough, Song said. “They are taking it one is a Legoland theme park. Due to step at a time, looking for policy open next year, it will offer 40 inconsistency from Malaysia and Joteractive shows and rides, along hor, and observing how Singapore with 15,000 giant lego models of SEEING THE FUTURE: Malaysian Prime Minister Najib Razak looks at model of future development of Kuala Lumpur city. REUTERS/Stringer and Malaysia work together on famous buildings. It will be the transfer of railway land and other first of three planned theme parks It had already attracted RM 69.43 billion previous agreements.” in Iskandar Malaysia, named after ($23 billion) in promised investment by last DeBritain’s Newcastle University Medical the late sultan of Johor. Launched on Nov. 4, 2006, Iskandar is one cember. About 38-39 percent of that sum has School is one of six colleges planned in an “Educity” complex in Iskandar, and will admit of five “economic growth corridors” Malaysia is been “realised”, Ismail told reporters in May.  Iskandar is targetting another RM 13 billion its first batch of students later this year. Britdeveloping over the next decade. They are part of an “Economic Transformation Programme” annually and a total of RM 73.3 billion over the ish boarding school Marlborough College will that aims to propel Malaysia into a fully-devel- next five years following the completion of key open this year, as well. A 355-acre (144-hectare) financial district oped nation by 2020 by lifting per-capita in- infrastructure, education and tourism projects by next year. Foreign investment has accounted will host corporate office towers, premium hocomes to $15,000 from $6,900 in 2009. tels, high-end residential properties, premium “At the moment, manufacturing contrib- for about 41 percent of the total so far. Improving relations between Singapore and retail complexes and luxury service apartutes 70 percent of the region’s economy,” said Ismail Ibrahim, chief executive of the Iskandar Malaysia are key to the Iskandar investment cli- ments. Malaysia is also aiming to get a piece of the Regional Development Authority (IRDA). “We mate as the island state is expected to be the growing Asian film production market with the hope upon reaching maturity at 2025, the main single biggest investor in the development. new Pinewood Iskandar Malaysia Studios, a joint contributing sector would be the service sector.” venture between Malaysia sovereign wealth fund Far from being a rival to Singapore, IskanKhazanah and Pinewood Shepperton, the British dar is courting investment from the rich cityfilm studio behind the Batman and James Bond state just across the Straits of Johor. Incentives movies. include corporate and personal income tax Khazanah will also work with Singapore’s breaks, and exemptions from the so-called sovereign wealth fund Temasek Holdings to “bumiputra rules”—foreign investors are allowed develop a wellness township in Iskandar, ofto own 100 percent of their businesses, with unrefering medical facilities, holistic health services stricted hiring of foreign “knowledge workers”. and alternative medical treatment. Like different coloured Lego blocks, Iskan   dar will feature various zones—financial, cre Editing by ative media, tourism, education and healthcare Song Seng Wun Bill Tarrant in the service sector; electrical and electronics, Regional Economist, CIMB Research John Chalmers petrochemical and food processing among others in manufacturing.

ISKANDAR, MALAYSIA, July 7

L



SINGAPORE INC. HAS BEEN CAUTIOUS ABOUT INVESTING IN JOHOR

 

77

malaysia’s dilemma

july 2011

Mahathir: racial divide deepening



DR MAHATHIR MOHAMAD: Former Malaysia’s Prime Minister smiles as he speaks to Reuters during an interview at his office in Putrajaya outside Kuala Lumpur May 4, 2011. REUTERS/Bazuki Muhammad

YES, IT’S WORSE NOW. DURING MY TIME, I COULD RELY ON CHINESE SUPPORT FOR MY PARTY. NOW THE GOVERNMENT IS THREATENED WITH LOSING CHINESE SUPPORT EXCLUSIVE INTERVIEW with DR MAHATHIR MOHAMAD, former Malaysian Prime Minister on the racial divide in the country ON THE NEXT PAGE

8

malaysia’s dilemma

july 2011

By Bill Tarrant PUTRAJAYA, MALAYSIA, July 7

M

alaysian Chinese have stopped supporting the government because they no longer feel they are getting their share of projects, former prime minister Mahathir Mohamad said. The former prime minister looked back on his two decades in power in a May interview at his office in Putrajaya, the showcase administrative capital he built in the 1990s and one of the “mega-projects” that helped define his regime. Chinese and Indians make up a third of the population but have become increasingly unhappy about an official policy that discriminates against them in favour of majority Malays. “Yes, it’s worse now,” Mahathir says of the racial divide in Malaysia. “During my time, I could rely on Chinese support for my party. Now the government is threatened with losing Chinese support.” He noted that his government two decades ago bowed to Chinese demands to have their own schools taught in the Chinese language, and said it showed how accommodating it was to minority races. “Despite having a national (Malay) language, they don’t teach in the national language. They can’t speak the national language.” But he acknowledged that having separate schools had become a major factor in the racial divide.     “We would like them to come to national schools. We even suggested you can have your Chinese school, you can have your Tamil school, but why not put all three schools on  one campus? So they can eat together, they can play together, and each gets to know that in the real world they have to interact with different races. But the Chinese say no. They say if you do that, we won’t support the government.”     Mahathir also ensured Chinese support by doling out government contracts to them and their Malay partners, which critics said encouraged corruption and cronyism. Mahathir’s successors shelved big projects to pare down a widening fiscal deficit, at the cost of Chinese votes, Mahathir said. “For some reason or another, the moment I stepped down, all the projects were stopped ... When you stop big government projects, a lot of people, well their businesses will go down.”

THE SUN SETS near the Petronas Twin Towers (C) and Kuala Lumpur Tower (L) January 19, 2009. REUTERS/ Zainal Abd Halim

DON’T DEPEND ON FOREIGN FUNDS

The man who made Malaysia part of the “East Asia Miracle” with a massive inflow of foreign direct investment (FDI) doesn’t think much of it today. “We should not be too dependent on FDI anymore. We’ve come to the stage when locals can invest. They have now the capital. They have the technology. They know the market. And I think they can manage big industries.” Mahathir published an 809-page autobiography, “A Doctor in the House”, in March because he felt “the need to make corrections of the opinions and the accusations that were levelled at me”. The accusation that grated the most, he said, was that he undermined the judiciary.

The criticism is rooted in a 1988 amendment to the constitution that transferred powers over the judiciary to parliament. It essentially emasculated judicial independence, and allowed him to get judicial backing for his political manoeuvres from then onward. Dr. Mahathir could not disguise his contempt for lawyers. “A doctor wants to find out about the truth of his patients so he can identify a treatment. A lawyer wants to get his client off the hook. And even if he knows the client is guilty he is going to find ways and means of getting him off the hook.” Editing by

John Chalmers

For more information contact: BILL TARRANT, Enterprise Editor, AsIA Find more Reuters special reports at our blog The Deep End here:

http://link.reuters.com/heq72q

© Thomson Reuters 2011. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks and trademarks of Thomson Reuters and its affiliated companies.

[email protected]

PDF produced by WALTER SIM [email protected]