Friday, 18 July 2008


THE WHIRLWIND ECONOMIC crisis sweeping through Asia has taken its toll of political leaders. With mass demonstrations calling for his resignation, is it now the turn of the ageing Mohamad Mahathir, who has ruled Malaysia almost unchallenged for 17 years?

Mahathir's fortunes depend very much on the Malaysian economy. His apparent 'popularity' over a decade or two of growth was reinforced by an autocratic control of society. Now, as the economy goes into reverse, more and more discontent comes to the surface. If the economy, suffering from massive over-borrowing and over-capacity, cannot be turned round, Mahathir will have increasing difficulty convincing workers to support his policies.

On 1 September he introduced stiff capital controls to deal with a sliding currency and falling production (down 7% in the second quarter this year). The next day he removed from office, Anwar Ibrahim, the staunch free-market finance minister and deputy prime minister, Mahathir's heir apparent.

Anwar quickly condemned as a 'political conspiracy', allegations circulated against him in Mahathir's kept press. They ranged from massive corruption, paid links with foreign speculators through to 'unnatural sexual acts' with associates. Fighting back, he launched a 'reformasi' movement, touring the country and addressing mass rallies of between 30,000 and 100,000 people. His demands for an end to cronyism and for democratic freedoms found an echo not only amongst the burgeoning and frustrated middle classes but also amongst workers and the poor.

On 20 September, masked men invaded a press conference at his home and took him into custody under the ISA - Internal Security Act - a hated legacy of British colonial rule. His wife Azizah, also threatened with arrest, shifted the movement she 'inherited' into a higher gear. A video made by Anwar before his arrest was widely circulated and his case went world-wide on the internet.

In spite of a ban on meetings of more than five people, huge crowds gathered at his home and often moved defiantly onto the streets or into the mosques, where banners were unfurled demanding an end to Mahathir's corrupt regime. When Anwar appeared in court with a swollen face, black eye and bruises, and later with a neck brace, Mahathir claimed the injuries were self-inflicted!

After years of isolation from public opinion, surrounded by flatterers and toadies, a virtual dictator like Mahathir can totally misjudge how far he can stretch credulity. Outrage was universal. Protests grew larger and noisier. A High Court judge has now scheduled Anwar's trial to re-start from 2 November, with a recess that conveniently coincides with an APEC conference in Kuala Lumpur involving Asian heads of state.

But how far can a movement go that is based largely amongst professionals and business people, whose main aim is to break down cronyism to advance their own interests? Azizah said: 'We are not trying to set up something new. The basic structure is there. All you have to do is remove the oppression'. Yet the cracks opened up by this public spat inside the ruling layers - brought about by economic and social stagnation - can open the way for other layers of society to lay their claims to a better deal.

Anwar, though a campaigner against poverty in his student days (for which he was imprisoned), has since been in the camp of the enemies of labour. No one should be fooled by his populist messages from prison, 'we must save the country from being exploited by a handful of individuals out to manipulate the economy to amass wealth for themselves'. Anwar is a firm supporter of capitalism in Malaysia - of massive profit-making and the gross exploitation of the mass of the population. He participated in a cabinet that ratified the arrest and harassment of even the mildest dissidents and which used the very ISA his supporters now demand should be abolished.

Last December he displayed his orthodox neo-liberal credentials by pushing through a programme of austerity measures. They were, inevitably, an attempt to rescue the Malaysian economy at the expense of the working class and other oppressed layers. These failed to stem the disaster of an economy moving rapidly into decline. Mahathir has been able to blame Anwar, along with all free-market enthusiasts, for the continuing financial disaster. He has taken over as finance minister and, with the 'protection' of monetary controls, has reduced interest rates, introduced budget deficits (8% of GDP this year), and pumped $3.4bn into infrastructure projects.

Some analysts think these measures could lift the economy temporarily and give Mahathir a little respite, but the political opposition to his rule may have already reached a point where it will be difficult to contain. Critics note he is still authorising expensive measures like the $2.63bn government 'bail-out' which amounts to a form of nationalisation for Renong Bhd. Once the 'investment arm' of the ruling UMNO party, Renong "has nine listed companies in its stable and interests in toll-road operations, construction and engineering, property development, telecommunications, financial services, oil and natural gas" (Wall Street Journal, 9 October).

Towards the middle of this year, Mahathir denounced foreign speculators and a 'new form of colonial domination', using his own brand of populist anti-imperialist rhetoric. After the mass movement in Indonesia had brought down Suharto towards the end of May, voices were raised in UMNO, warning Mahathir to clean up his corrupt administration. He claims he was considering standing down. Now, after arresting his own protégé, he claims he cannot step down because there is no successor!

Mahathir's decision in September to break with the IMF's conditions caused panic amongst the world's financiers. Lee Kuan Yew of Singapore said 'developing countries' were watching to see which economic model - free market or capital controls - succeeded in overcoming the immediate problems: 'I feel we are going to have a backing away from a globalised financial system' (International Herald Tribune).

Whatever the outcome of this ugly power struggle, it already means that the country will never be the same. If millions of workers have had difficulty combating the pro-government stance of the main union federation, a breach in the regime's authority, especially the winning of democratic reforms, will give them the confidence to develop their own independent unions.
Politically, two new overlapping party and NGO alliances were announced on 27 September. The People's Justice Movement (GKR) involves 17 organisations including the Islamic PAS. And the Coalition for People's Democracy (GDR) has 18 predominantly secular organisations, including the People's Party (PRM), Socialist Party, Democratic Action (DAP) and PAS. These will probably be temporary formations pushing the demands of the 'reformasi' movement.

Socialists will support the democratic slogans - for the abolition of the ISA, the release of those detained under it, for basic rights and the freedom of the press, assembly, elections, etc. But, to begin to solve the problems confronting the mass of workers, they will have to go further than the movement around Anwar is prepared to go. As in Indonesia and elsewhere, middle-class fighters will content themselves with a first victory over despotic rule and try and open up ownership and control in society for themselves.

The working class, by developing its own organisations and fighting strength, must do the same - but that means breaking with all forms of capitalist rule, not just today's cronyism. Without eliminating private ownership of the major conglomerates and of land, the massive crises of capitalism will never be overcome. The traditions of socialist struggle will be revived in Malaysia under the impact of events. Not only will more tyrants fall. The system they have held together by brute force will be replaced, through victorious revolutionary movements, leading to the victory of socialism in Asia and beyond.



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