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Divided We Fall

Premier Mahathir tries to rally supporters, and manages to alienate friends and foes alike

By S. Jayasankaran and Lorien Holland/KUALA LUMPUR

Issue cover-dated September 21, 2000

MALAYSIAN PRIME Minister Mahathir Mohamad may be sitting on a solid majority in parliament, but by attacking constituencies at both ends of the political spectrum he has set his coalition on a helter-skelter course for division.

Mahathir set things off with a contentious National Day speech on August 30 in which he compared an influential ethnic-Chinese organization to a radical group accused of treason. Then, six days later, the government announced a plan to divert control of lucrative petroleum royalties from a state led by the opposition Islamic Party, Pas.

The two moves illustrate the mindset of a 75-year-old leader in what he has said will be his last term, with little to lose and everything to gain as he pursues the two most important elements of his legacy: unifying Malaysia behind a strong United Malays National Organization, and checking the growing influence of Pas.

But neither the ethnic Chinese nor the majority Malays have been impressed. "He's not making any friends," says an analyst at a government-linked think-tank in Kuala Lumpur.

On September 5, the federal government decreed that Terengganu, whose state government fell to Pas last November, would no longer receive annual royalties from Petronas, as it had done under Umno since 1975. This year's pay-out totals over 800 million ringgit ($211 million), of which Terengganu got more than half in February. The year's balance and future payments will go to a Finance Ministry-appointed committee that will decide how it is spent in Terengganu.

Deputy Premier Abdullah Ahmad Badawi described it as "a brilliant idea"--the arrangement, after all, gives Umno control over what would otherwise comprise more than 70% of Terengganu's state budget. But opposition member of parliament Syed Azman Syed Ahmad warns that the decision "will just split the Malays further"--and thereby diminish popular support for Umno.

From Mahathir's point of view, however, there is little to lose in the short term, either economically or politically, from his twin thrusts. Two-year-old currency controls prevent significant capital flight by any ethnic Chinese angry enough to move his money out. And the next general election is not due until 2004--allowing Mahathir to rely on his oft-stated notion that "Malaysians have short memories."

But Pas and its supporters are unlikely to forget lost royalties anytime soon. The Finance Ministry said it wants to ensure that the oil money continues to go to development projects, as it did when Umno ran the state. The ministry is taking over, it said, because it lacks confidence in "the Pas government's ability to cooperate in assuring prosperity and the welfare of the people in the state."

Pas officials see national politics at play. Syed Azman, the Pas member of parliament for Kuala Terengganu, the state capital, fumes: "Umno is worried that we might spend the money wisely for fear that the people will regard us as a viable alternative"--an alternative even at a national level.

Analysts say Umno is determined to deny Pas a fount of patronage that could be used to build national influence. "The thought of Pas able to dole out goodies terrifies the government," says a diplomat.

That is not Umno's only fear. The Chinese group that Mahathir attacked--the Malaysian Chinese Organizations' Elections Appeals Committee, or Suqiu--is a nonpartisan body representing over 2,000 grassroots movements with largely Chinese-educated members. Chinese community leaders set up Suqiu before last November's elections to call for, among other things, better governance, less restrictive laws and a de-emphasis on race in policy-making.

In his speech, Mahathir criticized the way Suqiu addressed race in its demands for change, after first accusing the Islamic Brotherhood of Al-Maunah--29 of whose members are on trial for treason--of trying to fan racial sentiment. "I appeal to the extremist groups from these two races to stop playing with racial fire," he said.

"This is the last thing one expects in a National Day message," says a senior adviser to an Umno minister. Suqui said it was "confounded" by the premier's statements. Mahathir has since agreed to meet Suqui, though no date has been set for the meeting.

Though Mahathir's attacks seemed outlandish, they were in some ways politically consistent. The premier may merely have been demonstrating even-handedness in attacking any group championing what he interprets as exclusive ethnic interests. And he has long attacked what he describes as external threats--from currency speculators and Western "colonizers" to religious fanatics and, now, "extremist" Chinese--in an apparent effort to unite Malaysian, and especially Malay, support behind Umno and the ruling National Front.

"It's bizarre," says P. Ramasamy, a political scientist at the National University of Malaysia. "It looks like he's trying to shore up Malay support for Umno but it's preposterous to call Suqiu extremist."

When Suqiu presented its pre-election demands to the cabinet in September last year, its 17 points were "accepted as universal principles, meant to benefit all races," according to the three Chinese parties in the National Front. But when Suqiu reiterated its proposals recently, one point was interpreted by Umno as an affront to the special status of the Malays, which is enshrined in the constitution.

The spectre of Chinese "chauvinism" has worked to rally Malay support in the past, but this time Mahathir's remarks merely embarrassed Chinese partners in the ruling coalition who had endorsed Suqiu's demands and alienated those who hadn't. Ethnic Chinese make up 30% of Malaysia's population and firmly backed Mahathir in the elections.

Oppositionists expressed worry that Mahathir's uncorking of the racial genie could presage a wider crackdown similar to that in 1987, when 133 people were detained under the Internal Security Act, which permits detention without trial. That crackdown took place against a backdrop of increasing racial tension fanned by opposing political parties.

This time around, Malays have not leaped behind Umno in response to claims of a Chinese threat. When Umno Youth invited Malay leaders from both Pas and the opposition National Justice Party to march on the Chinese Assembly Hall in the interests of Malay unity on August 18, there were no takers. "If Umno thinks that they can get the average Malay to rally around by championing special rights, they're missing the point," says the ministerial adviser. "That's old hat. The average Malay just wants to get on with his life."

Terengganu Chief Minister Hadi Awang would probably argue that with a state government deprived of revenue, the average Terengganu Malay, who largely voted for his party, is not being allowed to get on with his life.

Terengganu's oil comes from federal territory more than a hundred miles offshore. But in 1975, Premier Abdul Razak Hussein agreed that the state should receive a 5% royalty on oil revenue, formalized by way of an agreement that Petronas has honoured to this day. The Terengganu government has received over 6 billion ringgit from the deal, and rising oil prices mean it would now receive almost a billion ringgit annually.

A senior Terengganu civil servant says his colleagues are "appalled by the decision." The decision promises to keep opposition fires burning. Says Pas's Syed Azman: "We're not giving up; we're looking at all options and, yes, we'll sue if necessary."